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

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



Senate Report 



No. 216 




IRAN-CONTRA INVESTIGATION 

APPENDIX B, VOLUME 5 
DEPOSITIONS 



United States Congressional Serial Set 



Serial Number 13746 



United Slates Government Printing OlFice 
WashinKK.n : 198'.) 



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 5 
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 



bM4i f MXnt >»»»i 



MSOCun COUMUil 

jon. p HI 



Bnited States Senate 

SELECT COMMITTEE ON SECRET MILITARY 

ASSISTANCE TO IRAN AND THE NICARAGUAN OPPOSITION 

WASHINGTON, DC 20510-6480 



March 1, 1988 

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

Dear Mr. President: 

We have the pleasure to transmit herewith, pursuant to 

Senate Resolution 23, Appendix 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, 



uye 




Warren B. Rudman 
Vice Chairman 




[II 



U.S. HOUSE OF REPRESENTATIVES 



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SELECT COMMITTEE TO INVESTIGATE MO«Mw»»c»iyi c>m> w^w*. couw> 

^ri^'l7T« SSU'SSViouwa COVEHT ARMS TRANSACTIONS WITH IRAN 

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WASHINGTON. DC 206 IS 
(202) 226-7902 

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 
Sebsion, 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 fcj^-jrelease to the public. 

ly yours. 




Lee H. Hamilton 
Chairman 



United States Senate 

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

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

George J. Mitchell, Maine 

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

James A. McClure, Idaho 

Orrin G. Hatch, Utah 

William S. Cohen, Maine 

Paul S. Trible, Jr., Virginia 



Arthur L. Liman 
Chief Counsel 

Mark A. Belnick Paul Barbadoro 

Executive Assistant Deputy Chief Counsel 

To the Chief Counsel 

Mary Jane Checchi 
Executive Director 

Lance I. Morgan 
Press Officer 



VI 



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 McColIum, 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. KaganofP 
Craig L. Keller 
Hawley K. 

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

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



VIII 



Committee Members' Designated Liaison 



Senator Inouye 
Senator Rudman 

Senator Mitchell 

Senator Nunn 

Senator Sarbanes 
Senator Heflin 



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



Senator Boren 

Senator McClure 
Senator Hatch 

Senator Cohen 

Senator Trible 



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



Part Time* 



Assistant Counsel 
Hearings Coordinator 
Staff Assistants 



Interns 



Peter V. Letsou 
Joan M. Ansheles 
Edward P. 

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

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



Document Analyst 

Historian 

Volunteers 



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



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



IX 



United States House of Representatives 



Select Committee to Investigate 
Covert Arms Transactions with Iran 

Majority Staff 



John W, Nields. Jr. 
Chief Counsel 

W. Neil Eggleston 
Deputy Chief Counsel 

Kevin C. Miller 
Staff Director 



Special Deputy 

Chief Counsel 
Staff Counsels 



Press Liaison 
Chief Clerk 
Assistant Clerk 
Research Director 
Research Assistants 



Charles Tiefer 

Kenneth M. Ballen 
Patrick J. Carome 
V. Thomas 

Fryman, Jr. 
Pamela J. 

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

Birmann 
Julius M. 

Genachowski 
Ruth D. Harvey 
James E. Rosenthal 



Systems 

Administrator 
Systems 

Programmer/ 

Analysts 
Executive Assistant 
Staff Assistants 



Catherine L. 

Zimmer 
Charles G. Ratcliff 
Stephen M. 

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



Minority Staff 



Thomas R. Smeeton 
Minority Staff Director 

George W. Van Cleve 
Chief Minority Counsel 

Richard J. Leon 
Deputy Chief Minority Counsel 



Associate Minority 


Robert W. 


Minority Staff 


Michael J. Malbin 


Counsel 


Genzman 


Editor/Writer 




Assistant Minority 


Kenneth R. Buck 


Minority Executive 


Molly W. Tully 


Counsel 




Assistant 




Minority Research 


Bruce E. Fein 


Minority Staff 


Margaret A. 


Director 




Assistant 


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 
Fascetl 

Representative 

Foley 
Representative 

Rodino 

Representative 

Brooks 
Representative 

Stokes 
Representative 

Aspin 



Michael H. 

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

Schweitzer 
William M. Jones 

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



Representative 

Boland 
Representative 

Jenkins 
Representative 

Broomfield 
Representative 

Hyde 
Representative 

Courter 
Representative 

McCollum 
Representative 

DeWine 
General Counsel to 

the Clerk 



Michael W. Sheehy 

Robert H. Brink 

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

Dennis E. Teti 

Tina L. Westby 

Nicholas P. Wise 

Steven R. Ross 



XI 



Contents 

Volume 5 



Preface XXI 

CIA Officer 1 

Clagett. C. Thomas, Jr 193 

Clark. Alfred (With Gregory Zink) 251 

Clarke, George 351 

Clarridge, Dewey R 509 

Cline, Ray S 557 

C/NE 829 

Cohen, Harold G 1057 



Depositions 



Volume 1 



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



Volume 2 



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



Volume 3 



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



Volume 4 

Channell, Carl R. 

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

Chatham, Benjamin P. 

CIA Air Branch Chief. 

CIA Air Branch Deputy Chief. 

CIA Air Branch Subordinate. 

CIA Chief. 

CIA Communicator. 

CIA Identity "A". 



XV 



Volume 5 

CIA Officer. 

Clagett. C. Thomas. Jr. 

Clark. Alfred (With Gregory Zink). 

Clarke, George. 

Clarridge. Dewey R. 

Cline. Ray S. 

C/NE. 

Cohen, Harold G. 

Volume 6 

Collier, George E. 

Cole, Gary. 

Communications Officer Headquarters, CIA. 

Conrad. Daniel L. 



Volume 7 



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



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



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



Volume 8 



Volume 9 



XVI 



Volume 10 



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



Volume 11 



Furmark, Roy. 

Gadd, Richard. 

Gaffney, Henry. 

Gaffney. Henry (With Glenn A. Rudd). 

Galvin, Gen. John R. 

Gantt, Florence. 

Garwood, Ellen Clayton. 

Gast, Lt. Gen. Philip C. 

Gates, Robert M. 

Glanz, Anne. 



Volume 12 



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



Hakim, Albert. 



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



Volume 13 



Volume 14 



XVII 



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



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



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



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



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



Volume 15 



Volume 16 



Volume 17 



Volume 18 



XVIII 



Volume 19 



Miller. Richard R. 



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



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



Volume 20 



Volume 21 



Volume 22 



Raymond, Walter, Jr. 

Regan, Donald T. 

Reich, Otto J. 

Revell, Oliver B. 

Reyer, Billy Ray (See John Chapman). 

Reynolds, William B. 



Volume 23 



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



XIX 



Rosenblatt, William. 

Royer, Larry. 

Rudd, Glenn A. 

Rudd. Glenn A. (See Henry Gaffney). 



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



ShackJey, 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. MaxweU. 

Trott, Stephen S. 

TuU, James L. 

Vessey, John. 

Walker, William G. 

Watson, Samuel J., IIL 

Weinberger, Caspar. 

Weld, William. 

Wickham, John. 

Zink, Gregory (See Alfred Clark). 



XX 



Preface 



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

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

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

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

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

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

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

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

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



XXI 



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

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



XXII 



Publications of the Senate and House 
Select Committees 



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

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

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



XXIII 



COa NQ_ 



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ITS - l~f^ /87 ^ 



DEPOSITION OF^^^^^^^^^ dl'R (j^ C:' r~ 
Saturday, April 25, 1987 

United Statas Sanat* 
S«l«ct CoBBitta* on Sacrat 

Latanca to Iran 
fagxian Opposition 

allad as a 
b^ counsjl for t]K SSlact^^Riuiittaa, at tha 
of tha #alact gptaaiVP*', Rooa SH-901, Hart Sanata 
Bu|ldl^, Waa^ffhgton, D. C. , coBaancing at 10:15 
tha IVtnasa having baan duly svom by MICHAL AKM 
ER, a Notary Public In and for tha Diatrict of 
1 Columbia, and tha taatiaony baing takan down by Stanomask 
by MICHAL ANN SCHAFER and tranacrlbad undar har 
diraction. 






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1 APPEARANCES : 

2 On b«half of the Senat* Salact Conalttaa on Sacrat 

3 Military Assistanca to Iran and tha Nlcaraguan 

4 Oppoaltlon: 

5 DANIEL FINN, ESQ. 

6 TOM YOUNG 

7 On bahalf of tha Cantral Intalllganca Agancy: 

8 KATHLEEN A. MC GINN, ESQ. 

9 Aaaiatant Ganaral Counsal 

10 Offica of Ganaral Counaal 

11 RHONDA M. HUGHES, ESQ. 

12 Laglalatlva Counaal 

13 Offica of Congraaaional Affaira 




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EXAMINATION 


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^^^^Hexhibit 


NUMBER 












FOR 


IDENTIFICATION 




1 
























83 




2 
























85 


10 


3 
























86 


11 


4 
























90 


12 


5 
























92 


13 


6 
























101 


14 


7 
























106 


15 


8 
























108 


16 


9 
























114 


17 


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11 
























121 


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132 


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137 


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IS 
























153 



UNEU^RED- 



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l)N6USSIFIED 



PROCEEDINGS 



Whareupon, 



called as a witness by counsel on behalf of the Senate 
Select Committee and having been duly sworn by the Notary 
Public, was examined and testified as follows: 

EXAMINATION 
BY MR. FINN: 
Q Once again thank you for coning in. As I 
mentioned, why don't we go through this chronologically, 




Q Prior to assuaing the positioni 
did you have any discussions concerning the nature of 



i/WrbBsro 



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wmmo 



your responsibilities once you arrived there with either 
your superiors at the Central Anerican Task Force or any 
other of your superiors in the CIA? 

A Yes. I'm sure I did, yes. 

Q Can you recall at all what those discussions 
would have been? For example, did you return to 

headquarters prior — ^^^^_^^^__^.^^_^_^^.^^^^ 

Yes. ^^^^^^^^^^^^^^^^^^H| I 
remember having a meeting with,^^^^|^^^^^^^^Hand with 

ind Dewey Clarridge before going down 
there, and having sort of read through the files up here 
and looked at what was going on| 




Q Would this meeting have occurred prior to your 
coming on scene^^^^^^^^^^^H or afterward? 

A I think it was prior, yes. 

Q Do you have a general idea when that might 
have been? 

A It couldn't have been too much before I went 




UNtt^SIFIED 



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7 

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IS 

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20 

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UNGUiSW 



A To th« best of my recollection. 
Q Just for the record, at that time Dewey 
Clarrldge was still the Latin America Division Chief? 

A Yes, he was the Latin America Division Chief. 

And ^^^^^^^^^^^^^^^ was? 
A Chief of the Central American Task Force. 

MS. MC GIKN: Could we stop for just a second? 
lif you could try to let him say his whole question 
and then answer, because I think the court reporter may 
be having a hard time because you are both tending to 
talk at once. 

THE WITNESS: Okay. Fine. 
BY MR. FINN: (Resuming) 
Q You had mentioned that In the context of those 
discussions with^^^^^^^^Hand Clarridge that there was 
a discussion of your views zUsoutI 

This period, going toward June of '84, was a period 
In which funding for the contra program was running out; 
is that correct? 

A It had run out, I think. It ran out on the 
31st or something, the end of May. 

Q Do you recall any discussions as to the future 
of that program,! 




nerally speaking there would be 



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Baterial that was In tha plp«lin« that would contlnua 
coming, and, you )cnow, w« ware waiting to ■•• what was 
going to happen with th« Congress in the fall, what would 
happen 1 October. 

Q As to this materiel in the pipeline, could you 
say what the upshot was concerning how that would be 
treated? 

A Hell, it was treated just as it had been all 
along. The mate rial would come in and be turned over t o 
the FDN. 




-Q Fine. Thank you. At the time the funds per 
s« ran out there were no additional operational funds 
necessary at approximately May 31 of *84. . Has there a 
significant quantity of arms and ammunition which had 
already been purchased! 




I don't )cnow. I assume. Their level of 
activity was fairly high. They were up aroundj 
guerrillas, doing well. I'm not sure how much had been 
expended^^^^H|HH|H^^mm frankly. 



8 



UNCusm 



1 Q Wall, why don't w« return to the meeting that 

2 you had in April or May of '84 and w« can go on to the 

-3 material issue later? Beyond the fact that you discussed 

4 the possible resumption of Congressional funding for the 

5 program in October of '84, were there any discussions of 

6 how the program would be managed or conducted on the 

7 assumption that such funding might not have been resumed? 

8 A Not that I recall, no. 

9 Q Wouldn't you say that's a bit unusual in a 

10 situation where a program is winding down and the 

11 prospects for resumption are unclear, not to have some 

12 form of discussion eibout hov^^^^^^^^Hwould comport 

13 itself with respect to the resistance forces? 

14 A Well, it was still fairly early in the game, I 

15 think, back in May, and, you know, I don't know, looking 

16 back on it, if things had solidified to the point where 

17 it was known that for sure there would not be, frankly. 

18 I don't remember. 

19 Q At any time prior to your assignment 

20 ^^^^^^^Hdid you have discussions with the Director of 

21 the CIA, William Casey? 

22 A No, I did not. 

23 Q So you had not met Mr. Casey at the time of 
your assignmentJU^^^^^^^^^W 

25 A No. I don't recall. Wait a minute. Hold it. 



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I may hav« met him once In the halJ 

|, but I never had a meeting or 

a meeting with him. 

Q Prior to being chosen for the poeltlon of 

you were not ta)cen to see 
Casey for an Initial discussion by Clarrldge or 
lor anyone else? 
A No. 





Q How about after your arrivall 

Did you then 

return to headquarters for consultations with the 
Director or with your imaediate superiors? 
A No. 

Q To the best of your recollection when was the 
next time you returned to Washinqrton? 
A I don't recall. Probably 
perhaps. 

Q Can you fill in some of the details concerning 
trip? I presume that would have been for 
consultations 

A Probably, yes. If I could just go off the 
record for a second. 

(A discussion was held off the record.) 
MR. FINN: Bac)c on the record. 



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BY MR. FINN: (Reauoing) 



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Q What I'm ttying to gat at is to begin to 
understand what planning went Into the winding down of 
the progras after the funding ran out and when it became 
clear that funding would not be restored. This would 
have been in, let's say, the September to October of '84 
time fraae. Did you return to Washington for 
consultations J 




You mentioned earlier that the contras had a 



mmm 



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UNCUSSIfe 



11 



1 fairly high level of activity. By this I presume you; 

2 mean the FDN specifically. 

3 A Specifically FDN, but also the Indians, as I 

4 recall. They were both doing quite well. 

5 Q So it's your perception that at that time 

6 there would have been a continuing need by the FDN for 

7 additional sources of arms and ammunition, particularly 

8 ammunition? 

9 A That's correct. 

10 Q Would that also be especially true of 

11 ammunition or would it range? 

12 A It would range across. But, you )cnov, they'd 

13 capture stuff. Also, when you provide them the weapons 

14 those weapons should last for a certain period without 

15 having to be replaced. You have to have a certain 

16 replacement factor, of course, but it would be mostly 

17 what I would consider munitions and food. 

18 Q To the best of your recollection did the 

19 material that had previously been purchased, let's say 
2 for which all charges had been expended prior to the 
21 funding cutoff on the 3l8t of '84, continue to either 

n ^^^^^^^^^^^krm ill tpersement^^^^^^^^^^^^^^^^l 

^^^^^^^^^^^^^^^^^^^^^^^^^■to the FDN?^^^ 
24 A Yes. After May 317 

2 5 Q Yes, that's correct. 



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A Yes, that material was In th« pipeline, 
continuing to be dispersed. 




Q Would that have been sufficient to sustain the 
FDN and Indian forces at the level of activity that they 
were then experiencing, let's say, into Deceaber of that 
year, '84? 

A If they sort of stayed off the offensive I 
would assuae it would. I really don't )cnov, to tell you 
the truth. I think that they couldn't maintain their 
level of activity without continuing munitions. 

Q Did this level of activity that you noted, the 
Lguerrilla f orce ^^^^^^B then continue 
military activity, continue through 1984 and into the 
spring of 1985? 

A No. They began coming out. 




Q Can you say what time frame the withdrawal 
spanned? 

A October, November, December. 

Q Ou]|p^lA|a4.^|%i|fM^pyring Easter, I 



IDIIXJISSiED' 



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believe, of '85 there was a major Sandlnlsta Incursion 

is that true? 

A That's true. 

Q When that incursion occurred did it result in 
a high level of Bllitary activity by the contra* who were 
defending that area? 

A Yes. 

Q Did they have adequate aBBunition to sustain 
that activity during that period? 

A To the best of my recollection, yes. The 
material had started to arriv*. 

Q And where was this material coming from? 

A Private benefactors. The FDN — Calero was 
getting material. It was being sent into the country. 



^ 



Q 
A 

assume. 
Q 
A 
Q 
A 

weapons . 
Q 



What sort of material was this at that time? 
Mostly munition* and some weapons, I would 

By munitions you mean ammunition? 

Ammunition. 

This would be small arms ammunition? 

Yeah, for their rifles, for their basic 



Did you have 




idea of 



where thi 



"mem 



from? 



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UNClASSIflED 



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A What w« b«ll«v«d was tha aatarial was coaing 
trou actual prlvata banaf actors In tha Unltad Statas, 
waalthy paopla who Calaro had contactsd and had provldad 
hia funds to buy this aatarlal on tha Intamatlonal arss 
■arkat. 




15 




Q Dld^^^^^^^^^^Hyoursalf fora an astlmat* 
of th« valu* of thm supplias that v«r« being provided In 
th« early part of 1985? 

A No, not to ay recollection. I )cnov we eent 
ciibles in estlaating how much had cone into country, but 
it was difficult to do because you don't )cnow what price 
he paid, and the prices really varied. Like one 
cartridge could vary from 12 cents to 30 cents, and if he 
got 12 cents and he's buying 20 Billion, that's a hell of 
a savings. 

Q It was your understanding that Calero and the 
FDN were being provided cash or funds in sons fora which 
they were then using to support their purchases? 

A That was our iBpression in the beginning. 

Q Let ae go back again to the period in which 
the funding is running out. This is in the suBiner of 
•84. And then when the Boland Aaendaent, what I guess is 
called Boland II, which contained the "direct and 
indirect" language cane into effect,, the decision was 
made! 



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A Y«», that's correct. 

Q Wh«n was that daclslon taken? 

A I think aftar th« law was passed. 

Q This would Bsan after October of '84? 

A Yes. 

Q Going back one step for a ainute, the FY 1983 
statute which contained the $24 Billion contra assistance 
prograa also contained a clause having to do with direct 
or indirect assistance once the funds ran out. Do you 
recall any activity or any change of policy with respect 
to^^^^^^^^^^^l activities cosing into prior to 
October of '84? 

A No, frankly. There Bay have been. 

Q The only issue that you can recall as a result 
of the Congressional actions was the specific issues 
having to do with the funding of itsBS that had 
previously been purchased and whether they could continue 
to be supplied? 

A Yes. 




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Q Do you r«call a^^^^^^^^^^^lconfaranc* 
iMlng b«ld||^^^^^^^|in S«pt«ab«r of 

A Y««. Z think it vaa August. Z say b« 
Incorract. It may b« Saptaabar, but to ay racollactlon 
it vaa Auguat of *84. 

Q What vaa tha occaalon for that aaatlng? 



It vaa a noraall 



confaranca. 



UNCtftSffiD 



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UNCussm 



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1 Th«y usually try to hava on* cvary year. 

2 Q Who attandsd from headquarters? 

3 K Lst's s««. The Director was there. Dewey 

4 . Clarrldge was there. Clair George was there. I don't 

5 recall anyone else. 

6 Q Mr. Clarridge was still the chief of the 

7 division at that time? 

8 A He was still the division chief, yes. 

9 Q Do you recall anyone else froa other agencies 

10 or outside the CIA being peraitted to be present at that 

11 meeting? 

12 A There Bay have been. 

13 Q Specifically do you reneaber Ollie North 

14 having been present at that aeeting? 

Ollie North vasHJIJjjHBHJ^ but 

16 don't recall hia being in our aeetings. 

17 Q So you can't recall any specific session that 

18 was part of this aeeting at which North was an attendee? 

19 A No. He aay have bean, but I personally do not 

20 recall. 

21 Q Just to refresh your recollection, how did you 

22 becoaa aware that North was^^H^^f during this tiae? 

There was a cocktail party|^^m^^mm^^ 
I^^^^Hm^mH^^^H and North was 



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Q Do you racall a scsBlon at which th« chlafa 
war* a8)cad to describe the activities and the situations 

Ifor the visitors? 

A No, but I'B sure that would be a normal thing 
to do. 

Q And you don't recall Ollie North having been 
present at that session? 

A No, I do not. 
— Q Do you recall Ollie North giving a briefing on 
the situation in the southern front area at that session, 
at any session? 

A No, I do not. 

that^^^^^^^^^^^^Hoeeting was there 
any discussion of the future of the contra program? 

A Hell, I'm sure there was a discussion saying 
they were going to try their best to get support from 



Congress . 



UNGUSSffl) 



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Q Did Mr. North — when you w«r«^^^^^^^| do 
you recall North speculating or discussing on the future 
funding for the contras? 

A No, I don't. 

Q If I were to tell you that North did discuss 
that issue ^^^^^^^Bat soae tiae, would that assist your 
recollection concerning whether he was at the aeeting? 

A No. I reaeaber the conference rooa and the 
neetings we had. I reaeaber having dinner at] 
house, or ^^^^^^^^^Hhouse , and the cocktail party! 





Q But to the best of your recollection the only 
tiae that you can recall North being present is at the 
cocktail partyl 




That's right. 




Q If North had been peraitted to attend 
■••ting, would that not hav^ b^an unusual? 

A I would think so, yes. 

Q So wouldn't you agree that if North had been 
present at the aeeting that it would have been 
sufficiently unusual that you aight have reaembered it? 



wmsm 



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UNCUSSIflED 



22 



1 A I would think I would hav« ramembared It, but 

2 I frankly don't. 

3 Q Was that a larg* maatlng? I'm trying to 

4 rafrash your racollactlon on this point. 

5 A Hall, It was a larga room and whan tha 

6 Dlractor was thara, you know, you had soma paopla from 

7 haadguartars — I'm sura mora basldas Clair and Daway and 

8 tha Dlractor; othar paopla who just happanad to ba 

9 around. 

10 Q Do you racall tha arrangamants that vara mada 

11 for tha haadguartars dalagatlon to arrlva? Spaclf Ically, 

12 do you racall If 0111a Morth cama with tham or whathar ha 

13 arrlvad saparataly? 

14 A Z don't know. 

15 Q If wa may, why don't wa mova forward a llttla 

16 bit to tha onsat of tha humanitarian asslstanca program 

17 and tha rasumptlon of cartaln actlvltlas having to do 

18 with asslstanca to tha contras? To tha bast of my 

19 knovladga tha humanitarian program was approvad, mora or 

20 lass. In tha lata summar or aarly fall of '85, I ballava 

21 in Saptambar. 

22 A August? 

23 Q August or Saptambar of '85. If you agraa, 

24 lat's usa tha August '85 data. It appaars to hava baan 

25 In tha baglnnlng of August of '85. 



ONCttssire 



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A Y«S. 

Q Under this program, which was created 
essentially by two statutes, the CIA was once again 
permitted to share intelligence information with the 
resistance. 




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Q At this tlm« was this lnt«lllg«nc« also 
provided for tha purpoaa of aaalatlng tha FDN and othar 
organizatlona in tha affactlva dalivary of humanitarian 
auppliaa? Lat aa clarify that. 

Waa inforaation providad to tha FDH that would 
aaaiat it in aaking flight arrangaaanta , in daaigning 
flight plana into Micaragua for tha dalivary of auppliaa? 

A During thia vhola pariod, yaa. 

Q Can you racall whan that function bagan? 



No. 



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Q Do you r«call specific flight vector 
infomation avar baing provided to tha contras? 

A No. Frankly, I don't. 

Q Do you baliava, hovevar, it aight hava baan 
provided? 

A It rings no ball at all. I don't think so. 
FON pilots )cnow Nicaragua vary, very veil, and there's 
not Buch that va could give then outside] 
^m which would change their ways of flying in and out. 

Q Deapita tha faailiarity of the FDN pilots with 
the country, might it not have been necessary to acquaint 
thea with specific approach aethods for specific drop 
zones or things of that nature? 

A Not really, because the drop zones are so 
large. 




Q If the FDN were asked to fly or arrange for a 
flight to an unfaailiar area, for axaapla where southern 
front forces would be operating, sight it be essential 
for thsB to have more detailed flight inforaation? 

A I would assuae, yes. 

Q Thank you. 

A The reason I sails is getting the FDN to drop 



icassreo 



27 



^nmms 



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to th« south Is no mean trlc)c. 

Q I thlnlc we could probably discuss that later. 
What was your understanding of the CIA's role 
with respect to the humanitarian assistance program? 

A Well, our role was one of assisting NHAO in 
chec)cing to see if the suppliers actually did exist and 




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Q You atatad that part of th« Blaaion of th« CIA 
with raspact to tha huaanltarian prograa wa» to varlfy 
tha racalpt of auppllaa, Z baliava; la that corract? 

A Yaa. That aatarlal waa coalnq. Baaically 
mora that thasa paopla actually did axlat, thaaa 
auppliara, and that thay vara aupplylnq aatarlal, that 
tha billa vara valid bllla, valid invoicaa. 

Q Did tha CIA obtain apacific information on 
auppliaa that had baan racaivad that it than tranamittad 
back to Naahington? 

A I'm not aura if va did or not, or if that vaa 
dona baaically aa part of^fB^fHand aada into a NHAO 
raport, if you undaratand vhat I'b aaying. 

Q Parhapa you could clarify that. 

A Mall, I'B not aura if va aant any traffic on 
it or tha inforaation that vaa collactad by tha CIA 

[and tha Stata DapartBant officar vaa 
juat forBulatad into a rapoi 





30 



umssffl 



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1 ^^^^ 

2 Q Were CIA personnel ^^^^^^^^^^^^^^^It asked 

3 to report on the delivery of supplies pursuant to the 

4 NHAO program? 

5 A Yes, to the extent of not getting on every 

6 truck and counting every slab of meat. We just couldn't 

7 do that. But that material was coming in, that food was 

8 arriving, that people were eating, yes. 

9 Q In terms of specific deliveries, to the extent 

10 that ^^JH^^Vper Sonne 1 reported on that, what were their 

11 sources? Would they have to obtain this information 
^^^^^^^^^^^^^^^^^^^^^^^^^^^K^K^^^ or they 

13 have done this as a result of personal observation? 

14 A I think both. But I can't really say. 

15 Q So to the extent that there are reports on 

16 this subject, those reports would be based, in your view, 

17 mostly on personal observation or mostly on information 

18 that ! 

19 A Z don't know. When you look and the guys are 

20 eating and they are not screaming about food or looking 

21 starved ~ 

22 Q Would it surprise you if the reports from I 

23 ^^^^^Hwere much more specific than the impressionistic 

24 type that you described? 

25 A Of course. You're talking how many years ago. 



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Q If.^^^^^^^^|wa« providing aor* or laaa 
detailed reports on supplies that were being received, 
humanitarian supplies, by the contras, where would those 
detailed reports have coae from? 

A The same^^^^^^^l If you're talking about] 
yes. 
Were^^^^^^^^^^^^Hpersonnel spending a 
great deal of their time making personal observations 
concerning the precise inventory of supplies that were 
coming in under this program? 

A I don't recall hov much of their time it would 
have taken. 

Q Do you agree that if such information 
concerning inventories and detailed lists of supplies was 
being col] 




y««. 



That would certainly be my impression of It, 

What I'm asking is, 

lists of the supplies 





A I don't recall. 

Q Okay. I'd like to go through how this prograi 
unfolded over time. As ve noted, the approval was 
received for the humanitarian program sometime in August, 



UNCi:lt$Slfe 



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of '85. War* th« hunanltarlan d«llvari«s prior to 
Novembar of '85, to tha baat of your racollaction? 

A I don't )cnow tha data. What stic)c« in ay mind 
vara tha fii 




baan any pravioua himanitarian dalivariaa? 
A I don't )cnow. I don'VraBambar. 




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Pi^es 33-35" 



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Q You B«intlon«<l the word earlier "private 
banaf actor", and you aantionad it with raapact to the 
October to December '84 tiae fraae. Ha* that tera in 
currency during that earlier tiae fraae, late '84? Do 
you recall how the word ceuie to your attention, the 
phrase? 

A No. Frankly, Z don't. 

Q At what point did you discover that the NHAO 
office was relying on contractors to aake arrangeaents 




35 



n^SSIflED 



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for d«llv«rlfls of humanitarian suppll«s? 

A I would assuma when th« L-lOOs landed, whan 
they started coming In, that they were contracted and 
they weren't U.S. Air Force. 

Q With respect to flights that were arriving 

were you aware that contractors were not 
only making specific flight arrangements but were 
essentially serving as brokers and had a presence at 





A I'm not sura what you mean by brokers. 

Q Did you become aware that pursuant to tha NHAO 
program the State Department had not only arranged from 
private sources aircraft for delivery^^^^^^f^^Hbut 
had also arranged, procured tha services of an 
intermediary to make further arrangements for the KHAO 
program? 

A No, not to my recollection. 

Q Whan did you become aware that Max Gomez or 
Falix Rodriguez i 

A Oh, I had heard Max Gomez was going to 
Salvador \ 
that muat have been '83 or early '84. 

Q Did you at soma point link Gomez with tha 
humanitarian assistance program? 




"MASSIFIED 



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Q Whan did you bacon* avar« that Goaaz waa 
parforming aoma function with raapact to dalivariaa to 
tha FDN^^ 

A I don't racall. Parhapa tha navapapars. 

Q Did you bacoma avara at aoaa point that 
privata air crava had baan ratainad by aomaona to ahuttla 
auppliaaj 

A What tioa pariod ara w« talking about — 
during tha NHAO pariod? 

Q Yaa. Lat'a say in tha pariod of Novaabar of 
•85 to March of '86. 

A No, I did not. 

Q So it's your ballaf that tha privata air craws 
did not appaar on tha icana prior to tha winding down of 
tha NHAO prograa? 

A A« far as Z know. 

Q How would you laam about auch davalopaants If 
thay war* to occur? 

A I'm aorry? 

Q Lat'a aay that privata air crawa had appaarad 
on tha scan* Jj^^^^^^^^l How would you bacoaa 
thair axistanca? 

A Z'H atill not aura what you aaan. 

MS. MC GINN: Z think it aight ba battar if 
you askad hia a spacific cjuaation rathar than a 



UNCI3(SSIFIED 



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hypothetical, if in fact you )tnow that th«r« w«r« private 
air craws at a cartain tlma. I think ha's having 
problaaa with aoaa of thasa hypothaticals. 
BY MR. FINN: (Raauaing) 




Now you wara awara that suppliaa of soaa kind 



vara baing racaivad by tha contraa 




f roB 



38 



ONcussra 



40 




1 A Okay. Yes. 

2 Q In th« period prior to April of '86 how did 

3 you b«liav« these supplies were arriving? 

A The FDN HH the FDN^^B I'b not sure we 

5 )cnew where planes were coming froDJ 

6 when those planes landed. They could have been from New 

7 Orleans. They could have been froa Miaai. They could 

8 have been froa anywhere, frankly. 

9 Q When did you first become aware that DC-7 — 

10 I 'a sorry, C-7 Caribou and C-123 aircraft had arrived, 

11 were flying 

12 A When they flew^^^^^^^^^^and started, you 

13 ]cnow, operating] 

14 Q Can you put a date on that? 

15 A No. 

16 Q Was that prior to the winding down and phasing 

17 out of the huaanitarian assistance prograa or thereafter? 

18 A Well, I think it was after, to the best of my 

19 recollection, because the NHAO prograa continued on in a 

20 sense, where I believe there were not flights. There 

21 wasn't enough money for flights, but there was money that 

22 they were using for food and they stretched the aoney out 

23 into I 'a not sure when — March, April, May, soaething 

24 like that of '86. 

2 5 And I'm not sure. I'd have to look back and 




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find out when th« reports say that those first planes 
arrived and started doing some dropping. 

Q Did it ever come to your attention that lethal 
equipment and supplies were being added to huaanitarian 
supplies provided pursuant to the KHAO program when they 
were delivered ^^^^^^^^^^B 

A I recall that there was some rule. 0)cay? 
They've talked about the tan percent rule where they 
allowed a certain amount of materiel that somehow had 




ind then was transferred 
over on a space-available basis. But I don't )cnow what 
that material was. I can't recal.1 . I would assume 
munitions, meaning bullets. 

Q When you say that certain equipment had not 
been permitted^^^^^^^^^H are you referring 
Boeing 707 load which was originally destine^fo^^ 
^^^^^^B but was apparently diverted ^^^^|^^^^| 

A Yes. I think so, yes. I'm not sure if it was 
• 707, but it was an aircraft that I recall was due to 
com* ^^^^^^^^^H with lethal material j 




Q What was the approximate time period in which 
this occurred? 

A I 4pn^t recall — sometime in '86, but I don't 




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)cnow whan 

Q 
A 

landed 
munitions 

Q 
A 

Icnow. 

Q 



This would hav« been in early '86? 
I don't know. There was another plane that 
\t one time that came in with 

And that was earlier? 

I would have to guess on that. I really don't 



What was your source of information about 
those aircraft that made deliveries, either attempted to 
or actually made deliveries of lethal supplies? 

A 

Q Did you have any additional information 
concerning the contents or source of those supplies? 

A 




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Q So by somatim* In aarly '86, although not too 
•arly, It was your undarstandlng that a significant cargo 
of lethal aguipmant had baan divartadl 

A I'm not sura if it was '86 or '85. I don't 
rscall Buch oatsrial coming in in '86, frankly. 

Q You wars awara, than, that soaa of this 
natarial that was locatad^^H|HHHwas baing added to 

flights froB ||^|^B ^°^^|^^^^^^H 

A Yas. I Bust hava baan, yas. 

Q You rafarrad to a rula, I baliava. 

A I'va heard about that, just of recent tiae. 
This is soBSthing that just caae up. 

Q The so-called ten percent rule? 

A The so-called ten percent rula. 

Q You were not aware of that at that time? 

A I remember something vaguely along those 
lines, but I cannot sit here and say God, yes, there was 
a ten percent rule and this was that date and so and so 
did it. I'B sorry, I can't. 



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Q Who would hava appllad such a nils? 

A I would assum* tha Departmant of Stata. 

Q And It would hava baan a rula assantially 
governing tha bahavlor of tha FDN In terms of regulating 
tha extent to which tha FDN could place lethal equipment 
and supplies on NHAO-supported aircraft? 

A I see what you mean. Yes. 

Q Did NHAO, to tha bast of your ]cnowladga, 
subsidize or support tha flightsl 



A I don't ]cnow. 

Q You stated your understanding earlier that tha 
FDN had arranged airlift 
is that correct? 

A Clearances, yea, but I may be wrong. I know 
they do that now and they hava always dona it, and they 
hava always had their own aircraft, ^^^^^^^^^^^Hthat 
went back and foi 

Q Whan you say "their own aircraft" you mean 
aircraft that was chartered by the FDN or actually — ■ 

A Aircraft. Hall, it may hava baan chartered at 
the time, ^^^^^H 

^^^^^^^■was a charter? 

A Partially charter, yeah. They owned part of 





it. 



IWOUmED 



43 




45 

1 Q Wh«n th« C-7 and C-123 aircraft appeared at 

2 ^^^^^^^Hwaa It your understanding that thai* had also 

3 bssn supported by ths NHAO program? 

4 A No. 

5 Q So It's your bsllsf that the C-7s and C-123s 

6 war* coaplstaly paid for by ths contras or other private 

7 parties? 

8 A Prlvats partlss, yes. 

9 Q Do you recall a proposal for the contras 
LO thsBsslves to charter a C-123 aircraft? 

A I think so, but I'm not sure. 

Q Was that one of the saae aircraft that was 
later used? 

A I don't thinX so, no. LooKing at those 
aircraft, I don't thinX we would have accepted any of 
thea. They're kind of junk. 

Q At any rate, to the best of your knowledge the 
State Departaent did not provide any financial support to 
the shuttle flights made by the C-7 and C-123 aircraft? 

A As far as I know, no. 

Q To the best of your knowledge did the State 
Department provide support for flights|^^H^m^H|p-nto 
Nicaragua? 

A Ho. To the best of my knowledge, no. 

Q Was that ruled out? Was there discussion of 



UNCDtSStFtED 



44 



oNcusm 



46 




nto — 



that point? 
A 

Q Y« 

A I don't •v^n r«call that co«ing up, franlcly. 
It Bay have. 

Could V* tak* a break for a couple of ninutas? 
(A brief recess was taken.) 
BY MR. FIffN: (Resualng) 
Q When w e left off we were discussing the C-7 
and C-123 flights ^^^^^^^^^^Lnd your knowledge of 
thea. You were not able to put a date on when these 
aircraft cosBenced operations; is that correct? 
A Yes. X can't recall when they case 




Q At the point that the huaanltarian prograa was 
winding down were you generally aware that the contras 
were the beneficiaries o^ a priva te supply network that 
was operating] 

A I'd say yes. 

Q Did you associate that network with Max Goaes' 



A Mo. 

Q So it was your understanding that Goaes was | 
[solely to assdst the Salvadoran govemaent's 
counterinsurgency effort? 



KCNED 



I 



45 



UNKASSra 



47 



1 A I Bay hav« h«ard that h« was involved In, you 

2 )cnow, SOB* of thesa othar thlnga, but Max Gomez was 

3 involvsd in that for quits sobs tiss. That was his 

4 rsason for bsing thsrs, ths insurgency effort, whatever 

5 h« did with ths insurgents or countsr insurgency, yes. 

6 Q So you ars surs he was performing 

7 countsrinsurgency functions for the Salvadorans but may 

8 havs had soma information that h« was also part of a 

9 private supply networ)c for the contras? 
10 A Yeah, um-hum. 

What was^^^^^^^^^H policy toward these 

12 activities? Was there a policy concerning reporting on 

13 the supply actlvitiss of the privats groups? 

14 A Yes. 

15 Q What was that policy? 

16 A Yes. What matarial they had brought into the 

17 country, any material they dropped into Nicaragua was 

18 reported in Intel format to the community. 

19 Q So there was no restriction on reporting the 

20 deliveries that were made through this private network? 

21 A No. 

22 Q And every effort was made, to the best of your 

23 )cnowledge, to collect such information for intslligence 

24 purposes? 

2 5 A Yes, 



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Q Would you aay that you had fairly good reports 
on th« suppllss, the supply actlvitlas that wars baing 
conducted in this manner? 

A If we're talking about the drops going into 
Nicaragua r 

' yes. To the best of ny recollection we put 
out intelligence reports on each one. 





Did ^^^^^^^^1 every provide any support to 
shuttle flights conducted by the private benefactors 




A Not that I know of, no. 
Q So you are not avars of an instance in which 
flight clearance was arranged for such aircraft? 
k No. 



DNCbtSSm 



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Q At what point did you b€COB« aware that th« 
C-7 and C-123 aircraft w«re being us«d for d«llv«rleB out 
tnto Nicaragua? 

A I ballav* soon aftar th«y arrlvad and want 
ind actually mada a drop Inslda, but I 
baliava that thay wera basically an| 
oparatlon. 

Q Tha drops that vara nada out ^^^^^^^^| by 
thasa aircraft Includad lathal as wall as hunanltarlan 
suppllas? 

A I 'a not aura. I would assuaa yas. It would 
ba both. I aaan, avary drop wa Baka Is a combination of 
lathal and humanitarian -- almost all of tham. 





48 



HWiASsro 



Pa^es 



50-51 



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/o 1^1^ 



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Q Specifically, did you •vr discuss with 
Lieutenant Colonel North on the NSC the reactivation of 



A I nay have mentioned to his. I don't recall, 
but I may have aentioned it to hia becausi 
was a personal friend of his. 

Q At the tine you proposed to havel 
brought bade into service with the CIA were you aware of 



bis relationship to North? 



yes. 




Q How did you become aware of that? 



told me. 

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Have you ever discussed with North 
I role or duties with the CIA? 
A to the extent oiMH^H^^^^Vbelng a 
nan and asking North If he could assist In getting him 
some form of recognition, which we were unable to do In 
the Agency. 

Q When would that have occurred? 




spring or so of '86. 

Q Of '86. And you had no discussions with Ollle 
North concemlng^^^^^^^^^^^^lprlor to that time? 

A No more than how' 

Q When you discussed the commendation for 

I with North, was that on the telephone or face 




to face? 
A 
Q 
A 
Q 



It was face to face. 

Where was that? 

In North's office. 

I presume you were back in Washington on other 



business at that time. 



Yes, I was. 



UNCtASSIFIED 



51 



UNcyissm 



54 




1 Q Was North successful In obtaining a 

2 commendation for 

3 A Yes. He told me he was. 

4 Q Have you ever seen the commendation? 

5 A I have not seen It, no. 

6 Q What Is your understanding concerning the 

7 nature of the commendation that North arranged? 

8 A That North had arranged a letter of 

9 appreclatlc 

10 ^^^^^H^H for all he had done and It was signed, X 

11 thln]c, by the President. I'm not sure. But I called 

12 North and thanXed him when I heard that that had been 

13 done. 

14 Q Stepping back a little, would you say it was 

15 well known that Ollie North was engaged throughout the 

16 '85 and '86 time frame, time period, in obtaining private 

17 and non-CIA support for the contras? 

18 A Well, I don't )cnow how well )cno*m it was until 

19 - the press reports. I mean, I recall the press reports. 

20 Q Those would have been the press reports of 

21 September '85? 

2 2 A September '85, in that period. 

2 3 Q Were you already aware of North's activities 

24 at that time? 

2 5 A No, but that he was friendly with the FDN and 



mmma 



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close to Adolfo Calero, si senor. 

Q By September of '85 you vera avara — 

A Th« first reports were coming out, if you can 
believe the press, yes. 

Q Did you ever discuss with^^^^^^^^^fhis 
relationship with North? 

A Negatj 




Q You would say, therefore, that your decision 

to reactivatej|^^H|H^H was solely based on what he 
could do to assist authorized CIA programs? 

A Yes. 

Q He was not taken on for any other purpose? 

A He was not taken on for any other purpose 
other than that ha was an outstanding officer. 

Q Do you have any reason to believe that when 
I was located ^^^^^^^K that he engaged in 
activities that ware outside his official CIA aission? 

A No. 

Q Specifically, do you have any reason to 
believe that|^^mH^^|^| provided be 

characterized as military training to the contras? 

A The only training that^^^^^^^fl provided 
was in accordance with the agreement^ 




53 




Q But no training that you would charactariz* as 
military? 

A No. 

Q L«t'« say involving traditional military 
■)cilla, such as marksmanship, tactical planning, things 
of that nature? 

A No. 

Q Okay. At this point 1st us movs to anothsr 
issu* that wa'vs already sxplorsd. This concsms 
hslicoptsrs. Thsrs is an allegation that you may havs 
hsard of from on* Ian Crawford concsming an incidsnt 
upon which Crawford allsgss that a CIA hslicoptsr carried 
C-4 plastic explosive to a forward operating area of the 
contras. Are you aware of that allegation? 

A I am aware of that allegation. 

Q How did you become aware of that allegation? 

A From the newspaper article on the individual's 
reported story. 

Q So that would have been a few weeks ago? 

A A little bit more, I think. 

Q To the best of your knowledge did that 



incident occu 



mskmni 



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A To tha bast of my )cnowl«dg« that Incident did 
not occur. 

Q What was th« CIA's or ths station's policy 
concarning tha usa of Its helicoptars at that tiaa by the 
FDN? 

A Well, if wa were moving from one place to 
another, for instance out of Yamales coning back and 
there was someone wounded, we would bring him back with 
us. If on a space-available basis someone wanted to go 
do%m, wa would put them on tha aircraft and let thea come 
do%ni with us. But we were not supporting the FON in any 




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8 Q What waa th« policy of tha atatlon or tha 

9 base, to tha extent that you are aware of It, concerning 

10 use, let's say collateral use of those flights by tha 

11 FDN? Let me make this sore specific. 

12 Were FDN personnel pemitted on board the 

13 helicopters? 

14 A On a space-available basis, they were allowed 

15 on. 

16 Q Was cargo permitted on board the helicopters? 

17 A Yes. If we were moving cargo up, we'd put 

18 cargo on board, yes. 

19 Q Was there a policy to check or inventory the 
2 cargo that was placed on CIA helicopters by the FDN? 

21 A Couldn't do it in every instance. It was just 

22 impossible. 

23 Q Well, was there a policy to do so? 

2 4 A I mean actual policy? We were not supposed to 

25 carry any lethal material. 



mmm 



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mmm 



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1 Q How was that policy laplementad? Was there 

2 any inapectlon of cargoes that were loaded by the FDN? 

3 A There should be Inspections of cargo, but, 

4 like I say, that's Impossible to do In every Instance. 

5 Q My understanding of Crawford's allegations are 

6 that the Incident Is said to have occurred In a period of 

7 rather frantic activity by the FDN, during a Sandinlsta 

8 incursion. Is that your understanding? 

9 A No. My understanding is that he fl« 

10 with 2,000 pounds of plastic explosive on 

11 helicopter. From what I can deteraine, the FDN didn't 

12 have that aaount of C-4. They didn*t have plastic 

13 explosive. The helicopter couldn't carry that such, and 

14 there were no troops ^^^^^^H to receive it. So what 

15 he's talking about does not fit into anything that I can 

16 nail it down to. 

17 Also, that helicopter could have been the 

18 helicopter that the FD:« has. It looks the saae. 

19 Q Regardless of the FDN's purposes and supplies, 

20 however, there would be no way to guarantee that such 

21 cargo would not have been loaded on the helicopter? 

22 A Absolutely guarantee? A 2,000-pound load 

23 would turn the pilot green if it was one of ours. 

24 Q Have you aver discussed with anyone how such 

25 cargo might t^lvd^d without anyone noticing? 




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A I thinX that the pilot would kaap a pretty 
close tab on weights, and he can certainly tell when he 
checks his — 

Q Throttle? 

A And he gets his pounds and stuff. He knows if 
he's overloaded. He can feel it. 

Q Crawford also alleges that a CIA officer 

[was 

involved in this episode. Have you discussed this matter 
with 

A Yes, I have discussed this setter with! 



Q What is his stateoent? What did he tell you 
concerning whether he had given Crawford pemission to 
fly on the helicopter? 

A Well, X recall he did not give Crawford 
perBisslon to fly on any of our helicopters. That's not 
to say Crawford didn't go out and juap on a helicopter. 
The original allegation had^^Hon the helicopter flying 
the helicopter, and he did not fly a helicopter. And 
into Nicaragua. We've never flown a helicopter into 
Hicaragua. Mike does not fly a helicopter and he has 
never attempted to fly a helicopter into Hicaragua. 

Q Would it have been possible foi^^^Hto have 
been in the co-pilot's seat of the helicopter? Would CIA 



IINCtASStFIED 



59 



UNSmRED 



62 



officars who war* not pilots thamsclvaa occasionally taka 
tha co-pilot's saat? 

A Occasionally. 

Q And froa that saat it would ba posslbla for 
naithar tha pilot nor tha parson in tha co-pilot's saat — 
it would ba possibla that thay would not ba abla to 
obsarva a cargo that was loadad on tha halicoptar; is 

8 that trua? 

9 A Wall, all you hava to do is just turn your 

10 . haad. I aaan, thara's nothing that blocks your viaw froa 

11 that saat. You can turn and look at s«« what's going on 

12 on board. Now you don't know what's in soaa of tha boxas 

13 parhaps, but with at laast two individuals — that would 

14 ba^H^Band this fallow — and 2,000 pounds I don't know 

15 any of our pilots who would do that. 

16 Q But, at any rata, it's your undarstanding that 

17 it would hava baan fairly aasy to obsarva tha contants, 
IB to tha axtant thay wars labalad or claarly idantif iabla? 

19 A I don't know. It's difficult. You just don't 

20 know what packagas ara thara. It sight b« wrappad in 

21 papar. It aight ba sackad. 

22 Q What othar staps did you taka in tha aftaraath 

23 of this raport to assura yoursalf that this incidant had 

24 not occurrad? 

2 5 A I want and askad avaryona wa could. Ha 



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chackad with tha FDN. Vm ch«c)c«cl and trl*d to find out 
If any flights had b«en flovn down ther« during that 
period, and w* couldn't com* up with any. 

Q W«r« all pilots who could havs basn assigned 
during that period Interviewed? 

A I can't assure that because we have pilots 
changing constantly, and I don't )cnow the exact tloe 
frame that that occurred. 




Q I see. So If the allegations had concerned a 
particular period of time, let's say April of '86, which 
I believe — 

A Did It say April of '86? 

Q I believe that's the allegation. I don't have 
It with 




Q To your knowledge, has any effort been made to 
interview «my individuals who are identified as having 
been CIA helicopter pilots in-country at that time? 

A Ko, not that I Icnow of. 

Q At any rate, while it might be possible for 



tmctAMe 



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ic 
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th« FDN, for an individual to go upon a CIA halicoptar 
unob««rv«d, a non-FDN individual, and for th« TDK to load 
cargo, you baliava, baaad on your policy, that auch a 
flight would not baan into Nicaragua? 

A Such a flight, aa far as wa'ra concamad, 
would not b« into Nicaragua, that 'a corract. 

Q Ara thara strict instructiona ragarding tha 
us« of CIA halicoptara that pravant tha« fro« crossing 
tha bordar? 

A Yas, thara ara. 

Q Okay. Enough on that. Lat's now procaad to 
anothar ona of our big Issuas — tha contacts that aay 
hava occurrad batwaan CIA parsonnal and tha privata 
banaf actor air craws^^^^^^^^ It's our undarstanding 
that throughout aoat of, lat's say, tha paat yaar tha two 
CIA offlcars ass Ignad^^^^^^^ vara callad^^Hand 



A 

Q 
A 

Q 





landl 

That was] 

That's corract. 

It's furthar our undarstanding that 



ilntainad a rasldanca, although both of tha» would 
not always b« prasant^^^^^^^ at tha saaa tiaaj 




a privata air craws that wars 



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UNGiASSra 



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ma)cing flights Into Nicaragua. 

A Y««. 

Q Did aither^^^^^^^^Hevtr approach you or any 
of your aubordinatas who vera in tha lina of comsand to 
raisa isauaa concaming tha contacts that thay baliavad 
vara unavoidabla in that situation? 

A Yas. Thay raisad thosa guastions with] 



Q And what wara tha instructions ha issuad? 

A Thair instructions wara tha instructions that 
I gava thaa and which wara raitaratad latar on, that thay 
should stay away froa tha privata banafactors and should 
not hava anything to do with tha«. It was vary difficult 




You'va baan tc 

Q Z havan't had tha plaasura. 

A You havan't had tha plaasura. Anyway — 

Q Z'B tha only ona on Capitol Hill who has not 
had tha plaasura. 

A You'ra- not aissing such. It*s a vary 
rastrictad anvironnant, and Z'a not sura, frankly, how 
of tan thay wara thara, how auch tiaa tha privata 
banafactors spant thara 



loant tnara. 

wmmm 




\mmm 



66 



Q Hav« you discussad wlth^^^^^^^^Hany advlc* 
or othar assistance that th«y may hav* provldsd to the 
privata banafactor air craws? 

A Yas. 

Q What Is your undarstanding concarnlng th« 
contacts that thay had? 

A My understanding was as part of tha Intal 
exchange we would pass to the FDN inforaation on air 
order of battle In Nicaragua which they used for their 
own flights ^^^^^^^^^Hand also they would brief the 
private benefactor. 

Q I 'a sorry. "They" in this case aeanlng the 
FDN? 

A The FDN, yes. The FDN would brief the private 
benefactor pilots. 




And I understand that they froa tiae to tiae caae in and 
looked at his board, his aap, which basically was the 



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same as the FDN map, which was tha sane as the FDN map. 

Q So it's your understanding that the oral 
briefing provided by.^^^^^| was it just| 

A As far as I )cnov. 

Q Have you also interviewed ^Hon that point? 

A Yes, we have , but I don't recall — I didn't 
personally taDc^^^^^Babout it. 

Q So you believe the oral briefing was 
essentially only a confimation of the more extensive 
brriefings which had been provided to the FDN? 

A Yes. 




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Q I wanted to ralsa on* other issue. It's our 
understanding that Clair George made a trip to Central . 
America ^^^^^^^^^^^^^H Is 

A That is correct. 

Q Old Mr. George visit| 

A Yes, he did. 

Q Old he discuss this matter, namely contacts 
with the private benefactor air crews, with personnel at 



about it . 



talked to 



A He tallced tc 
him about it. 

Q Were you present during this conversation? 

A For a portion of it. 

Q What was your understanding of the 
conversation? 

A Well, the portion that I cam* up on, Clair wa s 
saying t°^BH just everything you have ^^^^^^^^^^^^H 
^^|H|B the IGH^HB^UBH^Hyou 
whole story .- ,4i^^t«t wasthe only part of It I heard. 



mmpti 



66 



\1H81A5«B 



69 



X Q Was ther* also a discussion with rsspect to 

2 th« qontacts with th« air crsws, namely th« naps? 

3 A I thlnX so. Z can't say. I don't know. I 

4 mean, what I heard when I walked up was Clair saying, 

5 ^^^^|you know, just tell exactly what you've told me. 

6 Tell the Inspectors. 

7 Q Were you a participant in any discussion by 
George with ^^^^^^^^^^^H concerning the 

9 helicopter incident that we discussed earlier? 

10 A I don't recall, frankly. 

11 Q Did you yourself discuss with Clair George 

12 this incident while he was in country? 

13 A I may very well have, but Z don't recall the 

14 conversation. 

15 Q Returning to the helicopter for a moment, in 

16 view of the fact of the possibility that certain cargoes 

17 might be located on a CZA helicopter and there was no 

18 systematic inspection of cargoes, is it then possible 

19 that there might have been widespread use of CZA 

20 helicopters to deliver limited quantities of lethal 

21 ••■istance? 

22 A Widespread use? No, Z don't think so. 

23 Q How widespread could the use be? 

24 A Z can't tell you. Z mean, Z don't know. 

25 There was not that many flights, frankly. And most 

ETZCQPEWORD 




e? 



«N«USSfflfll 



70 



1 flights would hav* paopl* on board, and if w« had an 

2 officer on board thay cartainly wouldn't put anything, 

3 lat anything on board li)c« that. 

4 Q Thar* would b* a CIA officer on board avary 

5 flight in tha parson of tha pilot; isn't that correct? 

6 A That's true. But the pilot has sany thinga 

7 he's got to worry about. 

8 Q Was it common practice also to have a second 

9 CIA officer on board? 

10 A Common practice? Usually he'd be flying the 

11 CIA officer somewhere. 

12 Q So except for occasions on which the 

13 helicopter was flying empty of CIA personnel or cargo, 

14 there would commonly be a CIA officer? 

15 A Yes, I would thinX so, yes. 

16 Q In view of the fact that there was no 

17 particular procedure for checking cargo, might it be 

18 possible that such an incident may have been repeated in 

19 other circumstances? 

20 MS. MC GINN: That's a rather speculative 

21 question. 

22 THZ WITNESS: I don't know. I really don't 

23 know. 

24 BY MR. PINK: (Resuming) 

25 Q Agreed. Anyway, you will admit that there was 



DNCtltSSIflED 



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no procedure under which cargo was Inspected on these 
helicopters? 

A Cargo was Inspected on these helicopters, that 
they could sneaX something on board? I can't look in 
every man's rucksack. I can't look In every bag that 
comes on. 




Q Would CIA personnel who were passengers or 
crew of these helicopters receive specific instructions 
not to permit lethal — quantities of lethal supplies on 
board? 

A YM. 

Q Z take it the FDN individuals were permitted 
to take their personal weapons. 

A Yes, they would have their personal. 

Q ix. would have been a violation of policy for a 
CIA officer, therefore, on such a flight to observe 
lethal assistance that was not a personal weapon on board 
and not to object to its inclusion in the cargo? 

A It depends what it was for. 

Q Could you elaborate on that? 

A Okay. Suppose we were taking materiel from 
~|to^^^^^^^BHI^^I^I^H Suppose 
we're bringing something down 




69 



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I thin)c that would ba allowed, 
Q You ara saying that a llaltad quantity of 

lethal matarial sight b« panaittad whan tha halicoptars 
wara going to, lat'a say, an undafandad, hazardous 
[araa? 

A No.^ If thay wara going to a placa whara 
■acurlty ia raguirad 




Q Wara any spacific guidalinaa or inatructiona 
foraulatad concaming how such lathal aquipaant could ba 
brought! 

A No. 

Q So it was ganarally parmittad to taka lathal 
aquipaant tol 

A Tc 




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Q So you are saying, ny intarpratation of what 
you ar* saying Is that lethal equipment would be 
permitted to be carried to ^^^HH^H providing It was 
defensive? 

A If It was a defensive thing for a place where 
an American Is going to be, okay, where Americans go and 

where Americans have tc^^^^HB^JB or make 
machinery Is working right, Z would say yes, we could do 
that. 




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UNCI 



ii'n^ji'iitf 






Q If v« Bay, at thia point lat'a juat raviav 
again aoaa of tha contacta you may bava had with aoaa of 
our laading playara In thla drana. You aantlonad that 
you contactad 0111a North, had a aaatlng with 0111a North 
on tha occaalon of aaaklng a coaaandatlon for 



A Yaa. 

Q Z ballava you aantlonad on a pravloua occaalon 
to aa that you had ona othar aaatlng of a paraonal 
natura . 

K Z hava had a coupla of aaatlnga with 0111a of 
a paraonal natura. 

Q But nona of thoaa Involvad anything ralatad to 



lIHCtftSStftfO 



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^^aiMStfigi 



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contra assistance? 
A No. 

Q Can you say generally when those occurred? 
A '85, early '86, something along those lines. 
Q In addition you met North in connection with 

meeting j^^^^^^H in August of '84? 
August of '84, and all 
What was the occasion! 
We had the visit 



I believe also North may have visited 
in December of '85. Did you see him then? 
A Is that 
Q No. I believe it was a visit of North 







A No, no. The only time Z saw him at I 
was v^*n BmH^m^^B That's where the 
were. 

Q So that was, I believe, December 11 of '85? 

A I don't )cnow what the date was. That sounds 
reasonable. 

Q Were you aware that there was a follow-up | 




73 



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tiimssn 



76 




Q Can you r«construct, £<L.U)* bast of your 

th« visits by^^^^^^^^^^^^^^^^^H I 
prssuB* h« would comnonly corns 



A H« would COBS on thoss visits I 

I svsryons who playsd a Isadlng rols In Csntral 
ABsrica. 

Q Did h« also pay visits by hlasslf or with 
othsr CIA staff? 

A Hs has bssn jj^^^^^^^^^^^R by hlmsslf, yss. 
Do you a trlpj^^^^^^^^ny J^^H in 
connsctlon with trips slsswhsrs in th« rsgion in ths 
spring of '86? 

A No. I Bsan, !'■ surs thsrs w«r« trips. 



Q ^ Do you racall a trip in that tias period in 





which fl^HI vas 



I but callsd ovsr to| 
or at any rats procssdsd to | 

A DB-hua. I'vs hsard of that trip. 

Q You havs no rscollsction of it as such? 

A No, I don't. 

Q Richard Sscord. What )cnowl*dgs do you havs of 
this individual? 

A Oh, I )cnsw Richard Sscord for a nuabsr of 
yaars. 

Q Lst's say aftsr 1984, ths bsglnning of 1984. 



BNCt(8«0 



74 



UNCUkSSiED 



77 



1 Hav* you aaan Sacord? 

2 A Yaa. I aav Sacord in '84. Z think It waa in 

3 '84. 

4 Q What waa tha natura of that contact? 

5 A Wall, I ran into him. I'm not aura how it 

6 occurrad. But ha invitad urn to atop by hia placa for a 

7 cup of coffaa. Z'a not aura if it vaa '84 or '85. And Z 

8 did. 

9 Q That vaa hia hoaa? 

10 A Yaa. 

11 Q Did ha hava any apacific raaaon to aaa you at 

12 that tiaa? 

13 A Zt vaa aora juat ahooting tha braaza, aa Z 

14 racall. 

15 Q Did ha aalca any atataaanta, to your 

16 racollaction, that vould indicata that ha vaa involvad in 

17 privata aupport to tha contraa? 

18 A No. 

19 Q Did ha giva you any raaaon to baliava that ha 

20 aought aoaathing or aought aoaa aaaiatanca froa you vith 

21 raapact to that? 

22 A No. No, air. 

23 Q Hava you aaan Sacord ainca that tiaa? 

24 A No, Z hava not. 

25 Q Thoaaa Clinaa. Hava you known Mr. Clinaa? 



UNCDtSSm 



75 



mmm 



78 



A Y«s. 

Q This is, onca again, in previous CIA ssrvica? 

A Yss. w« ssrvad togatharj 

Q vrhan Is tha last tiaa you saw Mr. Cllnas? 

A It was at Sacord's housa. 

Q At that sama function? 

A Ya«. 

m 

Q Did Sacord or Clinas axplain why thay wara 

togathar at that tlna? 

10 A No, thay did not. 

11 Q Was this a faally function? 

12 A It was just in tha Boming. 

13 Q Just the thraa of you? 

14 A And Sacord's wifa. 

15 Q Did Clinas giva you any reason to believe that 

16 he was involved in Central Aaerican-related things? 

17 A No. 

18 Q Old he seek any assistance froa you? 

19 A No, he did not. 

20 Q Did you put any special significance on the 

21 fact that Secord had Invited you in this time period over 

22 to coffee at his home with Clines? 

23 A No. We lived in the same neighborhood. 

24 Actually I had seen hia froa tiae to tiae, you Know, in 

25 the Safeway or tha Giant. 



wmma 



76 



IINMSIffiD 



79 




1 Q Do you rscall th« nature of the discussion you 

2 did have at that tine? 

3 A No, I don't. It was just a general how are 

4 you doing type of thing. Have a cup of coffee. 

5 Q How long did that last? 

6 A Forty-five ainutes, an hour at the most. 

7 . Q Can you be slightly aore specific on the 

8 dates? In the early '85 tiae fraae? 

9 A I really don't Icnow what the dates were. 
10 
11 
12 

13 ~ Q June of '84. Was it soaetiae long after that? 

14 A No, I don't think so. 

15 Q It would have been in the period, let's say, 

16 when the prograa was winding down or had woxind do%m? 

17 A Winding down or had wound down, yes. 

18 Q Rob Owen. Are you familiar with that 

19 individual? 

20 A Ym. 

21 Q Have you aet hia a nuaber of tiaes? 

22 A Mo. 

23 Q Can you recall the tiaes in which you did aeet 

24 hia? ^^^^^^^^^^ 

hia once ^^^^^^^^^^^^| 



DNtDlSSIFtED 



77 



VNCUSSIflfD 



80 



1 Q On« tlm« only, to your r«coll«ctlon? 

2 A On* tim* only, to my racollactlon. 

3 Q How did ha coma to your attantlon? 

4 A Ha was working for KHAO and waa working with 

5 tha Indians on building a hospital ^^^^^^^^^H 

6 Q Did ha coma in to your offica on his own 

7 initiativa or was ha brought in by sonaona? 

8 A I don't recall how it happanad, frankly. Ha 
was ^^^^^^^^^^H on businass waa 

10 introducad to hia. 

11 Q Oo you racall any othar rafarancas to Ovan in 

12 ' tha cabla traffic or in othar waya concaming ^^^^^H 

13 ^^^^^Haupport for his actlvitias in connaction with 

14 KHAO? 

15 A No. 

16 Q Bob Dutton. Do you know Mr. Dutton? 

17 A (Nods in tha nagativa.) 

18 Q Navar Bat Mr. Dutton? 

19 A To tha bast of ay racollactlon Z'v* navar aat 

20 Mr. Dutton. 

21 Q That's always safa to add. Richard Cadd. 

22 Hava you aat Gadd? 

23 A To tha bast of ay racollactlon I'va navar aat 

24 kr. Cadd. 

25 Q You statad that you. knaw Falix Rodriqruaz I 



iiNCttxsffe 



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WOMffiD 



81 



y«s. 



Have you saen hio at any tin* since I 




Have you net Mr. Rafael Qulntero? 
No, to the best of oy recollection. 
Soaetimes called Chl-Chi Qulntero? 
No. 

You stated In your previous Interview that you 
vers not in possession of a KL-43 cosmunications device; 
is that true? 

A That's true. Z have no and have not had a KL- 
43 coaaunications device. 

Q What is your understanding of CIA policy 
concerning coaaunications using such devices? 
A Verboten. 

Q Have you seen an approval froa anyone to have 
or use such a device? 
A Z have not. 
Q Including the Director? 
A I have not, no, including the Director. 
Q I believe you were the fortunate recipient of 
an intelligence award last year; is that correct? 
A Yes, I was. 



UimSIFIED 



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Q You hav* no reason to b«llav« that this award 
vas laauad for any support you may havs — lat's say 
unauthorized support you aay havs conductad for tha 
contras? 

A No. 

Q Thank you. 

At this point I'd lika to ask you soma 



UNetASStFIED 



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nmmiii 



83 



quaatlons about just a few cablas. 
A Okay. 

Q Or most of which appear to be cables. And I'd 
just like to get your comments on a few of then. 
Actually the first item here is not a cable. I have a 
document here that I'd like the transcriber to mark as 
[Exhibit 1. 

(The document referred to was 
marked H^^^HExhibit Number 1 
for identification.) 
This is not written by you, and I apologize 
for the quality of the reproduction. Let me call your 
attention to the second paragraph, and this is what we 
believe, for your information, to be a so-called PROF 
note by Ollie North to, I believe, Admiral Poindexter, 
although the recipient is not clear. 

In the middle of the second paragraph, let me 
read it to you since the quality is so poor — 
A Okay . 
Q There is a discussion in that paragraph 




When is this? 

The note is written in September of '85. 

UNCQtSStFIED 



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^nmm 



84 



A I 8««. 

Q At any rata, North aaya In this not* or 
appears to say tha following -j 




lavar approach you for that purpose? 

A Nagatlva. 

Q Do you racall this Incldanti 




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WASSffifg 




85 



Q I'm only bringing this to your attention since 
you are mentioned. You have the fortune or misfortune to 
be mentioned in that particular PROF note. You will also 
be relieved to hear that's the only one I can find. 

I give you another document which appears to 
be a cable. It's what appears to b« a fragment of a 
cable, and I ask the transcriber to mark that as. 
Exhibit Number 2. 

(The document referred to v&s 
marked ^^^^^Bsxhibit Huaber 
for identification.) 
This appears to be a fragment of a cable from 
an October 28 of '85, and if you look 
at paragraph C there the first sentence states, I believe 
— correct m« if I'm %n:ong — "the word from all 
Washington sources until ref" — - which I believe is 
another czUsle — "was that reimbursement for air drops of 
humanitarian assistance inside Nicaragua was, repeat was, 
within NHAO charter and would be approved." 
Do you recall this cable? 
A No. Frankly, I don't. 

Q Is this cable, to the best of your knowledge, 
accurate in saying that the decision was made in this 
time frame, OatrtPfWiS^ J)ot ^° J?*y ^V NHAO for flights 




83 



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86 

into Nlcaragua^^^^^^^^^^^^^^^^^^^l 
(Pause. ) 

Do you agree that this cable appears to 
Indicate that you, or at least ^^^^^^^^^^■believed at 
some point that KHAO would pay for flights into Nicaragua 

land a decision was made on or 
about this point, October of '85, not to go ahead with 
that? 

A Um-hua. 

Q Do you have any further recollection of this? 
A FranXly, I do not. 

Q Do you agree that it appears to be accurate? 
A That's what it appears to say, yes. 
Q So you don't remember any time in whichi 
Iwas planning for or assuming in this period, 
which is under the humanitarian program, that the 
humanitarian program would pay for flights into 
Nicaragua? 

A That's correct. 

Q Let me bring your attention to another cable 
which I'll ask the transcriber to mark as 
Exhibit 3. 

(The document referred to was 
marked^^^^HExhibit Number 
for identification.) 




UNCBBSIFIEO 



84 



\mmm 



87 



1 This ona also app ears to b« a cabls, a copy of 

a cabl* from^^^^^^^^^^^^^^HNov«mb«r 

3 you will looK at the second pag* of this document 

4 concerning air activities — now this is in November of 

5 '85 — there is a discussion here of procurement of a C- 

6 12 3 aircraft by the FDN. Do you have any recollection of 

7 this arrangement? 

8 A Where does this say this now? Oh, down on the 

9 bottom. 

10 Q The second full paragraph of paragraph C. 

11 (Pause.) 

12 Do you recall this ciUsle? 

13 A No. 

14 Q This cable would appear to indicate that the 

15 specific C-123 aircraft was already under consideration 

16 at that time by the FDN. Does that trigger your 

17 recollection? 

18 A It may be, but it does not trigger me any 

19 recollection now. 

2 Q Do you have any reason to believe this 

21 aircraft was one of the aircraft that was later used by 

22 the private benefactor organization? 

23 A No. 

2 4 Q You have no further recollection of the FDN 

25 planning f or gifccurement of such air services by a C-123 




85 



msmm 



88 



1 aircraft? 

2 A No. I'B sorry. I don't. 

3 Q Would you agr«« with ■• that th« way tha cabla 

4 la draftad it would appaar that tha apaciflc aircraft had 

5 alraady baan undar conaldaratlon? I call your attantlon 

6 to tha phraaa "if tha FDN can procura tha C-123 aircraft, 

7 as now plannad" . 

8 A I would not raad it that way, though. I would 

9 raad it as a C-123. Z wouldn't saa any particular. Tha 

10 C-123 a« just baing any C-123. 

11 Q I saa. And tha phraaa "as now plannad" just 

12 rafars to any C-123 that thay may ba abla to obtain? 

13 A That's corract. It alao may ba a minor point, 

14 but thifc is a C-123 and tha othar is a C-123K, which is a 

15 much diffarant aircraft. 

16 Q Would this ba an aircraft of choica for thia 

17 sort of oparation, a C-123 or C-133K, for that mattar? 

18 A Wall, Z don't )cnow. It dapands, you )cnow, on 

19 personal — through tha FDH. You know, it dapanda what 'a 

20 availabla. 

21 Q Ara thara a lot of thasa aircraft in 

22 circulation? 

23 A I would doubt it, franXly. 

24 Q What is tha origin of thia aircraft? Is it a 
29 U.S. military aircraft originally? 



DNUttSSIflEO 



86 



mmxfm 



89 



1 A (Nods In th« aff innatlva. ) 

2 Q Davaloped In connection with th« Vlatnaa 

3 period? 

4 A I think it was bsfor* Vistnaa. It goes back a 

5 long way. It's sort of a small C-130. 

6 Q But even despite the fact that there aren't 

7 too many around you don't recall any specific aircraft or 

8 firm being under consideration by the FON? 

9 A No. The thing is, I recall back in that time 

10 the FDN was getting all sorts of offers, people who were 

11 going to provide aircraft for certain eimounts of money, a 

12 number of which I think were not valid. 

13 Q I call your attention to one further statement 

14 in that cable before we're finished. It's the last 

15 sentence, just before the number 3, about four-fifths, I 

16 guess, of the way down the page. It provides further 

17 information about the C-123 and says: "The C-123s are to 

18 come from outside the country and parent firm unknown 

19 locally." 

20 I would suggest that that appears to indicate 

21 that ^^^^^^^1 had some further information about the 

22 C-123. Does that trigger any recollection? 

23 A No, it does not. 

24 Q I bring another cable to your attention — and 

25 this is more painful for me than it is for you because I 



UNCQtssra 



87 



lEI^SIFIED 



90 



had to read all thes* things tha first tlaa at CIA and 
th« sacond tlma In our own systaa trying to find tham, 
slnca thay )caap changing tha numbars on aa. 

I would ask tha tranacrlbar to labal this ona 
:xhlblt 4. 

(Tha documant rafarrad to was 
narkad^^^^^HExhlblt Numbar 
for Idantlflcatlon.) 
This is a copy of a cabla 
3n 5 Novambar 85. Parhaps you could raad tha 
first paragraph of this cabla. 
(Pausa. ) 

Ab Z in assuaing that^^^^^^^^^His 
Calaro? 

A Ya«. 

Q Would you agraa with aa that this paragraph 
saams to indicate that Calaro has had contact with 
aoaaona in Washington concaming humanitarian dalivarlas 
and was advlaad that a Mr. Olsstaad would hava aoaa rola 
in this? 

A That's tha way it raads. 

Q Thara is a furthar santanca, furthar clauaa, 
that Indlcataa that Olastaad will ba comaunicating via 
CIA channels . Is that accurate? 
A That 'a what it aays. 



BNCttSJIfffD 



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Q Have you aver met this Olmstead? 

A No, I have not. 

Q Hav« you ever met anyone you suspected was Mr. 
OlBstead or was passing himself to be Mr. Olmstead? 

A NO. 

Q Did the communication referred to in this 
cable occur through CIA channels? 

A Not that I recall. I would assume this would 
be going back to — well, humanitarian assistance. 




Q Do you recall this incident? 

A I don't recall this incident at all. 

Q Did you have any reason to believe at this 
tiae that individuals outside the U.S. Govemnent were 
about to play a role in the conduct of the huaanitarian 
aasiatance prograa? 

A No. 

Q At any rata, despite this aentlon you have no 
further inforaation concerning Olastead'a activities — 
any coaaunicatlons that may have occurred or the like? 

A No, I have no idea who Olastead is. 

looking at this cable now you don't have 



AiKl looking at this cable 

T)Nffi*SSIflED 



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any additional recollection concerning what Calero 
expected froa Olmstead in terns of inforaation or 
services? 

A No, sir. 

Q All right. Let's go on to the next one then. 

This one is on a slightly different subject. I'll as)c 
the transcriber to label this folder as| 
Exhibit 5. 

(The dociiaent referred to was 
marm^mK^mtxhibit Number 5 
for identification.) 





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Q Did th« discussions include discussion of the 
possibility that NHAO flights^^^^^^^^f could b« 
rssuaed in support of th« resistanca? 

A As I recall, that was th« rsasonl 



Q Has thsra also a discussion of permitting the 
FDN to resume its own support flights into Nicaragua 



A I don't recall that. 

Q I draw your attention to paragraph 5(a) on the 
second page of this document, in which you or the writer 
of the cable states that restrictions on KHAO flights are 
not the most immediately pressing obstacle, that the most 
serious one Is the restriction on resupply flights into 
Nicaragua. 

A These were NHAO flights, too, right, or NHAO- 
p«id-for flights? 

Q Well, I don't Know. I believe you said 
earlier in this interview that you weren't aware that 
NHAO was paying for flights into Nicaragua. 

A I was not until I read this. I thought this 



("ffiaswD 



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UNcyissn 



96 



1 said something or one of the cables talked aboutj 

2 and ^^^^^^B was the FDM-chartered aircraft. 

3 Q Actually it would appear to ae that this 

4 sentence, these two sentences, beginning after paragraph 

5 5(a) seem to indicate that a greater concern than the 

6 NHAO flights were the other flights, whether they be KHAO 

7 or otherwise, which were being sent into Nicaragua 

8 ^^^^^^^H Is that your understanding of the situation? 

9 A I don't know. 

10 MS. MC GINN: Why don't you read the whole 

11 cable? It sight give you a better idea. 

12 (Pause.) 

13 THE WITNESS: Okay. 

14 BY MR. FINN: (Resuning) 

15 Q It would appear to ae that in this document, 

16 in which you or soneone under your authority^ 

17 ^^^^^Hi* discussing issues that would arise^ 
v^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^l One 

19 the issues that will come up for discussion is the issue 
concerning whether ^^^^^^^^^^^^^^JHthe 
•oaacne to mount fllghts^^^^^^^^Hinto Nicaragua to 

22 resupply FDN units; is that correct? 

23 A That's correct. 

24 Q You stated just before, I believe, that you 

25 recalled the pri««xx«ason^^^^^^^^^^^^^^Jwas 



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from th« U.S. 




to resum* th« KHAO flights 

A Um-hum. 

Q Do you now also racall that thar« was 
discussion of tha issue concarning whathar] 

>8oma flights to ba launchad 
into Nicaragua? 

k No, I don't. 

Q Would you agraa that it would appaar, basad on 
this, that you wara cartainly planning for a discussion 
of that Issua? 

A y«s. 

Q But you can't racall tha issua caaa up? 
A Z can't racall tha issua caaa up, no. 




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Q Now you will agrea that thara was a problea In 
gattlng H^^^^^^^^^^^^^Hthas* flights to rasua* 
at this point? 

A Okay. This is th« TOU 

Q I don't )cnov what aircraft la baing rafarrad 
to, but soma flights] 

A If you'ra raading this in tha currant 
situation, in which drops ara parfonad by a conunarcial 
firm with a local raprasantativa, thdt is tha FDN 

Q Okay. So you do racall that thara was a 
problaa^^^^^^^^^^^^^^^^^^^^Hlatting tha 
rasuBS Its^ 

A I don't racall that, but that is tha aircraft, 
thay ara discussing ^*i^*^^^^^^^^^H vhich balongad to 
[or ha was tha raprasantativa. 




I prasuma tha mattars dascribad in this cabla 



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UNClASSmD 



99 



war* policy matters of som* Importanc*. 
A Un-huB. 
Q Would you usually becoma awara of such Issues 

[had raised such important concerns? 
A Well, it was sent to me, 



Q You believe you did read it? 

A I'm sure I did. I read all the traffic. If 
I'B not there, I read it when I get bac)c, so I would have 
read this. It's 1985. It's just too far back for ma. 

Q So you would agree that this cable seems to 
indicate that ^^^^^^^^Hhad anyway heard I 
concerns about the flights into Nicaragua by the FDN? 

A Yes. There were concerns at this particular 
time, for whatever reason Z don't know. I mean, we have 
to be locking for other cables and put this all together 
in a complete package. This is also an intelligence 
report out on this, too. So that reading this one cable, 
to get the full picture you'd have to see the whole 
thing. You don't have those others? 

Q No, I don't have them. 

At any rate, regardless of the fact that these 
issues were being floatei^ 
you can't recall any discuss J 

of the resumption of the FDN flights into 





UNttltSStFtED 



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UNOASSra 



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Nicaragua? 

A No, I don't recall it. 

Q To tha bast of your racollactloni 

[relatad aolaly to tha resumption of 
tha NHAO flights into country? 

A That's right. 

Q Do you recall any discuss J 




A No, I don't recall that. 1 thinX by that tine 
there was no ^ay ^^^^^^^^^^^^^^f^f^HB— 
that wouldn't have worked. I don't see how it could have 
worked . 

Q So you don't think there would have been a 
planf 




A Z don't recall that. There aay have been a 
plan at on* time, but I certainly don't recall that froB 
this Beating. 

Q Let Be show you the next set of cables. I 
will ask the transcriber to aark theB asj 
Exhibit 6. 

(The docuaent referred to was 



UNcnssfFe 



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mar)cecl ^^^^^■Exhlbit Nunber 6 
for identification.) 
MS. MC GIKN: I'll as)c tha wltnass to r«vi«w 
the entire cable, please. 

MR. FINN: While there ie a lengthy pac)cage at 
this point, shall we have a short break? 
(A brief recess was taken.) 




98 



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UNCLASSIFIED 



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Q Now this cabl* la not apcclflc on th« Issua of 
what flight* ar« In question. Is It your undsrstandlng 
that this solsly rslatas to ths NHAO flights, or doss 
lEC 




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this also ralat* to FDN flight activltla* which w« 
discussed sarlisr? 

A I don't )cnow, frankly. 




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UNCUfflfD 



105 



Q L«t B« call your attention, than, to tha final 
cabla In this sat, which is froB CIA haadquartars 
addressad^^^^^^^^^^^Hon a priority 
Diractor 665928. In summary this cabla appaars to 
indicata that whatavar plan that may hava baan undar 
considaratlon ^^^^^^^^^^^^^^^^^^^^^^^^^^^^| 
^HflH^^f^^^^^^^^^^^^^^^^^^^^^^^fhad 
baan put asida and a dacision was parhaps wisaly mada to 
forago that option. 

Is that your raading of this cabla? 

A YM. 

Q Do thasa cablas changa your racollaction of 
whathar thara was soma discussion^^^^^^^^^^^^^^^V 

it which you hava aoaa knowladga concaming 
tha propoaal to start NHAO flights again] 




A No,. I don't racall that. 

Q Evan raading thasa cablas you still can't 
racall it? 

A Evan raading thoaa cablas, no. 

Q You would agraa, though, tha cablas appaar to 
indicata that such an affort was mada? 

A Yas, it appaars that such an affort waa mada. 

Q Lat ma giva you anothar compilation of cablas. 
I'll ask tha transcribar to call thia^^^^H Exhibit 



UNttJtSSm 



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VNCMssimi 



106 



N\ub«r 7. 

(Tha docuaant r«f«rr«d to was 
mar)c«d^^^^^| Exhibit Number 
for Idantiflcation. ) 
It's basically two cables. Th* first is 
substantive and the second provides the identities, 
appears to provide the identities of the individuals in 
the first. 

A Okay. 

Q To the best of your knowledge did this follow- 
up teas referred to in the cabl< 
actually visit ] 
A Z don't recall their coaing, no. 
Q Do you agree that the teas which is indicated 
here appears to include Deputy Assistant Secretary of 
State Bill Walker, Lieutenant Colonel North froa NSC, and 
an individual naaed Chris Arcos froa the NHAO office? 
A Yes. 




Reference is also aade to an individual 



c/c^Jp 



who Z believe to be i 



identified as 
la that correct? 

A That's correct. 

Q I 'a learning. You do not recall whether this 
visit was actually made? 



* "BNEHfflffl 



103 



UNtu$$ra 



107 



Q You tharafora do not recall whathar you vara 
praaant In any discussions that this taaa say hava had 



A No. I was on fanlly visitation, I baliava, at 
that tiaa. 

Q Does this cabla triggar any racollaction 

concaming what tha subjact for discussion was at this 
tins? 

A Ho, it doas not. 

Q It probably would ba usaful to racall that 




thara was a discussion of plan to rasuaa asslstanca, sons 
foni of flights, parhaps NHAO flights, but ultisately 
approval J^^^^^H^H^^^^^^^^^H was 
approval would not ba forthcoming until a briafing was 
conductad. It would appaar that this cabla dascribas tha 
arrangaaants for that briafing to b« aada. 

Do you agraa that that appears to b« tha 
■•quanca? 

A I don't know, to tall you tha truth, if it is 
or isn't. I baliava oayba you can tall urn if this visit 
took placa. 

Q I'a sorry. I hava no information on that. 

A I don't think it did. bacausa I don't racall 



don't think It did, baca 



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th«B coming dovm Ilk* that or going ^°^^^^^^^^| '^* 
only visit I racall balng ^^^^^^^^H ^'^* ^* o"* that 
w« previously dlscussad. 

Q Do you racall any othsr visit with othsr 
arrangsBsnts or another time In which a tsaa llJc* this 
on* would have conducted that briefing that was requested 



I don't recall that. 





Q Okay. Nov on a different subject, back to the 
various flights thenselves, I would show you another 
exhibit which I would ask the transcriber to identify as 
lExhibit HuBber 8. 

(The docuBent referred to was 
■arked^^^H|Exhibit Nuaber 8 
for identification.) 
This appears to be a cable froa the 



(Pause. ) 



Okay. 

UNemfiED 



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mumm 



109 



Q I think parhaps w« ahould just go through thi« 
paragraph by paragraph sine* I, for on«, and parhaps you, 
hav* difficulty figuring out which axact flights ara 
rafarrad to in tha various paragraphs. !'■ sorry also 

* 

that I do not hava tha cabla which is rafarrad to in this 
cabla. 

At any rata, paragraph ona appaars to indicate 
that flights wara plannad for tha 25th of Fabruary of 
■86, which I prasuma to ba NHAO flights, which wara going 
to ba raquirad to stop ^^^^^^^H prior to procaading to 
Is that your intarpratation of paragraph ona? 
' A That's what it appaars to say, yas. 




Q This stop in ^^^^^Hwhich is dascribad 
appears to indicate that thara would b« no pic)c-up of 
aatarial ^^^^^^^H Do you any further 
specifics of the flight in question? 

A Well, no. I don't recall the flights. 



frankly. 



UNCtJtSStFIED 



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Q Whan flights of this naturs origlnatsd in ths 
United States and vsnt ^^^^^^^^Hand landed, was thsrs 
further supply activity that you are aware of? 

A No. 

Q Do you recall when flights of this nature 
arrived ]H^^^H^H based on the intelligence reports 
that you z'eceived J^^^m|^^|H whether they 
contained lethal assistance? 

A X don't recall. 

Q I point your attention in paragraph two to the 
aircraft route, which is soaewhat unusual 




I suspect is a 



UNCDSSra 



107 




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111 

rsfarenca to a drop or a loitar tlm« over Nicaragua; 
would that b« corract? 

A I don't read It that way at all. 

Q So you b«ll«v« th« aircraft actually w«nt to 



A Yes. They had materiel that they bought 



Q Do you recall what that was? 

A Boots, unifoms. 

Q Were there any lethal supplies conlngf 
'at that tiae? 

A I don't Icnow. I don't Icnov of any lethal 
supplies ^^^^^^^^^^Vthat came 

Q This would appear to be a NHAO-supported 
flight. Would NHAO pay the leg to ^^^^^^ and return 



A I don't )cnow. 

Q Do you agree that the flight route seems 
rather odd 




What would explain that 



routing? 

A I don't know 




UNtOtSStnED 



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itui^, 




So you mean the aircraft, avan returning from 



A Would have to etop ^^^^^^^^^H yes. 

Q Paragraph three makes a reference toj 
aircraft, which was apparently associated with the FDN. 
Is this the aircraft In question or is this a different 
aircraft? 

A I think at this time the only aircraft Z ]cnew 

is ^^^^^^^aircraft. 

Q You believe the flights discussed in the first 
two paragraphs also involved that aircraft? 

A No. Might be, but Z don't know. 

Q Zt would be unlikely, wouldn't it, f or | 
to fly to CONUS? 

A To the States. 

Q Anyway, it would appear from this that in 
February of '86^^^^^H^| was quite aware that there 
was an issue concerning getting the lethal materials over 
froaj^^^^^^^^^^^^^^^^^^^^^^^^Hat aware 
that the FDN was making arrangeaents to do that, based on 
paragraph three. 

A You mean the FDN would remove those lethal 
materials ^^^^^^^^^^^^^^^B 

Q That's correct 




\mwB 



109 



UNCUSSIffiD 



113 



1 A Ua-hua. 

2 Q Paragraph four is th« first raf«r«nc« I 8«« to 

3 ths Caribou. Doss this triggsr a rscollsction of whsn 

4 th« Caribou arrived on ths scsns? 

5 A Ho. 

6 Q Do you agras that this would appear to 

7 indicate that in'Tebruary of last year j^^^^m was 

8 aware that the third country crews were being sought for 

9 Caribou aircraft and that these crews would conduct 

10 drops, or it was planned that these crews would conduct 

11 drops into Nicaragua? 

12 A It looks that way from here, but you'd have to 

13 look at the reference and see what the reference said. 

14 This isn't coming out of the blue like this. Obviously 

15 it refers to this cable. 

16 Q The last sentence of paragraph four your 

17 station aaka that the Director, I p resume he adquarters, 
if not ^^^^^^^^B— parhapa mi^^H^- 

19 on tail nuBber and crew characteriatica of the Caribou. 
Why would they advise ^^^^^^Hj^^Hflconceming 

21 theae matters? 

22 A I don't know. I'd really have to see what we 

23 were answering. You really can't take this by itself. 

24 Q I believe you stated earlier that the FDN 

25 would arrange for the clearances for flights 



UlttWSSinED 



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UNKASSra 



114 



A To the best of my recollection, yes. 
Q Without seeing the other cable, would you say 
that this appears to indicate that ^^^^^^^^Hwas 
interested in flight clearance information? 
A I really don't know. 

Q Okay. Let me bring your attention to a few 
intelligence reports that nay have originated ^^^^^^^^| 
and ask the transcriber to mark these two intelligence 
reports as ^^HH Exhibit 9. 

(The document referred to was 
narked ^^^^^HExhibit Number 9 
for identification.) 
A Okay. 

Q Would you agree that these appear to be two 
intelligence reports fron February of 1986 which describe 
flights by L-lOO aircraft? 
A Yes. 

Q Could you identify the FDNJ 
[which is mentioned in these reports? 

^^^^^^^^^^^^^^^^^^^H would appear to be 





Is that a term of art or a routine description 




M-uot^ure, frankly. 



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UNCU^SIffiD 



115 





Q Are you fairly confident in that 
identification? 

A I would say I was fairly confident, yes. 

Q Can you identify^^^^^^^llocated as the 
)f the FDN? 

A That would bel 

Q So with respect to both of these intelligence 
reports it would appear that an L-lOO aircraft twice made 
flights ^^^^^^^^^ to 

A yes. 

Q Would you agree that the first report, which 
is CIA 744315, indicates that that aircraft delivered a 
certain quantity, less than ten percent, of lethal 
materiel in addition to its non-lethal cargo? 

A That's what the report says, yes. 

Q Would you also agree that the report indicates 

that this was a NHAO-supported flight? 

I 

A y«s. 

Q What would be the source of this type of 
information, in your best estimate? 

K Well, information of this sort would come from 



So the personnel 

I for this flight? 
That's correct. 

lEC 



I would commonly 




112 



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2< 

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Q And^^^^^^^^H would then, based on this 
intelligence inforraation, prepare a draft report of some 
)cind on the matter? 

A That's correct. 

Q The second report, which is CIA 748208, seems 
to indicate that the same aircraft shortly thereafter 

another delivery^^^^^^^^^^Hto ^^^^^^H^ Oo you 
agree? 

A That's correct. 

Q If you look at what appears to be a summary, 
^^H^^^^^H of that flight, at the bottom of the second 
paragraph which is on page two, the third item from the 
end, you will find reference to what I believe to be 
lethal equipment in the form of 500 boxes of C-4 
explosives, 100 boxes containing 7.2 — I'm sorry, 7,200 
M-79 grenades; is that correct? 

A That's correct. 

Q So you would agree that this flight also 
contained a certain amount of lethal as well as non- 
lethal equipment? 

A That's correct. 

Q I draw your attention in this document, the 
second document, once again to the first paragraph, which 
says that^^^^^v flight which originally had been 
scheduled was unable to go, which resulted in the L-lOO 



UNCDCTED 



113 



UNCy^SIFIED 



117 



1 making this flight. Do you agree that that seems to be 

2 true? — ,v 

3 . A Yes, it is. 

4 Q You had stated earlier, I believe, that! 

5 ^^^Hwas operated either by or under contract to the FDN; 

6 is that correct? 

7 A That's correct. 

8 Q Do you have any information concerning whether 

9 the second L-lOO flight mentioned here was supported by 

10 NHAO or whether it was also contracted by the FDN? 

11 A I don't )cnow. All I can do !■ read the 

12 report, where on the first one — now these reports were 

13 sent out within two days of each other and on one we say 

14 it's chartered by NHAO. On the second one we say it 

15 carried for UNO-FDN. But from reading this it would 

16 appear we have two separate charters. 

17 Q So you believe that the phraseology indicates 

18 that the second flight was not a NHAO-supported flight? 

19 A Yes, sir. 

20 Q Do these cables reflect your understanding of 

21 what the policy was regarding the use of NHAO aircraft, 
that that a NHAO delivery^m^^l^l^could pic)c 

23 up lethal equipment ^^H^|HB but that NHAO funds 
could not be used to make shuttle flights] 
to 



"TRsiflfD 



114 



(INCUSSffi 



118 



1 A I'm not sure exactly what the rules were as 

2 far as shuttle or passage or what. But there was what 

3 they called that ten percent rule, that they could put, 

4 if there was space available. But I must say both these 

5 are not completely clear. The second one is not 

6 completely clear, but it looks that way to me. 

7 Q I certainly agree. In view of the fact that 

8 the CIA was chartered or understood its mission to be to 

9 assist in the implementation of the NHAO program, 

10 wouldn't it be necessary to conduct that mission to 

11 understand what NHAO policies were? 

12 A Yes. 

13 Q But still you yourself do not seem to )cnow 

14 specifically what the policy was with respect to NHAO. 

15 A Not after this time difference. After the 

16 time that this occurred, I'm sorry, I just don't remember 

17 it. At the time I would have known what it was, but I'm 

18 sorry I no longer recall. 

19 Q So you would say that you were prepared to 

20 monitor NHAO flights at the time they were occurring and 

21 bad an understanding of the relevant policies? 

22 A I had an understanding of the relevant 

23 policies. I don't know what you mean by "monitoring the 

24 NHAO flights". I was not responsible for NHAO flights, 

25 but any material that was brought in we would report on. 



wmwm 



115 



uMcussife 



119 



1 Q If the infonnation available to you had 

2 indicated an anomaly with respect to the use of NHAO 

3 funds, would you also report that anomaly? 

4 A That would have been reported via the two 

5 individuals who came down. Any time there was an 

6 anomaly, they would report. 

7 Q So your understanding of the CIA mission was 
that essentially^^^^^^^^^^^^^^^^^^^Breported 

9 them back but did not itself try to monitor MHAO policy? 

10 A I don't know what you're getting at there. 

11 Q I'm just trying to find the role of^ 

12 ^^^^^^|with respect to the NHAO flights. 

13 A I was not checking to see if NHAO was 

14 following every letter. That's not my job. My job was 

15 to ensure that NHAO had the flights facilitated to enter 

16 into the country, to make sure that materiel was being 

17 purchased, to help the individuals that came down from 

18 Washington to do that checking. But, I mean, I didn't go 

19 and check every flight to make sure everything was 

20 absolutely correct, no. 

21 I was not a monitor of another U.S. Government 
2 2 agency. 

23 Q So your role was essentially to provide 

24 information to Washington, ultimately to NHAO, that would 

25 permit them to implement their program? 



iitteutssiFe 



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A Yes, sir. 

Q I'll show you anothe r cable which I'd ask the 
transcriber to mark as ^^^^^H Exhibit 10. 

(The document referred to was 
marked ^^^^^^ Exhibit Number 10 
for identification.) 
a cable (^^^^^^H|H^^Hwhich appears 
to have been sent ^^^^^^^^^^^^Ln March 21 of 
that correct? 

(Pause. ) 
A Now what are you asking me about this? 
Q I was just asking you to confirm that this is 
indeed — this appears to be a copy of a cable] 

I to ^^^^^^^^Hon March 21 of '86. 
A Right. 
Q In this cable it would appear that 

|is reporting certain arrangements that 
the FDN is making about a Caribou aircraft flight 



A Right. 

Q I note in the cable, paragraph two, that 
is p roviding the tail number of the 
aircraft ^^^^^^^^^^^^^^^^^Hand is promising to send 
further information on time of arrival and crew. 

A Ric 





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Q Can you tell me why ^^^^^^^^^| would be 
informing ^^^l^^^^^^^^^^^l in advance 
A I don't know. 





Q Nevertheless, there is a reference^ 

[in that paragraph. 
A Right, there is. 
Q It appears to indicate that 
planned to send this information 
A Um-hum. 

Q Vfhat would you do with such information if it 
were sent? 

A I don't know, frankly, to tell you the truth. 
Q Let's go on to what appears to be a set of 
cables which I'll ask the transcriber to mark as I 
Exhibit 11 and you can take some time to look these over 
if you wish. 

(The document referred to was 
marked ^HH Exhibit Number 11 
for identification.) 
(Pause. ) 
A Okay. 

Q These appear to be a set of cables which 
relate to events which occurred in April of '86. The 



nmB 



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first cable would appear to be a cable | 

:o headquarters and] 
of '86; is that correct? 

A That's correct. 

Q Among other things, in paragraph one of this 
cable it would appear that the aircraft in question was 
being used to supply lethal equipment, this particular 
aircraft being a C-123; is that correct — and| 

A That's correct. 

Q In the second paragraph there's also a 
reference to a Caribou aircraft which appears to be used 
for the same purposes; is that correct? 

A That's correct. 

The ^^^^^^^^^^^^^^^B also says 
these aircraft were NHAO aircraft it would not be 
permissible to put lethal assistance on them. 

A That's correct. 

Q And it asks for headquarter 's views on what 
appears to have been lethal assistance being put on these 
aircraft; is that correct? 

A On what they apparently believe are NHAO 
aircraft, yes. 

Q I draw your attention next to the cable 
identified as Director 845653 of April 26, 1986. This 
cable, which was sent in an information copy to your 



UNCtlOTfO 



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indicates that these aircraft were not NHAO- 
supported aircraft; is that right? 

A That's correct. 

Q And that therefore there would be no 
limitation on their use for lethal activities? 

A That's correct. 

Q With that basis, let's go on to the cable that 
was sent^^^^^^^^^^^^^^B The third cable is cable 

of April 26, 1986. Is this a cable from your 
sn that date? 

A That's correct. 

Q The first paragraph takes note that the 
aircraft In question, which appear to be the same 
aircraft discussed in the prior cables, were not NHAO 
aircraft, were not being supported by KHAO; is that 
correct? 

A That's correct. 

Q The second paragraph appears to reflect, the 
last sentence of the paragraph, that! 

[the FDN to contact their representatj 
and maXe sura that he does not sent aircral 
without proper clearance! 

A That's correct. 

Q The fourth paragraph appears to indicate that 
clearances had been a problem, that the crews of the C-7 





120 



UNCL4S»D 



124 



1 and C-123 aircraft were pretty much coining and going as 

2 they pleased; is that accurate? 

3 A That's accurate. 

4 Q The second full sentence on the second page 

indicate that ^^^^^^H^H was notify ing^^^^^H 

6 ^Hj^^^H^H in the absence of any form of notification by 

7 anyone else concerning the arrival of those aircraft; is 

8 that accurate? 

9 A That's what it says. 

10 Q Would that be a form, this notification be a 

11 form of request for flight clearance! 

12 A Yes, it would be a form of flight clearance, 

13 yes. 

14 Q So it would appear from this, at any rate, 

15 ^^^^^B^H^^^P ^^^^ knowledge that the flights were 

16 not NHAO flights and contained lethal assistance which is 

17 being coordinated by third parties, was nevertheless 

18 providing flight clearance support for such flights, at 

19 least on an occasional basis? 

20 A I think you're reading into it when you say 

21 that. 

22 Q What would your interpretation be? 

23 A My interpretation would be we were getting 

approvals for them,^^^^^^^^^^^^^H|until we 

25 talked to ChieV^filAO that they were NHAO flights. 




msstm 



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ONfiUSSIREB 



125 



Q So you believe at this point you may have 
believed these to be NHAO flights? 

A That's right. See, headquarters has been 
reporting to the contrary. Chief/NHAO, during a recent 
visit ^^^^^^^^^1 So it would appear to me that we had 

6 believed that these were. KHAO-contracted aircraft up 

7 until very recently, until this cable was written. Okay? 

8 And what Chief/NHAO said was, no they're not, but we 

9 would pay for them when they carried humanitarian 
10 supplies. 

H Q So your interpretation is that there was a 

12 confusion. You had believed these flights to be NHAO 

13 flights and then when it became clear that they were not 
that ^^^^^^H did 

15 A That would be my interpretation, yes. 

16 Q How did this confusion arise? 

17 A I don't )cnow. I mean, just reading "while we 

18 recognixe there has been headquarters reporting to the 

19 contrary, he says they are not." So obviously there's 
30 b««n reporting that they were and(|^^^^^Balso, from 

21 reading this cable, is confused. ^m^pthin)cs they 

22 are NHAO flights because they are saying they carry 

23 lethal material, but we have found out from Chief/NHAO 

24 that they are not. 

25 So I would assume what happened would be that 



vimmm 



122 



UlUSIffiD 



126 



1 we vera getting approvals for them up until the point we 

2 found out that they were not. 

3 Q Correct my recollection, but it seemed to me 

4 you said earlier that to the best of your knowledge NHAO 

5 was not providing support for such flights and that the 

6 only flight clearance that ^^^^^^^^Hf was obtaining was 

7 for flights from the United States. 

8 A That was the best of my recollection. That's 

9 correct. 

10 Q So it now would appear that there was a period 

11 in which ^^^^^^^H prior to learning that the flights 

12 in question were not KHAO flights, was providing some 

13 form of flight clearance? 

14 A That's correct. 

15 Q And this was on the basis of a confusion 

16 concerning who was sponsoring such flights? 

17 A Apparently, from reading this traffic, that's 

18 what it Is saying, yes. 

19 Q Would you agree that ^^^^^^^^^Vhad become 
2 aware that those flights did contain lethal equipment? 
21 A Yes. From this traffic, I'd say yea, sure. 
2 2 I'd agree with that. 

23 Q And regardless of the fact that they contained 

24 lethal equipmenl^H^^HH^Bwas still routinely, on the 

25 grounds that they were NHAO flights, was providing flight 




^•' *^' • ( 



123 



uNcussra 



127 



1 cl«aranca support? 

2 A No. What we're talking about is a specific 

3 instance. From what I read here, it appears we're mixing 

4 apples and oranges, that previously from this traffic we 

5 had provided clearances for whatever they were carrying. 

6 I don't know what that is, having not seen the traffic. 

7 But on these flights they have been carrying lethal 

8 material. j^^^^^^H^^ confused and is saying, hey, if 

9 this is NHAO stuff, how can we put lethal aid on these 
10 HHAO aircraft. 

H Wa go back and say look, these don't appear or 

12 headquarters says these are not HHAO aircraft. We go 

13 back and say, hey, yeah, we've been getting approval for 

14 these and Chief/NHAO tells us, contrary to what we have 

15 heard from headquarters, that these are not actually KHAO 

16 aircraft. 

17 So what appears to have happened was that we 

18 were getting approvals until this situation raised its 

19 head and everyone looked and said hey, wait a minute. We 

20 have something here we don't know what we're dealing 

21 with. 

22 Q Now if the flights had continued and some of 

23 them were KHAO flights, it would be permissible for| 

24 ^^^^^H^^ provide the flight clearance assistance? 

25 A Under my interpretation, yeah. 




124 



iweraRED 



128 



1 Q How would you deterraine if a specific aircraft 

2 was a NHAO-supported aircraft? 

3 A I don't know at this juncture in time if NHAO 

4 would tell us or what. But the one thing that I would 

5 say was that my recollection of this entire operation 

6 they never got clearances. They cane and went as they 

7 pleased. 

8 Q But at some point^^^^^^^^^Vprovided 

9 clearances, thinking they were NHAO? 

10 A Thinking they were NHAO, yes, early on. 

11 Q Now you said you wouldn't know when the lethal' 

12 supplies got in there until an aircraft landed; is that 

13 correct? 

14 A We usually wouldn't, yea. 

15 Q Unfortunately, you have to obtain flight 

16 clearances before an aircraft lands, or at least you are 

17 supposed to; is that correct? 

18 A Correct. 

19 Q So it would be entirely possible, it would 

20 appear, that if you were notified that a certain flight 

21 was on the way you would obtain the clearances and then 

22 you would find out on the ground that it just happened to 

23 contain lethal and was therefore not a NHAO flight? 

24 Could that situation arise? 

25 A I'm not sure if I follow you. In this 



IINffiBSm 



125 



uimstFifD 



129 



1 situation? 

2 Q I'm just trying to get at there seems to be a 

3 difficulty here. ^^^^^^^^Hcan provide flight 

4 clearance support for NHAO, can't for non-MHAO flights. 

5 But you don't tell whether something is a MHAO flight or 

6 not until later, when it lands and you find out what's on 

7 there. 

8 A We erroneously believed they were NHAO flights 

9 until this was brought up, and it was demonstrated that 

10 they're not. 

11 Q Do you believe that a significant quantity of 

12 lethal assistance was brought in on these flights prior 
to ^^^^^H^H discovering that? 

14 A I don't think so. I don't think there was 

15 that much material ^^^^^[^1 Maybe one, as you say, 

16 707 load, and I don't know how much that is, but s<^e of 

17 that was also destined for the south, and I think that 

18 material was used to drop to the south. 

19 Q And, any rate||^|^|^^Honly would have 

20 conducted this activity believing that it was part of the 

21 NHAO program? 

22 A Definitely. 

23 Q So when those supplies ran out and when NHAO 

24 wound down^^f^^^^HBwould not have provided that 

25 support? 



wwsm 



126 



UNcussn 



130 



1 A That's affirmative. 

2 Q So ^^^^^^^^H would not have supported 

3 private benefactor flights after the NHAO supplies had 

4 been exhausted? 

5 A That's right. 

6 Q Can you put an approximate date on that? 

7 These cables which discuss — 

8 A I would say about this time. 

9 Q About this time. So, in other words,! 

10 ^^^^HUteminated its flight clearance support sometime 

11 in late April or early May of '86? 

12 A To the best of my recollection. 

13 Q So, just to get this all on track, in a 

14 previous exhibit, which was Exhibit 10, a cable from your 

15 HH^Ip — ^'^ ^°^^- I think I have the wrong one. Try 

16 8; that's it. v 

17 As early as February of '86 the Caribou 

18 aircraft had appeared on the scene and^^^^^^^^H was 

19 reporting on their activities. 

2 A Not necessarily. What appears in 8 is the 

21 Caribou is mentioned with third country crews. They're 

2 2 talking about something that never turned out, so we 

2 3 don't know what this is. And this is in the dark until 

2 4 someone comes up with what that Director cable is and 

2 5 what it says. 



UNCUSHD 



127 



UNCUSSIHED 



131 



1 Q I understand that. 

2 A I wouldn't say it was on the scene on 22 

3 February. 

4 Q Nevertheless, from that Exhibit, Exhibit 8, 

5 paragraph four, there's already a preparation for 

6 obtaining the clearance on the Caribou aircraft; is that 

7 right? 

8 A If this is the same — you are assuming this 

9 is the same Caribou. We don't Icnow that. 

10 Q We don't Jcnow that. All right. Well, just to 

11 the best of your recollection, then, when did the Caribou 

12 flight using the same Caribou start and for what period, 

13 assuming that^^^^^^^^H ceased to provide the flight 

14 clearance support in late April? During what period did 

15 it provide such support? 

16 A I really don't )cnow. I'd have to looJc back 

17 through the traffic and pull that out. It would just be 

18 a guess on my part. 

19 Q I believe earlier you mentioned your theory 

20 that the private benefactors essentially came on the 

21 scene and started their activities after the NHAO program 

22 wound down. This material to me would appear to indicate 

23 an overlap and that some siuall, anyway, quantity of CIA 

24 support in the form of flight clearance support was being 

25 maintained during the period, let's say, leading up to 



mmsm 



128 



UNCUSSIEP 



132 



1 when the private benefactors became an independent outfit 

2 and no longer had NHAO support. 

3 Do you acknowledge that that may have 

4 occurred? 

5 A That may have occurred. I don't know, 

6 frankly. 

7 Q All right. This next one is very simple to 

8 understand. I don't know what it means. We can probably 

9 agree what it is. I'd ask the transcriber to label this 

10 I^HH^ Exhibit 12. It's cable Director 817901 of April 

11 of '86. 

12 (The document referred to was 

13 ** marked mi^H Exhibit Number 12 

14 for identification.) 

15 (Pause.) 

16 As I said, neither of us knows what this 

17 means, but what it appears to be is air routes for a 

18 flight sponsored by the FDN to the newly-allied 

19 commanders on the southern front; is that correct? 

20 A I don't know, frankly. The subject is UNO/FDN 

21 lethal drop to NACs. 

22 Q Are the NACs the Newly-Allied Commanders on 

23 the southern front? 

24 A I believe so. 

25 Q This would appear to give detailed flight 



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UNiASSIfKD 



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vector information for use in connection with that 
flight; is that correct? 

A That's what it appears to be, yes. 

Q Where would such flights originate — in 




A I don't know. I would assume. That would 
have to be an assumption. It would be| 

note that ^^^^^^^^^^^^^^^^B^s ^ri 
addressee, so it would be unlikely that the flight would 
have occurred ^^^^^^^^^^1 is 

A That's true. It's very difficult with this 
traffic when you take one piece of traffic. You have 
another reference here, the^^^^^^^Lable. Do we know 
what the^^^^^^^Bcable 

Q Believe me, we have had probably even more 
difficulty than you have, that we have not been provided, 
for the most part, most of the references of the cables 
that we have seen. I recognize your difficulty. 

A It says per ref. I don't know what the ref 
is. ^^^^^^H^s asking for Now why ^^^^^^f would 
^ask for going^^^^^^^H I 

understand. The cable doesn't make any sense to me. 
Okay? 

Q It appears to be flight vector information 
from a flight that would originate^^^^^^^^Hand at 







2-696 0-88-6 



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134 



In all probably it woulcTgo to the newly- 
allied conunanders in the southern part of Nicaragua. 

A I don't know. Apparently. You're going to 
have to look at see. You know, if I had a map and I 
could work out where these locations are, that would give 
me a better idea where the aircraft was coining from. But 
I don't recall this cable. It just hits me cold, 
frankly. 

Q So you have not seen flight vector information 
of this type being provided? 

A I don't recall us providing any flight vector 
information of this kind during this time period, no, 
frankly. 

Q This is something we can independently confirm 
what the significance of this is. 
A Yes. 
Q Thank you. 
A You're welcome. 

Q Let me then at this point draw your attention 
to what I will ask the transcriber to mark as Exhibit 13, 
[Exhibit 13. 

(The document referred to was 
marked ^^^^^HExhibit Number 13 
for identification.) 
YQ.U. C4h_tgnpr5 the jnarginalia, which I believe 





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was supplied. 

(Pause. ) 

A This is obviously one we sent. 

Q You would agree, then, this is a cable from 
dated August 18, 1986? 

A That's correct. 

Q This cable would appear to encouragel 
Ito obtain drop zone information from UNO/SOUTH so 
that that information could be provided to UNO/NORTH, 
UNO/FDN, to make a drop by the private benefactor Caribou 
mentioned. 

A Um-hum. 

Q You'll notice the marginalia. I believe it 
was supplied by your crack compliance officer, and you 
can go beat him for that. 

A No, I'm sure we got a cable on this, too, 
beating us about the head and shoulders. 

Q Was common tort^^^^^^^^^m-o 
serve as a channel of communication between the contra 
organizations related to the private resupply flights? 

A No. 

Q So you cannot recall activities of this nature 
occurring very often? 

A No. 

Q But you will say that it appears that! 



UWMSIFIED 



132 



mmm 



136 



1 I^H^^^^Hwere rather intimately involved in the 

2 transmission of flight and drop zone information? 

3 MS. MC GINN: I object to that question. I 

4 think that's a mischaracterization. 

5 THE WITNESS: Yes. 

6 BY MR. FINN: (Resuming) 

7 Q Objection noted. 

8 How would you describe the activity that is 

9 occurring? 

10 A I would think here that the FDN came and said 

11 exactly what this says, and we sent the cable out without 

12 reading it twice — regretfully. It was a mistake we 

13 made. Certainly if we were doing anything illegal we're 

14 certainly not going to send out that kind of cable. 

15 Q What's the problem with the cable? Why does 

16 the marginal note appear to say that this is not kosher? 

17 A I don't know why he wrote that in there, but 

18 it would appear to me that what we're doing is we're 

19 trying to get — we are intervening in the FDN and the 

20 southern patriots in providing information to private 

21 benefactors. Now the problem the FDN was having with 

22 their communications gear, obviously it wasn't working. 

23 Q Would be all right if the private benefactors 

24 were not involved? In other words, could you assist the 

25 communication process between UNO, FDN and UNO/SOUTH with 



BNEaSSIFIED 



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UNGLASMt 



137 



1 respect to the allocation of equipment and supplies and 

2 flights? 

3 A We wouldn't. 

4 Q You wouldn't do that? 

5 A No. 

6 Q In that case, I ' l!l show you — 

7 A We may have. 

8 Q Let me show you Exhibit^^^^^H Number 14, 

9 which is another set of cables. 

10 (The document referred to was 

11 marked ^^^^^HExhibit Number 14 

12 for identification.) 

13 I think you should probably take some time to 

14 take a look at these, since there are several of them. 

15 (Pause.) 

16 A Okay. 

17 Q Regretfully again these are not necessarily in 
la sequence and we don't have all the cables which are 

19 referred to. At any rate, the first document is 

20 identified as ^^^^^|B vhich, would you agree, appears 

21 to be a copy of a cable sent from ^^^^^^^^B on 

22 September 3, 1986? 
2 3 A That's correct. 

2 4 Q In paragraph two of that document it appears 

25 to ask headquarters whether cert^n supplies 



UNBtMSIflED 



134 



UNeyiSSIF4ED 



138 




1 are being held for a southern front organization under 

2 proper authority. 

3 A Right. 

4 Q The information provided] 

5 ^^^^^^1^^ that the gringos, or private benefactors, are 

6 holding certain supplies for use by the south. Could you 

7 tell me why ^^^^^^^^^| would cable headquarters in 

8 order to determine whether materials held by private 

9 benefactors mmm^PJ rightfully belonged to the 

10 FDN or UNO/SOUTH? 

11 A As I understand, I don't Icnow if the private 

12 benefactors, they may be saying that the private 

13 benefactors are holding them. What I would say, that 

14 these are KHAO stuff, it looks like. 

15 Q This is September of '86 now. 

16 A Right. 

17 Q NHAO material was still hanging around in 

18 September of '86? 

19 A I don't know, but uniforms, boots, panchos and 

20 pancho liners would all appear to be NHAO material that 

21 was there. I don't know how the situation worked over 

22 there, but I frankly don't know why it went this way. 

23 Q But nevertheless th« cable does not refer to 

24 the NHAO program. It refers to the gringos, the private 

25 benefactors! 



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139 



A That's correct. 

Q So you have no explanation of why you would 
ask headquarters to try to determine whether supplies 
held by these individuals, the private benefactors, are 
supposed to be held for the UNO/FDN or UNO/SOUTH? 

A Well, I'm not so sure that this is properly 
worded. I don't know how they would be holding then 





Q At any rate, the cable indicates! 
was aware there was some conflict between the northern 
and southern forces or was reported to be some conflict 
between the northern and southern forces concerning the 
rights to certain material that was being held by the 
private benefactors 

A Alleged supplies ^^^^^^^^^^ yeah. 

Q With that, let's turn to the next cable, which 
is^^^^^^^^H And this appears to be a cable sent from 

3n September 4, 1986, tc 
with an information copy to headquarters. Is that 
correct? 

A That's correct. 

Q I note in the last sentence of the third 
paragraph that^fljm is reporting UNO/SOUTH 's position 
that the private benefactors will support its claim to 
certain material; is that correct? 




mUSSIFIED 



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uNcymED 



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A Will respect its primacy for equipment and 
supplies ^^^^^^^^^^^H That's 

Q In view of the fact that this cable appears to 
refer to the cable we just finished discussing, would 
that mean it's discussing the same equipment? 

A It appears to be, yes. 

Q So that for some reasoni 
telling^^^^HH^Hthat relaying to your 

:he information that UNO/SOUTH believes it is 
entitled to certain equipment being held by the private 
benefactors. 

A Well, this one doesn't say that private 
benefactors are holding it. It just says they will 
respect its primacy for equipment and supplies stored. I 
don't know how the situation workedj^^^^^^^^H frankly. 

Q But nevertheless the immediately preceding 
cable was referred to in this cable. 

A Um-hun. 

Q Do you conclude that the same supplies are in 
(question or that this is only a more general comment by 



Well, looking at the title, the subject, it 
says ^^^HSupplies, which would be UNO/FOK supplies, 
what the UNO/FDN had on their books, according to this 



cable. 



mmms 



137 



UNtUfiSffl 



141 



So would this be the same supplies, do you 

2 believe? 

3 A It appears to be the same supplies. 

4 Q That^^^^Hin the previous cable indicated 




5 were being held for the UNO/SOUTH forces by the private 

6 benefactors? 

7 A It appears to me that this one discusses a 

8 certain amount, 450 non-lethal type material of each of 

9 these, while this one seems to me to refer to all 

10 supplies. 

11 Q I see. But there may be some relationship? 

12 A There may be some relationship. 

13 Q Would you agree that this cable 

14 seems to evince a fairly good understanding of the 

15 ability of the private benefactor organization to make 

16 air drops in view of the maintenance status of its 

17 aircraft? 

18 A I'm not sure I understand your question. 

19 Q Would you agree that this cable seems to say 

20 that the private benefactors will be having difficulty 

21 getting supplies to UNO/SOUTH because their aircraft are 

22 having difficulty, but that one aircraft will become 

23 available in the near future? 

24 A That's what it says. 

25 Q In view of the fact that this cable refers to 



UNCUSSfFe 



138 



UNimHD 



142 



1 your previous cable, does that mean thati 

2 Ah^H^^ basically telling you well, this equipment, 

3 whatever it is, is being held by the private benefactors 

4 ^^^^^^^|Hand regardless of the fact that the FDN would 

5 like to get some of it it should continue to be held for 

6 the southern forces? 

7 A I'm not sure I agree with you that it is being 

8 held for the private benefactors. I don't Jcnow how that 

9 worked over there. But what there is here is the FDN 

10 saying there are 450 pairs of non-lethal material that 

11 they carry on their books which the south says belongs to 

12 them, and it's going to be dropped in to them. 

13 Q In the previous cable, if I can turn your 

14 attention to that again, that seemed to clearly report 
^^^^^^^^^^^^^^^^^^^^^^^^H|^H that these 

16 were being held by the gringos, the private benefactors. 

17 A I'm not sure what they mean by that, you know. 

18 You are going from Spanish into English. "Being held by 

19 the gringos for use by the south". I'm not sure what 

20 they mean by that. 

21 Q So regardless of the fact that there is a 

2 2 specific reference to the private benefactors in this 

2 3 cable you say that you still don't necessarily realize at 

24 this point that supplies were in farft being held by these 

25 individuals? 



wyissm 



139 



ii^iumm 



143 



1 A I don't know what that means, frankly. 

2 Q Let me go on to the next cable here, which is 
^^^^^^^^^1 Oo you have 

4 A Right. 

5 Q This once again appears to be a cable from|[ 
^^^Hto the to ^^^^^^^^H dated September 

7 6, 198 6; is that correct? 

8 A That's correct. 

9 Q I would draw your attention to paragraph six 

10 of that cable in which |^H^| appears to be arguing for* 

11 continued aerial resupply to th« southern forces. Is 

12 that your interpretation? 

13 A Um-hum. The southern front is trying to get 

14 the FDN to drop the materiel. 

15 Q Now I notice there doesn't appear to be any 

16 cross reference in this cable. 

17 A Um-hum. 

18 Q It follows the two cables that we have just 

19 finished discussing. 

20 A Yeah. 

21 Q Do you agree that the Individual sending this 

22 cable ^^^^^^^^^H appears to be telling headquarters 

23 and you that the FDN should make sure that it continues 

24 to supply needed equipment to the southern forces? 

25 A Urn-, 



mmm 



140 




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144 

Q What from ^^^^^^^^^^H 

A Action requested for headquarters in 

Please advise UNO/FDN disposition for 
conducting air drops to the southern front. Please 

to bring ^^^^^^^^^^^^^^H situation under 
control . 

Q In that first sentence, advise UNO/FDN 
disposition for conducting air drops to the southern 

fom of ^^_^^^^^^^^^^^^^l 

seeking from ^^^^^^^^^Hand from headquarters? 

A Well, I think what they are asking is, is the 
FDN going to do it or is the FDN blowing smoke. You see, 
the fear on the southern front was that the FDN would 
never support them. 

Q The FDN that we are speaking about, did the 
FDN itself have aircraft which were making air drops to 
the southern front? 

A No. That's what they wanted. They wanted] 
^^^■to drop to the southern front. 

Q In view of the fact that the discussion on the 
two days previous had involved airlift by the private 
benefactors, why do you say that the items in question 
are the items that the FDN would be dropping with its 



Because that's what they were trying to get 



|)HttlSStfW-D 



141 



UNCussn 



145 



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them to do. 

Q Did the FDN ever drop supplies to the southern 
front with 

A I don't think they got down there. I don't 
think they could get^^f^^^ working properly. 

Q Are you aware whether drops were made to the 
southern front ^^^ 

A ^^^^^Hsaid there 

Q What did^^^^^Htell you concerning who made 
those drops? 

A That those drops — let's see. As I recall, I 
think the private benefactors were dropping to the 
southern front. 

Q Would you agree, then, that what's referred to 
in this last cable that we were just discussing! 

would probably refer to asking 
headquarters and vou to facilitate an FDN decision to 
have the private benefactors drop goods to the southern 
front when an aircraft became available? 

A I don't think so. I don't read it that way. 

The way I it ^^flH^^^H ^^^^ 

your view was the FDN serious or are they playing games 

with the southern front. 

Q So in your interpretation it's all right — is 
asking _you for more than you to tell them 





142 



IIHHMSIfB 



146 



1 whether FDN is willing to do this, or to actually 

2 encourage the FDN to do so? 

3 A Well, they are not asking us to encourage the 

4 FDN in the action required. They are asking us for the 

5 disposition for conducting air drops to the southern 

6 front and, as I said, there appeared to be — the 

7 southern front has always had a lot of suspicions about 

8 the FDN. 

9 Q Would it be permissible for you to approach 

10 the FDN and make recommendations or encourage the FDN to 

11 allocate' its supplies in certain ways? 

12 A We could certainly go to the FDN and ask them 

13 what they were going to do. 

14 Q That would not be ruled out, though, would it? 

15 A No. 

16 Q If it Involved private benefactor aircraft in 

17 the supply chain, would that be ruled out? 

18 A I don't know, frankly. 

19 Q S° ^^^^^^^^H. — 'can you confirm that I 

20 ^^^H^Hwould recommend to the FDN and to UNO/SOUTH 

21 various dispositions of supplies if a problem arose? 

22 A No. I think you are reading too much into 

23 that. 

24 Q Well, then why is^^^^^^l asking you for a 

25 report on the disposition of the FDN? 



UNCtJtSSira 



143 



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UNCUSSIFIED 



147 



A They are asking if the FDN is going to do this 
or not. I mean, you are looking at a political side of 
this. They are trying to keep these people together 
politically. 

But why couldn'tH^^^^^^H encourage the FDN 
to make a certain allocation of supplies? 

A I think a certain allocation of supplies — I 
don't even know what the FDN had here. I'd really have 
to look at all the traffic. I mean, when you pull out 
two or three cables it just doesn't really give me the 
flavor or the feelir 




which appears to be a 
September 6 of '86; is that 



This is 
cable sent fromj 
correct? 

A That's correct. 

Q If I'm not incorrect, this cable refers to the 
previous cable, which ^^ ^^^^^HIII^V ^" ^^^ previous 
cable ^^^^^H asked ^^^^^^^^1 for how 
dispose itself concerning resupply of the southern 



BNCtASWD 



144 



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14 
IS 
16 
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18 
19 
20 
21 
22 
23 
24 
25 



UIICUISSWCD 



148 



forces. You respond apparently in two ways. 

In paragraph three you give a flight status 
report on the aerial assets available to the FDN, 
including the C-123 and C-7 aircraft, and in the fourth 
paragraph you essentially attempt to provide the 
reassurances. You reassure concerning th« FDN intentions 
concerning the southern front. 

A Um-hun . 

Q Reading this cable, are you now so sure that 
^^^^^^^^^^did n ot un derstand the supply and flight 
situation^^^^^^^^Hdue to the fact that it seems to 
have such detailed information concerning the status of 
the private benefactor aircraft? 

A This would be something we would^ 

you know, 

in an ops Intel cable like this what they were doing. 
But that's certainly not an in-depth knowledge of what 
they were doing. 

Q At any rate, your response |^^^^|^^^^ cable 
concerning the disposition of supplies contained a rather 
detailed summary of how those supplies would be dropped 
by air, namely which aircraft could be used. 

A What I would say was this was a report of FDN 

and all we're passing on 
IS passing on ^^^^^^^^^to let them know what the 





145 



UNCUSSIFIED 



L49 



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situation is. 

Q So what appears to emerge here is that the 
conununication channel, if you wish to call it that, is 
UNO/SOUTH tellsfl^^^^^l it wants supplies or needs 
supplies. ^^^^^^^Htells you. You discuss ^^^^^^Hthe 
supply situation and you then tell ^^^^^^^^^^^^^Vt he 
supply situation, including the status of the aircraft. 

A You are making a conclusion based on a couple 
of cables. What this is is the south complaining and the 
south looking toward us. Is th« FDN serious? Is this 
actual? Are they really going to work together? What's 
your best estimate? And us going ^^^^H^H and saying 
what's your best estimate? What are you guys going to 
do? And taking it and sending it down there. 

But I wouldn't say the normal status of events 
was that they would send up, because most of the support 
was not via the FDN, as you know. 

Q So you are saying that you would not make 

these decisions or encourage FDN to make certain 

decisions. You were just keeplng^^^^^^H informed of 

what* FDN status was? ' 

A We would ask then what their decisions were 
\ 
going to be, yes, what their plans were. 

Q And then presumabl^AH^^Hwould discuss the 
information It received from you with the southern 



UNCti^Sn 



146 



uNiminEB 



150 



1 forces? 

2 A That they could do, yes. What ^^^^^^| did, I 

3 don't know. 

4 Q Anyway, the status of FDN's ability to support 

5 the southern forces implicated or involved the status of 

6 the benefactor aircraft? 

7 A you know, I don't know what to say to you. .My 

8 understanding is the private benefactor support to the 

9 south didn't involved the FDN. Right? The TDH support 

10 to the south was basically ^^|^^^^| when you are talking 

11 about a 20,000-pound paylaad compared to 5,000 in the 

12 Caribou. So you're talking about significant amounts of 

13 materiel that the FDN can move down. 

14 Q Well, I'm not so sure that the supplies in 

15 question were FDN supplies. You recall in the previous 

16 cable reference was made to the supplies being in the 

17 possession of the gringos or private benefactors at 
^^^H^^H This was in your cable, ^^^^^^^^W It 

19 appear that^^^^^^H^Hwas quite knowledgeable 

20 concerning who was holding these supplies and the air 

21 arrangements that could be made. 

2 2 A you may read that into it, you know, but if we 

2 3 "^^ ^■HII^^B^"*^ they tell us this and we put it in a 

24 cable, it doesn't mean that it's correct, number one. It 

25 doesn't mean we have intimate knowledge of it. 



uNcnssra 



147 



UNCUSSIFiED 



151 



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7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



Q At any rate, in paragraph three this cable 
would appear to indicate that^^^^^^^^^B was receiving 
detailed information on the status of the private 
benefactor aircraft 

A What this cable shows is in a specific 
instance ^^^^^^^^^^^^H^H information 
point in time, apparently. It doesn't mean that we had 
continuing information, because we did not. 

Q So on September '86^^^^^^^^^Hwas aware 
of which aircraft were flying. 

A ^^^^^^^^Happarently received this report 





Q And on September 3, '86,^^^^^^^^Hwas aware 
of what supplies were being held by private benefactors 

^^^^^^^^^^M yes. 
Q Okay. You see there's another cable in this 
series, two cables, which ^s^HH^^B ^i^^ this appears 
to be a cable sent by ^^H^^^^^| September 6, '86. 
this cable^^^^^^^^H appears to be aware of the control 
arrangements for the C-123s as well as their status, 
namely that the FDM does not control them. 
^^^^^^^^^^^^^^^^^^^^H We 
through that other situation, that they weren't belonging 



BNttAMttD 



148 



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IINCUSSiED 



152 




to KHAO. 

Q And the FDN i 
it was willing to use its credit with something called 
the Arns Supermarket to obtain weapons for the southern 
front? 

A That's correct. 

Q Correct me if I'm wrong, but the Arms 
Supermarket, I belie ve, is a priv ate organization in — 
which warehoused^^^^^^^^Hj^H in or near 

lich was maintained by international arms 




^am I correct in my understanding? 

A Yes. 

Q At this point, then, as of September 6, '86, 
lis aware of the limitations on UNO/FDN air, 
the ability of UNO/FDN to provide supplies to the 
southern front forces both through^^^^^^Hand the C- 
123s, and is also aware of the sources of arms that the 
FDN would use to supply those southern forces, if 
arrangements could be made. 

A Yes. We sent out intelligence reports on the 
materiel the FDN did get on credit out in the 
supermarket. 

Q Thank you. Let's not discuss the last cable 



in the series, which isJ 



lexcept just to say 



UNCUSMD 



149 



wimm 



153 



1 that it appears to be anothar one in this series of 

2 communications. 

3 All right. One more. 

4 A Is that it? Oh, great. 

5 Q I'd ask the transcriber to mark this 

6 Exhibit 15. 

7 (The document referred to was 

8 marked ^^^^^Hzxhibit Number 15 

9 for identification.) 

10 This is a cable Director 038759. This cable 

11 was sent to^^^^^^^^^Hin response to a reference cable 

12 by^^^^^^^^^l l3y headquarters on September of '86; 

13 is that correct? 

14 A Correct. 

15 Q Once again my apologies for not having the 

16 referred-to cable. It would appear, based on this, that 

17 ^^^^^^^^^^H requested a briefing facility for FDN and 

18 contract air crews, and specifically including the 

19 participation of a certain individual; is that correct? 

20 A Um-hun. 

21 Q If you look at the next cable, the iden tity of 

22 that individual appears to be someone namedj 

23 A Right. 

24 Q Do you recall this? 

25 A I recall it generally speaking, yes. 




UNIWinEO 



150 



mmmn 



154 



1 Q Who would the briefing facility have been 

2 intended for? 

3 A I'd have to see all the traffic. It basically 

4 would have been set up for the FDN. That would mean 

5 making sure their maps were — 

6 Q What is a briefing facility? 

7 A That's a good question. I don't know what a 

8 briefing facility — I'd have to make an assumption. I 

9 really don't know what a briefing facility is. 

10 Q Let's assume it's a briefing anyway. Who were 

11 the contract air crews referred to? 

12 A I don't know. What were the dates on those 

13 cables when we thought that the Caribou was in and things 

14 were going to NHAO? 

15 Q I think that was way back. We had one from 

16 February, which was about seven months earlier. This is, 

17 let's say, quite recent. 

18 A Contract air crews. 

19 Q At the time this cable was written in 

20 September of '86, what contract air crews were available 

21 to the FDN? 

22 A I'm not sure outside private benefactors if 

23 there were any others. 

24 Q You'll agree that based on the timing — 

25 A Walt a minute, wait a minute. Contract air 




151 



mmm 



155 



1 crews could well be -- what about the guys? I'm not 

2 sure, but we did have ^^^^^^H was contracted to the FDN. 

3 That was a contract and they were contract personnel. 

4 Q I notice the cable says air crews. 

5 A Um-hujn. 

6 Q I presume if it were^^^^^^Hit would only be 

7 an air crew. 

8 A No. There are about three crewa fori 

9 Q I see. So to the best of your )cnowledg« th« 

10 briefing in question or briefing facility in question was 

11 intended solely for the FDN? 

12 A And its contractors. 

13 Q Not to include the private benefactor air 

14 crews? 

15 A I don't know, but that's the way I would read 

16 this. 

17 Q And to the best of your recollection have you 

18 ever requested a briefing to be arranged for private 

19 benefactor air crews? 

20 A To the best of my )cnowledge, no. 

21 Q With that I think we are coming perilously 

22 close to the end. Let me ask just one or two other 

23 questions related to sons information I had just before I 

24 cam* in. 

25 Does an individual nanedy^^^^^^Hwork at your 



I naned^^^^^^^^Bv 



152 



1 

2 
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9 

10 

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WttSSffffB 



156 




MR. FINN: Okay. I think that will b* all. 
Thank you. 

THE WITNESS: Thank you. 

(Whereupon, at 2:20 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: 



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MAR 86 



STAf F 



DIRECTOR 



SUBJECT: A PPROVAL FOR ABRIVtl QF CARIBOU A IRCRAFT 
REF: 



2. AT THIS TlHEl 
NUnBER OF THE AIRCRAF 
ANO CREW DATA WILL BE FORWAROEO'T! 



IN 02S7ii9l 



C\^ Gffi^ER Exhibit 




3. FILE: 
END OF nESSACE 



3/-(^*8& 



Pinaiiy Decassili«)/H«teas«l on 

unde' pfoviscns of E 12356 
t)v K Jolmson. Njtionai Swuiily Cottnci 



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2. |^^HRCCEIV£D*PPROV*L| 

uNo/roN HOs^^HflHHBB'To 

TO TRANSPOR^nW^TTDON 7 *nO 16 APRIL RESPCCTIVI 
CRCuS OF bOTM AIRCRAFT AGREED TO TMlSj^THE CARIBOU^ 
oE RE PREVIOUSLY FLYING EHPTT FRO'^ ^■IffHI AFTER 
TOHHMHBBHHBI^*') ^^^^ REPEATEDLY 

PUTLETMA^rTOOfrTMesE NMAO AIRCRAFT. i»E HAVE 



SECRET 



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£3/9 



UNCIASSIFIEO 



177 




llhtUSSIFIED 



TON: 2<4|H| APR 86 



C 54CQ 



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IH Ok7a«tt 



CONCURPENCE UNO/FON mqs HAS OBTAINED SEFORE ALLO-iwr 
ETMAL jiB|N THE CARIBOO »N0 C-12J. """"^ *LLO-INC 




«. NO FILE. OECL OAOR Oftv >ium a . HP. 
£N0 OF MESSACE XHEt^ET 




mSSiFifO 



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178 




LADORECORD 



SUBJECT: UMO/FON SUPPLY f LIGHTS 



REF: 



}67itS<>l 



1. APPRECIATE IMFORnATIOM CONTAINED REf. C-7 CARIBOU AND 
C-123 FLIGHTS ARE NOT NHAO SUPPORTED .PER I SCUSS 1 ON WITH NHAO 
REP ON 21. APRIL. NHAO DOES NOT HAVE AtCBliTRACT OR CHARTER 
ARRANGEMENT FOR THESE AIRCRAFT. WE THEREFORE ASSUME THESE 
FLIG HTS ARI BEING PAID FOR BY THE FDNiOR'BY PRIVATE BENEFACTORS. 

MMi^BlCORRECT IN THAT NO REPEAT JtO^ETHAL AID CAN BE 
CIRIlEo ON NHAO FLIGHTS. I^Vl ~ 

2. SINCE C-7 CARIBOU AND C- 1 23 'AIRCRAFT ARE NOT FUNDED BY 
NHAO. WE KNOW VERY LITTLE ABOUT HOW THEY ARE BEING UTILIZED. 
THEREFORE. HQS APPRECIATES REF REPORT;aND--WOULD LIKE TO BE KEPT 
INFORMED ON THE USE OF THESE A I RCRAFT^J^ < 

3. FILE: i^^^^^^^ DECL OAORJ^RV HUH 4-B2 ALL 
SECRET ._> ._. _ 

CLACATF I^^^H. CL BY 




END OF MESSAGE 



SECRET 



CIHV1S3 




179 



LAOORECOf 
INCOMII 




•S 6688S73 



ASO 



P 

TOU: 2 



A|^gi 



APR SC 




Pariij«v DecUssifedrtWMsea an 3 ^^^ 9 6 
uneei provisionj ol E 12356 
by K Johnson Hitxmt Secuity Cowid 



SUtJCa: UNO/FON SUPPLY FLIGHTS 



REFi 



3C7ii8%1 



I. MILE Wt RECOGNIZE THAT THERIPUS lE EM MPS RtPQBT IMC 
TO THE COMTRARY, C/NHAO. DURING RECEr&.VISIT ■■■■■■I 
TOLO US THAT MHAO DOES NOT RPT NOT HAVE* A^CONTrAPT WITH THE 
OPERATORS Of REF AIRCRAFT. ALTHOUGH HE'TOIO SAY THAT HE SUPPOSED 
THAT NHAO would EVENTUALLY PAY FOR FLIGHTS lYTHE AIRCRAFT WHICH 
CARRIED HUMANITARIAN SUPPLIES. WE -COMJCLUOE, THEREFORE. THAT 
THERE IS NO RESTRICTION UPON REF AIRCRAFT^CARRYINC LETHAL SUPPLIES 
PROVIDED THE OPERATOR DOES NOT BILL NHA0TI:0R'THE~FL'IGHT: — THEY' 
WrnWr^NRAf "AIRCRAFT." " " 



2. THERE REKAINS A 
COORO I NATION 9F 
BOTH UNO/FDH 
WHEN THEY AM 
ARRIVAL. 
THE C ARIBO U AND 
THE 



CONSIDERABLE 
i. ^FOR THE 



Viti:M *«'> >mti r 



EUEE OF CONFUSION AS TO 

SPART. 
, ARMED OF REF FLIGHTS 
S fl> THIIR 





«. THE PRinARY OFFENDERS ON THE UNANNOUNCED ARRLVAL 
AND DEPARTURES ARE THE CREWS OF THE CARIBOU. WE HAVE FIGURED OUT 
ON OUR OM THAT THEY GENERALLY LEAVE AT NOON ON FJIIOAYS TO 



CJ^Jtf TSI 



'JNCU 




180 



l4AAIaA 




C 0775 



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IN 0618673 



F0N2.THE WEEKEND, ikNO GENERALLY RETUflN 
0»r«ON0*y. HOWEVER. TMEV 00 NOT 

:iR ihtemtioms to *nyone--tmey just leave, we 

j; TO THE POINT where WE AUTOMATICALLY NOTIFIED THE 
n'HAT THEY WOULD BE RETURNING FROM HAINTENANCE ON 
p^C ^s TMEY ACTUAL 




7. FILE 
SECRET. 
END OF MESSAGE 



OECL OAORnjRVTtUH k-t2. ALL 
SECRET 




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181 




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SUIJCa: UNO/rON LITXAL DROP TO MAC'S 
llEr:^^^^^p2%0« 0«7S04« 
\ 




Partially DecIaaifle<r/R««W« •«2fiJHJ^ 
under prevtsionl of LO. 12356 
by 2. Reier. N:tior.a! Security Council 



RECORD eOpn ^=^ 



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^^MHOnw Wl 

Qgj^Assi 



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IT^IKSUmYlKif URALS FOR »IR DROP 
IWtOTVrillCWtlWTICX 0? OZ FROM 
iCEeC. rtCASElKA/e UNO/SOUTH CQHI1£ 
Lflf U aKkWWULD APPRECIATeqB^ 



:. 

uSo/SOUtSi!; ORDER TO "OCUC.VA^it^t WO/SOUTH C 
t\-^ fnMMRMlTIQM OF QZ Ait^JtfVacD APPRtCIATB, 
II NC SAW IMFtM^HBte)P*>A»l V A THIS CMAHHIU 



3. FILE) 
ALL S!CRCT>^ 

tND "of MtUAfil 




?ui< 



U^- 



Rv Hun ii-ej. 



SCCRII 



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imwifASE 



■ Partially Declassified/releassd o.i JIMdX^ 
under provitions of E. J. •12355 
by 2. Ri.er, N3tic:'al Securi*- Council 









s^t 





(^I^VW^W^fti^ 



183 



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-Cyis: 




Pmally CXdasahedrtWMsed on -3^^^g8 

unOet praveans of E 123S6 

Dy K Jonraon Niunii Sacwity Cound 



I. ACTION REQUIRED: PLEASE 
UNO/FON TO DISCOURAGE APPROPRIATION 

2- THE SHHB SUPPLIES STOI 
REF, WERE ORIGINALLY EARMARKED FOI 
OPERATING IN THE SOUTHERN FRONT. 
ORGANIZE THE SECURE RECEPTION OF THESE: 
SUBSEQUENTLY DESIGNATED THESE SUPPL I 
UNITS; HOWEVER. DUE TO THE UNAVA I LABI _., 
AIRCRAFT THE DELIVERY OF THESE SUPPLES] 
UNO/SOUTH ADVISES THAT AT LEAST ONE BENI 
CAPABLE OF HANDLIN G REJUPPLY TO THE SOUTH 
FUTURE. 



ROPRIATE ACTION WITH 
/SOUTH SUPPLIES. 

flENTIONED 
ORCES 
TY TO 
UNO/SOUTH 
OTHER UNO/SOUTH 
OF FUNCTIONING 
S BEEN DELAYED. 
CTOR AIRCRAFT WILL 
IH THE VERY SEAR 




BE 



I SYMPATHIZES WITH UNO/FDN PLIGHT BUT MUST 
SUPPORT JHB/iTOIS DECISION THAT ITS NEEDS ARE ALSO URGENT AND 
RECEIPT OF REF EQUIPnEHT REPRESENTS THEIR ONLY HOPE OF HOLDING 
OUT UNTIL FUNDING RESUMES. UNO/SOUTH EXPECTS THAT PRIVATE 
BENEFACTORS WILL RESP ECT MS PRIVACY FOR THE EQUIPMENT ANO 
SUPPLIES STORED '■* 



1.. FILE: 
END OF nESSACe 




RCVIEWfOFOmSUASC 



OECL OADR DRV HUH k-ll 
SECRET 




C.\{ti ll'X 




184 




1 



-'a'lij.iv Ofcinsiliea/Reieased on -? i'c^8 & 
undei otovisions ot E 12356 
by K Jotmson National Security Council 



REQUIRED UNO/FDN EFFORT TO RESOLVE THE SITUATION 

ACTION REQUIRED: JIHIilHH^IHBB PLEASE 
ADVISE UNO/FON DISPOSITION FOR CONDUCTING AIRDROPS TO THE 
rHf BM FRONT PERSONN EL (SFP) . PLEASE ATTEW>] 
^SITUATION UNOERJCONTROL. 




185 



mmm 



86 2076778 




JSTliEVEsI^AT it is IrtPERATIVt THAT THE FOM 
^^uc PSmuAiFMT CQOOWILL ANO UNITY SOUGHT IN THt 



SHOWS 



tense situation ano 
Iwo^hTfo^^^^i 



provide a nuch meepi 
joe an airdrop ofj 
(forces, ifi 

FpORT OUR FUTU» 
InCUMENT UPON THE FON TO PROVIDE ni Mil 
THE SOUTHERN FRONT NOW. IF S0« T*'*^'*-^ 
FORTHCOMING TO THE SOUTHERN fORCES. THE 
m RESISTANCE) «UST8E PREPARED TO OEl 
CONSEQUENCES. PLEASE ADVISE. 



toOST TO SFP'S nORAL 
llTARY SUPPLIES TO 
lOPES TO HAVE A 

BELIEVE IT IS 
[aTERIAL SUPPORT TO 
ID IS NOT 
(ANO 8Y EXTENSIOM 
THE 




7. FILE: 
HUM k-82. 
END OF MESSAGE 



a£CL OAOR DRV 



SECRET 




Cl I hJ T7/ 



\immifm 



REVlEWtOfWmXA&E. 



186 




^ ..<V..l. 



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I'll 



[support FORJ 

2076778 
1. ACTION REQUESTEO;., SEE BaOW. 



Partially 0ecii5silrt*ReM«lM W- ^l.'if j^ 
SOUTH AIRDROPS undsr [KO»i;«n» o( I t?3SI 

by K Johnson, NiMnW SMU!'<y CeulKll 



(|i%) 



3. PLEASE ADVISE 
HAVE AMY AIRCRAFT FLYA 
FAR SOUTH AS T>iE I R OPERATl NG 
CONSI0ERA81F WAINTENANCl 



ETC. tm% 

CAM SUIiPi 
AREA. ffMEJ 



PdOES NOT 
IR CROPS AS 

lis oowHJ.oa 



CONDITION. THUS, THl ^^^"J '^'' -^ 




^^^ ROP- ta 

OM^BQliT'^S ItT^WaTtTmC for an AIRCBAFTg^ 
RN FRONT IS »i'ih. ";»,„. Tc atuttirTOaS HAVE 



ipr€ii¥o»«^rK*i5ffiicSK 







187 



UNCLASSIFIED 






ONGlHSSIflEfl 



188 



tACOr^crr,.; 

INCOhlNG 



\1^^ 




Partially Oeciassided/Released nn SZ-c^S fe 
undc orovisions 01 E 12356 
6v K Jottnson National Secunty Council 



SUBEJCT: 



REFS: 



POTENTIAL UNO/FON ACTION TO SALVAGE THE SOUTHERN 
FRONT 




1, 



ACTION REQUESTED: NONE. 





2. the uno/rom fully understands .the jprobleh in the south 
and is willing to 00 anything in its powerfo assist. as 
outlined in ref c, tne linitinc factor. i s -the lacx of an 
airpl ane that can fly the cargo to the. south. the uno/fon 

■■Bis grounded for maintenance and spare Jparts and the uno/fon 

HAS NO control OVER THE PRIVATE BENEFACTORJC- 123' S WHICH WE 
UNDERSTAND ARE ALSO DOWN FOR «AINTENANCE-!*« 

3. THE UNO/FON IS ALSO WILLING TO USE ITS CREDIT 
WITH THE ARM SUPERMARKET TO 08TAI.K A WUNII 
MEET THE NEEDS OF THE SOUTH. 



'«VJEW£OfORRa£AS€ 

-^5 Alc^lcK 



5. Fan 

SECRET. 

END OF MESSAGE 




C//A/ 2(p7 



189 










515% 



HNKUSSlfB 



190 

ilMW'A'C<*iriCf^ 3^^ 

* ry I -I u \ \ ■ i" I i" k » ■^^ .r.- • • - 

I* * 

^^^^^^^^^^^^^^^^^^^^ 1222 

8C 20*09*19 ASP PA CI 001 

P|a TOT: 03||mS£P 86 01 RECTOR 0387S9 

STAf y \)3MMtOrRrCT0R jja7 59 ^^MBflflHr— -U- 

SUBJECT: HH^ 

REF: H||MHHB0H2OO6625 

CONCURS I N REQUEST FOR lOEN ASSISTANCE IN SETTING UP 
ISRIEflNG F^ " " " ' 





ENO OF MESSAGE 



Partially Deciassitied/fleleased on J^^g R 
under Dfovisions ol E 12356 
by K Johnson National Security Council 



KVIONCDrWREUASC 



^c :^sj:c 




717 



^ Ap f6 



Cii A/ S'75 



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193 




, o< to. 12356 



^ 



194 



CR30440.0 
DAV/sjg 



UNITED STATES SENATE 

SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 



:i 



7 I 

8 ! 
9 

10 
L) 

1.1 

13 ., 

14 

15 

16 

17 i 

18 

19 

20 

21 

22 1 



DEPOSITION OF C. THOMAS CLAGETT, JR. 

I 

Washington, D. C. 
Friday, April 3, 1987 

Deposition of C. THOMAS CLAGETT, JR., called for- exam- 
ination pursuant to subpoena, at the Hart Senate Office 
Building, Suite 901, at 9:00 a.m., before DAVID L. HOFFMAN, 
a notary Public within and for the District of Columbia, when 
were present on behalf of the respective parties: 



W. THOMAS McGOUGH, JR., ESQ. 
Associate Special Counsel 
United States Senate Select 

Committee on Secret Military 

Assistance to Iran and the 

Nicaraguan Opposition 

THOMAS FRYMAN, ESQ. 

Assistant Majority Counsel 

KENNETH R. BUCK, ESQ. 

Assistant Minority Counsel 

United States House of Representatives 
Select Committee to Investigate 
Covert Arms Transactions with Iran 

HENRY FLYWJ 

Special Investigator 



unclass!?:lD 



195 



i^OLASS.r.^J 



i:| 


CONTENTS 




2 


WITNESS 


EXAMINATION 


3 


C. Thomas Clagett, Jr. » 






by Mr. McGough 


3 


4 


by Mr. Fryman 


36 




by Mr. Buck 


54 


5 






6 


EXHIBITS 




7 


CLAGETT DEPOSITION NUMBER 


IDENTIFIED 


8 


Exhibit 1 


5 


9 


Exhibits 2 through 5 


6 


10 






1] 






12 






13 






14 






15 






16 






17 






18 






19 1 






20 






21 

1 


. 




22 . 







UNCL.ASSIF'ii) 



196 



aaoo 01 01 
OAVbw 1 



2 
3 

4 I 

! 

5 

6 j 

7 I 

8 1 

9 I 
10 I 
11 
12 
13 
14 ' 
15 
16 
17 
18 
19 
20 
21 
22 



Ott « 



UNCLASSIFltD 



PROCEEDINGS 
Whereupon, 

C. THOMAS CLAGETT, JR. 
was called as a witness and, having been first duly swcrn, 
was examined and testified as follows: 

MR. MC GOUGH: Let's go on the record. 

EXAMINATION 
BY MR. MC GOUGH: 
Mr. Clagett, I'm Tom McGough, Associate Special 
Counsel here at the Senate Select Committee. I am going to 
be asking you a few questions today about a matter I believe 
you were interviewed about concerning the National Endowment 
for the Preservation of Liberty. 
A I interviewed about it? 
Yes, I believe you were interviewed. 
A I was interviewed. 

You spoke to Hank Flynn and Tom Simansky a few 
days ago. 

Let me begin now by telling you, obviously, as 
they may have advised you, you have the right to counsel, if 
you so care. I note today you appear without counsel. Is 
that by your own choice? 



. D-c y.t' ^f'y 7 



UNCLASSirrcD 



rftraflijiakNiHoMi 



o< E.O. 123S6 
Security Counci' ' 



197 



:o 01 02 

OAVbw 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



UNCLASSIFIED 

A I have no desire for counsel, 



The investigation is being conducted pursuant to 
Senate Resolution 23 — 

A Whatever that is. 

— which authorizes the committee to conduct it. 
I can provide you with a copy of it, if you would care to 
see it. 

MR. MC GOUGH: Let the record reflect that Henry 
Flynn has just entered the office. 
BY MR. MC GOUGH: 
Let me just begin by asking you some personal 
information. 

Would you give us your full name and your present 
home address and business address. 

A I have no business address. 

My name is Charles Thomas Clagiett, Jr. I go by 
the name of C. Thomas ClagJett, Jr., for family reasons. I 
live — do you wish me to continue? 

Yes. I was going to say, where do you live? 

What is your date of birth, Mr. Clagiett? 
A November 19, 1914. 



liNCLASSlflta 



198 



^iOO 01 03 



"JAVbw 



1 

2 

3 

4 

5 I 

6 

7 

8 

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



UNCIASSIFO 



Do you recall your Social Security number? 
A ^^^U^^B, I believe. I'd better check that. 
(A pause. ) 



MR. MC GOUGH: Let's mark this as Deposition 
Exhibit 1, if we could. 

(Exhibit 1 identified.) 
BY MR. MC GOUGH: 

Q Mr. Clagett, I am going to show you what has been 
marked as Deposition Exhibit 1, which I believe is a 
subpoena which was served upon you a few days ago. Is that 
correct? 

A That is correct. 

Q It includes with it a request — 

A I don't know that I have read this. 

Well, let me summarize the Request for Document 
Production. It requested that you produce, essentially, 
documents relating the National Endowment for the 
Preservation of Liberty. 

A Well, I can answer that question right quickly. I 
have no documents in my possession. 

Q I understand thati 



nderstand that. 

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A The docv^ments I did have have been t.rned over tc 
the grand jury. What grand jury is that? 
The Independent Counsel. 
MR. FLYNN: Judge Walsh. 

THE WITNESS: They are not in my possession. 
BY MR. MC GOUGH: 
You did, however, give to our investigators copies 
of four checks. 

A That is correct. 

MR. MC GOUGH: I would like to have -larked as 
Deposition Exhibits 2, 3, 4 and 5 — 

THE WITNESS: Let me look at those, please. 
MR. MC GOUGH: Sure. 
(A pause. ) 

(Exhibits 2-5 iiant if ied. ) 
MR. MC GOUGH: Mr. Buck, Ken Buck, who is 
Assistant Minority Counsel for the House Committee is going 
to join us. 

THE WITNESS: Minority or majority? 

MR. MC GOUGH: He's minority. Mr. Fryman is 



majority. 



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UNCLASSIFIED 



BY MR. MC GOUGH: 

Q Mr. Clagett, could you tell me your educational 
background, please. 

A Sormal grade schools, and so on. College, for the 
B.A. degree, St. Johns College in Annapolis, Maryland, 1939, 
period. 

Q Do you have military background? 

A Yes, I do. 

Could you tell me that military background? 

A I was with the United States Navy Reserve. I went 

T 

on activfe duty in March 1941 and on inactive duty, 1945, 
about November, I believe. I believe it was the day after 
the bomb was dropped and after things were over. I stayed 
in the Reserve until I had my back work done, and I was 
doing all right, and I just got out. I should have stayed 
in, frankly. I'd have got some nice retirement pay. 

You say you went out into business. There's 
obviously a considerable period of time between the time you 
left active duty and today. 

Could you give me just a general summary of your 
line of work? 

A A general summary. Before I went into the 



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military, into the Navy, I worked for the telephone company, 
Chesapeake & Potomac here in Washington. Upon my return 
from active duty, it was obvious that the people who had not 
gene into military service were up here, and I was going to 
have to come back there at much lower, so I decided not to 
return. 

I then did various things. I sold airports to 
local communities. I had a piece of an airport engineering 
outfit, T lEli lui r I III Mi I wi ■ijl f II Another guy and I 
started a trotting track. I got into the coal mining 
business. Coal, at that time, everybody thought was dead. 
And I got involved in the coal mining business, and that is 
where I ended up. Having mining endeavor. 

Where was your coal mining business located? 

A Southern Illinois and Western Kentucky. 

Did you, at some point, retire, or are you still 
actively employed? 

A No, I am not active any longer in that. I was in 
that business for some 30-3Ome years. In 1972, I believe it 
was, "72, '73, my company was merged into Houston Natural 
Gas on a stock LLim w Cu r, and I went on the board of 
Houston. And I retired from my work with Houston Natural 



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Gas this past year, the beginning of '86, '85. And new I am 
tending to my own affairs. 

Could you tell me the first contact you had with 
the National Endowment for the Preservation of Liberty? 

A I believe I received some kind of a communication 
through the mail. 

Do you remember who had signed that communication? 

A I believe Channell signed it. 

That would be Carl Channell? 

A I would think so. 

Do you remember what the substance of that 
communication was? • 

A Asking for money for support of the 
anti-Sand in is tas. 

Did it indicate what kind of support would be 
provided to the anti-Sandinistas? 

A I don't remember what kind of support that letter 
might have said. I don't have it. It went out? I sent 
them, I believer $50 or something. I don't know. 
It struck a chord with me, however. 

Do you remember — 

A Let me finish this, please. It struck a chord, 



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because of the fact that I have watched the infiltration of 
communists, Soviet Union arid communism into the underbelly 
cf this country, beginning with Cuba. I saw the influence 
of it back in the ' 303,^ real 1/ at the beginning, and I saw 
it down in through the islands and in through the isthmus, 
and in my opinion, it is going to keep coming, if we don't 
stop it. And our country will then be in a horrible 
situation. 

And it was this letter from NEPL, or NEPL, as 
we've called it, that struck this chord with you? 



A 


letter? 
A 





Yes, it struck a chord with me, yes. 

Do you recall approximately when you received that 



Not exactly. 

Let me give you a point of reference. I believe 
you told Mr. Flynn that you made a visit to the White House 
on November 21, 1985. VUth reference to that day, that 
visit to the White House, do you have any idea? 

A I was confused in that conversation as to the 
exact date, whether it was the 30th or the 21*1, or what 
have you or January or November. I'm not sure. I indicated 



that at that time. 



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Am I correct on that? 

MR. FLYNN: Yes. Approximately. 

BY MR. MC GOUGHi 

Let's say approximately the end of 1985 or early 



1986. 



Can you,- in reference to that, tell me how long 
before that visit you might have received this initial 
communication from NEPL? 

A No. I don't — I didn't think it was all that 
important. I have received many communications for money 
for political and other things. And I hope I am a loyal, 
patriotic American, and I have sent money to various -- as a 
result of various letters that I have received in the 
defense — requesting money for the defense of our country. 
And I have been very, very unhappy and very concerned about 
the unfortunate — in ray opinion, unfortunate way our 
Congress has allowed foreign influences into this country. 
It disturbs me deeply. 

Was there ultimately — did you ultimately have 
contact with a man by the name of Chris Littledale? 

A Yes, I did. 

Can you tell me how that happened? 



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A He came to see me. He telephoned and telephoned 
and telephoned and then came to see me. And the whole 
background of it was, the contras against the Sandini3tas> 
against the communist influence, infiltration. And again, 
it struck a chord, because if Nicaragua falls to the Russian 
influence, then it is going to be a bunch of dominos coming 
right up the isthmus, in my opinion. And I don't like that 
at all. 

Q When Mr. Littledale visited you, did he visit you 
at your apartment in the Watergate? 

A Yes, he did. 

Did he, at that point, solicit money from you? 

A He did. 

Did he tell you what the money would be used for? 

A I could not specifically say exactly what it would 
be used for. He talked about helping the resistance to the 
Sandinistas. 

MR. MC GOUGH: Excuse me. We will go off the 

record for one second. 

(Discussion off the record.) 
BY MR. MC GOUGH: 
We were talking, I believe about Mr. Littledale's 



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visit to you. And you said that he solicited money to 
assist* the contras. 

I had asked you if you could remember what kind of 
assistance he spoke o£ at that meeting. 

A The conversation, as I remember it, was general, 
and I don't think that I could point to any specific usage. 
I am, having served in the military myself, I am aware that 
it takes many things to support a military operation, which 
is what the contras are trying to do, with very little 
assistance from our country. 

There came a time, did there not, when you visited 
the White House and made a visit to the Hay-Adams Hotel and 
the White House? 

A Uh-huh; yes. 

Q Let's put a frame on it. I believe you told 
Mr. Flynn sometime late in '85 or early '86. 

A Correct. 

Can you tell me, first of all, how were you 
invited. How did the invitation come to you, if you recall? 

A I believe it was — 

MR. FLYNN: A mailgram. 

THE WITNESS: Mailgram, what you call it. 



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BY MR. MC GOUGH: 
Obviously, you responded that you would attend? 
A Yes, I did. 

Can you tell me where you went first? 
A I went to the Hay-Adams, I believe. 
Q What happened at the Hay-Adams; do you recall? 
A Again, I do get confused, because I have been at 
the Hay-Adams a couple of times. That particular time, when 
we went to the White House, I believe we gathered there, 
went over to the White House. I believe it was in the 
afternoon, later in the afternoon. And we went over to the 
Roosevelt Room and various people talked to us. And then 
Mr. Regan came into the room first, shortly thereafter, 
greeted us, and shortly thereafter, was followed by the 
President, who greeted us in a very warm manner and a 
picture-taking session ensued, after which the President 
left. And then we left to go back to the Hay-Adams, if my 
memory serves me correct, where we had dinner. 

MR. FRYMAN: Could we go off the record for one 



second. 



(Discussion off the record.) 



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MR. MC GOUGH: Let's go back en the record. 
BY MR. MC GOUGH: 

Let's back up for a moment. When you went to the 
Hay-Adams Hotel, who was there from NEPL, do you remember? 

A What is "NEPL"? 

I'm sorry. N-E-P-L -- The National Endowment for 
the Preservation of Liberty. 

A. First, Channell, and I think the other guy was 
there too. 

Littledale? 

A I think so. I'm not positive. 

Q When you first went to the Hay-Adams, do you knew 
if there were any government people there, anyone from the 
White House? 

A Vaguely. I think there was a gentleman from the , 
White House, who came over with us and got us i*. I'm not 
positive of that, but I suspect, I think so. 

So you went to what you believe was the Roosevelt 
Room in the White House, and Donald Regan came is; is that 
right? 

A That was after we had been talked to by others. 

Do you remember who else talked to you at the 



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White House? 

A No, I do not. I could not name them. I'm Ic-sy 
en names, really. 

That's all right. 

Was Colonel North one of the people who spoke to 
you initially, if you know? 

A I'm not sure whether Colonel North was over thpre 
at that time. I know that Colonel North -- my recollection 
is that Colonel North talked to us at the dinner. Now 
whether he was at the White House with us, I could not 
recall. 

Do you remember what the topic was before Donald 
Regan came in? Do you know what the topic was of the 
presentation? 

A The concern of what the Sandinistas were doing to 
Nicaragua, and they had to be resisted. That was the 
general idea of the whole thing. 

Did anyone at — well, let me start again. 

Do you remember what, if anything, Mr. Regan said? 

A I don't remember what he said. I indicated there 
were reasonable pleasantries. Beyond that, I'm damned if I 
know, and the President, the same way. He wasvery ^ ^,^^ 



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pleasant, but specifically, I think you fully realize in a 
situation like that, that Mr. Regan and President Reagan are 
going to be gracious, and that is probably about all. 

I understand that. 

A I hope you do. 

Q At any point during that day, did you see any 
other government officials that you might have recognized? 
Vice President Bush? 

A No, I don't recollect seeing Vice President Bush 
at that particular time. 

Q Would you know Elliott Abrams, Under Secretary cf 
State? 

A I know him by name. I'm not too sure what he 
looks like. I've heard him; I've seen him on TV, and I 
happen to admire him. 

Q But as far as you know, you did not see him — ycu 
just don't remember seeing him that day? 

A Not specifically. 

How about Admiral Poindexter? 

A No, I don't believe I've ever seen Admiral 
Poindexter. I may have, but I wouldn't remember it. I 
don't think I have. 



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UNCUS^oii itii 



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During your visit to the White House did anyone 
bring up the subject of contributions or solicitations for 
money? 

A My friend, what do you think Channel and 
Littledale were doing all the time? 

I understand. 

A Now if you want me to say they did it in the White 
House or out the White House, I can't say that; I don't 
know. All I do know is that they were after money all the 
time. 

Q After the White House briefing, you went back the 
the Hay-Adams Hotel, as best you recall? 

A That's my remembrance. 

I believe you told Mr. Flynn that Colonel North 
and Mr. Calero and a freedom fighter — 

A Two freedom fighters, I believe. 

Q — two freedom fighters were at the hotel. 

A I believe so. 

Do you remember what happened at the hotel? Was 
there a presentation of any kind? 

A Oh, yes. They got up. Calero talked to us. 
Colonel North talked to us. And it was a very interesting 



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situation. They tried to tell us what was going on down 
there, and it was net very pleasant. 

Do you remember if Mr. Channel or Mr. Littledale 
spoke to the group at the Hay-Adams? 

A I believe probably -- I think Mr. Channell did, 
and I know that Littledale "-.alked to me, and so did 
Channell . 

Now you indicated that at that point or at some 
point during that day, you were solicited for money. 

A I was. 

And that you pledged $20,000. 

A I pledged $20,000. 

Q Can you tell me, was it in the open group? Was it 
an open solicitation, or was it someone who approached you 
individually? 

A Well, I think it was in the room, and there were 
other people there, as I remember. They didn't get me in a 
cubbyhole and talk to me; no. 

Q Do you remember to whom you pledged the money? 

A To the effort to counter the Sandinistas. 

How did you make the pledge? Did you stand up and 
say "I will pledge"? 



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A No, I didn't stand Lp, make a here, and this, that 
and the ether stuff, no. There was a sheet of paper en 
which I indicated I would pledge $20,000. 

At the time you pledged that money, what did ycu 
understand it would be used for? 

A You guys tickle me. Ycu irritate me too. You're 
trying to pinpoint something, and I don't know what it is 
you're trying to pinpoint, but I am trying to answer it 
truthfully, as best I know how to answer it. 

I wanted it. Me, I wanted it for military action 
against the Sandinistas. That's what I wanted. That was my 
desire. 

Now whether they came out and asked for this and 
asked for that or asked for something else, I don't know. I 
have my own ideas about things and what is right and wrong, 
and I try to follow this. And I certainly wanted it, in my 
mind, to go for military purposes. 

Did anyone indicate to you — 

A And I believe the newspapers said some crack that 
I made about, I was not interested in lollypops and soda 
pops. 

I understand that. You would not have given the 



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money, had you thought it was just going for humanitarian 
aid? 

A Supposedly, our wise and wonderful Congress, in 
its wisdom, restricted all aid except humanitarian, I 
believe, at one point, which I think is a sad commentary. I 
have given money for humanitarian re::sons to many things, 
possibly including this one, but in my own mind -- and I am 
trying to answer you — and you're gettin' me irritated. 
You keep pressing about something — I wanted it to go for 
military purposes. Me. 

I understand that, Mr. Clagett. 

A Thank you. 

Q I don't want to get you irritated, but I do want 
to press a little bit, because the issue that we're very 
concerned about here is whether, /a, J the money went for 



military purposes, as I understand you wanted it to, and( b, 
if so, who directed it to military purposes. 

A I will answer that very succinctly. 

Thank you.. 

A I do not audit their books, nor did I demand a 
return statement to me to exactly the purposes that money 



would go for. 



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Do I make myself clear? 

Ifes, but I don't think you answered quite the 
question I was about to ask. 

A Well, why don't you ask the question flat-out? 

Did Mr. Littledale tell you or indicate to you 
that the money would go to military purposes? 

A I say it again, sir, that it was my desire that 
the money would go for military purposes. I am not going to 
start now, nor will I in the future, nor have I in the past, 
to my knowledge, said that they told mo where they wanted it 
to go. 

Is that because you don't want to say that or 
because they didn't say that? 

A I'm trying to tell you the truth. 

I understand, sir. 

A Okay. And I want to be very careful about this. 

I understand that. 

A Because I do not know, in my own mind, and I do 
not care, in my own mind, whether they asked for 
humanitarian aid or this or that or a bayonet or a gun. I 
know I wanted it to go for military aid, and specifically, I 
think I have mentioned before, that I would hope that it 



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would be seme kind of a weapon which would shoot down the 
damned HIND-D helicopters that our government has allowed to 
enter the fray down there. 

Q I understand. I don't want to put words in your 
mouth, Mr. Clagett. 

A You're not going to put words in my mouth, sir. 

I don't think I could if I wanted to, but are you 
telling me that you don't know or don't recall -- 

A You have my answer, and that's all you're going to 
get, Doc. I've done the best I know how, and you're not 
going to twist me. 

!^cw, your problem is, you're a lawyer; I'm not. 
But I've had to deal with lawyers that like to twist things 
to their own purposes. I'm not going to play lawyer. I'm 
going to tell what I honestly think, and I've already done 
it. 

Q All right. 

A I don't mean to get hot about this. 

I don't mean to get you hot. 

A You've got an answer which I think is a proper, 
truthful answer and all I know about it. 

Now if you want me to say something else, I'm not 



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going to do it. 

Then let me ask another question, and that is, 
we've covered Mr. Littledale. 

Did Mr. Channell ever indicate to you, to the best 
of your recollection — 

A I covered both of them, when I answered that. 

The answer is that you do not recall them 
indicating to you that it would go for military aid? 

A Wait a minute. I didn't say anything about that. 

That's my question. 

A I don't know. I tried t: answer this honestly and 
truthfully. 

That's all I want? 

A That's all I'm trying to do. Now you're trying to 
get me to say something that I'm not sure at all about. 
You're trying to get me to say that Mr. Littledale wanted it 
to go for X this or X that. And I'm sorry, I can't give you 
that answer. 

Let me just tell what I'm trying to ask, and then 
I ■ 11 ask it. 

My question is going to be, what did 
Mr. Littledale say or Mr. Channell? 




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A I don't remember exact words or what 
Mr. Littledale said or what Mr. Channell said. 

Q That's a fair answer, but let me finish the 
question, and then you can give that answer; all right? 

My question is, if you remember, did either 
Mr. Littledale or Mr. Channell indicate to you or tell you 
that the money would be used for military aid, if you know? 

A I've tried to tell you this several times. You 
keep coming back to it. 

If you answer that question no, you don't know? 

A I don't think so. I don't know. 

That's fine. We can close that. 

A All I do know, and I'll repeat myself again, that 
I wanted it to go for military purposes. Now I am not going 
to be able to say, if I remembered exactly, that they asked 
to go for weapons or something, I would have told you so. 
I'm not at all sure of that. Therefore, I tried to give you 
a decent answer, a proper answer. 

I think you just did. Now did you tell them that 
you wanted it to go for military aid? 

A Yes, I did. 



Who did you tell that to? 

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I told that to Channell, Littledale, to North, all 
three of them, at different times. I hate the idea of the 
Russian military supplies to the Sandinistas coming in to 
the isthmus and those HIND helicopters. If you know 
anything about a weapon, that's one of the most horrible 
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Q On those occasions, when you indicated to 
Channell, Littledale and North, that you wanted your 
contribution to be used for military aid, to the best of 
your recollection, did they ever say no, we can't use it for 
that? 

Did they ever outright tell you they couldn't? 

A Now wait a minute, you're going around the back 
door on the same question. 

Q Maybe. 

A Yes, you are. You've already gotten my answer, 
sir. You're not going to go around the back door on me. 

Let's change it to the front door. 

A Just stay in the front door, will you? 

Q Did they ever say they could not, they were not 
allowed to use it for military aid? 

A No. I don't think they did, nor should they have, 
in my opinion. 

Q Thank you. 

Now you had a private briefing with Colonel North 
at the White House. 

A I did. 

I believe you told Mr. Flynn that it was sometime 



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Did someone go to his office with Mh? 



in early '86, perhaps in January. 

A I think so. 

That took place in Colonel North's office. 

A That is correct. 

Q Was there anyone else there, other than you and 
Colonel North? 

A When he and I sat down, no. 

Q 

A Channell. I'm not sure whether Littledale did or 
not, but I think Channell did. 

But when you went into the office, it was just ycu 
and Colonel North? 

A i/hen I went into the outer office, they were 
there. Then Colonel North had — he and I went in another 
room. We sat down, and we talked. And I happen to admire 
him greatly. 

You discussed with Colonel North, I believe you 
said before. Redeye and Stinger missiles. 

A I discussed. We had a generalized discussion 
about the situation and what was going on down there about 
the helicopter l^ffot on the contras, and so on, you know. He 
was trying to bring me up-to-date about what the situation, 



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militarily, was down there, and it was pretty damn sad. And 
I evidenced the hope that there was some way of shooting 
down these damn helicopters. We got on the subject of 
missiles. "Do you have any?" "Well, they're hard to get 
and they're expensive." 

I think he told me they didn't have any at the 
time. And I said, "Well, I'm going to give you the money, 
and I hope you can get at least one. How much are they," as 
I recollect. And he said, "Somewhere around $23,000, and 
you couldn't get them in this country. Anything like that. 
They'd have to be gotten somewhere outside of the country." 
And I said, "Well, I think the French and the British have 
got some." "Well, we may able to get some British-made 
ones" -- or something. I don't know. It was generalized 
discussion. And there's no way I can pinpoint any closer to 
that, so I suggest you don't attempt to. 

Q You indicated you told Colonel North that you 
would be making a contribution. 

A Yes, sir. And I hoped for a Stinger or a Blowpipe 
or something that would shoot down the damned helicopters. 
That's what I wanted. And I'm not ashamed of it either. 

After the meeting, you then, in effect, made your 



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pledge or paid the $20,000 to NEPL7 

A Whatever that date was. 

We can pL.t a date on it. 

A The check's dated. 

It says January 16. 

A It speaks for itself. 

That's Exhibit 3. Just to get the sequence 
correct in mind, this check came after the White House 
briefing and after your meeting with Colonel North, as 
best you can recall? 

A I think so. I believe so, yes. I think so. 

Q There is a check which's been marked as Exhibit 5, 
which is one dated April 16, 1986, for $5000. 

A Oh, yes. 

Do you recall? 

A I recall this thing. 

Can you tell me about that? 

A Because first Channell and Littledale telephoned, 
telephoned, telephoned, telephoned, telephoned. They needed 
more money, they needed more money, they needed more money. 

So I said, all right, I'll give you another $5000, 
and that's the end of it, is what I said. I'd gotten 



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irritated by then at them. 

All right. 

A I have seen congressional. House and Senate both, 
attempts at raising/zmoney , and the minute I sent the money 
into them, by the very return mail, they say, oh, that's 
fine, send me more. And it gets tiresome. And after a 
while I get fed up, like I hope any ordinary human does. 

Q I understand that. 

A So I gave them $5000 more, and I said that's all, 
Buddy. 

Q Now I'm going to show you a check marked Exhibit 
4. That's a check to the American Conservative Trust, for 
SIOOO. 

A Yes. 

Q It's dated October 30, 1986. 

A Now I'm going to say something to you, my friend, 
the American Conservative Trust — and you have a lot more 
knowledge than I do — and the National Endowment for the 
Preservation of Liberty, to me, are two different things. 

Q Right. 

A Right? I don't know. Maybe they're the same 



thing in your mind. 



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No. Let me just ask -- 

A And so I find that Channell signed that letter, 
but I believe that the indication was that it was for seme 
other purpose than the contras and Sandinistas. 

But as best you can recall, that was a 
solicitation from Channell that resulted in a contribution 
to the American Conservative Trust? 

A Yes. 

All right. 

A After having been a conservative Democrat, I am 
new a conservative Republican. 

I'll show you also another check you provided to 
our investigators, and that is Exhibit 2, which is a check 
for the Council for Interamerican Security. 

A Now, I'm not sure who signed that letter. It 
might have been somebody else, I don't know. It might have 
been the same thing, but I sent them S50. 

That was back in 1985? 

A This was '85, in March. 

You don't know, sitting here today, whether that 
has any connection? 

A I think that might have been the original contact 



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right there. It could well have been, "Help Nicaraguan 
Freedom Fighters." That could well have been the original 
contact. 

All right. 

A I suspect it might have been original. 

Let me ask you who, at the National Endowment fcr 
the Preservation of Liberty dealt with you. You dealt with 
Channell. You dealt with Littledale. 

Did you deal with someone by the name of 
McLaughlin? ^ 

A No. 

Jane McLaughlin, a woman. 

A Not to my knowledge. 

How about a Stephen McNahon? 

A No. 

Did you ever hear of an account or a project 
called the Toys Project? 

A The newspaper boy asked me that question, and 
that's when he got his answer. And I'll give you the same 
answer. 

Please do. 

A No. I knew nothing about a damn Toys thing. I 



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don't know cE a Mr. Miller. I don't know of a 
Mr. Kuykendall. I don't know Mr. Robert Owen. 

Are you reading from the subpoena? 

A Yes. I am reading from here. 

We can shorten this up, because I have only a few 



more names I want to ask you about. 



Okay. 



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Q Have you ever heard of .'^hternat ional Business 
Communications or IBC? 

A IBM, I'm very familiar with. 

This is IBC. 

A IBC, I'm not at all sure. 

You already mentioned Mr. Miller. 

Have you ever met or did you ever hear of a Frank 
or Francis Gomez? 

A No, not to my knowledge. 

How about David Fisher, who would be associated 
with — 

A Wait a minute. There is a Fisher, another 
conservative fund raiser by the name of Fisher somewhere in 
the United States, out here in Virginia somewhere, whom I've 
sent money to, but I don't think -- 



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Not this David Fisher? 
A I don't think so. 

Q All right. We've already talked about a number of 
government officials. 
A Oh, we have? 




A 

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We talked about — 
I didn't know that. 

We talked about Regan,lB»«rj3K, Poindexter, North. 
Oh. 

Abrams. 

My question is, in the course of your dealings 
with the National Endowment for the Preservation of Liberty, 
did you come into contact with any other government 
officials, other than the ones we've discussed? 

A If I did, I don't remember, and that is an honest 
truthful answer. 

Q At any point in your dealings with the National 
Endowment for the Preservation of Liberty, were you asked to 
refer to Colonel North by any other name? 
A Does he have another name? 

Have you ever heard the name "Mr. Green"? No one 
ever told you to call him "Mr. Green"? 



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A No. Emphatically, no. 

MR. MC GOUGH: Let me step outside wit!i Mr. Flynn, 
Mr. Fryman and Mr. Buck Eor a while, and we may be able to 
wrap this up. 

(Recess. ) 

EXAMINATION 
BY MR. FRYMAN: 
Mr. Clagett, in your answers to Mr. McGough's 
questions, you referred to a meeting at the White House, I 
believe, in January 1986. 

Do you recall that? 
A Wait a minute. You're putting a date on it now. 
Q In early 1986. 

A Well, I think so. I think it was early 1986. 
In connection with this meeting, there was also a 
series of meetings with representatives of Mr. Channell's 
'organization at approximately the same time; is that 
correct? 

A You're generalizing with "representatives of his 
organization . " 

I don't understand who you mean. 
Did you meet with Mr. Channell at approximately 



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the time of the White House meeting? 

A Yes. 

Did you meet with Mr. Littledale at approximately 
this time? 

A I believe so. 

Q Do you recall i£ you met with anyone else from 
Mr. Channel's organization at approximately this time? 

A There might have been other assistants, helpers, 
or something, but nobody other than Calero, North, the two 
freedom fighters and some of the other guests whose names I 
really don't remember. 

Q And the only persons associated with Mr. Channel's 
organization that you recall meeting with, specif i'-ally, are 
Mr. Channell and Mr. Littledale; is that correct?. 

A Yes; that's correct. 

Now, as I say, I may have me^ others. 

That's right, but your specific recollection now 
is limited to those two? 

A That would be it. 

Now apart from the meeting at the White House, 
these additional meetings were held at the Hay-Adams Hotel; 



is that correct? 



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A Yes. I think that's the proper answer to that. 
Now — 

A Pardon me. I believe I indicated earlier that we 
went back -- I believe we went back to the Hay-Adams and had 



dinner 

A 

to? 


A 



Right. 

Is that the additional meeting you're referring 



Yes, that's part of what I'm referring to. 
Well, stick to what you're referring to, because I 
don't know about other meetings down there with them. 

Q Well, did you have any meeting with Mr. Channel 
before you went to the v/hite House? 

A Yes. I met with Channell before. He came up to 
my Watergate West, to my library there. Yes, I've met with 
Channell before. 

I'm sorry. My question was not properly framed. 

Mr. Clagett, I mean at approximately the same timt 
of the meeting at the White House, before you went to the 
White House, did you have any meeting with Mr. Channell at 
that time? 

A What do you mean by "a meeting with Mr. Channel 

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at that time"? 

Did you speak with him? 

A Certainly, I spoke with him. 

Did you go directly to the White House that day? 

A That is my recollection, and my recollection is 
that we met downstairs in the lobby and all ganged up there, 
and then took off to the White House. 

That is my recollection. I do not believe that I 
had a separate meeting, if that's what you're referring to, 
with Mr. Channell. 



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when you say "the lobby," what lobby are voj 
referrina to? 

A I do believe that the Hay-Adams has only one 
lobby. 

O Is it the Hay-Adams that vou are referrina to? 

A That is correct. 

MR. FPYMAN: Off the record again. 
(Discussion off the record.) 
MP. FRYMAN: Pack on the record. 
BY MP. FRYMAN: 

In connection with this white House meetina in 
January or early 1986, you first gathered, you recall, in 
the lobby of the Hay-Adams Hotel, and then you went to the 
White House, is that correct? 

A I believe so. 

And then after the briefing at the white House 
you returned to the Hay-Adams Hotel and you had a dinner, is 
that correct? 

A I believe so. 

O And at the dinner, the persons who attended 
included Mr. Channell, Mr. Littledale, Mr. North, and Mr. 
Calero, is that correct? 



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A I b«lieve so, and I believe that two small-sized 
freedom fighters were brought in. 

Two freedom fighters and other donors, potential 
donors? 

A Yes. 

And possibly other persons attendina? 

A Possibly other persons. 

Pight. 

Now, following this meeting, was that the time 
that you made the contribution of $20,000, which is 
reflected in Exhibit 3? 

I will show you. 
(Handing document to witness.) 

THE WITNESS: No. That was not the time I made 
this contribution, the check Cor $20,000, no. 
BY K!». FPYiJaNj 
That contribution was made in advance of Che 
white Rouse meeting? 

A Wait a minute now, whoa. 

(Pause.) 
What is the date? 
A Wait a minute, please. I am trying to get a 

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proper answer far you, sir, and I don't appreciate beina 
interrjpted in my thouaht process. I don't mean that in a 
mean way. I am trying to think here, and this is -- my 
diaries and thinas I wish I had. 

My recollection is that I at the time of the 
dinner signed a so-called Dledae for 520,000. My 
recollection is that I believed after meeting with Colonel 
North I then wrote a check, 

I also recollect that I was asked to give the 
msmey in 1985, and my accountant suggested that because it 
was supposedly a tax-deductible item that I wait until 1986. 
In 1985, I was on — what do you call the minimum tax 
payment thing — because of retiring and having another 
merger, having my stock in Houston being paid for in cash. 
That put me into a minimum tax bracket thing. 

So there was a delay from the time I made my 
commitment at the Hay-Adams and the actual date of the 
check. 

I hope that answers. 
Mr. Clagett, did that reflection refresh your 
recollection that the white House meeting and the pledge at 
the Hay-Adams would have occurred before January 1986? 



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So that could have been sometime in late 1985? 

A That might have been back in November. 

Of 1985? 

A It could well have been, yes. 

O And at that meeting and the follow-up dinner at 
the Hay-Adams, you signed a pledge sheet of some sort? 

A Uh-huh. 

And then following that, you had a meeting with 
Mr. North, is that correct? 

A Well, I am not sure whether that was in '85 or 
■86. 

Put it was after you signed the pledge card that 
you met with Mr. North? 

A yes, I believe I signed the pledge at that 
dinner. 

Right. So the chronology would be, first, the 
white House meeting, then signing the pledge; that would be 
the first step? 

A That is where I get a little confused as to 
chronology. I am not one — I haven't lost my marbles, and 
I am not one that goes around remembering everything under 



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the sun, and I don't think you do either. And I want this 
on the record now. I do the best l know how. 

So if you are aoina to try to pinpoint me on 
chronoloay when I have no reminder thina in front of me that 
I can pinpoint, it is aoina to be very difficult. 

O Well, I certainly don't want to put words in your 
mouth, and I am well aware that it is impossible for me to 
do so if I did want to do so, but I just direct your 
attention to the exhibit that is in front of you, which is 
Exhibit 3, which has a date of January 16, 1986. 

Now, that is one document that fixes a specific 
point in time? 

A Yes. 

Am I correct in understandino that you drew that 
check on or about January 16, 1986? 

A Oh, yes, sir. 

So the meetina at the white House and the pledge 
card that you signed, which you have described, would have 
occurred at some point before January 16, 1986? 

A I think so. I believe so. 

All right. 

And before you signed this check, you also had a 



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meeting with Mr. North. I believe voj have testified to 
that . 

A I may have testified to it. I think if I did 
testify to it I said, I thought. 

And that is your best recollection? 

A That is my best recollection at this time. 

Correct. That is all we can ask for. 

A I am tryina to do the best I can to answer you 
truthfully, sir. 

O Correct. 

Now, you have testified that your objective in 
drawina this check was to make a contribution for military 
aid to the Contras, is that correct? 

A That is correct. 

O Specifically, you had a hope that this would be 
used for some sort of military aid to deal with these 
helicopters that were a real problem in your mind, is that 
correct? 

A In my mind they are a real problem, and in my 
mind I hoped this would go for some kind of eauipment that 
would shoot them down. 

Correct. 

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A Yes, sir. 

Now, what was the reason why you believed makino 
a contribution to the National Endowment for the 
Preservation of Liberty would in any way meet these 
objectives of yours? 

A Well, when you attend a dinner and you have a pan 
by the name of Calero, Colonel North, and two freedom 
fiohters ud there tellina you what is goina on down in 
Nicaragua, it became, at least in my mind, very obvious that 
they were asking for and needed -- whether they told me they 
wanted arms or not I don't know, but it became obvious in 
the general overall sense that the need was military 
assistance, and that struck a proper chord with me and I was 
very happy to do so, make money available for what I wanted 
in the way of military, leaving some of the so-called 
humanitarian things up to others. 

Pight. 

Did you discuss your objective in this 
contribution with Mr. North? 

A I believe I have indicated in the past and I will 
indicate again that I indicated to Wr. North, Colonel North, 
that it was my desire and hope that the money I was giving. 



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or did qive, whichever timeframe it was in, would ao toward 
some kind of eauipment which would be utilized to shoot down 
Pussian armaments in the form of a HIND-D helicopter, and it 
was mv desire -- and this I evidenced to Colonel North and 
to others like Channell and Littledale, whoever might have 
been at hand — I still feel that way, and I am very pleased 
that I do feel that way. 

when you made this statement to Colonel North, 
what did he say in response? 

A I could not give you his exact words. 

O I am not asking for that. 

A I think he was pleased. I suspect that he was 
pleased, and that is about as far as I can say. 

I am just asking for your recollection, your best 
recollection now. 

A My recollection, sir, I do not have a camera 
mind. I do not take pictures with my mind that are always 
there. It is like a TV show that is on, and then it goes on 
to the next thing. I am not a storage house for every 
little detail of everything. 

That is understood, Mr. Claaett. 

A Thank you. 

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But let me just ask this once more. In this 
conversation you have a fairly specific recollection of what 
yoj said? 

A Uh-huh. 

And r am not asking you to give me any verbatim 
account of what Mr. North said in response, but since you do 
have a fairly clear recollection of your side of the 
conversation, I would ask what is your best recollection 
today of Mr. North's side of the conversation and what he 
said in response to your comments? 

A I was not inside Mr. North's head. I can only 
answer that again, as you have just said, my recollection. 

Correct. 

A So I cannot answer for Colonel North. However, I 
did get the sense that he was pleased. 

And what statements did he make, approximately, 
that gave you that sense? 

THE WITNESS: Off the record. 
(Discussion off the record.) 
MP. FRYMAN: We will go back on. 
BY MB. FPYMAN: 

Going back on the record, Mr. Clagett, in this 



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1 meeting with Mr. North, after you made the statements which 

2 you have just described, what is your best recollection 

3 today of Mr. North's statements or reaction? 

4 MP. FPYMAN: Off the record, please. 

I 

5 (Discussion off the record.) 
I 

6 I (Whereupon, the reporter read the record as 

7 reauested.) 

8 MR. FRYMAN: I believe there is a pending 

9 Question, Mr. Clagett, that related to what statement that 

10 Mr. North made that gave you this indication that he was 

11 pleased. 

12 BY MP. FPYMAN: 

13 Would you answer that Question? 

14 A I do not specifically recollect any statement 

15 that he might have made. I indicated to you, I believe/" 

16 previously that he struck me as being pleased. If I had 

17 been in his position, I would have been very pleased. After 

18 all, he was trying to do something for the Contras, and if 

19 somebody wants to give him money to buy something to shoot 

20 down a helicopter, if I were Colonel North I would be very 

21 pleased, and this was my sense. 

22 Actual* statements that he might have made, 1 do 



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not know. I hope that answers yojr Question. 

In the meeting with Colonel North, did he show 
yoj any document or any sort of piece of paper? 

A He miqht have. My recollection is that we 
discussed more or less some of the problems there of how 
they were moving in and really cornering some of the 
Contras . 

Documents, I am not sure I understand what you 
are referring to. We did not go into a great deal of 
detail, no. It was generalized conversation basically. 

Let me ask a more specific Question. Did he" at 
any point show you any sort of a sheet of paper that had any 
list or description of weapons on it? 

A Oh, no, sir, not to my knowledge, no. 

Okay. 

Now, after your meeting with Colonel North, did 
you have a further meeting with Mr. Channell before you 
actually wrote the check for 520,000, which is Exhibit 3? 

A Specifically, I couldn't answer that 
affirmatively or a denial. I don't know. 

You recall that you had expressed to Mr. Channell 
at some point your desire that your contribution be used for 



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military assistance? 

A Oh, yes, sir. I sure as hell did, and I miqht 
also add that inasmuch as I wanted t^ 



kidSH -- this, money,**' 
ntant to not ^ £m 



ao for military aid, I instrjcted my accou 
attempt to use that as a deductible 520,000 because when I 
was giving somebody some money for arms that didn't <3«i me 
it would be very deductible apparently. 

I have been audited by the Internal Pevenue 
before, and to me that would be a beautiful red flag for 
trouble. So I instructed my accountant not to attempt to 
deduct that. 

Who is your accountant that you spoke with? 

A I don't think it is of any necessity for me to 
name him to you, sir. They are my accountants. They are 
not involved in this whatsoever, and I resent that Question. 

O I feel I have to ask the Question. 

A I will refuse to answer you, sir. 

All right. 

A Why do you want their names? 
I want this on the record. 

Mr. Clagett, generally, the rules at depositions 
are that lawyers ask the Questions and the witness answers 



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the Question. 

A Sir, I am an American citizen, and I believe I 
have some rlqhts, too. So don't cut me off that way. That 
is not playing fair ball. 

I will move on then. 

A I would like to have you kindly answer my 
Question. 

I am not pressing the Question at this time. If 
in the event we decide we want to press the Question, then 
our position will be made known, and we may have to have a 
court proceedina over this. I don't think we will. 

Put at the moment I have raised the Question, you 
have declined to answer it, and I am moving on to somethinQ 
else. 

THE WITNESS: Can we go off the record? 
(Discussion off the record.) 
PY MP. FPYMAN: 

Now, Mr. Clagett, you have testified that you 
indicated to Mr. Channell that you wanted your S20,000 
contribution to be used for military assistance to the 



Contras? 



Yes. 



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Did you indicate that to Mr. Channell on more 
than one occasion? 

A I may have. 

O Do you have any specific recollection? 

A I have no specific recollection, but I certainly 
may have. 

O But you have a specific recollection of at least 
once? 

A If I had a specific recollection, I would try to 
tell you. 

You recall telling this to Mr. Channell? 

A I do, indeed. 

All right. 

A_ May I add that I still feel the same way, and I 




la j gain ~fj^ tl6e occauSon w^Ri tomorrow. 



^What dCd -he «ay jg^ iiw^ggi isa when- yatt~^old him 
that? 

A oh, I don't know. 

What was his reaction? 

A you are trying to be very specific again, and I 

do not know, and I don't remember his reaction. 

Did you tell this to Mr. Littledale? 



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A I certainly miaht hav« told It to him, too, and r 
don't remember hi« reaction. 
All riqht. 

A I am sorry. As I say, I am not a court reporter, 
and I don't remember everything. I haven't written It all 
down. 

f»P. FHYf^ANt Mr. Clagett, that completes my 
Questions. Thank you very much for b«arlnq with me. 

THE WITNESS: Thank you for bearing with me, too. 
MR. FPYMANt I think Mr. Buck may have a couple 

of Questions. 

EXAMINATION 
BY MP. BUCK: 
Mr. Clagett, my name Is Ken Buck. I am the 
Assistant Minority Counsel with th« House Select Committee. 

First, let me thank you for coming here today. 
Just two or three auick, short Questions. Hopefully, It 
won't reouire much explanation or aggravation. 

Did Colonel North ever ask you for money? 
A Colonel North? 
Colonel North. 
A My recollection Is he did not. My recollection 



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is that Channell and Littledale were the people who asked me 
directly for money. 

Now, it may have been at the dinner that Colonel 
North might have indicated to the assembled group that the 
Contras needed support, but specifically, I don't remember 
him ever asking me for money. 

Okay. The last hour and a half I am starting to 
get some sort of picture of what went on here. It seems 
that Colonel North and some of his aides gave an overview of 
what the situation was in Nicaragua in terms of military 
conditions and Mr. Channell and his group were the 
fundraisers. 

A I think that would be a proper overview, in my 
opinion. 

Just one more Question, Mr. Clagett. You 
mentioned to Mr. Channell and perhaps to Mr. North that you 
wanted your money to go for military purposes. 

My question is did they ever assure you that that 
money would go for military purposes? 

A I thought I tried to answer that earlier. 

I am sorry if it is repetitive. 

A I don't know whether I successfully answered it 



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tD you gentlemen's satisfaction. My sense is -- and that is 
all r can give you -- that they were reasonably pleased 
about that. 

Okay. 

A That would be my sense, and that is about the 
best I can do. 

MR. BUCK; I have no more questions. Thank you, 
Mr. Clagett. 

MR. MC GOUGH: Nothing further. 
(Whereupon, at 10:30 a.m., the takina of the, 
deposition ceased.) 

C. ''THOMAS CLAGEi 





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CERTIFICATE OP NOTARY PUBLIC & REPORTER 



I, David L. Hoffman the officer before whom 
the foregoing deposition was taken, do hereby certify 
that the witness whose testimony apoears in the 
foregoing deposition was duly sworn by me; that 
the testimony of said witness was taken in shorthand 
and thereafter reduced to typewriting by me or under 
my direction; that said deposition is a true record 
of the testimony given by said witness; that I am 
neither counsel for, related to, nor employed by 
any of the parties to the action in which this 
deposition was taken; and, further, that I am not 
a relative or employee of any attorney or counS'el 
employed by the parties hereto, nor financially 
or otherwise interested in the outcome of this action. 



^£^^7c 



Notary Public in gM^ tor tha 
District of CoK 




57 



My Commission Expires 6/30/90 



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SELECT COMMITTEE TO INVESTIGATE COVERT 

ARMS TRANSACTIONS WITH IRAN 

U.S. HOUSE OF REPRESENTATIVES 

AND 

SELECT COMMITTEE ON SECRET MILITARY ASSISTANCE 

TO IRAN AND THE NICARAGUAN OPPOSITION 

UNITED STATES SENATE 

Monday, July 6, 1987, 

Washington, D.C. 

Deposition of ALFRED C. CLARK and GREGORY L. ZINK, 

taken on behalf of the Select Connnittees above cited, pursuant 

to notice, commencing at 4:55 p.m. in Room 901 of the Hart 

Senate Office Building, before Terry Barham, a notary public 

in and for the District of Columbia, when were present: 

For the Senate Select Committee: 

CHARLES KERR, Esq. 
Associate Counsel 

JOHN MONSKT, Esq. 
Assistant Counsel 

LOUIS ZANARDI 
Accountant 



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For the deponents: 

CRAIG B. BRIGHT, Esq. 
Patterson, Belknap, Webb & Tyler 
30 Rockefeller Plaza 
New York, New York 10112 



ICO . M 
Wi'hinnrn C 2000] 



CONTENTS 




Examination by counsel for 


Paqe 


Senate Select Committee (Messrs. Kerr and Monsky) 


3 


EXHIBITS 




Clark/Zink Exhibits 


Markedd 


1 


30 


2 


62 



3 and 4 



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p ROCEEDINGS 



Whereupon, 



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ALFRED C. CLARK and GREGORY L. 2 INK 
vrare called as witnesses and, after having been first duly 
sworn, were examined and testified as follows: 

EXAMINATION BY COUNSEL FOR THE SENATE 
SELECT COMMITTEE 
MR. KERR: Mr. Zink, would you state your full name 
for the record, please? 

MR. ZINK: Gregory L. Zink. 

MR. KERR: And by whotB are you employed, Mr. Zink? 

MR. ZINK: Forway Industries. 

MR. KERR: And what is the address of Forway 

Industries? 

MR. ZINK: 122 Greene Avenue, Woodbury, New Jersey 

06096. 

MR. KERR: What position do you hold with Forway? . 
MR. ZINK: Vice president and chief financial 

officer. 

MR. KERRi And you've been employed by Forway since 

when? 

MR. ZINK: April 1, 1986. 

MR. KERR: Mr. Clark, would you state your full 

i name, please? 

MR. CLARK: Alfred C. Cl< 



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MR. KERR: Where do you live, Mr. Clark 

MR. CLARK: 

MR. KERR: And by whom are you employed 

MR. CLARK: Clark Management Company. 

MR. KERR: Their address is where, sir 

MR. CLARK: It's the same address as my home. 

MR. KERR: Could you give me a brief description of 
the business of Clark Management 

MR. CLARK: It is involved in providing investment 
management services, which includes open market investments 
and venture capital. 

MR. KERR: Now, you have a relationship with 
Forway, sir? 

MR. CLARK: Yes, sir. 

MR. KERR: And what is that relationship 

MR. CLARK: I am a stockholder and a director. 

MR. BRIGHT; Clark Management is the stockholder. A 

MR. KERR: All right. But you are a director; is 
that correct? 

MR. CLARK: Yes. 

MR. KERR: Now, with regard to the stockholders of 
Forway at the present time, who to your knowledge are the 
stockholders? You have identified Clark Management as one. 
Who are the others? 

MR. CLARK: CSF . 



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MR. KERR: That is a Swiss corporation 

MR. CLARK: I believe so. 

MR. KERR: Any other Stockholders? 

MR. CLARK: Not to my knowledge. 

MR. KERR: And who are the other directors of 



Forway? 



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MR. CLARK: Mr. Zucker. 

MR. KERR: So there are two directors, yourself and 
Mr. Zucker? • 

MR. CLARK: Yes. 

MR. KERR: With regard to the officers of Forway, 
can you identify the officers for me, please? 

MR. CLARK: The president and chief executive 
officer is Ronald L. Wade. The vice president of finance and 
chief financial officer is Gregory Zink. 

MR. KERR: Are there any other officers of the 
corporation? 

MR. CLARK: Yes. 

MR. KERR: And who might they be? 

MR. CLARK: Harry Jackson is a vice president. I 
think those are the officers that I'm familiar with. 

MR. KERR: Mr. Jackson's function is what? 

MR. CLARK: I'm not quite sure what his respon- 
sibilities are at the present time, and I^ 
ask Mr. Zink that question, if you would 




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MR. KERR: All right. Mr. Zink, can you help us 
out? 

MR. ZINK: Yes. He's vice president and secretary, 
and he is effectively chief engineer. 

MR. KERR: Mr. Zink, while I'm with you, can you 
give me an overview of the nature of the business of Forway 
at the present time? 

MR. ZINK: Yes. Forway Industries is a manufacturer 
and distributor of military spare parts, ranging from 
mechanical, electrical, optical, a wide range of specialty 
made-to-order parts. 

MR. KERR: Does it have any other business locations 
other than the Woodbury location? 

MR. ZINK; There are two subsidiaries. One is an 
inactive domestic-international sales corporation, and that's 
called Forway International. The other subsidiary is an 
entity, Forway Properties, Florida. 

MR. KERR: What is the nature of its business? 

MR. ZINK: It is a real estate holding company. 

MR. KERR: And it is wholly owned by the Forway 
parent firm? 

MR. ZINK: Yes. 

MR. KERR: Who are the officers of Forway Proper- 
ties? 

MR. ZINK: To the best Tf W ^HW.fledge for the 




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officers of Forvay Propert.es, currently only wUlar. Zuc.er 
The three other officers of that corporation have all 
resigned in the last year. 

MR. KERR: And who would they have been? 
MR. ZINK: Jacob Farber, and two individuals from a 
law f.n. .n Florida who were, to the best of my knowledge, 
effectively officers on paper. 

MR. KERR: Now, you say it's a real estate holding 
company. Describe a little more fully for me the nature of 
i.s business or, alternatively, what real estate it holds. 

MR. ZINK: Yes. Today it holds one office building, 
and I believe that's in aac.sonvUle or Clearwater - JacKson- 
.Ule or Tallahassee. Previously, it held another building 
and two oil and gas wells in Oklahoma, all of which have been 

sold. 

MR. KERR: And when were they disposed of? 

W,. ZINK: The oil and gas wells, I believe in the 
\ ,83, -84 time frame, and the other office building within the 

last two years . 

MR. KERR: It was disposed of before you began your 

employ? 

MR. ZINK: Yes. 

MR. KERR: The office building in Jacksonville or 

Tallahassee, who is its primary tenant, if you know? 



MtAUt M^OATMa CO 
10' C Sweei N E 



MR. ZINK: 



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parent, the management of that building is not something that 
we at Forway Industries in Woodbury have close tabs on. I do 
not know the name of the tenant. 

MR. KERR: In terms of who actually is responsible 
for the day-to-day business of the holding company, Forway 
Properties, who is responsible for that? Mr. Zucker? 

MR. ZINK: A fellow by the name of Jerry McAllister, 
to my knowledge, is the property manager. 

MR. KERR: And where is he located? 

MR. ZINK: I believe he is in the same location. 

MR. KERR: Jacksonville or Tallahassee? 

MR. ZINK: Yes, correct. 

MR. KERR: With regard to being able to reach Mr. 
McAllister, does Forway, the parent firm, have a record of 
where he can be reached? 

MR. ZINK: I'm not sure. 

MR. KERR: So if you all need to get a hold of him, 
you're not sure how you'd do it? 

MR. ZINK: We go through — have gone through Ben 
Cornelius in the past. 

MR. KERR: And you better identify Mr. Cornelius 

for me. 

MR. ZINK: Ben Cornelius was the accountant for 
Forway Properties prior to Ron Wade's employment at Forway 
Industries, and tU%rfriafign JtJji^tti^.C^aiaielius stepped down is 



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that there was a conflict of interest in that Mr. Wade and 
Mr. Cornelias are brothers-in-law. 

MR. KERR: Mr. Cornelius does not have a relation- 
ship with Forway Properties at present, to your knowledge? 

MR. ZINK: Not officially, no. He's more of a help 
when we need something than in an official capacity. 

MR. KERR: Now, the CEO of Forway you indicated was 
Mr. wade. Mr. Wade became president of the corporation when- 

MR. ZINK: On April 1, 1986. He became full-time 
in the June- July '86 time frame. 

MR. KERR: Now, just trace the interest in the 
corporation a bit further. Up until on or about October 3, 
1986, there was another stockholder of Forway, Mr. Zink? 
MR. ZINK: Yes. 
MR. KERR: And who was that? 
MR. ZINK: Jacob Farber. 

MR. KERR: And during the period that you've been 
an employee of Forway, from April of "86 through October 3rd 
of '86, what percentage of Forway, to your knowledge, did .Mr. 

Farber own? 

MR. ZINK: Fifty percent. 

MR. KERR: And the remaining 50 percent up until 
October 3, 1986, was held by whom? 
I MR. ZINK: Twenty-five percent by CSF and 25 

percent by Clark Management. 



ive percent cy *-or anvj ^ 

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MR. KERR: And as of October 3, 1986, an event 
occurred that changed the stock ownership. What was that 
event? 

MR. ZINK: The buyout of Jacob Farber's equity 
interest. 

MR. KERR: As a result of that buyout, how did the 
equity interest in the corporation change? 

MR. ZINK: The end result of that was that one- 
third of th6 stock was held by Clark Management and two- 
thirds by CSF. 

MR. KERR: All right. Now, just one other bit of 
background. CSF you say you believe is a Swiss corporation? 

MR. ZINK: Correct. 

MR. KERR: All right. Its representative in terms 

I 
of Forway is whom? 

i 

MR. ZINK: Willard Zucker. I 

MR. KERR: And this is the same Willard Zucker who i 
is president of the Properties subsidiary; is that correct? 

MR. ZINK: Correct. i 

I 
MR. MONSKY: And a director at the company? 

i 

MR. ZINK: Correct. i 

MR. KERR: We'll come back and pick up that i 

chronologically. 

Let me take you all back and start with Mr. Clark. 

Mr. Clark, in terms of your relationship with Mr. Zucker, 

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could you describe to me how it was thdt you came to know y.r . 

Zucker ? 

MR. CLARK: I met Mr. Zucker I believe approximately 

]ten years ago in the late "TOs through, I believe, a broker 

at Sloate, Wiseman, Murray called Nathan Abrams . 

MR. KERR: You met Mr. Zucker through Abrams. Did 
you have occasion to subsequently do business with Mr. Zucker? 

MR. CLARK: Yes. 

MR. KERR: Can you describe what the nature of your 

business was? 

MR. CLARK: I managed money for CSF. 

MR. KERR: And when you say you managed money, can 
you elaborate on that a little bit for me, and tell me the 
nature of the money that you managed and the nature of the 
management that you did? 

MR. CLARK: I managed funds that ranged between 
five and a high of approximately 15 million dollars on a 

discretionary basis. 

MR. KERR: Now, with regard to these funds that you 
were managing, let me just focus on that for a moment. Your 
understanding of CSF's business is what? what is the nature 

of Its business? 

MR. CLARK: My understanding is that they are, what 
I believe in Switzerland is called, a fiduciare or fiduciary 

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to- C Slim N E 



services, legal services, accounting services, and management 
services . 

MR. KERR: The funds that you were managing for 
CSF, then, would be funds for which you were responsible to 
CSF, but as to which it has obtained some fiduciary respon- 
sibility? Is that correct? 

MR. CLARK: My understanding is that they repre- 
sented investment funds that were entrusted to them that they 
farmed out to me for management primarily in the U.S. 
securities markets. 

MR. KERR: During the time that you were managing 
these funds, did you come to know whose funds ultimately 
these funds were? 

MR. CLARK: No. 

MR. KERR: Did you have occasion to talk to Mr. 
Zucker in general terms about whose funds it was that he was 
placing with you? 

MR. CLARK: No. 

MR. KERR: All right. Now, with regard to business 
activities with Mr. Zucker, you have indicated that you had 
funds management responsibilities with him. Were there other 
business enterprises which you found yourself engaged in with 
Mr. Zucker? 

MR. CLARK: The only other business with which I 
was engaged with Mr. Zucker was Forway Industries. He 

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I brought a limited number of investment opportunities to my 

attention, which, to the best of my recollection, were in the 
real estate area. 

MR. KERR: Now, you used the term real estate 

area . ■ Could you be a little bit more specific? What kinds 

I of opportunities did he ask you to take a look at? 

I MR. CLARK: I believe one of them was an apartment 

'complex or apartment building in Florida. The others -- and 
'I 
there may h^ve been only one other -- were something along 

those same lines, but I do not remember the specifics. 

MR. KERR: Now, with regard to Forway, you became 
involved with Mr. Zucker and Forway how? Describe the 
circumstances for me. 

MR. CLARK: Mr. Zucker approached me and described 
the business of Forway and said that -- rather, described Mr. 
Farber and said that Mr. Farber's 50 percent partner of Mr. 
Blau might retire. 

MR. KERR: And that would be William Blau? 

MR. CLARK: Yes. And if he did that, he might wish 
to sell his interest. He approached me for the purpose of 
going 50-50 with him in buying Blau's interest. 

MR. KERR: Can you place this in time for me? When 
did you have this discussion with Mr. Zucker? 

MR. CLARK: I believe it was late in 1982 based 
upon the fact that^ JJaa ^nvestjnent was made on January 11th of 



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mujo) WMMrmMi co . mc. 

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MR. KERR: And as of that time, January 11, 1983, 
you, through Clark Management, acquired a 25 percent interest, 
and Mr. Zucker, more properly CSF, acquired a 25 percent 
i] interest. Is that right? 

MR. CLARK: Correct. Clark Management acquired a 
25 percent interest, and CSF acquired a 25 percent interest. 

MR. KERR: With regard to the cost to you of that 
25 percent, 'can you tell me what price you paid for that 25 
percent interest? 

MR. CLARK: Yes. It was $925,000. 

MR. KERR: Did CSF put up a similar sum? 

MR. CLARK: Yes. 

MR. KERR: Management of that corporation prior to 
that acquisition was headed by Mr. Farber; is that right? He 
was president at the time of the acquisition? 

MR. CLARK: I believe so, yes. 

MR. KERR: And he continued in that role? 

MR. CLARK: Yes. 

MR. KERR: All right. And the business of the 
company at that time was what it is today -- military spare 
parts? 

MR . CLARK : Yes . 

MR. MONSKY: At the time you purchased your 
interest, did you ISA'VJW' moQfiV|^t<^|Ug -company? 



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HR. CLARK: No. 

MR. KERR: Let me take you to late 1985, early 
1986. Did there come a time in that period when Forway began 
to make use of Touche Ross at its accounting firm? 

MR. CLARK: Is that question directed to me? 

MR. KERR: Yes, sir. 

MR. CLARK: If you can recall. If not, I'll direct 
it to Mr. Zink. 

MR. ZINK: Yes. Forway began to use Touche Ross as 
their accountants I believe in mid-1983 for the year ended, I 
think, June of '83, which coincided with the time that Mr. 
Zucker and Mr. Clark acquired their interest. 

MR. KERR: And that relationship continued through 
early 1986? 

MR. ZINK: Through today. 

MR. KERR: They continued to be the accountants? 

MR. ZINK: Correct. 

MR. KERR: Turning to January of 1986, to your 
knowledge, Mr. Zink, was Touche Ross engaged in something 
other than simply for the year-end financial statements? 

MR. ZINK: Yes. 

MR. KERR: And what was that? 

MR. ZINK: In late January of '86, Touche Ross was 
retained to do what we woul^ <^U ^V ^ftf 4\ioris review of 
Forway Industries. 




268 



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UNCLASSIFIED 



16 



■MXW I MW JU m u CO . MC. 
W C Siffn N E 



MR. KERR: " Now, the partner in charge of that 
project was John Flynn? 

MR. ZINK: Yes, sir. 

MR. KERR: You were an employee of Touche Ross at 
that time? 

MR. ZINK: Yes. 

MR. KERR: And what position did you hold at Touche 
Ross . 

MR. ZINK: Senior management consultant. 

MR. KERR: Now, to your knowledge, were there 
meetings that took place in January of 1986 between Touche 
Ross personnel and Mr. Zucker? 

MR. ZINK: Yes. 

MR. KERR: Can you tell me how many such meetings 
and what you know about them? 

MR. ZINK: I was not part of the meeting in late 
January where the Forway problems were presented to Touche 
Ross -- Touche Ross representation at that meeting, to the 
best of my knowledge, being Messrs. Flynn and McConnell. 

MR. MONSKY: What was the first name of Mr. 
McConnell? 

MR. ZINK: John McConnell. 

MR. MONSKY: I take it they told you about this 
meeting. 

MR. ZINK^.Jes. I received a phone call over the 



269 



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17 



inuiM KvoonHOCO . mc 

10" C Slim S I 
Vuhuwion O C :0CO! 



weekend regarding ca project and where to be on Monday morning. 

MR. MONSKY: And where was that' 

MR. ZINK: That was Forway Industries, and our 
charge being to conduct an operations review and report back 
to Mr. Zucker and Clark -- I think it was about a week time 
frame -- what our overall review of the company revealed. 

MR. KERR: Now, Mr. Clark, did you participate in 
any meetings in late January with Touche Ross personnel? 

MR. CLARK: I don't believe so, but I'm not sure. 

MR. KERR: All right. With regard to Mr. Zuckers 
activities at the time of these meetings, other people he was 
seeing, other businesses he was engaged in, can either of you 
shed any light of Mr. Zucker's activities in late January 
when he had the meeting with the Touche Ross personnel? 

MR. ZINK: I can't, no. 

MR. CLARK: I cannot either. 

MR. KERR: With regard to events in February, you 
indicated that some time during the first week or so of 
February you would have met with Mr. Zucker; is that right, 
Mr. Zink? 

MR. ZINK: That's correct. 

MR. KERR: That meeting would have taken place 
where? 

MR. 2INK||-;uwJie_Tc^c^e R|>sj of f ices in Philadel- 
phia . 




270 



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iiiiiussim 



18 



•ULLtn HVOOTMO CO . MC. 
y>l C ium. N E 
Vuhu)«ton D C :0002 



MR. KERR: Mr. Clark, did you participate in that 
I meeting? 

MR. CLARK: I believe so. 

MR. KERR: Now, to the best of your joint recollec- 
tions, was that a meeting that took one day? Was there a 
series of days of meetings or what? Do you recall Mr. Zink? 

MR. ZINK: A few hours in the morning. 

MR. KERR: At that time you' gave what? Your 
preliminary .evaluation? 

MR. ZINK: Preliminary review of life at Forway, 
the status of the company. 

MR. KERR: Again, in terms of what Mr. Zucker's 
other activities may have been on the 7th of February of 
1986, do either of you have any recollection or knowledge of 
other activities he would have engaged in? 

MR. CLARK: I do not. 

MR. KERR: Mr. Zink? 

MR. ZINK: No, I don't. 

MR. KERR: No knowledge of other people he might 
have met at that time? 

MR. ZINK: No. 

MR. MONSKY: By this time in February, had you 
prepared a business plan for Forway? 

MR. ZINK: The result of the February 3rd -- that 
ballpark date -- luefitiofl^ the next step for Touche Ross was 

rnjAl innirirffv 



271 



-icig 



UNCUSSIFIED 



19 



MtXIK HVOOTMO CO MC 
M)7 C Si>n< N E 



ij to prepare a business plan based on their findings to be 
;. presented to First Pennsylvania Bank, and then hopefully to 
|| be implemented in the coming months. So, yes, a business 
plan was prepared, and I believe it was dated February 7th. 
The night before that, it was presented to Mr. Zucker in the 
evening . 

MR. KERR: As of that time, February 7th, when you 
all were putting the business plan together for presentation 
to the bank> had either of you had any discussions with Mr. 
Zucker about him looking to funds under his control that were 
equitably owned by either Albert Hakim or General Secord? 
I MR. ZINK: No. 

MR. CLARK: No. 

MR. MONSKY: At this point, Mr. Flynn was still 
running the project? Was he one of the people? 

MR. ZINK: The consulting project, yes. 

MR. MONSKY: Had Mr. Zucker at this time used an 
office at Touche Ross, or can you recollect? 

MR. ZINK: Other than for our meetings, I saw him 
use or heard of no other use of -- his using Touche 's 
facilities . 

MR. MONSKY: And those meetings were where? 

MR. ZINK: On the 25th floor where Touche Ross is 
located. 

MR. MONSKY: In a conference room? 



UNCUSSIFIED 



272 



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ONCUSSIFIED 



20 



MR. ZINK: Yes. 

MR. MONSKY: Okay. 

MR. KERR: Now, we have a record that Mr. Sucker 
visited the Republic National Bank on February 7, 1986. Do 
you all have any knowledge of what business he was transacting 
there that day? 

MR. ZINK: No, I don't. 

MR. CLARK: No, I do not. 

mA. KERR: Let me move you to early March 1986. 
Were there meetings during the first week of March 1986 that 
either of you attended? 

MR. ZINK: Yes. 

MR. KERR: Mr. Zink, could you outline that? 

MR. ZINK: There was a meeting, I believe, March 
6th in the morning, once again at the Touche Ross offices. 

MR. KERR: Can you describe who was there and what 
happened? 

MR. ZINK: The attendees were myself, Messrs. Flynn 
and McConnell and Zucker and Clark. The purpose of the 
meeting was to update Messrs. Zucker and Clark on our 
progress relative to implementing the business plan and an 
operational update. 

One of the recommendations in the business plan was 
to bring in new management ^J^f °ff^S^*\ii^ii*W*l^y ^ '^^'^ 
president, and create a|fM|f mU(P1IJ1^<| F.4§ to the lack of 



273 



irc21 



UNCLASSIFIED 



21 



IMXlll KVOimMI CO . MC 
\01 C Sum N t 



financial expertise at Forway. 

I 

) MR. KERR: Do you have any recollection of when on 

that morning this meeting ended? 

MR. 2INK: I would say it was another couple hours 
in the morning. 

MR. KERR: Would it have ended before two o'clock? 

MR. ZINK: I do not know. 

MR. KERR: In terms of the folks that attended the 
meeting and. where they went after it was over, let's start 
with you. Do you recall what you did after this meeting 
broke up? 

MR. ZINK: Yes. I went to Florida. 

MR. KERR: What knowledge do you have of the 
immediate destinations of the other members of the group that 
were at that meeting? 

MR. ZINK: I don't know where any of them went. I 
do know that at some point in these January-February-March 
meetings Mr. McConnell, Mr. Flynn and, at a minimum, Mr. 
Zucker went to lunch. But I don't know whether this was the 
day they went to lunch or it was after possibly the February 
meeting. 

As I said, I left and so I really don't know. 

MR. KERR: Mr. Clark, in terms of your activities, 
do you recall where it was that ^q^ #4^|i^^A a f ter this 
meeting was over? 




274 



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Maxlll KVOMTINO CO INC 

I 
>0' C SotcT. N E 



MR. CLARK: I do not recall. I do recall, now 
that Mr. Zink has mentioned it, that we did have one lunch 
with Mr. Flynn. I do not recall -- I think it was at the 
Racquet Club in Philadelphia, and I do not recall when that 
took place. But I remember one lunch. I do not remember 
where I went after that meeting; however, I would assume I 
went back to New York because when meetings were finished, 
that's where I think I always went. 

MR. MONSKY: Was Mr. Zucker present at that 
meeting, the lunch, that you recall at the Racquet Club? 

MR. CLARK: Yes. 

MR. KERR: Let me see what recollection, if any, 
you have of one other possible event. Do either of you 
recall on the 6th of March Mr. Zucker indicated that he was 
going to be meeting with a woman from Washington, D.C., or 
meeting with any other client that day? 

MR. ZINK: No, I don't. 

MR. CLARK: I do not either. 

MR. KERR: And do you recall at the lunch at the 
Racquet Club whether or not you all were introduced to 
someone who was not part of your group, preferably a woman 
from Washington, D.C.? 

MR. ZINK: I wasn't at the lunch. 

MR. CLARK: I have a vague recollection that one or 
two officials of i'lft^tA^nA^|L#fcmi| P^Vk were there. The 



rinnrutcrFirn 



275 



110 2 3 



""CLAssmn 



23 



»tj.t» Kvofrriaio CO . 
W C 5««ti N t 



lunch was hosted by John Flynn. 
'I MR. MONSKY: On March 6th, do you have any recolle'-- 

'i 

tion of Zucker stepping out of the meeting and using an 
office near John Flynn's office? 

MR. ZINK: No, I don't. 

MR. KERR: Now, do you recall any other meetings 
that took place with Mr. Zucker in early March 1986? 

MR. ZINK: Yes. There was an additional meeting on 
March 9th, if that's the Sunday following the meeting I just 
mentioned . 

MR. KERR: And what happened at that meeting? 

MR. ZINK: Ron Wade had come into town from 
Milwaukee to talk to Mr. Zucker and Mr. Clark, Mr. Wade 
eventually becoming president of Forway. The principal 
objective of that meeting was to interview an individual for 
the financial position, and that interview did take place on 
that Sunday morning. 

MR. KERR: Did there come a time that day when 
there was a conversation with you, Mr. Zink, about the 
potential for you to become an employee of Forway? 

MR. ZINK: Yes. After the main objective of the 
meeting had been concluded, I remember riding in an elevator 
with Mr. Zucker where he introduced the idea of me becoming 
the VP-Finance at Forway. 



MR. KERR: Wit 



^(infirK^dirfeif 



Mr Zucker 



276 



nic24 



^fimim 



24 



Hujii Kvomma co . wc. 
10' C Sucn N E 



was present at that meeting on March 9 or thereabouts? 

MR. ZINK: Yes, he was. 

MR. KERR: Mr. Clark, you were present? 

MR. CLARK: Yes. 

MR. KERR: Do either of you have any recall of 
Other people Mr. Zucker intended to meet with or the business 
' that he was doing that day, March 9? 

MR. CLARK: I do not. 

MR. ZINK: I don't either. 

MR. MONSKY: At this time was Mr. Zucker interview- 
ing people? 

MR. ZINK: Mr. Zucker was part of the interviewing 
group that was interviewing the potential CFO candidate. 

MR. MONSKY: When the interviews were conducted, 
were they done from an office or a conference room? 

MR. ZINK: The initial meeting started in the 
conference room near John Flynn and Ken Hagstrom's office. 
There was a discussion -- somehow that meeting split up, and 
we ended up, some of us ended up in the main conference room 
I at Touche Ross near the lobby. But I don't recall. I have a 
faint recollection of Farber coming in, and maybe Zucker and 
Farber having a discussion in that conference room. But I 
don't have a clear picture of why we split up. 

MR. CLARK: May I also say that there was one 

people . 



person interviewed; jj^fl|f°jl ^ |f j j^f 7« j^^ 



277 



li^mma 



25 



10' C imn. N £ 



MR. KERR: And that was Mr. Wade? 

MR. ZINK: No, no. Mr. Casey was the fellow 
interviewed. Mr. Wade was one of the attendees along with 
Flynn and McConnell. 

MR. KERR: Thank you. 

MR. MONSKY: This is all on March 9th? 

MR. ZINK: Correct. 

MR. MONSKY: Let me ask you one other question 
about offices. I take it it would not be unusual that if 
Zucker asked to use an empty office that there would be one 
available in the Touche Ross floor? The 24th floor was the 
only floor of Touche Ross, correct? 

MR. ZINK: No. There are other offices on the 25th. 

MR. MONSKY: The 25th and the 24th. 

MR. ZINK: Yes. 

MR. MONSKY: But if Mr. Zucker wanted to use an 
empty office, would he be able to do so? 

MR. ZINK: Conceptually, yes. 

MR. KERR: Do you have any knowledge of whether or 
not he made use of a Touche Rosa office that day? 

MR. ZINK: No, I don't. 

MR. KERR: With regard to events that we have 
knowledge of on March 11, 1986, Mr. Zucker apparently visited 
Republic National Bank in New York again. Do you all have 
any knowledge of why ItttTflf^A^^ff I t^f I^H'^ that day? 



278 



:nc26 



uNCUssm 



25 



MR. ZINK: No, I don't. 
I 

MR. CLARK: I do not either. 

1 MR. KERR: Mr. Zink, you became employed at Forway 

'shortly thereafter, April 1; is that right? 

j MR. ZINK: That's correct. 

MR. KERR: All right. Now, from that point, April 
1 looking forward, can you give me some notion of the extent 
to which you were in contact with Mr. Zucker? Is he somebody 
you talked to every day, every week, once in a blue moon? 
How often? 

MR. ZINK: That was a period of great turmoil at 
Forway, and there was a lot of internal upheaval relating to 
Wade and Zink versus Farber relative to the operation of the 
company. It was my understanding that Farber was calling 
Zucker saying that Wade and Zink are doing crazy things, and 
then I would either get a call from Mr. Zucker or I would, in 
anticipation of what I thought was going on, call Mr. Zucker 
to keep the record straight. 

So our conversations between April and June, I 
don't recollect the frequency of them, but the subject matter 
was purely — heavily related to the problems at Forway. 

MR. KERR: When in the course of your employment 
did Messrs. Hakim and Secord first come to your attention? 

MR. ZINK: Mr. Hakim's name first came to my 



iMjJit nvomma co . mc 
io- C Siicn N E 



'I 



attention in late August of 1986 



te Augu! 



iiNHi h^m^ii 



279 



mc27 



IINClASSIFIfO 



27 



»• C S<Jt»I N t 



MR. KERR: And to help me decipher the context, 
what was the context of his name coming up? 

MR. ZINK: There was a potential product that Mr. 
Hakim was going to introduce to Forway to potentially mass 
produce a weapon that has become known as the Laser Gunsight 
Project . 

MR. KERR: And Mr. Hakim's name was introduced to 

you by Mr. Zucker? 

MR. ZINK: Yes. 

MR. KERR: What did Mr. Zucker tell you about Mr. 
Hakim at that time? 

MR. ZINK: Would you say that again, sir? 

MR. KERR: Yes. What did Zucker tell you about 
Hakim when he raised Mr. Hakim's name to you? 

MR. ZINK: I believe he introduced him as a 
business acquaintance and friend. 

MR. KERR: Did he describe to you at that time the 
nature of his business relationships with Mr. Hakim? 

MR. ZINK: Not in any detail, no. 

MR. KERR: Did he tell you in general terms what 
the relationship was? 

MR. ZINK: Only to the extent that I was being 
asked to transfer funds to Stanford Technology, which was my 
understanding, given the type of product that Mr. Hakim was 
going to introduce, th*t-h^-W*s.iii, U^fi_fliTI12_type business. 



'^^f'*^*f'i(»itji|'ffH 



280 



J1C28 



IMXIII HOOMTMa CO.. HC. 
10! C iinn N E 
*uhirf(Ofl D C I(VV«» 



UNCUSSIFIED 



28 



But Mr. 2ucker told me nothing about Mr. Hakim. 

MR. MONSKY: Did he tell you who Mr. Hakim's 
business associates were? 

MR. ZINK: No. 

MR. KERR: Now, the incident that you're referring 
to would be the 550,000 transfer that takes place on or about 
August 25, 1986? 

MR. ZINK: That's correct. 

MR. KERR: And it was only in that context that you 
first learned of Hakim; is that right? 

MR. ZINK: Yes. 

MR. KERR: Was General Secord ' s name mentioned to 
you in that context? 

MR. ZINK: No, it was not. 

MR. KERR: With regard to the Stanford entity, do 
you recall which Stanford entity it was? 

MR. ZINK: It was Stanford Technology. 

MR. KERR: STTGI? 

MR. ZINK: No. It was the California company. 

MR. KERR: STTGI is not the right one. It was 
Stanford Technology that you were dealing with? 

MR. ZINK: That's correct. That's the corporation 
on whose behalf the account was that I wired the money. 

MR. KERR: I'll come back to that in context in a 
moment. Let me get oi^A^fcliflS q#a£l,Antfja..ua. before us. 



mm f w^iips 



281 



mc2 9 



nnmifiB 



29 



10' C iiieti N I 



General Secord -- when did his name first come to 

your attention? 

MR. CLARK: Are you referring to me? 

MR. KERR: Let me deal with Mr. Zink first. 

MR. ZINK: General Secord' s name first came up 
around the time that it appeared that Farber was going to be 

bought out. 

MR. KERR: And you placed that when? 

MR. ZINK: Late September '86. 

MR. KERR: Now, Mr. Clark, you heard of General 
Secord an earlier time. Isn't that right? 

MR. CLARK: That is correct. 

MR. KERR: Can you describe for me the circumstances 
under which you heard of General Secord? 

MR. CLARK: I do not recall the exact circumstances 

under which Secord' s name first came up or exactly at what 

date it came up. However, in reviewing my files, I found a 

memorandum from Zucker to Farber with a copy to me, which you 

have a copy of. And that memo prompted my memory to the 

point that apparently Zucker and I picked up Secord at an 

airport around - on June 18, 1984. That airport, I believe, 

was the Philadelphia Airport, and we brought him to Forway 

for what I recall to be the purpose of acquainting himself 

with the Forway operation. 
" •* ' „R. KERR: You rvr^irt^d ua with a copy of a letter 



,. ^^J ^^W'rr^'r^if, 



282 



mc30 



Mmsim 



30 



ItUJf KVOOTMa CO.. MC. 

V07 C Sum S E 



dated June 18, 1984, from yourself to Mr. Farber, which has 
attached to it a two-page memorandum. Correct? 

MR. CLARK: Yes. I attached that this morning. i 

MR. KERR: All right. You would place the memoran- ; 
dum roughly in time with the June 18, 1984, letter; is that 
right? 

MR. CLARK: Correct. 

MR. KERR: Let me have this marked as Exhibit 1 to i 
the deposition. 

[The document referred to was marked for iden- 
tification as Clark/Zink Exhibit No. 1] 

MR. KERR: Using Exhibit 1 as a way of trying to 
focus your recollection, the first paragraph of the memorandum 
suggests that you may have met Mr. Hakim some time in this 
period of time, June 1984. Do you recall meeting Hakim at 
that time? 

MR. CLARK: No, I did not meet Hakim at that time. 

MR. KERR; Okay. So the reference to the you have 
met Albert" in the memorandum is Farber -- 

MR. CLARK: Excuse me. This memo is to Farber. 

MR. KERR: That's what I'm asking you. 

MR. CLARK: Yes. 

MR. KERR: You did not have occasion to meet Hakim 
yourself? 



MR. CLARK: Correct. 

• A. ... . 



UNClASSinED 



283 



mc31 



DNCUSSIflEO 



31 



■MJJ* naroaTno co . mc 
Wl C Sum N E 
VMkHKlMl D C MOO] 



MR. KERR: Do you recall having any discussions 
with Dr. Farber about his impressions of Mr. Hakim? 

MR. CLARK: No. 

MR. KERR: Can you give us any further recollection 
of what it was that Farber and Hakim and Zucker were getting 
together on in June of 1984? 

MR. CLARK: I'm not sure they were getting together 
on anything. My recollection is that Secord was coming down 
to look at the Forway operation to see it and to find out 
whether he and Forway could work out a mutually advantageous 
business relationship. I was not a party to those conversa- 
tions . 

MR. KERR: Why was this memo sent to you, if you 
know? 

MR. CLARK: I do not know. 

MR. MONSKY: In general terras, was your understand- 
ing that Secord was contemplating making an investment in 
Forway? 

MR. CLARK: No. No thought of outside investors 
had ever arisen at this time in 1984. 

MR. KERR: With regard to what's related here, 
advice by General Secord that a decision had been made about 
the U.S. government to initiate a program for the manufacture 
of spare parts for certain foreign military equipment, and a 
suggestion that there wj^ a resistance activity in an unnamed 



'Si-*. tP5-i-S.tance activity 



284 



(nc32 



mjMI DVOirTMO CO MC 
10' C Stim N E 
WuhiAfton D C 20002 



UNCUSSIFIED 



32 



country that might consume such equipment, do you have any 
further or better recollection of what it was that the 
General had in mind when he gave this advice to Dr. Farber? 

MR. CLARK: I have no knowledge of anything in this 
memo except for the fact that I was in the car that picked up 
Secord and delivered him to Forway. 

MR. KERR: Okay. Let me be very precise so that we 
understand each other. Did you have any knowledge in 1984 -- 
be it May, June, July, any time in 1984 — of General 
Secord ' s activities with regard to supplying munitions, 
lethal equipment and the like to resistance forces in 
Nicaragua? 

MR. CLARK: No, I did not. 

MR. KERR: Do you know of any relationship today 
between General Secord 's approach to Forway in 1984 and 
supply by him or entities controlled by him to resistance 
fighters in Nicaragua? 

MR. CLARK: I do not. 

MR. ZINK: Mr. Zink, do you have any knowledge of 
these matters? 

(Witness indicates.) 

THE REPORTER: "No" was your answer, sir? 

MR. ZINK: Correct. 

MR. KERR: There's also a curious last paragraph. 
Let me just ask you i^<iyi-^i--^ UP^^^a^^' "^ last point to 



imni»«^<«itim 



285 



mc3 3 



UNCUSSinED 



33 



ICO. ■■ 
MI C Sum N I 
Vitkaifias. O C iOOOl 



be resolved is to design a method of compensation for Secord 
and his present employer which would be consistent with 
existing laws and regulations applicable in the United States 
with respect to the procurement of this type of equipment. ' 
And then he invites himself into any such deliberations by 
saying, "I would very much be interested to be a party to the 
deliberations for I have years of experience in dealing with 
Albert Hakim, who is involved in STTGI . " 

D9 either of you have any notion of what it was 
that Mr. Zucker was referring to in that paragraph? 

MR. CLARK: I do not, other than what is here. 

MR. MONSKY: There's an earlier reference to the 
effect that Mr. Secord is now "associated for better or for 
worse with Albert Hakim. " Do you have any understanding of 
what the "for better or for worse" referred to? 

MR. CLARKi I don't have an understanding. I can 
only speculate that Mr. Hakim -- he says in here that he 
believes -- based upon my own assessment of Mr. Hakim, I would 
conclude that he is a sales oriented person who you cannot 
take at face value everything he says. And I would assume j 

the "for better or for worse," I assume that that's what that 

1 
refers to. ; 

MR. KERR: Let me ask you to step back for a moment 

and describe for us your perception of Zucker's relationship 

to Hakim. Perhaps I-flin j^tpjig . Did you describe them as 



lIlfhT'ACOiFirn 



286 



mc34 



i/Ncussm 



34 



■mot O tPO KTt W CO . MC 
WI C SuctT N E 



friends as well as business associates? 

MR. ZINK: I did. 

MR. KERR: Mr. Clark, what was your perception of 
the relationship between ZuCker and Hakim? 

MR. CLARK: I did not have a perception of the 
relationship in 1984. 

MR. KERR: As of today. 

MR. CLARK: As of today, I assume that my perception 
is that Hakim was a client of Mr. Zucker's. 

MR. KERR: So you perceived their relationship to 
be essentially that of business relationship, of investment 
manager and client; is that correct? 

MR. CLARK: I don't know what -- I mean, I assumed 
that it was attorney and client. 

MR. KERR; In terms of the way you all dealt with 
Zucker -- so I can get a sense of that -- Zucker can wear any 
number of hats, but was it your impression when you were 
dealing with him that he was acting as attorney for CSF or in 
some other capacity? 

MR. CLARK: My understanding was that he was acting 
as the chief executive of CSF. 

MR. MONSKY: You dealt with him primarily on 
investments? 

MR. CLARICia ■I^rf^^alt_with him on investments and on 

this. 



immis 



287 



.nc35 



WNCUSSIFIfO 



35 



I MR. MONSKY; He was not your personal lawyer'' 

JIR. CLARK: No. 

MR. KERR: Let's go back. Let me take you to early 
June 1986. There came a time in early June when Mr. Zucker 
was again in the Woodbury, New Jersey, area; is that right? 

MR. ZINK: Yes. 

MR. KERR: Can you describe what happened then, Mr. 
Zink? Zucker was staying in Philadelphia at the Hershey 
Hotel at that time? 

MR. ZINK: Yes. My recollection is that on June 
the 3rd Mr. Zucker arrived in Philadelphia, I believe at the 
Philadelphia Airport, where he was picked up by Mr. wade. 
They met Mr. Clark and I at the Hershey Hotel where we then 
went out to dinner the night of the 3rd, had all-day business 
meetings on the 4th at Forway that Mr. Cohen and Mr. Farber, 
in addition to Wade, myself, Clark and Zucker, attended. And 
a final meeting was held the morning of the 5th where a board 
resolution further defining roles and responsibilities at 
Forway was held. 

MR. KERR: Did there come a time on the 5th when, 
to your knowledge, a meeting took place with the company's 
bankers? 

MR. ZINK: Yes. It's my understanding that the 
driver of one of our vehicles took Mr. Clark and Mr. Zucker 






to Philadelphia. I 



IIMMtC<J1t!trt 



lark was dropped 



288 



;nc36 



UNCUSSIFIED 



36 



mtjLjnt RvooTiNO co . mc. 

)0' C Slim N E 



off at the train station, Mr. Zucker at First Pennsylvania 
Bank, where it's my understanding also that he had lunch with 
Robert DeVult, Forway's loan officer, and Mr. DeVult's boss, 
a fellow by the name of Alan Armstrong. 

MR. KERR: Mr. Clark, did you or did you not attend 
the luncheon meeting with DeVult and Armstrong? 

MR. CLARK: I don't believe I was there. 

MR. KERR: Insofar as either of you know about that 
meeting, carl you describe what you've been told occurred at 
that meeting? Mr. Zink? 

MR. ZINK: The purpose of the meeting was to 
reassure First Pennsylvania Bank that Mr. Zucker and Mr. 
Clark were committed to the survival of Forway, and Mr. 
Zucker being up to that point the lead individual in putting 
any money that was required into the company and making the 
effort to hire consultants and remove Farber from the 
president position. The whole purpose of the meeting was 
really for Zucker to meet DeVult's boss, which was another 
layer of First Pennsylvania Bank that Forway up to that point 
had never penetrated. 

MR. MONSKY: Did Zucker have signatory power on any 
of Forway's accounts at the bank? 

MR. ZINK: No. 

MR. KERR: Do you have any knowledge of any 



representations that were made y^^|l6 Jtoft'b»W 



officers at that 



289 



-.c37 



xujn mtpomwa co mc 

10- C 5ir«i N E 



UNCLASSIFIED 



37 



luncheon regarding Secord or Hakim? 

MR. 2 INK: No. 

MR. KERR: When, to your knowledge, were Secord or 
Hakim first brought to the attention of the bank? 

MR. ZINK: Late September. 

MR. KERR: Mr. Clark, do you have any further 
different recollection of what would have occurred at this 
meeting with the officers of the bank on or about June 5th? 

MR. CLARK: No. I wasn't there. 

MR. KERR: Okay. And you weren't told anything 
more by Mr. Zucker about what happened? 

MR. CLARK: No. 

MR. KERR: We also have a note that Mr. Zucker paid 
yet another visit to Republic National Bank on June 6, 1986. 
Do either of you know anything about that visit by him to the 
bank? 

MR. CLARK: I do not. 

MR. ZINK: Nor do I. 

MR. KERR: Okay. Let me move you to August of 
1986. We touched briefly on the events of August 25, 1986. 
Mr. Zink, let me ask you to take us through the transaction 
whereby $50,000 came in from CSF and was distributed out by 
Forway on August 2 5, 1986. 

MR. ZINK: I was told by Mr. Zucker that the Laser 
Gunsight Project that I referred to earlier , in connection 



« > 



I 



lat I referred to earl i 

iiiAi Aooinrh 



82-696 0-88-11 



290 



nic38 



UNCLASSIFIED 



38 



■uj* Mx aotwu CO.. MC. 

lOT C SctTti N E 

'"• ' — "-» n r J0002 



with that project he had agreed with Mr. Hakim on behalf of 
Forway to send S50,000 to Stanford Technology as a -- i call 
jit a finder's fee. Ron Wade and I have talked about it. He 
calls it seed money for the project. 

My role was to give instructions on the incoming 
wire and then transfer the money to Stanford Technology, 
which I did at Albert Hakim's instruction. 

MR. KERR: As of that time, August 25, 1986, Forway 
did not hav^ the financial resources to make such a payment 
itself; is that right? 

MR. ZINK: That's correct. 

MR. KERR: The incoming funds came from what 
source, if you know? Came from CSF, I take it. 

MR. ZINK: Yes. 

MR. KERR: By way of what banking channel, if you 
know? 

MR. ZINK: Off the top of my head, I don't know. 

MR. KERR: And the money was wired out to Stanford 
Technology Corporation? 

MR. ZINK: I believe so. 

MR. KERR: Do you know to what bank? 

MR. ZINK: Bank of America, Pruneyard branch. 

MR. KERR: That's in California? 

MR. ZINK: Yes. 

MR. KERR: In terms of how this money which came 

'^''MAi looinrn 



291 



-nc39 






"Ncuss/fe 



39 



into Forway is carried on its books, how do you all carry 
this sum at this time? 

MR. ZINK: It is not on our books. 

MR. KERR: What are the corporation's intentions in 
terms of how it will treat this infusion of $50,000 and the 
distribution of the $50,000? 

MR. ZINK: Be accounted for properly. 

MR. KERR: Okay. Do you have any idea what that 
means at this point? 

MR. ZINK: I'll consult my accounting manager. 

MR. KERR: The laser sight transaction was not 
consummated; am I correct? 

MR. ZINK: That's correct. 

MR. KERR: And, indeed, there had been no agreement 
to go ahead with the laser sight as of August 25, 1986; isn't 
that right? 

MR. ZINK: That's correct. 

MR. KERR: Do you have any idea what you were 
paying a finder's fee for at that point? 

MR. ZINK: No. 

MR. KERR: Okay. 

MR. ZINK: I might add other than -- my inference 
was the, shall we call it, up-front costs required to 
potentially bring this product to fruition. But that's 



speculation and inference. 



-. ^ - 



llWPIKCirirn 



292 



mc4 



UNCUSSIHED 



40 



IMUtll KVOtmHO CO . MC. 
«)' C itmx. N E 
Wuhtfinon DC '*■«' 



MR. KERR: Now, let me narrow it down. I really 
I need to know what you were told by Zucker. Did Zucker give 
I you any of that kind of detail, or is this all surmise on 
your part? 

MR. ZINK: I don't recall the exact words around 
it. I wish I did. 

MR. MONSKY: Did Mr. Zucker ever ask for anything 
in exchange for the $50,000 seed money, or whatever, which-- 

MR. ZINK: No, he did not. 

MR. KERR: Has Mr. Hakim or anyone on behalf of 
Stanford Technology ever represented to you or, to your 
knowledge, anyone else at Forway what Stanford Technology 
perceived this $50,000 to be? 

MR. ZINK: No. 

MR. KERR: We have another entry that on August 27, 
1986, Mr. Zucker again visited Republic National Bank. Any 
knowledge of why that occurred? 

MR. ZINK; No. 

MR. KERR: Any knowledge of any other business that 
he was transacting in the States on August 27, 1986? 

MR. ZINK: Not to my knowledge. 

MR. KERR: Mr. Clark, do you have any knowledge of 
the $50,000 transfer? 

MR. CLARK: I do not. 



MR. KERR: 



mjfM°r 



have any knowledge of other 



293 



iic41 



UNCLASSIFIED 



41 



■•jjn mtpomma CO mC. 
^0' C ium. N t 
VutlulifM. O C 10002 



business that Zucker might have been engaged in in the August 
25 through August 27 period? 

MR. CLARK: No, I do not. 

MR. KERR: Now, there were meetings that took place 
in the third week or so of September 1986 which involved Mr. 
Hakim, amongst others; is that correct? 

MR. ZINK: Yes. 

MR. KERR: In terms of how those meetings got set 
up, what were you told? What were you told about why Mr. 
Hakim was going to come by and visit with you all at Forway 
the third week of September? 

MR. ZINK: Is that to me? 

MR. KERR: Yes. 

MR. ZINK: There were two principal objectives of 
Mr. Hakim's visit: one being the introduction of an indi- 
vidual with the laser gunsight, a fellow by the name of 
Robert Fritchie; the second, call it a sub-objective, was 
that Mr. Hakim was mentioned by Mr. Zucker as someone who 
potentially could be in a position to acquire the equity 
interest of Farber. 

MR. KERR: All right. You would have had this 
conversation with Zucker approximately when, vis-a-vis 
September 21 when they actually show up on your doorstep? 

MR. ZINK: I would assume during September. There 
was a conversation I had at home, and it may have been the 



294 



mc4 2 



ofiimim 



42 



mULMK t X X U MO CO . MC 
107 C SiiTO N E 
Vulunfion C 10001 



Friday preceding the Sunday arrival. It was an early morning 
call. 

MR. KERR: Early morning because the call was 
coming from Europe or what? 

MR. ZINK: I don't know. I don't remember where 
the call was coming from, but I do know I got a call at seven 
o'clock in the morning. 

One of the things that I remember standing out 
during that, conversation was a conversation between Mr. 
Zucker and I about Mr. Hakim. I remember asking Mr. Zucker a 
question, can he do it? Does he have the ability to do it? 

MR. KERR: "Do it," meaning what? 

MR. ZINK: Purchase the equity, have access to 
those funds. To that point, I didn't know what Albert Hakim 
-- anything about Mr. Hakim. 

MR. KERR: And what did Mr. Zucker tell you? 

MR. ZINK: In effect, he said yes, he has the means 
available to him if he so desires. 

MR. KERR: Was anything said in that conversation 
or any other preliminary conversation about General Secord 
and his relationship to Hakim? 

MR. ZINK: I don't believe so. 

MR. KERR: When did it come to your attention that 
Hakim had a partner, if you will, named Secord? 

MR. 5JlJii;L.-.l believe it was some time during the 



¥«irti likWihfYi 



295 



010 4 3 



UNCLASSIFIED 



43 



■■jjii atMMrma co « 

M- C Sum N E 
VuhiTftcfl O C iOOOJ 



September meetings. It somehow worked its way into the combo 
framework rather than an individual. 

MR. KERR: Mr. Clark, were you aware prior to 
September 21 that Mr. Hakim was going to be visiting at 
Forway? 

MR. CLARK: Yes. 

MR. KERR: Okay. And how did that come to your 
attention? 

Mp. CLARK: Mr. Zucker said he was going to drive 
up from Washington with Mr. Hakim, and during that period of 
time he wanted to talk to him about buying into Forway. 

MR. KERR: All right. You intended to be present 
at Forway when these meetings took place, I take it; is that 
correct? 

MR. CLARK: Yes. 

MR. KERR: So that I'm perfectly clear, would this 

i 
have been the first occasion that you had to meet Hakim, or 

had you met -- 

MR. CLARK: The first and only occasion that I met 
Hakim. 

MR. KERR: And you knew that Hakim was coming up as 
a potential investor; is that correct? 

MR. CLARK: Yes. 

MR. KERR: Did you ^lao know he was coming up to 
try to sell a laser sight? 




296 



mc44 



UNCIASSIFIED 



44 



■MLU* HOOtlTIHO CO . MC. 
>0- C Sur»1 N £ 
VuhmiTon C 20002 



MR. CLARK: I don't remember, but it's possible. 

MR. KERR: All right. Were you aware -- 

MR. CLARK: In fact, I think it's probable I did 
know. 

MR. KERR: We've seen a reference to the partnership 
relationship in 1984 between Secord and Hakim. Were you 
aware, were you conscious in September of 1986 that Hakim was 
part of a matched set including General Secord? Did you see 
Secord as a, potential investor at that point? 

MR. CLARK: I asked Zucker at one point if Hakim 
comes in does that mean Secord comes with him, and he said 
yes, or words to that effect. 

MR. KERR; Can you place that conversation? 

MR. CLARK: No. I believe it was previous to the 
actual meeting, but... in the period just before it. 

MR. KERR: Mr. Zink, when you said that phone call 
at seven in the morning you asked Mr. Zucker, does Hakim have 
the money, Zucker 's response was — I want to make sure I got 
this right — that he has access to it. 

MR. ZINK: My best recollection of the words were 
the means available to him to get it. That's my best 
recollection. 

MR. MONSKY: So you were left with an impression 
that Hakim would have sources that he wpijli 

MR. ZINK: Yes. 




297 



:nc4 5 



»nmim 



45 



mUMH KVOKTWO CO . MC. 
lOT C Sircri N C 



MR. MONSKY: Okay. 

MR. CLARK: May I respond to that question, too? 

MR. KERR: Sure. 

MR. CLARK: I asked the same question of Zucker, 
and the answer was yes. And he said to me that he managed -- 
words to the effect that he managed and had authority over 
certain of the funds belonging to Hakim, what I assumed 
belonged to Hakim. 

MR. KERR: Zucker managed? 

MR. CLARK: Yes, Zucker. And he mentioned there 
was a conflict of interest, and so my impression from all 
this was that Hakim himself had the funds to come up with. 

MR. KERR: You thought that Hakim had funds in his 
own right without relying on other people; is that correct? 

MR. CLARK: The man who came up to Forway was Hakim. 

MR. KERR: Right. 

MR. CLARK: My impression was that Zucker had the 
authority to act for Hakim, but in practice Hakim was going 
to make the decision. 

MR. KERR: I'm with you. Okay. 

MR. CLARK: Now, he may have been making it on 
behalf of Secord, I don't know. But my impression was it was 
Hakim's decision as a practical matter. 

MR. KERR: All right. 

MR. MONSKY: Do you remember Hakim saying anything 



298 



mc4 6 



UNCussra 



46 



W7 C Sum N E 



to the effect that he would have to consult Secord? 

MR. CLARK: No, I do not. 

MR. MONSKY: Mr. Zink? 

MR. CLARK: Excuse me. Afterwards. 

MR. KERR: Place that in time. After September 21? 

MR. CLARK: After that meeting, there was a further 
discussion of terms under which they would become equity 
investors, and Zucker told me that Hakim told him that he had 
to somewhat improve the terms to be able to demonstrate to 
Secord that he had improved the deal that was offered to him. 

MR. KERR: So at some point in late September, 
early October 1986, you became aware that Secord had a 
potential equity interest in this deal; is that right? 

MR. CLARK: Along with Hakim, yes. 

MR. KERR: Let's go through the chronology of what 
actually happened. On September 21, Mr. Hakim and Mr. Zucker 
arrive in New Jersey, right? 

MR. ZINK: Correct. 

MR. KERR: And Hakim and Zucker take up residence 
for the evening at the Gloucester Inn? 

MR. ZINK: Correct. 

MR. KERR: And you were there as well? 

MR. CLARK: Yes, I was. 

MR. KERR: Who was accompanying Hakim? 

MH. CLARK: An Oriental. People who accompanied 

IlilAI lAAiriri% 



299 



•rc47 



WHtUSSW 



47 



WJ C Siren N E 



Hakitn when he arrived were Zucker and an Oriental lady, who I 
believe was Korean but I'm not sure. 

MR. KERR: And the relationship between Mr. Hakim 
and the Oriental lady you don't know; is that correct? 

MR. CLARK: I assume it was a girlfriend, wife or... 

MR. KERR: Very friendly secretary or whatever. 

MR. CLARK: Yes, sir. 

MR. KERR: Okay. 

MR. CLARK: No, I don't think she was a secretary. 
I think it was a lady who was... 

MR. ZINK: My understanding was it was his wife. 

MR. KERR: His wife. Okay. That's helpful. 

MR. ZINK: Judging by the rock on her finger. 

MR. KERR: Okay. Do you have any idea why she was 
not registered at the hotel that day? 

MR. ZINK: She was with him. 

MR. KERR: I know. Usually one registers as Mr. 
and Mrs. The registration only shows Mr. Hakim. Do you have 
any idea why she was not registered? j 

MR. ZINK: No. | 

MR. KERR: In terros of what happened, did they j 
arrive late on the 21st? 

MR. ZINK: Late evening. 

MR. KERR: Late evening. 

MR. ZINK: Yes. I'd put it at seven o'clock, eight 

IlilAI ■AAirir*f% 



300 



mc4 8 



UNCLASSIFIED 



48 



o 'clock. 



mUMtt KVCXTWO CO . MC. 

107 C Sutti. N E 



MR. CLARK: Yes. 

MR. KERR: And you all went to dinner together that 
evening? 

MR. ZINK: Yes. 

MR . CLARK : Yes . 

MR. KERR: Was there any discussion at that dinner, 
not focusing now on Forway, but on other business activities 
that either. Zucker or Hakim were engaged in at that time? 
Anything by way of social chit-chat, anything of that kind 
that you can recall? 

MR. ZINK: Not to my recollection. 

MR. CLARK: No. 

MR. KERR: No recollection of any discussion by 
Zucker or Hakim of another client that Zucker intended to 
meet with during the forthcoming week? 

MR. ZINK: No. 

MR. CLARK: No. 

MR. KERR: The next day you had meetings at Forway? 

MR. ZINK: Correct. 

MR. KERR: And can you give me the gist of what 
those meetings were about? 

MR. ZINK: As I remember it, we had a morning 
meeting with some fragmentation. I think Mr. Clark can help 
fill in the pieces^ but tf^re was a meeting between Farber 



Tul^il^d'irirn' 



301 



mc49 



UNCLASSIFIED 



49 



MftXSJI Kt^OMDMO CO . MC. 

>«' C S<itn. N E 
Wul%*nfnm or '*v«i» 



and Zucker, wade, Clark and myself. There were a series of 
meetings that I participated in that were focused solely on 
Forway. I did not participate in any of the meetings, any of 
the other meetings that were going on. 

MR. CLARK: You weren't in the lafer meeting? 

MR. ZINK: That's in the morning. In late morning, 
early afternoon, we broke for lunch. Well, we didn't break 
for lunch, we went to Philadelphia to meet with Bob DeVult 
and his boss. 

MR. KERR: The bankers? 

MR. ZINK: Correct. 

MR. KERR: Okay. Before I get to the bankers, let 
me interject something. It came to your attention at some 
point -- either on the 21st or the 22nd -- that Mr. Zucker 
was hopeful of receiving $25,000 in cash by way of First 
Pennsylvania Bank; is that correct? 

MR. ZINK: Yes. 

MR. KERR: Describe for me how that came to your 
attention. 

MR. ZINK: My recollection is that prior to the 
leaving Forway -- 

MR. KERR: On the 22nd? 

MR. ZINK: On Monday, the 22nd, Mr. Zucker ask^d me 
to contact Mr. DeVult and inform/ask him that S25,000 had 



ij been -- he had arranged for 525,000 to be wired into Forway's 

I >.. MtiAi inninrn 



302 



TC50 



UNCUSSIFIED 



50 



mjji) MvomiNO CO imc. 
>0; C Siitci. N E 



account at First Pennsylvania, and if 325,000 in cash could 
be available to him prior to us terminating our meetings at 
the bank. 

MR. KERR: Mr. DeVult's response to that was what? 
Did he say he could do it or he couldn't do it or what? 

MR. ZINK: He indicated he would have to check it 
out. He said something like it's not a routine type request. 

MR. KERR: Were you given any instructions on what 
you were to 'ask in terms of the denominations of the bills 
for $25,000 to be produced in? 

MR. ZINK: No. 

MR. KERR: You were not. Did Mr. Zucker indicate 
to you what business or other purpose he had in mind for 
$25,000? 

MR. ZINK: No. 

MR. MONSKY: Did Mr. Zucker ever request at any 
other time for cash to be produced out of the Forway's 
account? 

MR. ZINK: No. 

MR. MONSKY: When did Mr. Zucker learn that the 
cash would be unavailable? 

MR. ZINK: Early to mid-afternoon. Early to mid- 
afternoon on that Monday, the 22nd. 

MR. MONSKY: Okay. And what was his reaction? 

MR. ZINK: He was not pleased. 



303 



TCSl 



UNCLASSIFIED 



51 



■IXIII DVOXTlMO CO . «C 
101 C Sutn N E 



MR. KERR: How was that evidenced? 

MR. ZINK: At least one remark regarding the 
professionalism of First Pennsylvania Bank. 

MR. MONSKY: Would you say he lost his cool a 
little bit? 

MR. ZINK: No. 

MR. KERR: Let me pursue it a tad further. Did he 
give you any indication at that point of any business or 
other problems that would result to him because he couldn't 
get his hands on 525,000 cash? 

MR. ZINK: No. There was no discussion ... ask me 
the question again. I'm sorry. 

MR. KERR: Yes. He's reacting negatively at not 
being able to get 525,000. Did he indicate in any fashion 
that this was causing him difficulty with a business or some 
other kind of transaction? 

MR. ZINK: I recollect him saying, I need the 
money. Is there any other alternative?" 

MR. KERR: Did you suggest any other alternative to 
him? 

MR. ZINK: I did not have any. 

MR. KERR: Do you have any knowledge of any other 
business entities or sources of funds that he could have gone 
to at that time to come up with 525,000? Do you yourself 
have any such knowledge? 



"NClASSIFIFn 



304 



nnc52 



UNcussife 



52 



tWXIK KVOKTMOCO . MC. 
«7 C iattx. N £ 



MR. ZINK: No. 

MR. KERR: Mr. Clark, do you have any knowledge of 
any other efforts made by Mr. Zucker to lay his hands on 
$25,000 cash on the 22nd or thereabouts of September. 

MR. CLARK: I do not. 

MR. KERR: Did he make any request of you for 
assistance in raising that cash? 

MR. CLARK: No, he did not. 

MF. KERR: Did he indicate to you why he needed 
525,000 cash? 

MR. CLARK: No, he did not. 

MR. KERR: He didn't mention the $25,000 cash in 
connection with the meeting he was planning to have at 
approximately 11:30 to 12 on Saturday, the 27th of September? 

MR. CLARK: No. 

MR. KERR: In terms of where Zucker got the bad 
news that he wasn't going to get $25,000 cash, were you 
present when that news was visited upon him? 

MR. CLARK: My recollection is that there was a 
check for $25,000 that he wanted to cash and that there was a 
problem with it, and that is the extent of my recollection. 

MR. KERR: Any further recall of anything he said, 
any reaction he had to that problem? 

MR. CLARK: No. 

MR. KERR: Did he discuss it with either of the 



305 



tnc53 



UNCLASSIFIED 



53 



officers of the bank? 

MR. 2 INK I Yes. 
MR. KERR: Who? 
MR. ZINK: With Mr. DeVult. 

MR. KERR: Let me go to the bank meeting. In terms 
of what happened at the meeting with the bank, I assume 
something other than the $25,000 check was discussed, right? 
MR. ZINK: Yes. 

ytR. KERR: What was discussed at that meeting? 
MR. ZINK: One of the other purposes of the visit 
was to try and convince First Pennsylvania Bank to extend a 
ll working capital loan. That was the purpose of the meeting. 
MR. KERR: In that context or otherwise, was the 
discussion with the bank officers about the potential for 
buying out Mr. Farber as of September 22? 

MR. ZINK: Not in the meeting that I participated 

in. 

MR. KERR: Do you have knowledge of that being 
discussed in some other fashion that day with the bank's 

officers? 

MR. ZINK: If it took place, Mr. Clark would be the 



iiftj.tjl mvotrrmQ CO mC 



only -- 



MR. KERR: Mr. Clark? 

MR. CLARK: I do not recall that conversation. 

MR. KERR: Do you recall any discussion in any 

_. iB»».^»'.»'<«'/^r»--rr.r 



306 



nc54 



UNCLASSIFIED 



54 



mtjLU) ntrooTtNO co twc 

107 C Sicttl N E 
Vuhuifton D C 10002 



context with the bank's officers about the investment 
potential of Secord or Hakim as of that time? 

MR. MONSKY: Of the general. 

MR. CLARK; I never had a conversation; I was never 
present where a conversation took place about that. 

MR. KERR: Did it ever come to your attention that 
such a discussion was had with the bank's officers, Mr. Zink? 

MR. ZINK: Yes, but I am not sure of the timing. 

MR. KERR: Why don't you give me the context, and 
then we'll figure out what the date is, okay? How did that 
come about? 

MR. ZINK: One of the things that happened during 
that meeting was that Dr. Farber solidified in all of our 
minds his inability to effectively help the company, and I 
believe it was becoming increasingly apparent up until that 
point and then culminating at that point that Farber — it 
wasn't working with Farber in it. But the problem was how do 
you get him out. 

And, based on my conversations with Mr. DeVult--and 
what I'm trying to put in a time frame is if Mr. Zucker made 
any comments to Mr. DeVult about having the financial means | 
somewhere to get Farber out. 

MR. KERR: So that I can understand what's going on 
here, the deal to take out Mr. Farber closed on October 3rd. 
I believe from what you told us that Mr. Zucker wouldn't have 



307 



11C55 



UNCLASSIFIED 



55 



W C V'fn N E 



been present for that, right? 

MR. ZINK: That's correct. 

MR. KERR: And from what you have told us previously 
off the record, Mr. Zucker was in town on September 21, 22, 
perhaps September 23, and then he comes back in on Saturday, 
September 27th, 1986, and then, so far as Mr. Farber is 
concerned, Mr. Zucker doesn't appear on the horizon again, 
isn't that right? 

Mr. ZINK: That's correct. 

MR. KERR: Now, if Mr. Zucker made any representa- 
tions to the bank's officers, is there any occasion other 
than the 22nd when that could have occurred? 

MR. ZINK: Not to my knowledge. 

MR. KERR: Do you have a present recollection of 
Zucker making representations to the bank's officers about 
Hakim and Secord? 

MR. ZINK: Faintly, yes. 

MR. KERR: So if there were such representations, 
more likely than not they would have occurred at the meeting 
on the 22nd, is that correct? 

MR. ZINK: Yes. 

MR. KERR: Mr. Clark, do you have anything that you 
can add or that's inconsistent with that recollection? 

MR. CLARK: I do not. 

MR. ZINK: Could I add one thing? 



308 



™c56 



UNCLASSIFIED 



56 



mLLl» mrotmNO co mc. 

50' C Siicct N E 



MR. KERR: Sure. 

MR. ZINK: Based upon my conversation with Mr. 
Zucker the Friday preceding the visit, I may have said 
something to Mr. DeVult as well. One of the things the bank 
ii was interested in was will Forway make it, i.e., will they 

;i 

■ lose their million-plus loan. And they recognized that with 

i| 
him in it the probability was a whole lot higher 

MR. KERR: 'Him" being? 

MR. ZINK: Farber. So that in the ongoing discus- 
sions that I would have almost daily with our loan officer, 
that would be something that, based on a conversation with 
Mr. Zucker, I may have replayed back to Mr. DeVult. 

MR. KERR: Loan officers are funny creatures, and 
every bank is different, but I would have thought that if the 
bank was looking to the financial backing of Hakim or Secord 
or CSF, they might have wanted you all to make some kind of 
representation in writing. They didn't want you to do that? 
I MR. ZINK: No. 

MR. MONSKY: Do you remember Mr. Zucker making a 
representation, something to the effect that a general would 
be making an investment in the company? 

MR. ZINK: Yes. 

MR. MONSKY: Could you describe that, as best you 
could. 

MR. ZINK: ■ f £1^*1^ ^^f Jk" this last September time 



309 



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57 



)0; C Siren N I 



frame, a representation that I believe I heard back from Mr. 
DeVult was made to him by Mr. Zucker, describing that 
potentially a general, not just any general, may be interested 
in acquiring some or a piece of Farber's equity. 

MR. MONSKY: And did you have any inkling of who 
that general might have been? 

MR. ZINK: The name Secord was I believe thrown 
out. At the time the name meant nothing to anybody. 

MR. KERR: Moving the chronology a bit further 
forward, Zucker, to the best of your recollection, did in 
fact leave the Woodbury area on September 2 3rd? 

MR. ZINK: Yea. 

MR. KERR: By that time, Mr. Clark, had you also 
departed? 

MR. CLARK: I believe so. 

MR. KERR: We have another notation that Zucker 
visited the Republic National Bank on September 25th, 1986, 
suggesting he was in the New York City area at that time. Do 
either of you have any knowledge what business he was doing 
in New York on or about September 25th, 1986? 

MR. ZINK: No. 

MR. CLARK: I do not. 

MR. KERR: We have been advised that Mr. Zucker was 
back in Woodbury on September 27th, 1986. Is it your 
understanding that that is correct? 



»oo . is It your 

iiNr.1 mm 



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58 



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MR. ZINK: Yes. 

MR. KERR: It's a Saturday. 

MR. ZINK: Yes. 

MR. KERR: And neither of you were present when he 
was meeting with Harold Cohen and Mr. Farber and Mr. Horowitz, 
is that right? 

MR. CLARK: Yes. 

THE REPORTER: "Yes" was your answer? 

MR. ZINK: That's correct. 

MR. KERR: Did you receive information from Mr. 
Zucker on that Saturday on what he was about? 

MR. ZINK: Yes, I did. 

MR. KERR: What did you hear from him? How many 
times did you hear from him? 

MR. ZINK: I believe I made a total of three calls, 
a minimum of three calls to Mr. Cohen's office, and the first 
one was in the 10 o'clock time frame. I learned that Mr. 
Zucker was not doing very well with the negotiations, and was 
very frustrated, and could I call back in an hour or so. 

MR. KERR: You learned that from Zucker himself? 

MR. ZINK: Yes, I did. I called back— and this is 
a guess--in the noon time frame. I was told by Harold that 
Bill had stepped out. 

MR. KERR: That would be Harold Cohen? 

MR. ZINK: Harold Cohen. 



IINPJ AQOinrn 



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MR. KERR: Did he tell you where Mr. 3ucker had 
stepped out to? 

MR. ZINK: No, he did not. And then I made I think 
a final phone call in the 2 or 3 o'clock time frame where Mr. 
Zucker informed me that he was extremely frustrated and had 
given up trying to reach a settlement with Farber and was 
going to New York. 

MR. KERR: Let me just stop you there. Do either 
of you have any knowledge of a trip that Zucker took to 
Philadelphia Airport that day, September 27,. 1986, some time 
between 10 and 2 that day? 

MR. ZINK: No, I do not. 

MR. CLARK: I don't know. 

MR. KERR: Mr. Clark, did you have occasion to talk 
with Mr. Zucker that day? 

MR. CLARK: It's possible. My recollection is that 
shortly thereafter--! may need some help on dates-- it became 
apparent that the only circumstances under which Farber was 
going to sell is if he was pressured and pressured very hard 
to sell, to which point I developed an ultimatum that I would 
no longer go along with the banks and I would call the loans 
unless he agreed to sell for $750,000. 

MR. KERR: Let me stop you there. You and Mr. Zink 
had indicated that Mr. Zucker was frustrated. What was 
frustrating him, his ^"^i-^i^^ Wa<^M^|fi terms with Farber? 



312 



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UNCUXSIflEO 



60 



muMK mroimto co . mc. 

W7 C Sirtti N £ 



MR. CLARK: He was frustrated in getting a deal, 
and I think in addition to that he was frustrated by Farber's 
lack of flexibility and perhaps by having the son-in-law come 
into this, and the son-in-law, if I remember correctly--it ' s 
a vague recollection--was not a positive force in Zucker's 
eyes in terms of persuading Farber to accept a deal . 

MR. KERR: Did you have any further contact, Mr. 
Zink, with Mr. Zucker on this matter that weekend? 

MR. ZINK: No, I did not. 

MR. KERR: Could you have contacted Mr. Zucker the 
following Monday, September 29, 1986? 

MR. ZINK: Yes, I did. 

MR. KERR: And what was the nature of that contact? 

MR. ZINK: I believe I received a phone call from 
Mr. Zucker whereby he told me that he had given his proxy to 
Mr. Clark and that, as far as Jacob Farber and Harold Cohen 
were concerned, he was off the face of the earth for a future 
period. 

MR. KERR: Do you know where Zucker was at the time 
that you had that conversation with hijn? 

MR. ZINK: I don't know for sure. 

MR. KERR: Can you give me your best guess or 
estimate? 

MR. ZINK: In Jacksonville, Florida. 

MR. KERR: And what is that based on? 



313 



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61 



»• C Sorri N [ 



MR. ZINK: The dates--I would have to substantiate 
it with dates, but I believe Mr. Zucker had meetings with Mr. 
'Cornelius in Jacksonville in that time frame, and that's why 
I said it. I'm not definite about it; the dates would have 
to bear me out. 

MR. KERR: Did it come to your attention some time 
during the week of September 29, 1986, that Mr. Zucker was 
back in Switzerland? 

MR. ZINK: That was my assumption, yes. 

MR. KERR: Do you recall receiving a telephone call 
from him from Switzerland during that period of time, some 
time through and including the 3rd of October? 

MR. ZINK: I don't remember whether I did or didn't. 

MR. KERR: Mr. Clark, did you have any contact with 
Mr. Zucker during that period up to the 3rd of October? 

MR. CLARK: I may have; I do not recall precise 
conversations . 

MR. KERR: In terms of doing the deal with Farber, 
an agreement was ultimately reached that week, was it not? 

MR. CLARK: Yes. 

MR. KERR: Who was responsible for handling that 
transaction for you and Mr. Zucker? 

MR. CLARK: Mr. Bright. 

MR. KERR: And he had power of attorney from you 
and from Zucker? 



iiNPi A<;<;iFiFn 



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MR. CLARK: Yes. 

MR. KERR: In terms of the deal that was done, as 
I of October 3rd, 1986, when the deal was consummated, what 
understanding, if any, did you have cf the role Messrs. Hakim 
and Secord might play in this transaction? 

MR. CLARK: I have a memo here, dated 6 October 
'86, which indicates that Hakim and Secord would probably 
purchase two-thirds of the shares owned by Farber, to the net 
effect of — 'the transaction would be that Hakim and Secord 
would end up with a third of the equity, Clark Management 
would end up with a third of the equity, and CSF would end up 
with a third. 

MR. KERR: Now, the memo is dated October 6. Did 
you have an understanding prior to October 6 that this was 
the nature of the arrangement that was going to be entered 
into? 

MR. CLARK: From my standpoint, I was purchasing a 
third and CSF was purchasing a third. I did not know whether 
or not Hakim and Secord in effect purchased their third, so 
to speak, through CSF. I considered that a matter between 
Zucker and Hakim and Secord. 

MR. KERR: Let me show you the memorandum that's 
dated October 6, 1986--you have given us a copy of it. I 
would like to have that marked as Exhibit 2. 

[The document referred to was marked for iden- 



315 



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UNCUSSIFIED 



63 



■Mxai x M Oo r wQ co . mc 

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tification as Clark/Zink Exhibit No. 2] 

With regard to Exhibit 2, you would have received a 
copy of this memorandum at or about the time of its date? 

MR. CLARK: I don't remember. 

MR. KERR: With regard to the points that are set 
forth in the memorandum, do you recall when you would have 
discussed them with Mr. Zucker? 

MR. CLARK: I did not have. a discussion of these 
points with. Mr. Zucker. 

MR. KERR: The memo was sent to Messrs. Wade and 
Zink. Did you discuss with them the terms that are set forth 
in the memorandum? 

MR. CLARK: The terms of--you are referring to 

paragraph five? 

MR. KERR: Well, the memorandum itself is addressed 
to Wade and Zink. Paragraph five goes through some tax 
aspects, and also talks about Hakim and Secord. But in terms 
of what's set forth in the memorandum, did you review this 
with Wade and Zink at some point? 

MR. CLARK: I believe we did not. I believe it was 
for them to respond to the individual points that Zucker 

raised. 

MR. KERR: And with regard to the Hakim and Secord 
potential purchase of two-thirds of Farber's shares, as set 
forth in 5(c) (i), do you have a recollection of discussing 



316 



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64 



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10^ C Siitcc N £ 
^uhinvten *^ *" ' 



this aspect of things with Zucker at any time before October 
6, 1986? 

MR. CLARK: Yes; we discussed the possibility of 
them coming in. Once again, whether or not they came in was, 
from my standpoint, irrelevant, what was relevant and what 
was the only relevant point of this whole situation was that 
Farber would be bought out so that our new management could 
run the company without being stymied. 

MR. KERR: So I can understand, it was of importance 
to you that CSF in some fashion or another put up the money 
to buy out Farber, correct? 

MR. CLARK: It was important to me that Farber be 
bought out, period. 

MR. KERR: With regard to how Hakim and Secord 
would fit into the corporate structure, was there any 
discussion between you and Mr. Zucker about whether or not 
Hakim and Secord would actually appear on the books of the 
corporation as stockholders? 

MR. CLARK: There was no discussion of that. 

MR. KERR: One way or the other? 

MR. CLARK: One way or the other. 

MR. KERR: The desirability of having Hakim and 
Secord as unidentified equity holders of stock was not 
discussed, is that right? Are you with me? 

MR. CLARK; I can respond to your question by 



317 



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"WSS/flfll 



65 



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making the observation that I assumed that it would be done 
through CSF. At the same time I assumed that Zucker felt it 
would be a point in favor of the company, to the advantage of 
the company, to have Secord involved. It was unclear to me 
whether he would be publicly involved as a director or not. 
And I think -- 

MR. KERR: What you put your finger on is what 
troubles me. If, on the one hand, you are holding Hakim--or 
somebody is holding is holding Hakim or Secord out as 
investors of significance to the bank, that would suggest 
that their position was going to be disclosed in some fashion 
or another. 

MR. CLARK: Yes. I do recollect one conversation 
with Zucker--and I cannot tell you when it happened--but we 
were talking about the board of directors, and my recollection 
is maybe Secord. 

MR. KERR: I see. But there was no agreement 
actually reached on giving a position on the board to either 
Hakim or Secord, is that right? 

MR. CLARK: No, not a formal agreement. 

MR. KERR: And no actual agreement was entered 
into, to your knowledge, obliging Hakim and Secord to 
purchase an equity position in the corporation, is that right? 

MR. CLARK: Could you say that again? 

MR. KERR: Sure. No actual acrpement was entered 



318 



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66 



■ LLIU MCPOimNa CO INC 
10 ; C Sice«i .N I 



into, to your knowledge, obliging Hakim and Secord to 
purchase an equity position in Forway. 

MR. CLARK: Correct. 

MR. MONSKY: Mr. Zink, did you receive a copy of 
this memo? 

MR. ZINK: Yes, I did. 

MR. MONSKY: And after you read this memo, what was 
your impression of the role that Hakim and Secord would be 
playing with respect to the Farber situation? 

MR. ZINK: I assumed that Secord and Hakim would 
probably acquire the equity. 

MR. MONSKY: Was there a debt to be purchased from 
Mr. Farber? 

MR. ZINK: The debt was forgiven under the terms of 
the buy-out agreement. 

MR. MONSKY: Did you discuss this memorandum with 
Mr. Zucker? 

MR. ZINK: Not immediately. 

MR. KERR: But you did discuss it at some point. 

MR. ZINK: Yes. 

MR. KERR: At what point? 

MR. ZINK: Two pieces. The first piece deals with 
what's on the second page, the growth and prosperity in the 
future of Forway. And Ron Wade and I reacted to the page 2 
words, so'''®^^^-'-'^? A'-f'Q^t^^ ^'^V»»i^W^*^® lost his marbles? 



319 



nic6' 



UNCUSS'iFIED 



MR. KERR: You thought it was a tad too optimistic? 

MR. ZINK: Just a tad, yes. And the wording back 
there, because of our day-to-day operational involvement, 
overtook at the time what was on page 1. 
:j MR. MONSKY: Was the reference to a minimum sales 

volume of S15 million high? 
I MR. ZINK: Yes. The largest sales the company ever 

•had were SIO million. 

MR. MONSKY: Is that a year? 

MR. ZINK: A year, yes. 

MR. MONSKY: Did Mr. Zucker give you any impression 
about how the sales volume would pick up? 

MR. ZINK: No, and that was why it was so ludicrous. 

MR. KERR: But he didn't make any representations 
to you about how he or Hakim or Secord or Mannie Wiegensberg 
or anybody else was going to come to the rescue of the 
company. 

MR. ZINK: That's correct. And the second piece to 
the discussion on this was some question initially about--and 
I don't believe it happened until even late October; I mean, 
it was not something that we immediately reacted to because 
of our distaste for page 2. Operationally, other than the 
debt entry, nothing there really mattered in doing the things 
we were doing at Forway. And that's exactly how they were 



\0' C iatt\ N E 

VMKuinon D C .■OOOl 



handled. The wh 



cJe«Ldfi4.of a recapitalization, stock 

lllfn* lOnirirrh 



320 



mcS8 



UNCLASSIHED 



68 



iwuiii mrommo co . inc. 
)0T C Scicti N E 
Vtihinnnn O C JOOOl 



certificates, etcetera, etcetera, were put off. 

MR. KERR: Did there come a time when you had an 
actual conversation with Zucker about the potential contribu- 
tion of Hakim and Secord by way of a purchase of these 
shares? Did you ever discuss item 5(c) (i) with Mr. Zucker at 
any time? 

MR. ZINK: Yes. 

MR. KERR: When was that? 

MR. ZINK: It was after the news of those in- 
dividuals' involvement in the larger issue we are here 
talking about. 

MR. MONSKY: Prior to this discussion, was your 
impression that the purchase had been made, as described in 
the memorandum? 

MR. ZINK: I did not know how the purchase was 
effected. I did not participate in the arrangement of wiring 
of funds and the like. 

MR. MONSKY: Well, Farber was bought out, right? 

MR. ZINK: Yes. 

MR. MONSKY: And the transaction described here, 
the process of buying Farber out--the transaction was in the 
fashion described in this memorandum in terms of the dollar 
amounts and so forth. 

MR. ZINK: I did not know how the money was moved. 

MR. MONSKY: But the money was moved. 

IIIIOI knmrtrrk 



321 



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UNCLASSIFIED 



69 



HujK avoimra co . mc 
10 C Suen N £ 
" .ion DC ;0COJ 



MR. ZINK: Farber was paid. 

MR. KERR: That occurred October 3rd, to your 
■ knowledge . 

MR. ZINK: Correct. 

MR. MONSKY: And so your only knowledge of who 
might have paid Farber would come from this memorandum up to 
that date. 

MR. ZINK: Combined with the discussion that I had 
with Mr. Zucker preceding his visit in September. 

MR. KERR: And that discussion related to Hakim and 
Secord. 

MR. ZINK: That's correct. 

MR. ZANARDI: Just one question. You had no reason 
I to doubt that the terms of the memorandum were not imple- 
mented. 

MR. MONSKY: You had no reason to doubt it and 
nothing to confirm it. 

MR. ZINK: That's correct. 

MR. KERR: Mr. Clark, did you have at any time up 
until some time in November any further knowledge of the role 
that Hakim and Secord may have played in this transaction as 
it was done by CSF? 

MR. CLARK: No, I did not. 

MR. KERR: Now, you had a conversation, Mr. Zink, 
some 



time in ''^-"jf^j^l^^ Ijt^ (^TfKf^n 



322 



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UNCUSSIFIED 



70 



IMLLIK HVOHTMO CO . MC. 
>o; C Suen N E 



MR. ZINK: Approximately. 

MR. KERR: The conversation was yourself and Mr. 
Zucker? 

MR. ZINK: Yes. 

MR. KERR: Anybody else participate in that 
conversation? 

MR. ZINK: Not to my knowledge. 

MR. KERR: Was it by telephone or face to face? 

MR. ZINK: It was telephone. 

MR. KERR: And can you describe for me what 
transpired in that conversation? 

MR. ZINK: It was a conversation--and I don't 
specifically remember the conversation, I believe there were 
several issues discussed, one of which we talked about the 
more key issue and other items related to Forway. 

I posed the question to Mr. Zucker: Given what's 
going on, do Secord and Hakim have a beneficial interest in 
Forway? And his response to me was no. 

MR. KERR: And that conversation would have taken 
place after the press attention began to focus on the 

MR. ZINK: CSF, Secord, Hakim — and my banker 
started to ask me questions. 

MR. MONSKY: Was your question to Zucker: What 
should I tell the bankers? 

MR. ZINK:_ _I ^ar\.' t.koP'i bQw_ti)e. question was 



llifiiSl^l'^ffhJFii'h 



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UNCLASSIFIED 



71 



it».ijii mromwtQ co . 
to- C Sum N E 



i worded. I don't think the banker issue was the only issue 
that concerned me. 

MR. MONSKY: Did you put the question to Zucker: 
'Did Secord or Hakim ever at any time have an interest? 
MR. ZINK: No. 

MR. MONSKY: So you were left with the impression 
I that as of that moment Hakim and Secord did not have an 
interest. 

Mft. ZINK: Yes. 

MR. MONSKY: Did Zucker say to you anything to the 
effect; No, they don't have an interest now, and they never 
•; have; the memorandum that was sent to you that mentioned 
'I Hakim and Secord, there was no investment. 

'{ MR. ZINK: No; the way it was put was that CSF owns 

two- thirds of Forway's equity. 

MR. MONSKY: As of that moment? 
I MR. ZINK: I don't know whether that was qualified 

that way. 

MR. KERR: So you don't know when in time, if ever, 
CSF acquired that position? 

MR. ZINK: No, I don't. 

MR. KERR: And, Mr. Clark, do you know anything 
more about that arrangement? 

MR. CLARK: No, I do not, except the -- 
MR. KERR: The March memo? 



IINPIKCinrn 



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MR. CLARK: Yes. 

MR. KERR: Maybe the time is now to deal with the 
March memo, since it cross-references this one. Let me have 
marked as Exhibit 3 the March 6th, 1987, memo from Mr. Zucker 
to Mr. Clark. 

[The document referred to was marked for iden- 
tification as Clark/Zink Exhibit No. 3) 

Let's mark as Exhibit 4 a memo from Mr. Bright to 
Mr. Zucker of March 6, 1987. 

[The document referred to was marked for iden- 
tification as Clark/Zink Exhibit No. 4] 

Now, in terms of what's going on in Exhibits 3 and 
4, the memo from Mr. Bright to Mr. Zucker, was it, to your 
knowledge, FAX'ed or otherwise electronically transmitted to 
Mr. Zucker on the 6th of March, do you know, Mr. Clark? 

MR. CLARK: I assume it was because it says 
"facsimile memorandum." 

MR. MONSKY: Have you asked Mr. Bright about that, 
whether it was transmitted on that day? 

MR. CLARK: Whether it was transmitted on that day? 
No, I have not. 

MR. KERR: Is it your understanding that the 
Zucker-to-Clark memo is in response to the Bright-to-Zucker 



memo? 



MR. CLARK: Yes, it was. 



UNCUSSIFIED 



325 



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i| MR. KERR: From the Bright memo, it appears that 

,1 

i! there was some financial concern that was before the company 

on March 6th, 1987, is that your understanding as well? 

MR. CLARK: Yes. 

MR. KERR: And in response to that concern Mr. 
Zucker was being asked to see to it that CSF would put up 
$200,000 in additional collateral, is that correct? 

MR. CLARK: Yes. 

MR. KERR: Now, Mr. Zucker got back in touch with 
you and sent you the March 6th memo--and let's dwell on the 
first paragraph for a moment. 

That paragraph says "Given existing circumstances 
and fact that I had to finance purchase of one-third from fat 
man when the others were dropped for obvious reasons, I think 
it appropriate that you proceed to do what is requested in 
the above-mentioned memo." 

The "above-mentioned memo" is the CBB FAX memo of 6 
March 1987, I think, but I'm not sure. Can you translate 
that paragraph for me in terms of what you understood it to 

mean? 

MR. CLARK: I understand that he is asking me to 

put up the $200,000 in collateral. 

MR. KERR: And the explanation for that is what, as 
that memo is written? 
I MR. CLARK: As I understand this 



UNCLASSIFIEI 



326 



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74 



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MR. KERR: Let's take it step by step. The fat 
man' translated to whom, as far as you were concerned. 

MR. CLARK: Jacob Farber. 

MR. KERR: The others' were who? 

MR. CLARK: I assume Secord and Hakim. 

MR. KERR: Last point was for obvious reasons. 
What did you understand "obvious reasons" to refer to? 

MR. CLARK: The publicity surrounding their names. 

y[R. MONSKY: Did you understand that to mean, then, 
that they were dropped at the time of the publicity? 

MR. CLARK: I have-- I can only read what is here, 
and I think you have to interpret it. 

MR. MONSKY: Well, I'm asking you for your inter- 
pretation. 

MR. BRIGHT: Alfred, if you know. You don't have 
to guess. 

MR. CLARK: You asked me the "when" question. 

MR. MONSKY: Yes. 

MR. CLARK: The answer is I do not know. 

MR. KERR: You never had occasion to discuss with 
Mr. Zucker whether at any time Hakim and Secord had purchased 
from or through CSF an equity interest in Forway, is that 
right? 

MR. CLARK: That's correct. As I said before, to 



me it was irrelevant ■ 



UNCUSSIFIED 



327 



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UNCLASSiFIEU 



75 



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MR. KERR: I understand. 

MR. CLARK: -- who the purchasers were. The only 
relevancy was getting Farber out. 

MR. KERR: The reason I ask, and the reason it 
might be relevant--see if it stirs any further recollection-- 
one sometimes is concerned about potential lawsuits that 
might arise when this kind of unhappiness hits the newspapers. 
Did you ever have occasion to discuss with Zucker any events 
involving Hhkim or Secord that might give rise to potential 
litigation over his interest in Forway, claims that could be 
made against this stock that's been purchased with funds from 
the Iran expedition, for example? 

MR. CLARK: No, I did not. 

MR. KERR: The remaining references in this 
memorandum to "RW and "OBEF" refer to an employment situa- 
tion, is that correct? 

MR. CLARK: That's correct. 

MR. KERR: And, Mr. Zink, maybe you can give us in 
a nutshell what that refers to. 

MR. ZINK: Mr. Zucker was proposing that Forway 
obtain visas for two individuals from Spain or from Switzer- 
land who would become employees of Forway, and Ron Wade and I 
had some serious reservations about the practicality and 
appropriateness of bringing people in when we were in a 

workforce-reduction mode. And the issue culminated in Rod 
... . * (iiW^^ - 



328 



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Wade I believe sending a Telex to Mr. Zucker to the effect 
that It didn't make sense, and Mr. Clark intervened at some 
point in that correspondence to effectively kill that issue. 

MR. KERR: Now, just one final follow-up question 
on that, Mr. Clark. You did in fact advance the $200,000 in 
question after receiving this memo from Mr. Zucker, is that 
correct? 

MR. CLARK: That is correct. 

MR'. KERR: Now, with regard, Mr. Clark, to further 
meetings and conversations that you have had with Mr. Zucker, 
you have had occasion to meet with and have discussions with 
Mr. Zucker since October 3rd, 1986, isn't that right? 

MR. CLARK: That's correct. 

MR. KERR: Can you describe for me the occasions 
when you have met face to face with Mr. Zucker since that 
time--how many such occasions and when were they? 

MR. CLARK: They were in the period at the end of 
1986 or the beginning of '87. 

MR. KERR: So that would be late December, early 
January? 

MR. CLARK: Yes. That's one occasion. The second 
occasion was February 11th, 12th. And there may have been 
another occasion in March, I'm not sure. 

MR. KERR: And where would these meetings have 
taken place? 




329 



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MR. CLARK: They were in Geneva at the office of 



'CSF. 



■MXD* HVOOTMO CO MC 
»• C Sinn N E 
Vuhii<|ton D C JOQO] 



MR. KERR: And can you give me your best recollec- 
tion of the things that you and Mr. Zucker would have 
discussed at those meetings? 

MR. CLARK: These discussions were about the phase- 
out of Clark Management's role as an investment manager for 

CSF. 

MR. KERR: Now, did you have occasion during one or 

\, more of those meetings to discuss with Mr. Zucker Mr. 

Zucker 's relationship with Secord and Hakim as it was being 

raised in the press at that time? 

MR. CLARK: I did not discuss it with him and I did 
not ask any questions. He volunteered information to me. 

MR. KERR: What did he tell you? 

MR. CLARK: He told me that six and a half million 
I dollars, or an amount of money in that general neighborhood, 
had been segregated, separated, or frozen, pending what I 
assume to be the final determination of who the money 

belonged to. 

MR. MONSKY: Did he say anything to you about how 
the number 6.5 million was arrived at? 

MR. CLARK: No. 

MR. KERR: Go ahead. 

MR. CLARK:. .Ee_ ai5o S4id that the fees that CSF had 



:..tie_iIso said that t^ 

IlljflP lAAPW , 



330 



rr.cTS 



liNcussm 



78 



MurraMco. M 

W7 C Sirt»i N E 



received were customary fiduciary fees, they were standard 
fiduciary fees, and those were the only fees they received, 
indicating to me that he was acting as an agent rather than 
as a principal. He said that Roland Farina, who was the head 
of their accounting, had excellent records showing money that 
was coming in, money that was going out, and that Hakim had 
|i been given copies of all these records. And he hoped that 
Hakim would turn it over to the special prosecutor and to 
your committee. He also said that he could not do it because 
of Swiss law, under which he would be penalized if he did. 

MR. KERR: Anything further you recall about that 
representation by Mr. Zucker? 
I MR. CLARK: No. 

MR. KERR: In terms of trying to place it in time 
as between end of '86, February 11-12, or some time in March, 
can you -- 

MR. CLARK: My guess is that it was at the earlier 
of those meetings. 

MR. KERR: Have you ever had a conversation with 
Mr. Zucker since the stories in the newspapers about Mr. 
Zucker 's involvement in making or attempting to make offers 
of support to either the North family or Mrs. North? 

MR. CLARK: No. 

(i^R. KERR: So you never had occasion to discuss 
that or have him discuss it with you?] 



UNCUS.SIFIED 



331 



fT)c79 



UNCLASSIFIED 



79 



V)J C Siitrt N I 
WufiuitioA O C 10002 



MR. CLARK: No. 

MR. KERR: Mr. Zink, have you ever had occasion to 
discuss that with Mr. Zucker? 

MR. ZINK: No. 

MR. KERR: Have either of you had dealings with Mr. 
Farina? 

MR. CLARK: Yes, I have. 

MR. KERR: And can you tell me the kinds of things 
that you talk about with Farina? 

MR. CLARK: Farina is the person who is in charge 
of the accounting and computer operation, recordkeeping 
operation, at CSF. He is the person that we, Clark Manage- 
ment, dealt with in terms of statements, brokerage statements, 
in terms of the recordkeeping. 

MR. KERR: Was there ever a time when you had any 
conversation with Mr. Farina about the role he played at CSF 
relating to Mr. Hakim or General Secord? 

MR. CLARK: No. 

MR. MONSKY: Is Mr. Farina still with CSF? 

MR. CLARK: My understanding is he has left. 

MR. KERR: Do you know when that occurred? 

MR. CLARK: I believe he told me that he was 
leaving at the end of March. 

MR. KERR: Did he say anything to you or did 
anybody else ever tell you why it was that he left CSF? 



332 



•ncSO 



UNCLASSIFIED 



80 



iMxiM mpomma co . mc. 

Vt: C Sum N E 



MR. CLARK: No. 

MR. KERR: Let's go off the record. 

[Brief discussion off the record] 

MR. KERR; Back on the record. In terms of your 
experience with Mr. Farina and, more generally, CSF bookkeep- 
ing, recordkeeping, operations, can you describe what 
experience you had with Farina and CSF? 

MR. CLARK: Yes. It was an account and fiduciary 
trust company and we were doing transactions at brokerage 
houses, in particular Parker-Alexander and Bear-Stearns . It 
is not uncommon to have a lot of errors, and you have to 
reconcile them. And these would inevitably happen on a 
continuing basis, and there would be a lot of questions from 
him to us: what about this, what about that, what about the 
other thing? And so there was communication going back and 
forth about that. 

MR. MONSKY: Did he prepare. Farina or people at 
CSF prepare reports and send them to you and ask you to 
reconcile those reports? 

MR. CLARK: No. 

MR. ZANARDI: You sent reports to him? 

MR. CLARK: Yes. And he would ask us questions 
based upon those reports . 

MR. MONSKY: Off the record. 

[Brief discussion off the record] 



333 



mc31 



«\i»e 



81 



Yes 



Have you had subsequent conversations 



wjLtn Kvoimra co . nc 
w C s.i»»i N E 

r4^infroA D C 20002 



MR. KERR: Two Other matters. Mr. Zink, you've had 
conversations with Mr. Zucker since October 3rd? 

MR. ZINK: Yes. 

MR. KERR: You had one in November that we 
discussed . 

MR. ZINK: 

MR. KERR; 
with Mr. Zucker? 

MR. ZINK: Yes. 

MR. KERR: Have you had any further conversations 
with Mr. Zucker that would relate to the matters that have 
been subject to press coverage? 

MR. ZINK: Nothing direct. I can remember two or 
three conversations— once again, the focus was Forway 
matters. And I can remember a piece of the conversation 
being something along the line: how's it going, Bill? And 
getting, you know, things-are-tough, getting-by kinds of 

answers . 

MR. KERR: Did Mr. Zucker ever indicate to you when 

we might expect to see him in the United States again? 
MR. ZINK: No, he has not. 
MR. KERR: Mr. Clark? 
MR. CLARK: No, he has not. 
MR. KERR: And with regard to Mr. Zucker, when last 

did you speak to Mr. Zucker? ||^|^| ||AAlrlrll 



334 



■ncfl2 



HNtmSW 



82 



uKiJit KtPoariHO CO inc 
10" C Siic»i. N E 

VuAiniton D C i0002 



MR. ZINK: Maybe a month ago. 

MR. KERR: With regard to the investigation of the 

House and Senate committees, you had no discussions with him 

I 

;| about our contact with you, is that correct? 

I 

MR. ZINK: Absolutely not. 

MR. KERR: Mr. Clark? 

MR. CLARK: No. 

MR. KERR: Does Mr. Zucker have counsel in the 
United States, to your knowledge? 

MR. ZINK: I believe so, yes. 

MR. KERR: Who would that be, to your knowledge? 

MR. ZINK: I don't know the firm's name. 

MR. KERR: Do you know the lawyer's name? 

MR. ZINK: I know of one attorney in New York that 
did an opinion for Mr. Zucker. It's a guess: I think his 
name is Bailer, but I'm not a hundred-percent sure. 

MR. KERR: Mr. Clark, do you have any knowledge of 
legal counsel Mr. Zucker would have in the U.S.? 

MR. CLARK: No. 

MR. ZINK: I would also add to that that when I was 
interviewed by the special prosecutor, Mr. Bright took notes 
of that interview and sent them to Mr. Zucker 's counsel, or 
who I assumed to be Mr. Zucker 's counsel. 

MR. KERR: Let's go off the record for a second. 

[Brief disc 



3<:n«*iQfl-off the record) 



335 



nc83 



finmsim 



83 



UKLt* DCKWrMO CO . 
■«• C Sirm N E 



MR. KERR: We've made inquiry of Mr. Bright as to 
I who it was that he sent the notes to. Mr. Bright indicated 
that in that matter he was acting as counsel for Zucker, and 
that while he has no objection to revealing who he sent the 
notes to, he feels that it's a matter of attorney-client 
privilege that he is not free to waive and make available to 
us, is that right, Mr. Bright? 

MR. BRIGHT: That's right. 

MR. KERR: Thank you. 

MR. MONSKY: Back off the record. 

[Brief discussion off the record] 

MR. MONSKY: Mr. Clark, I just want to clarify one 
point. There is a memorandum attached to Exhibit 1. The 
memorandum is undated. Could you tell me how you placed the 
date of that memorandum? 

MR. CLARK: Yes, the first line says "You may or 
may not recall that the day after the wedding Al Clark and I 
picked up Richard Secord at the Philadelphia Airport. The 
wedding reference is related to the wedding of Farber's 
daughter, which I attended. And in my file I had a letter to 
Farber thanking him for being included in the wedding, and in 
my letter I say: I greatly enjoyed myself at your extravagan- 
za last night. The letter is dated June 18, so I assume the 
wedding was on the 17th--that's 1984. So in this way that 
was how I was able to determine a date for the memorandum. 



336 



mc84 



UNCLASSIFIED 



84 




mjjn mrooTMO co . mc. 

107 C Sirrrt N I 



MR. MONSKY: Thank you. 

MR. KERR: Let's shift gears for just a moment and 
turn to a somewhat different matter. In 1986 Forway In- 
dustries was a subcontractor on a ^^^^^^^^H contract 

is that right? 

MR. 2 INK: No. 

MR. KERR: What was the nature of the relationship 
on that contract? 

■MR. 2INK: Forway 's contract was with the BDM 
Corporation. 

MR. KERR: BDM was the general, to your knowledge? 

MR. ZINK: They were the prime. 

MR. KERR: Prime contractor? They had the contract 
with the government? 

MR. ZINK: That's my understanding, yes. 

MR. KERR: Your contract ran with BDM. 

MR. ZINK: Correct. 

MR. KERR: Now, in terms of the Forway contract 

with BDM, did General Secord become involved in some fashion 

I 

with that contract? I 

i 

MR. ZINK: Yes., ; 

MR. KERR: When in time did he become involved? ; 

MR. ZINK: General Secord was appraised [sic] of the 
requirements of the contract some time between May of '86 and 
November of '86. He took part in an actual transaction that 



took part in an actual i 



337 



ic85 



DNClASSiFlEB 



85 



■HJJ* HCKMnHO CO . MC 

^0• C Siiffi N E 



took place in December of '86. 

MR. KERR: Now, did CSF play a role in the transac- 
tion? 

MR. ZINK: Yes, they did. 

MR. KERR: Can you give me the essence of the role 
that CSF played? 

MR. ZINK: They posted a letter of credit on behalf 
of Forway Industries due to Forway's inability to do the same 
thing. 

MR. KERR; Now, with regard to General Secord, 
General Secord brought in yet another individual to assist in 
that contract, is that correct? One Emmanuel Wiegensberg, to 
be precise? 

MR. ZINK: Yes. 

MR. KERR: And Forway entered into a relationship 
of some kind with Mr. wiegensberg, is that correct? 

MR. ZINK: With Mr. Wiegensberg ' s firm. 

MR. KERR: And with regard to which of Mr. 
Wiegensberg' s many firms that might be, can you tell me which 
firm it was? 

MR. ZINK: It was either Trans-World Arms or 
Parktown Products, something like that. 

MR. KERR: With regard to General Secord, did 
General Secord receive any payment, to your knowledge, 
arising out of this transaction? 






338 



mc85 



UNCLASSIFIED 



86 



I 



IWUlll KVOtlTINO CO . MC 
W C Siicti N E 



MR. ZINK: Yes, he did. 

MR. KERR: And how much was he paid? 

I 

MR. ZINK: $32,000. 

MR. KERR: And was that payment to him or to STTGI? 

MR. ZINK: The S32,000 payment was made to STTGI. 

MR. KERR: Was Mr. Wiegensberg paid anything, to 
your knowledge, or his firm? 

MR. ZINK: Yes. He was paid for the cost of the 
product being acquired as well as reimbursed for transporta- 
tion-related costs--shipping, handling, licensing, etcetera. 

MR. KERR: The amount of the payment to the 
Wiegensberg entity was what--approximately? 

MR. ZINK: $180,000. 

MR. KERR: And then on top of the $180,000, $32,000 
was paid to STTGI? - •^^- 

o ■ - 

MR. ZINKf Correct^ -^^ - 

MR. KERR: These payments were made approximately 
when? 

MR. ZINK: Mid-December '86. 

MR. KERR: To your knowledge, have there been any 
other payments made by Forway te General Secord or STTGI? 

MR. ZINK: No. 

MR. KERR: Have there been any further payments 
made to Mr. Wiegensberg ' s firm? 

MR. ZINK: Yes. 



W/A?c/fi 



;rn 



339 



mc87 



*fj)xsm 



MR. KERR: Can you tell me approximately when in 

:• time that payment was made? 

i 

I MR. ZINK: I'm comfortable with an amount of ar'^und 

■| $44,000. 

MR. KERR: Approximately when? 

MR. ZINK: The timing I'm not real sure of, but had 
to be in the January-to-April time frame of '87. 

MR. KERR: And by that time, January to April 1987, 
in terms of, any payment rights that General Secord or STTGI 
would have, had those payment rights been negotiated to take 
place in some other fashion other than the first transaction? 

MR. ZINK: If STTGI or any other entity were to be 
:l involved in another such transaction, it was agreed by the 
parties that one payment would be made to Mr. Wiegensberg' s 
organization, the disposition of funds to any other parties 
involved in the transaction would not be something that 
Forway would necessarily become involved with. 

MR. KERR: Is there a continuing relationship 
between Forway and Mr. Wiegensberg' s entity at present? 

MR. ZINK: Not to my knowledge. 

MR. KERR: Do you anticipate any such relationship 
in the future? 

MR. ZINK: 

MR. KERR: 



■ujii avoariHa co . nc 

10* C Sm»i s £ 

Wti*iio(io«> O C 10001 * 



I don't know. 

Have you ever met Mr. Wiegensberg? 



MR. ZINK: No. 



UNCIASSIFIEB 



340 



nc88 



UNCLASSIFIED 



88 



iOl C iuttt N E 
VuluAfton. O C 10002 



MR. KERR: Do you have any knowledge of when we 
might have Mr. Wiegensberg grace the United States once again? 

MR. ZINK: No, I don't. 

MR. KERR: Thank you. I think that does it, 
gentlemen. Many thanks, I appreciate it. 

[Whereupon, at 7:15 p.m., the taking of the 
deposition in the above-entitled matter was concluded] 



UNCIASSIFIED 



341 



mc89 



Hujii < »> o«mu CO . nc 

W C Sirm N E 



UNCUSSIFIED 



89 



I have read the foregoing 88 pages, which contain a 
correct transcript of the answers made by me to the questions 
therein recorded. 



ALFRED C. CLARK 



GREGORY L. ZINK 



Subscribed and worn to before me this 
day of , 1987. 



Notary public in and for: 



My commission expires; 



UNCLASSIFIED 



342 



CERTIFICATE OF NOTARY REPORTER 



90 



)07 C Sam N I 



I, Terry Barham, the officer before whom the 
foregoing depos.'.tion was taken, do hereby certify that the 
witness whose testimony appears in the foregoing transcript 
was duly sworn by me; that the testimony of said witness was 
taken by me and thereaftrer reduced to typewriting by me or 
under my supervision; that said deposition transcript is a 
true record of the testimony given by said witness; that I am 
neither counsel for, related to, nor employed by any of the 
parties to t;he 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 hereto, nor 
financially or otherwise interested in the outcome of the 
action . 



Terry 
and fo 



My conunission expires May 15, 1989. 



BarMam, iWtary Public in 
r tne District of Columbie 



iiNCussra 



343 



t yf ' /< 



^ ^ Claric Management 



unwssw 




Ir Ko rpormwd 



JWM It, lt84 



Mr. Jaoobo rarb«r 
rorvmy Xaduatxlaa, Inc. 
133 Cr*«n Av*nua 
Moedbury, BJ 06096 

0«ar Jake, 

X Traatly anjoyad nyaalf at your airtravsqaBaa 
lairt nlyht wtilch waa fixat-rata froa atart to flniah. 
If how I fait thia Bominq waa an lodlcatlon of how food 
tha party waa. I hava not ba«n to a battar ona la yaara. 

I laft Ruth'r praaant with your aacratary but 
forgot to laava tha ancloaad card. 

I waa daLlghta<3 to ba a part o' your apaclal 
occaalon and Z look forward to aaalnq you again In tha 
naar futura. 

With baat ragards. 

llnoaraly, 

jafrad Clark 



slosurv 



!«)«' prowsnns ol E tjoy, 
by K Joknson. Nidona) Secuniy Cour». : 



mumw 



(iiu^ 



5a2 Fifth A»enuc New Vbri 10036/Tel (m) 764-6100/Telex 668645 



344 



aJc /j^'.- 



UNCUSSIFIEO 



MEMORANDUM 



TO : 
CC : 
FROM 
RE : 



Dr. Jacobo Farber, Forway Industries 

Mr. Alfred C lark 

Willard I. Zucker 

Richard V. Secord, STTGI 



You m 
Clark 
Ai rpo 
ai rf 
respo 
many 
State 
a kno 
assoc 
V en t u 
nat io 
your 
poss i 



ay 
and 
rt a 
rce 
ns i b 
fore 
s Go 
w1 ed 
i ate 
re c 
nal 
Own 
ble 



r ma 

1 P 
nd b 
gene 
le f 
i gn 
vern 
geab 
d. f 
al le 
(STT 
asse 
hel p 



y not recall that the day after the wedding Al 
icked up Richard Secord at the Philadelphia 
rought him to Forway. Secord is a former 
ral who, during his military service, was 
or the sale of American military equipment to 
countries as the representative of the United 
ment and Military Forces. I believe him to be 
le and effective individual. He Is now 
or better or for worse, with Albert Hakim in a 
d Stanford Technology Trading Group Inter- 
GI). You have met Albert and you have formed 
ssment as to the degree to which he can be of 
to Forway. 



Richard Secord advises us that a decision has been made by 
the United States Government to Initiate a program for the 
manufacture of spare parts for certain foreign military 
equipment. No one has specified the origin of this 
equipment but each person Is free to speculate on its source 
of origin. Apparently, as was the case in Egypt, certain 
foreign countries In the past furnished large amounts of 
this equipment to countries who, at the time, were their 
allies or friends. The relationships having subsequently 
changed, the countries having this equipment are in no 
position to make use of it because of an absence of spare 
parts. 

From what I understand, the United States Government has 
concluded that It would be more cost effective to effect a 
repair of this existent equipment than to furnish these 
countries with new equipment, and accordingly the US 
Government is prepared to commit funds to secure the 
manufacture of the necessary spare parts which It will then 
provide to certain countries it selects. According to 
Secord. he believes that he can get Forway in on the "ground 



|A Decla«rfiM/fiei«3S«(l (Ki.lkrJ?-'^88 

unoc orovispcns ol E '23M 
by K Joknson. Njlional Security CouncH 



lJNC[/i9.^i 




S\ii 



345 




floor* of this business and that it could represent a very, 
very substantial ongoing business for Forway. In fact, some 
of the numbers thrown around by Hakim run into amounts in 
excess of 100 million dollars to be appropriated by the 
Government for this activity. 

We can also imagine certain other uses that the US 
Government may have for some of this equipment if it is 
repaired. At present there Is one area of activity where 
the US Government is endeavoring to assist people resisting 
forces of the country which manufactured this equipment and 
where it is less embarrassing to equip the resistance forces 
with equipment manufactured by the other party than to 
introduce American equipment which could be found in the 
area. Whatever the reasons that the Government has for this 
program, it appears that if It does go ahead It Is something 
that we should monitor very closely. 

I think that it is Important that you meet with Secord as 
soon as possible, first to form your own opinion of the man 
and second to get better Informed as to what this program 
is, where it is to be administered, its aims and objectives. 

A last point to be resolved Is to design a method of 
compensation for Secord and his present employer which would 
be consistent with existing laws and regulations applicable 
in the United States with respect to the procurement of this 
type of equipment. Before any proposals are made, I would 
very much be interest to be party to the deliberations for I 
have years of experience in dealing with Albert Hakim who is 
Involved in STT6I. 



WIZ/«ac 




346 



^ O'J-H 



Q^\f\n 


\ 


^, V//V/ r^ 


kOOll'L! 


J 

MCMORANOUM 




TO : 


Aon WAOe CC 
Srtg ZINK 


: Alfrtd CUrk 
Albart Htklffl 


FROM : 


Wlllard I. Zucktr 




RE : 


FOR WAY 




DATE : 


Monday 6 Octobor 1986 





1) R«ctp Co. to 1,600,000 shirts of no par, or $ 1 . 

p«r vtlut. 



2) Cancti | 200,000 dtbt to Ptrbtr 

(a) dots this crtatt Incont for book purposts 7 
Probably. 

(b) Dots this crtatt taxablt 1neo«t T 



3) What Is our NOL carryforward at 30/6/86 7 



4) Lot's find appralstr for tht building (snail), and 
gtt approval fro* Harold Cohtn that appralstr Is 
satisfactory to thtn. 



S) I propott that «t trtat for tax purposts tht JF 
transaction at follows : 

(a) Ttralnatlon of tnployatnt contract - no ta» 
Incldtnct. no book Ineldtnct. 

(b) Surrtnd«r of dtbt by Farbar • stt above. 

(c) JF sold his shares for | 750,000 

(I) Hakia and Stcord Mill probably 
purchast 2/3rds of thtst sharts for ) 
600,000. 

(II) A1 Mill purchast 1/6th for | 75.000. 

(III) I will purchast l/6th for $ 7S.000. 



by t Jodnson NjDonti S«euri|y CooncK 



UNCUSSiflED 



5lti&, 



347 



mmmm 



6) What Hill ctpUtI stock tccount bt tfttr 

c«nc«11«t1on of the dtbt to Ftrbtr of (200.000 ? 



7) W« art ttntttlvtiy moving to tach contribute 

) 60,000 to ctpltti to Incrattt the capital itock 
account by i 180,000. 

8) To appaaia tha bank, ma w111 propoia a collataral 
arrangtnant for ( 300,000 • no tfftct on ForHay's 
books. 



9) With tha allnlnatlon of JF salary, ttc I look 
forward to : 

a) Iflss bitching, 

b) nonthly shlpntnts of not lass than $800,000 and 
prafarably 1 n1111on $. You should ba abla to 
cut a nlnlauta of 5,000 Involcas par yaar at 
avaraoa of ( 2,500 or $ 12,5 Million In salas, 

c) a ffllnliflua of 2SX Gross Profit Margin for 
3.125,000 of Gross Profit, 

d| GU controllad to 1, .125. 000, 

e) a before tax profit of 2 million. 



10) At the earliest possible time, I wish to see back 
the funds which went to factor Ineligible account 
receivables. This was taken for a specific 
purpose, and for short term and must be repaid. 

11) Longer range - I think we can process 500 invoices 
per month (we have done this In the past) at )2,500 
or more average for a minimum sales volume of 15 
mil Hon dol lars. 

)f we can made a gross profit of 25 to 30S, that 
should give jus 3.750,000 to 4,500.000 as gross 
profit. 

Allowing 6SA, Including Interest expense of 2 
million - that should leave us with 1,750,000 to 
2.5 million of before tax profit or 11.661 to 
16.66X of sales. 

Can wa do It 7 



HIZ/ac 



UNClASSIFiEB 



348 



C /*>^.<^9 



I 



nnwssro,.. 



To: Al CU'rk 
From: Bill Zuck«r 



<r'/..4/z-...' Sx.i^ % 



'^'^,r:> 



NEMORANOUM 



Ra: CBB FAX Mmo of 6 March 1987 
Date: 6 March 1M7 



Givtn existing circumstances and fact that I had to 
finance purchase of one third from fat man when the others were 
dropped for obvious reasons, I think it appropriate that you 
proceed to do what Is requested In the above mentioned meao. 

If you dlsagnl^. please let me know. 

Other pending Issue was described In fax relayed by you 
from RW. I do not wish to make an Issue of it notwithstanding 
any commitments I fitve made to OBEF. nevertheless I am certain 
he can explain prtsfence on grounds of training and that any 
Mfferen iai can b« handled in ways not to excite locals. For 
ne the question it whether It Is the introduction of a higher 
level of competence (an Issue I aa Incompetent to decide) and 
someone eventually capable of making a contribution and perhaps 
even replacing KO. I find dismissal on basis of ftW conversation 
with gentleman atntloned and based on very short exposure under 
fat man regime perlMpt not sound. 

I would appreciate It If you would discuss matter 1n depth 
and determine. If possible, real motivations and make the decision 
on basis of what yee think best for operation. 

Beginning to tee a flicker of light at end of tunnel. 



I 



' K l Hl B m i 



■Mbfi 



■•id/Released nn Z- (tA^^ ~— ft 8 
imnir ni in I91II 



»y K JoAnton. Nitionai Stcuniy Council 



Mmm 




349 






Mussra 



FACSIMtUi MEMOnANDUM 



March *l, 1987 



TO: 



FROH: 



Mr . Zuek«r 
Craig B. Drl<jht 



SUBJrCTi i^^r-i. P«rmayWnia Bank, W.A. 



I^nna) 



»H.f »h« rirat rtannaylvania 
crag line inform,. '"•^^•J ';\o>c«t *ha -ddi- 

tional $200,000 ^^"="^iSDUY^U t^«*"" ^ di«:ontinu. 
it ia not forthcominy promptly, ^•"'j.^^ina racdivad U 
elation, with Zinc'. =«"?«"][:.• iff r^Alfrad^ 
froa you thay propoaa to damand it rroai 



it out. 



?laaa« yat xn touch with Oavault and 



atraiqhtan 



With ba.t raflorda, 



0^ 



C.B.B. 



be. Mr. Klfrad C. Clark 



•*Rete»sea on tG^«J88 



Hy It Joinson. *litJOn« Swunly Council 



UNCUSSIFIED 



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STENOGRAPHIC MINLTE8 
UarevlMd and Unedhed 
Not for QboUUob or 
DapUcation 






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B 



DEPOSITION OF GEORGE CLARKE 



Wednesday, June 3, 198 7 



U.S. House of Representatives, 

Select Comraittee to Investigate Covert 
Arms Transactions with Iran, 

Washington, D.C. 



Committee Hearing! 

Ottkft 

VJa, HOUSE OF REPRESENTATIVES 



W 




Partially Declassified>Relffas>'H nn i-^-'^-^l 
under provisions of E.O. 12356 
by N. Menan, National Security Council 



OFFICB OP THE CLERK 
Oflle* of OfllcUl lUpoften 



m&mm 



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DEPOSITION OF GEORGE CLARKE 



Wednesday, June 3, 198 7 



U.S. House of Representatives, 

Select Coiwaittee to Investigate Covert 
Arms Transactions with Iran, 

Washington, D.C. 



The deposition convened at 1:00 p.m., in Room 2226, 
Rayburn House Office Building. 

Present: Pat Carorae and Bruce Fein, Staff Counsels, 
House Select Conmittee to Investigate Covert Arms Transac- 
tions with Iran. 

Also present: Rhonda M. Hughes, Legislative Counsel, 
Office of Congressional Affairs, Central Intelligence Agency 



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MR. CAROME: Good afternoon. Sorry for the slight 
delay in getting underway. 

For the record, I am Pat Carome, Staff Counsel for 
the House Select Conunittee to Investigate Covert Arms 
Transactions with Iran. 

Also present is another attorney on our committee , 
Bruce Fein. 

The CIA has been provided with a copy of our 
committee's rules and its regulations and I have given you 
einother copy now. 

I just want that to be on the record. 

The mandate of the House Committee is to investi- 
gate the circumstances surrounding primarily the Iran affair, 
but also the United States' involvement with the contras, 
and this deposition is being conducted pursuant to the rules 
that I have just referred to. 



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355 



EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 

BY MR. CAROME: 
Q Could you at the outset very briefly tell me a 
little bit about your background, your schooling, and the 
positions that you have held at the Agency. 

A I received a BA and JD from University of Iowa 
in 1965-1968. I spent six years on active duty with the 
Army JAG Corps, served in Vietnam. 

When I got out of the Army, I came to the Office 
of General Counsel as an attorney. 
Q What year was that? 
A That was 1974. 

Prior to coming to the Agency, I spent my last 
year in the Army as an instructor at the Army's JAG School. 
I have been with the agency in the General Counsel's Office 
since 1974 except for one year in which I served as a 
special Assistant to the Deputy Director in -- from 1976 

to 1977. 

Q And what positions have you held in the Office of 
General Counsel? If you could just give us the position. 

A Other than as a line attorney, I have since become 
the Associate Deputy General Counsel for Litigation in 
Intelligence Community Affairs. 

Q When did you take that position? 

A Oh, it must have been about a year or two ago. 



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Q What was your position in the fall of 1985? 
2 A At that time, I believe I was Associate General 

2 Counsel for Litigation in Intelligence Community Affairs. 
. We have since had a reorganization, the title has 

g changed, but basically, my responsibilities have been the 
g same for about the last three years or so. 
_ Q And what were your basic responsibilities in the 

- position you held again during the time period November 198 5 
through February 1986? 

A Well, I supervised litigation, I supervised our 
dealings with other members of the intelligence community 
on legal issues, and I provided advice to the General Counsel 
on covert action matters and I reviewed the work of the 
at that time Counsel to the Director of Operations who is 
now the Associate General Counsel for the Director of 
Operations. 

Q What is his name? 

A Well, the current Associate General Counsel is 
George Jamison. The individual at the time was Murray 
Myerfeld. 

Q It was Mr. Myerfeld' s work you were reviewing? 
A Yes. 

Is it correct that you were the attorney at the 
Office of General Counsel who was most responsible for legal 
advice on covert action matters as a norm? 



a^siii4^„ 






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1 A I have to qualify that. I gave advice to the 

2 General Counsel directly. The Associate General Counsel for 

3 the Director of Operations, at that time he was commonly 

4 called the Counsel for the Director of Operations, Deputy 

5 Director of Operations, was responsible for the day-to-day 

6 advice on covert action matters and keeping abreast of what 

7 was happening in the various programs. 

8 But whenever new proposals came up or anything 

9 that came up the sort of chain of command required the 

10 General Counsel's approval, concurrence or signature, I 

11 would review it. 

12 Q So that you would routinely be involved in the 

13 legal advice provided with respect to new covert action 

14 findings; is that right? 

15 A Yes. 

16 Q And you would be the senior attorney providing 

17 that type of advice; is that right? 

18 A Certainly one of them. The counsel to the DO 

19 was also an attorney who provided advice. 

20 He often would participate in the drafting of 

21 findings or related documents, but when it came over to the 

22 General Counsel for his final review and approval, I would 

23 review it. 

24 Q Turning to the November 198 5 time frame, am I 

25 correct that there came a time in late November 198 5 when 



ilM£lM!iIlL 



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UIWEKSSffllBE' 



1 you become aware that a new covert action finding was being 

2 drafted? 

3 • A I can't be entirely sure of the time as November 

4 of 1985. I do recall late in the year 1935 there was an 

5 occasion in which I was called into the General Counsel's 

6 Office to review a proposed finding. 

7 I recall it happened early one morning, and i 

8 h^ve previously described this to you when you and N«b1 

9 Eggleston interviewed me. 

10 Q Yes, and as I understand it, correct me if I am 

11 wrong, the day prior to that, there was a meeting which. a 

12 number of other people have suggested that you attended. 

13 I am wondering if you could tell me your recollection of what 

14 happened on the day preceding the morning where you looked 

15 over the finding. 

15 A I can't be entirely certain that it was the 

^j day before, because I am not sure whether the day which 

15 I was called into the General Counsel's Office was a Monday 

•jg or not. It may have been Monday, in which case the previous 

20 tiay that I recollected would have been a Friday. 

21 But there was a sequence of events in which two 

22 individuals from headquarters, I don't really know their 

23 names, I do believe they were from the Director of 

24 Operations, came over to brief the General Counsel, and the 

25 Deputy General Counsel on a matter that had to do with the 

HMOS AeciriTD. 



359 



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12 for 



1 shipment of some arms to a third country overseas. 

2 Q When did you learn that is what these people 
were coming over to brief those two lawyers on? 

^ A I cannot be entirely certain at this point 

5 whether I knew that specifically before they came over to 

6 get the briefing or whether I learned it afterwards. 

7 Q When you say when you learned it afterwards, 

8 how much longer afterwards? 

9 A It would have been within a matter of a day or 

10 two after that period of time. So I mean I can't be entirely 

11 certain whether at the time they came over I knew what it was 

t 

13 I do recall that it was they were to debrief the 

14 Deputy Counsel and Deputy General Counsel on a sensitive 

15 project or a sensitive matter, and my recollection is that 

16 I was specifically asked not to attend because it was con- 

17 sidered too sensitive. 

18 Q Who asked you not to attend? 

19 A It was either Stan Sporkin or Ed Dietel. I am 

20 not certain which one. 

21 Q What time of day was it you recall being asked 

22 not to attend? 

23 A It was late in the day, probably between five 

24 and six or somewhere there abouts. Since I was not asked to 

\^ 

25 attend, my recollection is I left for the day. It was very 



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shortly after that day, it was either the following day or 
the next day that I came into the office that I was asked to 
come over to the General Counsel's Office and review a 
document that he was ready to take over to headquarters. 

I recall doing that, I recall looking at a one- 
page document. My recollection is that it was a proposed 
finding. 

I don't recall any of the details of what was on 
the piece of paper, but I can say that I specifically do not 
recall there being any paragraph or sentence in the proposed 
finding that purported to give retroactive effect to the 
finding. 

I know that has come up subsequently as an issue, and 
in fact the document that they subsequently found in the 
office contained such a statement. 

I don't recall that. I don't ever recall seeing 
that until I saw the document when it was found back in, I 
think it was December of 1986. 

[Brief recess. ] 

MR. CAROME: Could you read back the last question 
and answer? 

[Whereupon, the record was read by the reporter.] 

BY MR. CAROME: 
If I can go back to this evening before you looked 
at the finding, proposed finding, other information seems to 




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1 suggest that the morning you looked at the finding was 

2 probably Tuesday, November 26, and that -- so the evening 

3 before would have been Monday, November 25. 

4 Is your recollection contrary to that, or woold 

5 that be consistent with your recollection? I realize 
5 you may be having a difficult time placing the precise date. 
7 A I really couldn't say. I did not make any con- 
g temporaneous memorandum for the record of the incident because 
g at that time that particular series of events wasn't par- 

10 ticularly out of the ordinary. 

•)■) I mean there was no reason for me to make any 

•)2 record of it at the time, so I mean — if you have an - 

13 indication that there was a — if you have an indication fron 

14 other sources that people came over on the evening of the -- 

15 whatever you say the Monday was. The 2 5th — 

16 C! Yes . 

17 A — and that there was another meeting at Stan's 
Ig office on the 26th, I don't have any basis to indicate that 
ig that is wrong. 

20 Q And what did you do when you were told that, 

21 not to attend the briefing, from the people at the DO and 

22 that the matter was too sensitive for you to be involved in? 

23 What did you do next? 



A I didn't attend. My recollection is I went home, 
Q The following morning, what time is it that you 



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^ recall the meeting in Mr. Sporkin's office? 

_ A You know, my recollection is it was somewhere 

_ shortly before 9:00 o'clock. I can't be certain of that. 

. He was — it seemed like, my recollection is he was 

_ in a hurry to go over to headquarters, and I was called to 

come up to his office, this piece of paper was handed to me, 

I looked at it. I don't recall having any particular reac 

tion to it, and I certainly didn't have any discussion of it 

with him, with Stan Sporkin. 

Q Were there other attorneys present or anyone 

else present at that time? 

A My recollection is Mike Makowka was present 

I don't recall if Ed Dietel was present or not 

Q He may have been present? 

A He may have been 

MR. CAROME: Could this be marked Exhibit 1, 



please? 



[The document marked GC Exhibit No. 1 follows:] 
******** COMMITTEE INSERT ******* 




biisina. 



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BY MR. CAROM£: 

Q I Show you a document that has been marked as 
Exhibit 1 and ask you if you have ever seen that document 
before. 

A I can't say that I have ever seen this specific 
version that you have handed to me. I have seen a version 
of it that appears to be identical. This appears to be the 
document that was found by our office in, I think December 
of 1986, as we tried -- as the office tried to reconstruct 
the events surrounding this whole incident or episode. 

Q Is it possible that that is the document that 
was shown to you on the Monday morning in Mr. Sporkin'-« 
office? 

A Yes, it is possible. It is possible. 

Q Does the content of that document mesh with your 
recollection of what it was that you were looking at? 

A I can't say. I simply can't say. 

Q I show you what has been marked as Exhibit 2 , 
a document that is stamped "Draft" at the top and appears to 
be a draft, a cpvert action finding, aiH^^a«|(£^u the same 
question: Does this appear to be the document that you 
looked It on tWir^mo rt I n y we a*»<peakiSqP*b6ut In General 
Counsel Sporkin's office? 

Jk. It certainly wouli^be mor*" likely that this would 

be the Kind of docum^Kjt becau||a.>^ .^b typed up in the format 



ym ^ v^ 




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of a proposed finding. 

I simply cannot tell you whether or not this is th« 
version of the proposed finding that I saw that morning in 
Stan's office. 

Q I believe the last paragraph — 

A Is a little different. 

Q And the last paragraph of Exhibit 2 includes 
reference to ratification of previous acts. Does that 
indicate to you that this is not the document that you lookec 
at? 

A Well, Exhibit 1 that you showed me talks 
specifically about ratifying all actions taken by the . 
U.S. Government officials in furtherance of this effort. 
The Exhibit 2 document basically says the same 
thing, it is just worded a little bit differently. I don't 
recall ever seeing that language until I saw this document 
in December — or saw a document similar to this in 
December of 1986 when Bernie Makowka searched through his 
files and fieally came up with a Mag card, which is a word 
processing document that was used to produce this. 

To my understanding, there is no hard copy of 
this document in existence in our office. 

Q To the best of your recollection, the proposed 
finding you looked at didn't include the ratification 
language; is that correct? 



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1 A I do not recall having this kind of 

2 ratification language. 

3 Q Do you recall whether the document you looked 

4 at back in November 1985 referred to munitions or missiles? 

5 A I certainly have a recollection it dealt with 

g hostage rescue. The documents that are in front of me talk 

7 about being authorized to provide material and munitions. 
g I don't have a recollection now, i don't recall 

g now that I knew that then, that I can remember then. But 

•JO I <io remember it dealt with hostage rescue. 

I! Do you remember any reference to Iran in the 

^2 document you looked at? 

^3 A I can't really say. It probably dealt with Iran. 

14 I probably would have seen that at the time that it dealt 

15 with Iran, but I can't remember it. 

1g Q Do you recall whether it mentioned Israel? 

17 A I do not recall it mentioned Israel. This draft 

1g you have given me does not mention Israel. 

ig Q Do you recall whether or not again it mentioned 

20 arms of any sort or munitions or missiles? 

21 A I can't recall. I do know that during the time 

22 period December to January, the subject of Israel came up, 

23 and that is reflected in the previous statements I gave to 

24 you. It is reflected in at least one memo for the record I 
wrote at the time. 



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1 Q Who did you understand to have been the drafter 

2 of the document you looked at that morning in Sporkin's 

3 office? 

4 A I guess I understood that it was Bernie Makowka , 

5 although I can't recall whether I knew that at that time or 

6 I was advised of that or informed of that at a later time. 

7 Q What was said by anyone at that meeting when you 

8 were looking at the proposed finding? 

9 A I don't recall anything specifically. I think the 

10 purpose of it was Stan wanted me to take a look at it to 

11 see if I saw anything obviously wrong with it that would-be a 

12 problem. That is my recollection what the purpose was of 

13 calling me up. 

14 He often wanted to get my advice on things , and the 

15 sort of time return we were in was not conducive to giving 

16 the matter very good consideration because he was in a hurry 

17 to go over to headquarters. 

18 I certainly would have to say that my 

19 participation at that point, for the five minutes or less I 

20 was there, was certainly pro forma. 

21 My recollection now is I wasn't given an 

22 opportunity to really consider the document very carefully 

23 or seriously. 

24 Q Do you recall -- 

25 A There may have been reasons for that. 



367 




_ 15 

1 [Discussion off the record.] 

2 [Brief recess.] 

3 BY MR. CAROME: 

4 Q Just so that it is clear, Mr. Clarke, you have a 

5 firm recollection that you did not attend a meeting that 

6 immediately followed a briefing of Mr. Sporkin and Mr. Dietel 

7 by DO personnel on flights that had taken place in support 
6 of moving arms to Iran; is that correct? 
9 A I don't have any recollection of that. If you 

10 have any information from anyone else that indicates that I 

11 was at such a meeting, if you could give me that information, 

12 it may refresh my recollection. 

13 I don't have any recollection of being at a 

14 meeting following this briefing that Sporkin and Dietel got. 

15 Q As I understand it, at various points, Mr. Makowka 

16 and Mr. Dietel, and I am not sure, but I believe also Mr. 

17 Sporkin, have a recollection that you attended such a 

18 meeting. 

19 I gather that your recollection is different 

20 from that; is that right? 

21 A It certainly is. I don't recall being at a 

22 meeting immediately following this briefing that I was given. 

23 Q And your first recollection of any talk about this 

24 finding that seems to be embodied at least in idea form in 

25 Exhibits 1 and 2 is a morning meeting with Mr. Sporkin at ^ 



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which a draft finding had already been prepared. 

IS that right? 
A Well, as I said, as I previously said, I cannot be 
actually certain at this point in time that this is what 
the meeting in Sporkin's office was about. 

I cannot be certain that it was about this finding 
As I previously mentioned to you, there was at least one 
other finding that my recollection is Makowlca was involved 
in working on. 

It was a proposed finding on the subject of 
hostage rescue or counterterrorism generally. I don't have 
a recollection as to which of the two it was. '' 

Q But you do have a recollection of being in a 
meeting one morning in which a proposed finding was dis- 
cussed; is that right? 

A Yes, a proposed finding was shown to me and my 
recollection is the purposes were what do you think, do you 
see any problems? 

Whether it was this finding or some other 
finding 
I don't recall. 




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Q And you saw a draft finding on that subject as 
well? 

A I think it is likely that I did. Whether or not 
I saw that before this particular meeting you are referring 
to or whether or not that was the finding that was discussed 
at this particular meeting, I can't remember. 

This thing was not — the development of this 
paper that you have got in front of you that you have given 
me. Exhibit 2, was not something that I participated in 
drafting. I would remember that if I did. 

Q But you do recall looking at a finding that dealt 




A Yes. 

But I do not recall any of the details that 
is in this document marked Exhibit 2. 

Q E)o you recall whether or not the draft finding 
you looked at on that morning contained alternative para- 



graphs about whether or not 




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ought to be notified? 



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A I don't recall reading any alternative paragraphs. 

Q Do you recall any discussion at that meeting on 
the subject of notification of Congress? 

A No, but it is entirely possible that — and 
indeed even likely if we discussed it — there would have 
been such discussion, but I can't say because I don't recall 
much discussion at that meeting. I recall it being very 
brief. 

Q You say that you would have recalled seeing a 
paragraph on retroactiveness of a finding because that 
would have been something that would have jumped out at you; 
is that right? That would have been unusual? 

A I certainly think that I would recall it if I ha d 
seen it at the time, because we — to my recoil"#etion , we 
had not ever used tThat concept bef«:e in »11 the ^perience 

a i aee d ^?|JL" "^ t ^eeafl aii^ ^n^l^^SH^^'kdfl^ thS¥e 
would have ever^been a need to ratify something that had 
been done, because th» normal practice was to get — is to 
get findings before you do things. 

Indeed, it is my opinion that the law requires 
you to get a finding for CIA to do the kinds of things that 
are covered by the House Iranian amendment. 

Q And that it be done in advance of the activity? 
A That is right^ An_at^cy^ney who works for me has 




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1 written two subsequent opinions on the subject 

2 Q Which attorney is that? 
A One who IS no longer with the office 



3 

4 

5 Q And since November 198 5 or so, he has written 

g two opinions? 

A Yes. He wrote them at my direction. 
Q And the conclusion of those opinions was what? 
A That absent — in the absence of a finding, we 
do not have authority to do the kinds of activities that 
require a finding and that a ratification, a so-called . 
ratification is not sufficient to cure the requirement' 
in the statute which requires the President to make a find- 
ing in advance of CIA activity. 

The statute reads, "Unless and until the 
President finds," so the statute reads we may not expend 
funds unless and until the President finds that our activi- 
ties are important to the national security. 

Q Did you ever have an opportunity and did you ever 
discuss with Mr. Sporkin what he was trying to do by includ- 
ing the ratification clause in the November finding? 

A After this document surfaced and I became aware 
of it, and I recall I became aware of it in December 1986, 
I had at least one meeting with Stan at which this could 
have been discussed. I had^ at least one phone conversation 



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accomplished. 



^ in which you think it was likely we discussed it, yes, 
_ and there was discussion of what was intended to be 

3 

. Q What did Mr. Sporkin say about what was intended 

to be accomplished? 

A My recollection is he said what we were trying 
to accomplish by that was to really just get the President's 
approval for what had been done or to get his acceptance 
of any actions that had been taken prior to th^ormal sign- 



ing of the finding. 

MR. CAROME: Off the record a second. 
[Discussion off the record.] 
BY MR. CAROME: 
Q Did there ever come a time when you knew that 



the findl.'^Jthe draft finding you had looked at at the 



morning meeting we have been discussing, whether or not that 
finding was ever signed. 

A When this thing got going in November and 
December of 1986 and they found this document, I was 
present at meetings at which Bernie Makowka acknowledged thai 
he helped draft the finding or had some association with 
the drafting of it at which he said that it had been — 
that he had received word from Oliver North that the finding 
had been signed and that by this Bernie took it to mean this 
particular finding that he, Bernie, had worked on because 



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1 that was the only one Bernie had ever discussed with him or 

2 had ever had any dealings with Oliver North on. 

3 According to Bernie Makowka, he said Ollie North 

4 said yes, the findings were signed and it is in my safe in 

5 case anything happens to me or something to that effect. 
g Q As of any time in late 1985 or early 1986, did you 
•t have any indication from anyone that the finding you had 
Q looked at had been signed? 
g A In early 1986, I became aware that a finding had 

^Q been signed. I don't know, I do not know, I certainly didn't 

y, know then, what the finding was 

^2 I heard about it in the office from either Stan 

-« or someone else, and since I generally had some responsibil 
ity for reviewing these kinds of matters and knowing what 
was going on from a legal standpoint, I urged, certainly 
urged Ed Oietel, and I may have urged Stan, to get a copy of 
the findings so we could see what was intended to be 
authorized 

Q And did you understand that finding to involve 
support for arms shipments to Iran? 

A I think so. I think so. I knew there was a find- 
ing that authorized us to, I believe, ship arms in order to 
help get some hostages released. 

I was concerned because it is hard to give advice 
on what they are supposed to be doing unless we see the 




sed to be aoinq un 



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22 



' underlying documents that covers the authority. 

2 Q If we could go back to November 1985, after the 

3 session when you were shown a draft finding, was there any 
* further discussion at all that you were a part of about the 

5 draft you had looked at? 

6 A Not that I recall. 

7 Q Oo you recall a few days after you looked at the 

8 draft finding that Ed Dietel said something to you about 

9 the fact that there may have been some CIA involvement on 

10 the matter that the finding related to? 

11 A Well, my recollection is that during that time- 

12 period, there was some general discussion abouir^^^^^^^H 

13 ^^^^^^1 what we could do to help get the hostages out , and 

14 at some point in that period in late November through 

15 December to early Jemuary of 1986, the subject came up of 

16 shipping missiles. 

17 I believe missiles to Iran. 

18 And at one point, it was missiles that Israel had 

19 that would go to Iran. And there was — I asked — there 

20 was discussion I had with Ed Dietel about his office and he 

21 said to me they have already shipped some or some have alread 

22 been shipped. 

23 Q Do you know when that discussion took place? 

24 A I can't say whether the discussion was in December 

25 My guess is that it would probably be in December, sometime 



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in December 1985. 

Q Do you recall whether it was early or late 

December? 

A I can't recall. 

Q Do you have any recollection about a flight by 
a CIA Proprietary Airline to Iran in early November, prior 
to the shipment of HAWKS in late November? 

A All I know about that is what I have subsequently 
read in the Tower Commission report, papers, subsequent 
internal chronologies that have been produced at the agency. 
I didn't have any knowledge of that at the time. 

Q No knowledge of a Proprietary flight? It might 
have been unrelated to arms shipments from Israel, but -- 




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disapproved. 

There was some discussion of it. Hurray Myerfeld, 
I believe, was involved in that and it was not approved. 
I don't recall, but that — I think that was earlier than 
November. 



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EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. CAROME: 

Q Earlier than November 1985? 

A Yes, I don't recall anything about a shipment of 
HAWKS or TOWS from Israel to TddWan in November 1985. 
I never was aware of that until subsequent events. 

On this^^^^^^^^^^^^^^^^H wei^^ 
you involved in the legal advice being given on that subject? 

A Well, I can't recall at this point. I found out 
about it at the time, I think, Ernie Myerfeld called me and 
discussed it with me 




my recollection is it was not approved. 

Q Do you )cnow why it was not approved? 

A I don't recall. 

Q Do you know why it was that Mr. Makowka was 
tasked to draft that finding in late November rather than 

you? 

No, I do not. 

Have you ever spoken about that with Mr. Madkowka? 

I don't really think I have. I don't think so. 

Have you ever spoken about it with Mr. Sporkin? 

No, I don't think so. 

IS it correct, that in late 1985 and early 1986, 



A 

Q 
A 

Q 
A 
Q 



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Mr. Sporkin was asking you if there were any legal restrictiorjs 
on transfers of arms to foreign countries? 

A Yes, that subject came up. 

Q Do you remember when it first came up? 

A Well, we had an occasion to locate it in connection 



wit 



Q Do you recall when it specifically came up, when 
the recipient country for the arms was to be Iran? 

A I really couldn't pin it down other than to say it 
was probably some time in late December or early January. 
You have got — I know the committee has got a copy of a 
document which an attorney who worked for me prepared 6^, 
January 1986, in which this issue is discussed. 

Q I want to get to that. I am trying to pin down if 



licuss/ion£ 



there were any dicuss^ions prior to that January 6 memo? 

A I think there probably were. I can't recall 
specifically, but my guess is there probably were. 

Q And what type of transactions did you understand 
was being contemplated at that point? 

A Well, I can't say exactly when I got the information 
but my recollection is that some time in this period the 
first time this sort of thing was approached to me, I dis- 
tinctly recall it being that they were going to be some 
missiles that were going to be provided to Iran. They would 
be provided from Israel and that the Israeli stock of these 



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particular missiles which were TOWS, would then be 
replenished with some newer stock, newer DOD, either new 
model or more recently produced models, more recent versions 
of the sane model. 

Q Who told you that? 

A Well, I can't say specifically. I think it would 
have been in some meeting or discussion I had when Stan was 
present, Stan Sporkin was present at. 

Q And as best you can figure, that is probably some 
time in late December that that discussion took place? 
A Late December or very early January of 1986. 
Q During that very first or very initial discussion 
or discussions, was there any discussion at that point 
about whether or not these contemplated transactions would be 
reported to Congress, to your knowledge? 

A I don't recall specifically when that subject 
was discussed. I think I can say it is likely it was 
discussed because we, the attorneys who were looking at this, 
were concerned about the applicability of several statutes 
that applied to weapons that had already been provided 
to a third country or to Israel under the foreign assistance 
act, or other applicable statutes. And the reason that this 
thing sticks out in my mind as being unusual is that I 
don't recall we ever, CIA, ever can be involved in covert 
weapons actions, transfers that involved taking countries 



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inuufivvrii •I-*' 28 

existing stock of weapons that were supplied or provided 
under the foreign assistance act and sending those over and 
then giving them a newer model or of the same model. 

Q One problem 

A My recollection is that we advised Stan, we were 
running into some problems here, if this is the way somebody 
wants to do something, because we have the other statutes 
that seem to apply. 

Q What was the problem with the other statutes? 

A Other statutes seemed to require specific approvals 
by the President and specific reporting requirements to 
Congress which we don't, CIA doesn't normally deal with,. 
Those are things that DOD normally deals with. 

Q Was it your understanding at that point this 
was a transaction or group of transactions that Mr. Sporkin 
did not want to have reported to Congress? 

A I wouldn't say that it was something Mr. Sporkin 
didn't want to have reported to Congress, I would say it 
was something that raised a question, by recollection is 
the sensitivity of what was under discussion. You have to 
understand as this thing developed from December into January, 
we the attorneys who were working on this, and attorneys 
who worked for me, were only given Bits and pieces of 
information. We don't have anything called a big picture. 
Ke were told to look at some statutes, to what statutes 



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applied to arms transfers to third countries and so on, 
and so forth, and it was only as the thing developed that I 
got more and more information that Iran was involved 
and Israel was involved, and those words came up, those 
countries came up. 

But I don't recall anything that Stan Sporkin said that 
indicated that he personally didn't want there to 
be any reporting. 

Q Do you recall that at least, perhaos. Director 
Casey may not have wanted there to be reporting of this? 

A Well, I don't recall that specifically. I will 
say that whenever we considered covert actions programs, and 
matters, we have always maintained that in certain sensitive 
kinds of situations the President has the prerogative to 
withhold notification from Congress. I was present and 
I was involved in drafting of, and the consideration on the 
agency's part of the oversight provisions that are now in 
the National Security Act, and I know that to be the case 
because I was working for Dan Silver who was the Administratioji 
sort of point man on that legislation at the time it was 
drafted, and it was very clear to everyone who was involved 
in drafting that that the Executive Branch was making a 
claim that in appropriate circumstances the President could 
withhold notification to Congress. 

So when these covert actions matters get considered, our 

clients at the ^e#«1|\ j^h? (i^e^f^o^*'^ ^^ ^^' *^'°' *'^ 



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always usually consider or at least they usually considered 
whether or not this is so sensitive that notification should 
be withheld from Congress, and that gets considered ultimately 
is the call that has to be made by the White House. 

We at least consider it initially. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. FEIN: 

Q Could I interject one point. 

Isn't the discussion not whether to inform Congress 
but whether it shall be prior informing before the activity 
concludes? 

A That is correct. 

Q Or when the informing will occur after the 
project is completed, and it is rather misleading to ask 
the question about whether or not there will be contemplation 
of informing Congress or not when really the question is' 
one of timing, not whether or not it will be done? 

A That is absolutely right. The issue is at what 
point the notification will be made. Generally, the 
notification is made prior because we notify significant 
anticipated intelligence activities which by statutes 
covert actions are. 



CUSML 



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EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. CAROME: 
Q I don't intend to try to debate here at all the 
law surrounding when notification shall be given,' I am 
trying to get at the facts. 

A Sure. The discussion is my recollection we have 
never discussed the permanent withholding of notification 
of Congress, it is always, whenever there is discussion of wher 

the notification will be made, the issue is when you are going 

is 
make it, before the activity underway or after the activity 

has been safely accomplished? 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE - 

BY MR. FEIN: 

Q Just S X one modest amplification then of your 
statement. It would be true then, Mr. Clarke, that you 
in your experience at the agency had never encountered 
discussions about withholding permanently special 
activities from Congress, there was no sense that the agency 
would do these things in an under-a-cloak that would vanish 
into the black hole of history? 

A Well, there was never any serious discussion in 
connection with any covert action proposal, that T have 
been aware of, of permanently withholding of notification. 

There has been on occasion some theorTtical discussion, 
amongst some attorneys in our office, as to when timely 



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notification under 5019B) might in lonie theoretical and 
unusual circumstance permit extended withholding of 
notification. That has never been a practical consideration 
in any covert action program that I have been aware of. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. CAROME: 
Q MarJc this 3. 

(The following document was marked as Exhibit GC-3 
for identification:) 

COMMITTEE INSERT 



IWLASSiflE 






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W^IESt 



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Q You mentioned before, as initially described to you, 
the transaction was to involve the shipment of TOW 
missiles from Israel and the sending of newer TOW missiles 
from the United States to Israel; is that correct? 

A That is my recollection of sort of a general 
proposal that was being made. 

Q Was there any discussion on the shipment of HAWK 
missiles that you recall? 

A No, the first time I have heard of HAWK missiles 
being involved in this was in the November or December 
1986 time frame. At the time the only thing I ever heard 
was TOW missiles. 

Q Did you ever gave a sense that the objective of 
this transaction was to upgrade the Israeli stock? 

A At one point in time, I can't say how accurate 
my recollection is, but at one point in time, I recall being 
concerned that the sole objective of what was being proposed -\- 
you have to understand, the attorneys working for me were not 
being given facts, we were being told to consider this, 
consider that. I recall being concerned at one point in 
time because I thought the whole purpose of what was being 
proposed was to upgrade Israeli stock of TOW missiles 
to get rid of some older stock that might only have 50 percent 
fire rate and get newer ones in; that sort of bothered me. 

Q Why did that bother you? 



||^(0^'<5incq 



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A It didn't sound like the kind of thing we would 
traditionally do as a covert action program. 

Q Why not? 

A Well, I am not sure what the foreign policy 
objective is behind that and why it would be important to 
the national security that CIA do that sort of thing 
covertly when it could be done in a covert way through 
the foreign assistance act. 

Q Was that concern at all part of the reason that you 
asked one o f your attorneys to look into the implications 
of transfers under the arros export control laws? 

A It could have been. I have to say I don't re»lly 
recall specifically why Betty Ann Smith was asked to do the 
memo she did on 6 January, other than that we were 
considering these kinds of issues. 

Q Let me just hand you, Mr. Clarke, what has been 
marked as Exhibit 3. I believe this is Betty Ann Smith's 
memo that you are referring to; does that seem to be 
what that is? 

A Yes. 

Q And am I right that you asked Betty Ann Smith to 
prepare this memorandum at some point? 

A If I didn't ask her personally — I mean it was 
I told her that General Counsel asked us to look into this. 

I don't recall specifically what was said to her. 



'HS« «««II1™ «^ ^ 



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Q DO you recall when it was that that would have 

been requested? 

A It would have been very early in January of 1986 
although we had asked her, I had asked her at some point 
previously within the previous year to do some general 
research into the statutes applicable to arms transfers 
so we could have a more comprehensive understanding of the 
whole landscape, so to speak. 

She did some research in that area. But my recollection 
is that+his one specifically was probably, I probably asked 
her to do it in late December or early January. 

Q Was this memorancam prepared with an eye toward 
the contemplated transaction of sending arms to Iran? 

A You have to understand at the time she was asked 
to prepare this, my recollection is neither I nor certainly 
not Betty Ann Smith had any of the details as to what was 
being proposed and what specifically was under consideration 
That only^et•s take a look at statutes that are applicable 
to arms transfers 'and it could have been specifically 
because my initial impression was that there was going to be 
a sort of rotating of third country's stock of some TOW 
missiles, specifically Israelis, and we had to look into that 
to see if there was any problems. 

O The document starts out with a reference to 
a question that has arisen under what circumstance recipients 



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of U.S. foreign military assistance can transfer 
military equipment provided through the foreign assistance 
act to a third country. Do you know if the third country 
being referred to there is Iran? 

A Well, certainly I think it is logical to assume 
in light of subsequent events that that roust have been the 
country. Whether or not we or I specifically knew that at 
the time this was prepared, I cant say at this point. 

At some point I became aware that we were talking 
about Iran because the memo that I wrote for the record 
on January 15 specifically indicated that we had been 
considering trajisferrinig stuff to Iran. At some point 
my knowledge of the thing increased. 

Q Do you know why this memorandum was not signed? 

A I don't know. I though-t about that. I don't 
really know. It might have been, it could have been one 
explanation is that it could have been that she didn't 
sign it because it had not been firmly reviewed by me. 

Usually we don't sign things and put them in final until 
the senior attorney who has asked for it, has had a chance to 
review it to make sure all appropriate points are covered. 
That would be the reason. 

Maybe Betty Ann Smith would know why she didn't sign 
it. 

Q Do you recall reviewing that memorandum in around 



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January 6. 



m&si 



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A I recall seeing it. I don't recall to what 
extent I reviewed it or asked her to do either more research 
or to change anything. I don't recall that. 

Q Around this point in time, perhaps even a few days 
earlier than January 6, it appears that two other CIA 
attorneys, Mr. RoShan and Mr. Cole, were working on another 
draft finding involving the support for the sending of 
arms to Iran. Were you at this time in early January, at 
all aware of that? 

A Absolutely no knowledge. 

Q The first time I heard about that was in either 
December of 1986 or January of 1937, that in fact, these 
two attorneys who work for Makowka had been working 
on the finding. 

Q Did it surprise you that these other two attorneys 
were working on the financing? 

A I don't know if it surprised me, I guess a little 
bit, yes. I guess it surprised me I didn't know about 
it. 

Q Can this be marked as the next exhibit, I believe 
Exhibit 4, 

(The following document was marked as Exhibit GC-4 
for identification:) 

COMMITTEE INSERT 



lliiSSHi' 



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Q Mr. Clarke, I show you what has been marked as 
Exhibit 4 to this deposition, and ask if you could tell me 
what that is? 

A It is a memorandum that was prepared in draft for 
Stan Sporkin. The date is not clear at the top, but 
I think it is dated, 7 January of 1986. On this copy the 
date is not clear. I brought a copy, I think. 

No, I didn't bring it with me, but I have looked at 
it recently. I think the date is 7 January. 

Q I believe that is correct. We have better copies 
to show it to be dated the 7th. 

A It was prepared either by George Jamison or me 
or both of us jointly, togetheg to Stan Sporkin. 

Q If the date of that memorandum is the 7th, do you 
know when the preparation of that would have been 
begun? 

A Well, it certainly could have been on the 7th. It 
could have been prior but it wouldn't surprise me if it was or 
the 7th-. 

Q And whose idea was it that that be prepared? 

A I guess I can only say Stan must have asked us 
to do it. I mean I could have decided to do it on ray own 
but I don't recall that I did that. 

Q Do you know who provided you with the information 

re 



in the first paraaraph concerninq the nature 



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to have financial under discussion, were does that language 
come from, do you know? 

A I don't have a recollection of it right now. My 
guess is it came from information that was provided to me 
in meetings that I had with Stan, that I had or George 
Jamison. 






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Q At this point there is a finding that is referred 
to in the first paragraph. Do you know what the staty^s 
is of the finding on this subject at this point in time, 
meaning January 7th '86 or thereabouts? 

A You want, to show me which findingyou are referring 
to? 

Q There is a reference in the second line to a 
finding. It may be that that is speaking hypothetically . 

A I would certainly take that to mean prospectively. 
I believe there is sufficient legal authority to support 
a covert action finding that would result in a transfer 
over. If there was already a finding I don't, if I already 
knew of a finding, I wouldn't be writing a memo that 
started out that way, I don't believe. 

Q The first paragraph refers to the transfer of 
equipment under the Economy Act. Do you know where the 
idea of using the Economy Act in this sort of transaction 
grew up aiom? 

A It is a concept that we have used for a long 
time, for a number of years. We can get equipment we 
need for our covert action progrjuns from DoD under the 
Economy Act, and we have written prior opinions in the 
office about it. 

BV MR. CAROME: 
Q Paragraph 3 refers to^^^qhl^J^At could arise 



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if the equipment to be transferred constituted arms, 
the U.S. provide to a second country through the Foreign 
Assistance Arms Export Control Act. 

DO you know why that subject was addressed here? 
A Well, at this point I can only surmise it is 
because I had information that indicated that some of the 
missiles or weapons that were going to be provided to Iran 
were those which had already been provided to Israel under 
the Foreign Assistance Act, and we wanted to flag that 
problem because of the separate reporting requirement and 
approval requirement that applied to weapons covered by 

those statutes. 

Q At this point was it clear to you that there 

would not be reporting, prior reporting of this action, 
that there is a desire there not be prior reporting of 
this transaction that is contemplated here in this 

memo . 

A No. 

Q Had at this point Mr. Sporkin said anything to 
you about the sensitivity of the initiative under 

discussion here? 

A Had he said anything to me about the sensitivity 

of it? I think I would have to say I would have to say 

that iTwould have thought it would be very sensitive 

since it was being handled i" such a way that the information 






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about it was coming out in dribs and drabs. Plus I think 
I knew at the time that he was having discussions with 
Ollie North about this subject. 

Q You knew this as of January 7? 

A I believe I knew it sometime in January. 

Q It could have been as early as January 7 that 
you were aware of that. 

A Yes, and at some time during this period I 
become aware that there already was a finding that had 
been signed. It was at that point in time that I started 
to ask certainly Ed Oietel, and I know I asked Ed, we have 
to get a copy of this, you either have Stan get a copy . 
or you have got to get a copy from somebody down in the 
NSC staff, and I don't recall whether I ever said that 
directly to Stan but certainly to Ed. 

Q What was the reply when you said that? 

A Ed agreed. 

Q And was it unusual for there to be a signed 
finding that CIA did not have a copy of? 

A Yes, I would have to say so. I think that 
probably there may have been at least one or two earlier 
occasions where, I cannot say for certain that I know 
of any earlier occasions where we didn't get a copy 
of the findings. 

Q This mucl^ J^Y^^e^^i^ii^#^^»n.^d? 



.\ 



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A Yes, it certainly was unusual. 

Q And do you know why it was that matter was 
being handled in that fashion? 

A I don't. I can only surmise because everybody 
considered it to be sensitive. It dealt in part with 
the rescue of hostages and so there was a need certainly, 
a certain need for security, added security precautions. 
I can only surmise that. 

Q And the way that Mr. Sporkin seemed to be 
handling this was unusual in your experience in the fact 
that only small pieces of information were being given out, 
is that right, to the attorneys working on it? 

A Yes, we don't usually do things that way. 

Q The second page at the top of this January 7th 
memorandum, which is Exhibit 4, refers to a recent statute 
on the subject of reporting of weapons transfers in excess 
of $1 million. Do you know why that was included in this 
memorandum? 

A I mean it is a -- I really can't say except that 
it's a statute that is on the books and something that we 
at least thought was worth mentioning because of potential 
applicability. I can't emphasize enough that as this 
thing was being developed since we weren't sort of getting 
all the information that we thought we needed, we started 
to throw out everything we thought could possibly be 




396 



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applicable and I guess I finally made my frustration with 

that way of proceeding known when I wrote the memorandum 

I wrote on the 15th in which I finally told Stan when he 

called me by phone since I wasn't getting all the information 

I wasn't going to give him a legal opinion over the 

phone, what he wanted to do, was okay. That's very straight 

forward. I told him that at the time. 

Q At this time in early January you were advocating 
following the Economy Act route in handling these transac- 
tions, is that right? 

A Well, I don't know whether we were advocating 
it. I think we said that was one way that we could do at. 
This is the traditional way we would do it, we did it, 
we could do these kind of things. 

Q Was it your understanding at the time that if 
the Economy Act route was followed that you would not have 
to worry about reporting requirements under the Arms 
Export Control Act or the Foreign Assistance Act? 

A Well, my recollection is that — I think it is 
my opinion that those acts only apply to weapons and 
material that is transferred under those acts. So that 
if we get equipment and weapons from DoD under the Economy 
Act those acts don.'t cover the particular weapons and 
equipment that we acquire. 

Q Therefore, the reporting aspects of those 






82-696 .400 



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statutes woulCT be irrelevant to the transaction. 

A Those reporting requirements -- they are inherent 
in those acts would be irrelevant to what we did with 
the weapons. 

Providing we got the equipment from DoD under 
the Economy Act. 

Q Referring again to the $1 million transfer 
statute that is referred to in paragraph 4 of this 
memorandum, is it your understanding or was it at the time 
your understanding that the $1 million figure was a figure 
that applied to any given transaction as opposed to any given 
item of munitions or weapons? 

A I don't recall what our thinking was at the time. 
We were sort of flagging this. I don't know that we were 
really attempting to give him specific advice that applied 
to any specific transaction or any specific piece of 
equipment. 

Q Do you know if at that time you or your office 
had a position on what the $1 million applied to, namely, 
was it for weapons, was it for transfer? 

A I don't recall if we had a position at the time. 
We probably did but I just don't recall, beside I mean 
that really, I have got to tell you that is not the only 
determining factor that would be applicable to 
figuring out whether that provision applied, because it's 






'.- V-- 



-. *_ ' >" 



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been the office's position that whether or not you have 

to report because of that specific reporting requirement, 

the $1 million requirement, is dependent upon and taw 

consistent what is decided with respect to the overall 
/\ 

covert action, so that if you had a case where the 
President decided to withhold notification of the activity, 
that the 51 million equipment reporting provision would 
not force us or require the President to report something 
that he had previously held initially would be withheld 
from prior notification. 

I am sorry that is a long, complicated way of 
saying what I intended to say. Did you understand? 
Q Yes. 

In that situation, where there has been, let's 
speak hypothetically for a minute^where there has been a 
covert action finding that the President has directed 
the Director not to report to the Congress, then there is 
a weapons transfer contemplated that would in normal 
•circumstances trigger $1 million requirement of the 
statute, what would be done then? 

A There would be no additional reporting. There 
would be no reporting as a result of the $1 million weapons 
provision and the legislative history to that provision 
recognizes that potentially you could have a problem if the 
President directed that initial finding be withheld, the 






399 



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notification, prior notification be withheld, that this 
provision would not, should not be allowed to undo his 
decision and require the reporting of this transfer of 
a piece of equipment. 

Q Would it be the opposite of General Counsel's 
position, was at the time that there would be a need to go 
back to the President and reconfirm the fact that there 
should not be reporting when this $1 million transfer issue 
came up? Do you know if that question was faced? 

A I don't think that question was ever addressed 
at the time. 

Q Do you have an opinion as to how that situation 
should be addressed? 

A I don't know if the purpose of the covert action 
was such that it contemplated weapons transfers. I don't 
think we would have to go back and get his separate approval 
just because the weapons exceeded $1 million. That would 
be my view, I believe. 

If the particular kind of program only contemplated 
a small level of assistance, and then all of a sudden we 
dramatically increased tenfold level of assistance so it 
got to be over $100 million, then we would probably 
consider that to be significant and would probably go 
back and get his separate approval. 

Q Would J/.PU Jidrk this as the next exhibit 



Ld^PUJi^i^k this as the n 

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HNtt/^iPiBT 



48 



[The document marked Exhibit No. 5 follows:] 
.♦♦•♦•••COMMITTEE INSERT******** 







401 



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yMft^Ptia:T 



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BY MR. CAROME: 

Q Mr. Clarke, I show what has been marked as 

Exhibit 5 and ]ust state that it appears to be the same 
as the last two pages of Exhibit 4, except for a typed 
notation up in the top corner that says "Destroy When 
Complete", and first I ask you to look at that if you would 
like to. 

A Yes. 

Q Do you recall the notation "Destroy When 
Complete" being typed in the corner? 

A No, I don't recall that. 

Q You don't recall having typed it yourself or 

"^ - ~ 5^ -ids. - - 
directing yoi*r secretary to do that? S" ~ 

A No. 

Q,^^ pa^jrott Know if there were, any lat^^ drafts 



prepared, o<.thi9 0aiDor 



A 1 don~*t know. I do know tfiat T^ave r^>*l?M5een 
able to locate a signed copy of this and my recollection 
is that I never signed it because I never considered it to 
be a complete and final product, and the reason I think 
that it was never completed and put in final is that 
things simply moved too fast and it might not be important 
for Stan to have a signed thing. 

He just wanted to see what our research showed 
and what our the4<ih^^ yere ^rij;l, as I said, I think 



\ 



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George Jameson could have done some of the drafting of 
this memo even though it is from me. 

Q Is it possible? 

A Although I recall some of the language so I think 
I assisted in drafting it. 

Is it possible that what we have here as something 
still marked a working copy could have been the product 
of editing done after January 7 or do you recollect that? 

A I think that would have been unlikely, very 
unlikely. You mean to edit it after Jan^ry 7 and still 
date it January 7? 

Q Yes. 

A I think it would be unlikely. 

Q Mark this as the next exhibit. 

[The document marked Exhibit No. 6 follows:] 
••••♦•••COMMITTEE INSERT******** 






403 



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mmE 



51 



BY MR. CAROME: 
Q Referring back again to Exhibit 4 and 5, do you 
recall that this memorandum was^ that you provide this 
memorandum to Mr. Sporkin? 

A I don't have any specific recollection of handing 
It to him. I think it is likely that he saw it. 

Q Did he ever tell you his reaction to the 
memorandusi? 

A Not that I recall. 

Q I show you what has been marked as Exhibit 6 
and ask if you recall that that is one of the attachments 
to your January 7th memorandum? 
A One second. 

What was the last question you asked me before 

this question? 

[The previous question was read by Reporter.] 
THE WITNESS: Before I answer that question as 
to whether this was one of the attachments to my January 7 
draft memo, the 6 January memo, which is /marked your 
Exhibit 4 and 5, was in the package of materials that 
George Jameson and I prepared for Stan to use m briefing 
the Director and in going to a meeting that I understand 
he was going to go to at some point down at the White 
House on the subject of this finding. 

Because we prepared a package of materials which 






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had a bunch of tabs to it, which are listed, as a matter 
of fact. They are listed in your memo there, in the 
draft memo I did dated 7 January and it refers to Tab A, 
Tab B, Tab C, Tab D and Tab E. So, I think that Stan 
did get the memorandum. 



» -^ ^ 






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TOP SECRET 



53 



Q When did you think he received it? 

A I can't say exactly. 

Q But you understand that this was something that 
was given to him for purposes of preparing him for a 
meeting at the White House; is that right? 

A Well, it was to prepare him for whatever meetings 
he was going to have on this subject. I don't know. I 
specifically knew at the time it was for a meeting at the 
White House. I know he did go to a meeting, at least one 
meeting, and maybe more down at the White House. 

Q Referring again to Exhibit 6, I believe that is 
one of the attachments to your January 7th memorandum; is 
that correct? 

A It was under Tab B. There was a cover note, a 
cover memo on top of that that Stan sent to the Director, 
Deputy Director. 

Q Are you looking at it? 

A Yes. 

Q At the cover memo? 

A Yes. 

Q May I see that? 

A Sure. 

Q What you are referring to is dated January 7, 



1983. 



A Yes, it has OGC Number 83-00175. 



8L^-6S6 409 



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Q Okay. 

A The memorandum you are referring to is-- 

Q Is the next number. 

A Yes. 

Q This exhibit 6 refers to a question of military 
transfer to Iran. Is that correct? 

A Yes. 

Q Do you have any idea what was being contemplated 
to be transferred to Iran at this point in time, January 
• 83? 

A Well, I can only assume — January '83 — let's. see 
I really couldn't say for sure. 




Q Do you have a recollection of that? 
A Well, I know that we have — those things were 
considered in the past. 

Q That's all I have on that. 

Could you mark this as the next exhibit? 
(The document referred to was marked as Exhibit 
GC-7 for identification.) 






407 



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BY MR. CAROME: 

Q Mr. Clarke, I show you what has been marked as 
Exhibit 7 and ask if this is also one of the items that was 
included with your January 7th, 1986 memorandum. 

A Yes, it is. 

Q And that is an opinion of the Attorney 
General, is it? 

A Yes. 

Q On the subject of weapons transfer under the 
Economy Act. 

A Yes. 

Q And there is a reference in that opinion to a* 
specific reporting statute; is that correct, a statute 
that pertains to reports to Congress of weapons transfers? 

A Yes, that is right. 

Q Do you know whether or not that particular 
statute was a subject of the discussions that were going on 
in the office of General Counsel in early January 
pertaining to the Iran arms transactions. 

A My recollection is that it was, but I am not sure 
that we wrote anything that specifically addressed 10 
U.S. C. 133 note. 

Q Do you know what it — 

A I don't recall it off the top of my head. 

Q You don't recall? 



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56 

A I don't. 

Q What the nature of the discussion was. 

A No, I don't recall -- well, I just recall it 
coming up. I don't recall what the nature of the 
discussion was to consider or resolve that statute or 
resolve questions about the statute. I don't recall 
specific off the top of ray head what the statute 
specifically provides for without having it in front of 
me. Let rae see. 

Q I aiD not sure that that is necessary. 

A I am curious now. I don't like to see statutes 
that I don't recall in this area. 

Is it correct that you do not recall during this 
January 1986 timeframe seeing any findings either draft or 
final or signed or unsigned, dated in the first week or so 
of January? 

A I do not recall seeing any finding dated in the 
first week of January until much later, like in December of 
'86, January of '87 when we finally started to get more 
information about what had really been going on in this time 
period. That was this first time I saw the January 6th 
finding, I believe it is. 

MR. CAROME: Mark this as the next exhibit. 
(The document referred to was marked as Exhibit 
GC-8 for identification.) 



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BY MR. CAROME: 

Q In addition to not seeing findings from 
that first week of January period, you did not have any aware- 
ness that there were any activities going on to draft such 
things; is that correct? 

A I did not have any awareness. I was not aware 
there was any activities going on to draft such a finding. 
As I said previously, I became aware at some point that there 
was a finding that had been signed and that is when I 
urged Ed Dietel and, I think, Stan to get us a copy 
because I heard that there was only one copy, and they 
were keeping it down at the White House. 

This must have been as early as January 6 or 7. 

A It might have been. 

Q I show you what has been marked as Exhibit 8. I 
am not sure you would have seen this document. I ask 
you have you ever seen that document before. It is a one- 
page memorandum that says DCI in the upper right-hand 
corner, and is dated January 13, 1986. 

A I have seen this recently, within the past 
three or four months. I have seen it after this whole thing 
became a subject of investigation. 

Q Do you recall seeing it back in January of '86. 

A No. 

Q In the first paragraph there is a reference to 



;'Mn =cc;r"'" 



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Sporkin's legal analysis, and it is two options. I ask you 
to read that first paragraph and tell me whether or 
not you recall those two options being under consideration 
at the time in January of 1986. 

A I guess I recall there being some mention of 
that and my recollection is that-- my recollection is 
that we felt that there were problems under the applicable 
statutes for the weapons to be transferred directly from the 
Israelis, but I never saw this memo. I never saw this 
memo at the time. 

I first saw this memo within the past two 
or three months when documents were being collected for' 
this query. 

Q And what were the two options as you understand 
them to be that were under discussion. 

A Hell, one, to do it in the same way that is 
going to involve DOD directly assisting or authorizing 
some weapons to be transferred from Israel to Iran, and 
the other for us to be involved in some kind of traditional 
covert action way. 

Q And which of those two options did you favor at 
the tijne? 

A I favored the second because I was concerned 
about the statutes that required approvals and reporting 
and reporting to Congress under those statutes of 



mm ji^^inrn 



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retransfers of weapons given to countries under the 
Foreign Assistance Act. 

Q Paragraph 2 of this Exhibit 8 refers to questions 
about when Israel had enough money to purchase TOWs under 
a particular option. Do you recall any discussions that 
you participated in or heard about on that subject at 
that time? 

A No, absolutely none. 

Q [)o you recall any discussions in that 
early January time frame about the cost of TOWs or the 
cost of any weapons that you participated in? 

A Not really. 

Q When you say not really-- 

A There have been some mentions of cost, but I 
don't recall any figures. I don't recall any details of 
the discussion. 

Q Do you know who? 

A Value. There may have been some discussion of what 
the value of these were, but I don't recall that. 

Q And do you recall who it was that was talking 
about the question of value of the weapons? 

A No, I don't. 

Q And in this January time frame what is it that 
you understand is to be shipped to Iran are TOW missiles; 






' a ^ 



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A Yes. 

Q Mark this as Exhibit 9, please. 

(The document referred to was marked Exhibit GC-9 
for identification.) 

BY MR. CAROME: 

Q Mr. Clarke, I show what has been marked as 
Exhibit J. I believe it is a memorandum that you wrote. 

A Yes. 

Q And I ask if you could just briefly tell me 
what that is. 

A It la. a memorandum for the TMnord that I did 
based on a phone conversation ^r phone call I. .received from 
Stan Sporkin on the 15th of Ja«wary '86. ' 1 "started the 
drafting of it and did probably most of the drafting J» the 
same day I received the call, which was 15 January '86. 

I think I probably finished the drafting of it 
and I signed it on the 11th of March 1986. 

Q Does this time up in the upper right-hand corner; 
is that the time of the phone call? 

A Yes. 

Q Is it also the time that you are writing the 
memorandum, roughly? 

A Yes, for some reason I decided to do the memo 
for the record immediately after getting the phone call. 

Q What did Mr. Sporkin say to you in that phone call? 



413 



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A Well, I really can't specifically remember at this 
point in time other than what I have got set out in the 
memo here — he called me, called me to discuss some options 
or ways of accomplishing a transfer of weapons. The 
first paragraph, I think, is accurate as to what I 
recalled him asking about and the second paragraph is accurate 
in what I told him. 

I told him I felt uncomfortable with what was 
being proposed and once again as reflected in paragraph 2, 
it gets back to that initial theme that I was concerned 
about about rotating Israeli stocks of weapons, and I 
think this is an accurate reflection of what I said, and did 
at the time to the best I can recall it right now. 

Q Did Mr. North come on the telephone at some point 
during that January 15 phone call from Sporkin. 

A Yes, he did. 

Q Did you understand that Mr. North was in the 
same place, same office as Mr. Sporkin? 

A I certainly did. He said let me put Ollie on. 

Q Do you know where it was they were calling from? 

A I surmised it was from Ollie' s office down at 
NSC staff at the White House, but I can't be certain about 
that. They could have been calling anyplace that had a 
secure line. 

Q They were calling on a secure line? 



H^ilf^J ROOJI^irf^ 82-696 417 



414 



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UNCHSSIfffFT 



62 



A Absolutely. 

Q Yet Mr. Sporkin seemed to be reluctant to provide 
you with the facts of the contemplated proposal; is that 
right? 

A Well, he certainly wasn't giving me many specific 

facts. I think I made reference to that in here some place. 

Q It may be the top of the second page. 

A Yes. 






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63 



BY MR. CAROME: 

C What did you understand Mr. Sporkin to be referring 
to when he referred to an agent or a middleman? 

A Just that, that there would be somebody out there 
who would really be sort of conducting the deal, putting the 
deal together, really making the whole thing work, but it 
wasn't really going to be our guy. In light of subsequent 
events, we all probably know it is probably General Secord, 
but that is also surmise on my part. I don't know if they 
had any idea how it was going to work. 

Q Did Mr. Secord' s naiae come up at all during this 

conversation? 

A No, it did not. Mr. Secord' s name came up subse- 
quent to this time, a time which I mentioned to you before, 
Stan Sporkin called me and said he was leaving and said I 
was going to have to follow this thing from here on. He 
gave me a briefing and told me to go to a meeting they were 
going to have at headquarters about this. That is the first 

time I ever heard his name mentioned. 

Q You hadn't heard General Secord' s name mentioned 

back in November either, is that right? 

A No. 

Q There is a parenthetical group of sentences in 
paragraph 2 that talk about consideration since January 10 
of a proposal to provide missile.^ to. Israel that would, in 



i 



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2S 



part, be to secure the return of U.S. citizens held by or 
under the control of Iran. Do you know what you were re- 
ferring to in those parenthetical sentences? 

A Only what's reflected there. 

Q Did you understand at this point that there had 
been a finding on this subject signed at the time you were 
writing this memorandum? 

A I had, as I have said before, I had information 
that there was a finding that had been signed. I had never 
seen it, I had urged that we get a copy of it to find out 
what was going on and what was intended to be authorized, 
and that's the only thing I can figure out these couple of 
sentences refer to. 

As it turns out, the dates are obviously wrong, 
because we now know the first finding was dated 6 January, 
'86. And my sentence here says according to the general 
counsel, this activity was authorized by a signed Presidential 
finding which he worked out with Oliver North on 10 to 11 
January, '86. 

So somehow the dates got wrong, but it confirms 
what I previously remembered, which is that I heard there was a 
finding, and I said we ought to take a look at the thing. 

Now, at some point, I think it was sometime after 
January, George Jamison, who worked for me at the time and 
still works for me, went down to the White House and looked 



\m\ mm;\i 



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at It. You can get from him when he first saw the finding. 
It may have been after the January 17 finding. It may be 
George never saw the 6 January finding. It may have been when 
he went down there, he was shown the 17 January finding. 

Q In the telephone conversation with Mr. Sporkin and 
Mr. North, did either of them mention Iran or Israel? 

A No. My recollection is they were careful to talk 
around the countries. And I remember being a little bit 
confused at the time and not being really sure what the hell 
anybody was talking about,! 




It is my recollection they didn't 
tell me the countries. 

Q Did either Mr. Sporkin or Mr. North, on this phone 
call, tell you why it was they wouldn't explain the facts 
of the situation they had under consideration? 

A No, no. 

Q Do you know what it is that caused you to go back 
two months or so later and sign this document? 

A Well, the only thing I can recall is that I did a 
draft at the time, and just because I had a lot of other 
things to do, this wasn't really a high priority kind of 
thing at the time, and in my stack of work in my safe it 
popped up, and !'• llrftitflV P<iE^ "* *n* IJ-I^ «nd signed it. 



82-696 0-88-15 



418 



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Q Do you know why there is a reference to derived 
from NSDD 159 on the bottom of this? 

A NSDD 159 IS the directive that deals with covert 
actions and human approval, and that is what we are talking 
about. 

Q Do you recall what Mr. North said during that 
telephone conversation? 

A No. 

Q You do recall him coming on the line, though, is 
that right? 

A Yes. 

Q And your memorandum refers to him coming on the 
line to "clarify the hypothetical facts for me." 

A Yes. 

Q Do you recall what he said by way of clarification? 

A Just he was explaining hypothetically what was 
going to happen. 

Q Was he referring to the use of this agent? 

A It could be. I just don't recall specifically what 
it was. I mean, I said, I recall something to the effect, 
"Let me clarify the facts for you", or something like that, or 
"Let me clarify the situation for you", or the proposal for 
you, and basically just said what Stan had already previously 
said. 

Q Did you understand that both Sporkin and North were 



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eager to get you to say that this was a fine way to proceed? 

A I got the impression that Stan was hoping that, 
based on what he told me, I could see a way to say it was 
okay to proceed as they were proposing. But I couldn't. 
Because, first of all, I didn't have many facts; secondly, I 
was concerned about the statutes that applied to military 
equipment thatthad been transferred to other countries under 
other statutes. 

What was your concern? 

A My concern in that regard was there would have to be 
several approvals obtained for re-transfer, and there would 
have to be separate notification under those statutes to the 
Congress of the re-transfers. 

And why would that be a problem? 

A That would be a problem because -- I am saying this 
in hindsight, I guess, or maybe we discussed it at the time, 
that one of the options I guess being considered was to not 
report the matter to the Congress before it was done, not to 
do prior reporting. 

And, indeed, I believe that Stan's talking points 
memo that he used for his meeting with the Director reflects 
it, those were options. 

Q Do you recall having said to me in our interview a 
week or so ago that third-party arrangements being proposed 
in this telephone call was a flimsy way to do things? 



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A Say that again? 

Q Could you read back that question? 

(Whereupon, the reporter read back the pending 
question. ) 

THE WITNESS: I don't know whether I used the word 
"flimsy" . 

BY MR. CAROME: 

Q Is that accurate — is that how you felt about the 
proposal? 

A I said that I thought — I said that I was bothered 
at the time that we would be using our authority, the author- 
ity that we had developed and was recognized to do this-, 
activity by using someone who had so little direct involve- 
ment with us at CIA. 

Q And your concern was that might not be a valid way 
to invoke the authorities of the CIA? 

A No, I don't think I said that. I guess it troubled 
me because, I guess it troubled me because, I aun trying to 
think back as to why it troubled me at the time. I guess it 
troubled me at the time because I got the feeling that this 
middle guy — I mean someone once described it to me as a 
middleman sort of acting with our authority, and I guess my 
best recollection of why it troubled me at the time is under 
the way it was described, it sounded like we wouldn't have 
any -- we, CIA, wouldn't have any control over this person. 



:^»!f»l IIQ^''" 



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and I guess that is what bothered me. 

MR. FEIN: The other person, as events ultimately 
unfolded, was Richard Secord? 

THE WITNESS: I don't know. I mean, I don't know. 
He's the guy who seems to be centrally involved in what 
ultimately transpired, but -- 

MR. FEIN: Would that have been the first occasion 
in your entire experience at the agency where a so-called 
third party or a commercial cutout, as Secord described him- 
self, was ever employed in a covert operation? 

THE WITNESS: I think the answer to that is no. It 
certainly would be the first experience to my experience with 
the third party cutout, commercial guy was the whole opera- 
tion basically. 

BY MR. FEIN: 
Q You mean that in this instance, the plan was that 
once the weapons were transferred to the so-called commercial 
cutout, that was the end, the joint venture at that point -- 
there wasn't any joint venture, so to speak, where you are 
utilizing part of a commercial cutout where agency officials 
are then involved in the ongoing completion of the project? 

What was distinctive about this one was that once 
the transfer of arms was made to the third party, that was 
the end of the agency involvement? 

A Yes, I, think that 's what subsequent events show. 



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that basically we exercised little control, we exercised little 
follow-up and follow-through, to my knowledge. 

Q Little or none? 

A Well -- 

Q What control did you have at all? 

A You can use both. Little or none. I don't know 
that we had much real involvement with this. 
BY MR. CAROME: 

Q Are you aware of any other arms transfers that were 
done under the Economy Act from DOD to CIA and then CIA 
ultimately to a foreign government where in the chain between 
the CIA and the foreign government there was a private "party? 

A Am I aware from my own personal experience of any? 

Q Yes. 

A No. But I wouldn't want to say there were none, 
because somebody would have to go back and look, do an exhaus- 
tive review of the kinds of things we have done in the past 
12 years or longer. 

Q But during the time you have been there, you have 
never come across such a situation, is that right? 

A I think that's accurate. I can't recall any. 

MR. FEIN: In any event, it would have been ir- 
regular -- not irregular in the sense of wrong, but a non- 
routine method of employing the economy. 

THE WITNESS: I wcxildn't want to go so far as to say I had any 



mm mmm 



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feeling or thought at the time that there was anything 
illegal about it. 

BY MR. CAROME: 

Q At the end of this telephone conversation with 
Sporkin and then North, do you recall how things were left? 
Was It left that you had successfully shot down this proposal, 
or did you know what was going to happen with it? 

A To the extent I have a recollection, I would only 
say I thought I had made my point and position clear to Stan, 
if we are going to oe involved, we have got to really be 
involved and not just sort of let somebody else be out there 
running around with our authority doing something. but I 
don't recall how the conversation ended. 

I do know that subsequently we either helped Stan 
prepare or prepared for him some talking points in which I 
think he made some of the points -- 

Q I was going to talk about the talking points next, 
and I was going to make them an exhibit. Before we do that, 
if I could ask you, as of this point, we are now at January 
15, 1986, how is it that you understand, what is it that you 
understand the purpose of this transaction to be? Do you now 
understand it not to be a que.= tion of replenishing or up- 
grading Israeli stocks but rather to be an initiative to get 
the hostages out? 

A I can't really say at this point what I really knew 






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at that period m time. I mean, I have learned so many things 
subsequent to that period of time, it's kind of hard to 
distinguish between what I knew then and what I really know 
now in light of subsequent events. 

Q Could you make that the next exhibit. I think we 
are now up to 10. 

(The following document was marked as Exhibit 

GC-10 for Identification.) 

COMMITTEE INSERT 



l]^^?''^S^'R[0 



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BY MR. CAROME: 
Q I show you what has been marked as Exhibit 10 and 
ask you if you recognize what that item is. They appear to 
be talking points that Mr. Sporkin provided to Mr. Casey. 
They are dated the 15th of January, 1986. 

Did you have any role in the preparation of those 

talking points? 

A I don't recall, I really don't recall whether I saw 
them at the time or saw them subsequently. One thing to 
determine is whose number this is for classification on 
^^^^^1 Did we ever determine if that's Jamison's number or 

not? 

Q I thought it turned out to be Sporkin' s. 

MR. HUGHES: Yes. 

TH£ WITNESS: That makes it more likely he did 
them on his own and I only saw them subsequently. 
BY MR. CAROME: 
Q Were you aware at the time talking points were 
being prepared by the Director for a meeting at the White 
House on or about January 16? 

A I think I was, but I can't be certain. 
Q The talking points say that the key issue involved 
was the question of reporting to Congress. Do you know 
why It was that that was viewed to be the key issue at that 
time? 



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A Specifically? I can only generally recall there 
must have been some discussion about the issue of withholding 
prior notification from the Congress. 

Q Do you recall participating in those discussions 
at the time? , 

A I can't recall any specific discussions, no. 

MR. FEIN: Let me bring you back. Stan testified 
when he was out of the agency he withheld prior notification 
to Congress with regard to the Canadian rescue of hostages 
in the Canadian Embassy during the so-called hostage crisis 
there. Would it have all been unusual if this was an effort 
to gain the rescue of hostages to not notify Congress in 
advance, or was that the kind of a so-called ethos of the 
notification statute at this point? 

IHE WITNESS: Certainly the fact that we had not notified the 
Congress and had not been notified in that case served as a 
precedent, even though at that time there was no statute on 
the books that required notification. Under that time, all 
we had was Res. 400, as I recall, and we had obligation in 
Executive Order 12036 to keep the Congress informed as to 
Presidential procedures. 

But I think that is a precedent for this kind of 
activity in which the Congress was not notified. 
BY MR. CAROME: 

Q Was one factor driving the desire there not be 



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URKBSfflfSET 



75 



prior reporting to Congress a concern about the nature of the 
political reaction that there would be here in the United 
States if the operation were disclosed? 

A I don't recall anything ever being said that 
indicated that was a consideration. 



Q 
A 

today? 



Did you infer that was a consideration at the time? 

No, I did not. 

MR. FEIN: Would you infer it was a consideration 



THE WITNESS: I would have to say, in my honest 
opinions, that the discussion of withholding, withholding 
prior notice probably really focused on the need for security 
and the need to keep the matter secret and secure for the 
purpose of accomplishing the objectives. 

There is a great amount of feeling that when 
things get reported on the Hill in these categories, in these 
covert action categories, that they leak out. In this kind 
of situation, I guess the feeling was that it could be 
disastrous for the success of the operation. That's just 
my opinion. 

Only those who were involved in the actual decision 
making that led to the finding and those principals involved 
in the discussion could say for sure what the factors were. 

BY MR. CAROME: 
Q The talking points ip the fourth line say "Since 






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there is a Presidential finding." 

Do you know if at this time it was clear to you 
that in fact there already was a Presidential finding in and 
of itself? 

A Which paragraph? 

Q The first paragraph of the talking points. 

A Well, that is certainly consistent with what I 
previously said, which was that I had heard there was a 
finding, which is the one I urged we take a look at. 
Does that answer your question? 

Q Yes. 

Were you aware that the January 16 meeting that 
these talking points were apparently prepared for would be 
participated in by Weinberger, Meese and Casey? 

A No. 

Q Were you aware around this time or around that 
January 16 meeting that Secretary Weinberger had gone back 
to his Legal Department and sought an opinion on the 
transactions contemplated? 

A I have heard that. I don't recall whether I heard 
that at the time or whether it was subsequent. 

Q Do you know who you heard that from? 

A Stan Sporkin perhaps. I think it could have been 
subsequent, because I did have a conversation with him on 
one or two occasions since November of '86 about it. 



(iftirji.OTiFJL 



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Q And do you recall what Mr. Sporkin said on the 
subject of Secretary Weinberger getting legal advice from 
his own people? 

A Just that he had said that he was going to go 
back and get it. 

Q Was there anything further about whether or not 
Weinberger got advice and what the nature of the advice was? 

A There may have been, but I don't recall what it is 

or was. 

Q You are not sure whether or not you were aware 
of that back in January of 1986, is that right? 

A I don't think I was. I think I became aware 'Df 
that subsequent. 

MR. CAROME: Mark this as the next exhibit. 
(The following documents were marked as Exhibit 
GC-11 and GC-12 for Identification.) 
COMMITTEE INSERT 



UNCLASSIFIED 



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imSBRBF' 



78 



BY MR. CAROME: 

Q I show you what has been marked as Exhibit 11 and 
ask if in January of 1986 you recall having seen that 
document? 

A No. 

Q Have you seen it since, other than before today? 

A Yes. I have seen it since either December of '86 
or January of '87. This subsequently surfaced in the course 
of the collection of documents for this review. 

Q Do you recall where this document surfaced? 

A I don't. I think, I think the NSC staff. 

Q So the record is clear, this is a finding, da'ted 
January 6, apparently signed by the President and bearing 
some handwritten notes around the middle of the page adding 
the words "and third parties." 

Do you know whose handwritten notes those are? 

A 

Q It is our understanding they are Mr. Sporkin's 
notes. Do you know of any reason to contradict that? 

A _ No^^-If X were asked to give jyg opinio^ I iffflaid saj 
it looks like his handwriting. 

Q I show you what has been marked as Exhibit 12 and 
state for the record that that appears to be the January 17 
signed finding. Do you know when you first saw this docu- 
ment or became aware of it? 



I do not know jEor cei 




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A I don't think I really ever saw this until November 
or December, '86. 

Q Do you know when you becaime aware that it had been 
signed? 

A No, I don't. 

Q Did you understand that the January 16 meeting that 
Mr. Sporkin was going to attend was directed to the subject 
of a finding such as this? 

A No. I mean, I knew that there was a — I had an 
impression, I think I had an impression there was going to be 
a meeting about a finding for the purpose of what had been 
generally described to me in not a tremendous amount of- 
detail. That's the best I can do. No, I didn't know they 
were specifically going to look at this piece of paper with 
these two paragraphs. 

Q Do you have an understanding why the phrase "and 
third parties" was added into this finding? 

A No. No one has ever discussed that with me. 
BY MR. FEIN: 

Q If you look at the ultimate paragraph there, 
about the U.S. Government will act to facilitate efforts by 
third parties and third countries to establish contact with 
moderate elements, wouldn't it have been if the third 
paragraph had omitted "of third parties" and ]ust spoke of 
third liaison sej:yi(ie;i -in_ tJ^ijiA. tPWitU-es , that is, the last 




432 



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wMM^ 



If II ®° 

paragraph clearly contemplated the insistence of third 
parties, and it would be rather odd if the first paragraph 
was not congruous with that contemplation? 

A I really can't say. I mean, it depends on what the 
people who drafted this had in mind and what they would have 
said in any accompanying papers, if any, to describe it to 
the President or the other members of the NSC. When we 
drafted findings, we usually explain in scope papers what's 
intended, so I wouldn't rule out that they couldn't have had 
a separate purpose with respect to paragraph one objectives 
from paragraph two objectives. It's possible. 

Q But from what we know in retrospect, from what we 
know in retrospect as to the purpose for which the finding 
was utilized, that possible differentiation simply would not 
make sense, would it? 

A I don't — 

Q Because, in fact, all the purposes converged in the 
sense that the whole effort to establish more moderate 
government and what was necessary in terms of arms provisions 
to achieve that objective was concurrently the same method 
necessary to achieve the second objective, which was to 
obtain the release of the hostages? 

A I really just don't think I can give an opinion on 
that. People are going to have to reach their own conclusionfe 
on that. You can look at this thing and say in light of 



iiNCUJisiiia. 



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UP[Ctt^l»T 



61 



1 what is said in the first paragraph, why is the first 

2 sentence of the second paragraph even needed? 

3 Q Except for the fact the first sentence in the second 

4 paragraph refers to third parties. I would agree with you 

5 if you had third parties in the first paragraph -- 

6 A It does, in the 17 January version, it does. 

7 Q I agree, but I am ]ust talking about why at this 

8 stage Stan wrote in "and third parties" in the first para- 

9 graph. 

10 A I don't know. 

11 BY MR. CAROME: 

12 Q Do you think that might have been because of Secord 

13 contemplated role? 

14 A Certainly it would be one explanation that makes 

15 some sense. But I am not in a position -- 

16 MR- FEIN: Especially since Secord testified he 

17 was at- Oie meeting in the White House at which this meeting 

18 was discussed. 

19 THE WITNESS: That is right. 

20 BY MR. CAROME: 

21 Q After the January 15 telephone call with Sporkin and 

22 North, what is the next time you hear anything at all about 

23 this Iran activity? 

24 A Well, I think it was a couple of days later. I 

25 think it was a couple days later, on the 17th, when Stan told 



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me that he was going to be leaving and that I would have to, 
you know, sort of follow this, or if any issues came up, I 
v«3uld have to deal with them on this matter that we have been 
discussing. 

Q Stan was leaving. 

A Yes. 

Q Where was he going, do you recall? 

A I believe by that period of time, his nomination 
had been voted upon and confirmed by the Senate to be a 
Federal Judge. 

Q He was leaving the agency altogether at that 
point? 

A Yes. And so subsequently I got the word there was 
going to be a meeting on either the 23rd or 22nd of January 
to discuss this matter, and I went to that meeting. 

Q And this is the first meeting that takes place 
after the phone call? 

A The first, the only meeting after the phone call 
in which I had anything further to do with this, this 
natter. 

Q And who do you recall -- 

A Let me back up on that. I don't want to say it's 
the only meeting, because there was a meeting, there was at 
least one or two meetings that could have been after 15 
January at which some outlines were discussed about how to 



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proceed with accomplishing the finding. 

Q Let's try and talk about these meetings separately, 
one at a time. 

A I ]ust want to make it clear there could have been 
more than one meeting I attended, but certainly this was the 
one that I probably remember the best, the one that occurred 
on 21 or 22 January. 

Q Who was in attendance at this meeting on 21-22 
January? 

A My recollection is that it was Ed Juchniewicz, 
who was the ADDO -- this is all classified, right? 

Q Yes. 

A -- the ADDO, a fellow nameq^^^^^^^^^^Hchief 
of the NE Division, and another official from the DO named 



How do you spell that person's first name? 

It isl 

What is her position? 

I think she is Chief of what is called I 




the DO. 
Q 
A 
Q 
A 



Am I correct that you are reviewing -- 
I took some notes at the meeting. 
Those are before you, is that correct? 



Yes 



m\ hmm 



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llfiKBSffiiaE' 



84 



MR. CAROME: Could we go off the record ]ust a 
second. 

(Discussion off the record.) 

THE WITNESS: Executive Registry No. 7947 down 
in the bottom right-hand corner. 
BY MR. CAROME: 

Q What you are looking at are handwritten notes, whicf 
I understand will be provided to the conunittee very shortly 
after this deposition, is that right? 

A Yes. 

Q Can you tell me what the subject of this meeting 
was? 

A It was just generally to discuss what was going to 
be done to implement a finding or implement whatever CIA's 
role was going to be in assisting this matter, this operation 

Q And was this a finding relating to -- is this the 
Iran finding we are talking about here? 

A I think in retrospect it is. Whether or not I knew 
what specific finding it was at the time, I am not sure. 

Q How many pages of notes is it that you have? 

A One page. 

Q What was your role at this meeting? 

A Just to be there to answer any legal question or 
give any legal advice on issues that may have come up that 



required such advic 



lOiSSIFIED 



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Q Did any legal issues come up at the meeting? 

A Not that I recall. 

Q Was the subject of shipments of TOW missiles dis- 
cussed at that meeting? 

A Well, I don't recall if they mentioned TOWs. I 
wrote dovm equipment. 

Q Was the subject of Economy Act transfers discussed 
at this meeting? 

A It probably was. I didn't put that down in my 
notes. It probably was. 

Q Was Secord's name mentioned at that meeting? 

A Yes. 

Q Was Secord present at the meeting? 

A No. There were only four people, myself and the 
other three people were present. 

Q What was said about Secord at the meeting? 

A Just that he was going to put the deal together. 

Q In what sense? 

A That's what I wrote. It wasn't -- I mean, the 
discussion -- I would have to say that the discussion 
presumed that people already had a lot of knowledge, so the 
notes that I made were just sort of shorthand notes of 
things that were said. He was formerly DOD, he was going to 
put the deal together, and -- 

Q He was formally DOD? 



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Q What does that mean? Oh, formerly. I understand. 

A There must have been a discussion of TOW missiles. 
Whatever it was, there was a discussion of limiting the number 
until we get the hostages. North and Secord were going to 
set the deal up in London, there was a question about a 
bank account, somebody made reference to the fact we can't 
prove this is a moderate group. 

Q Do you know who made reference to that? 

A Either^^^^^^Hor Juchniewicz. It could have been 
Juchniewicz. That is it. That is all that is in my notes. 
There were other people who were supposed to know details: 
[ciaire George — 

Q They knew the details? 

A Those were people mentioned who were somehow to be 
knowledgeable about this operation. I made a note, "Call 
ibout details." 

Q Can you tell when that meeting took place exactly? 

A Either the 22nd or 23rd of January, "86. 

Q Is that what the notes say? 

A That is what I wrote on the notes at the bottom, 
wrote that subsequent to the meeting. I don't know how 
subsequent to the meeting, but I wrote that based on my 
best effort to reconstruct when it would have been after I 
received the guidance from Sporjjio. j^, I know it was shortly 
after I receiv 



iMfelSSaffl 




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Q You say there may have been another meeting or two 
that you attended. Do you recall a meeting sometime after 
January 17 that was in Sporkin's office and attended by 
Sporkin, Deputy General Counsel Dorty Clark and Jim Harris? 

A Yes. There was a meeting at which there was a 
discussion of how to lay out a road map for people to do 
things, do the Economic Act transfers, set up the bank 
account, so on and so forth, and somebody did a first draft 
of this, and my recollection is that Harris took it and made 
it a more expanded draft. I think you have those. If 
they had dates on them, it would be helpful in settling when 
the meetings were. 

Q Do you recall the date of that independently? 

A No. 

Q There may be a date on one of the documents. Why 
doB^t t^MMB^^y|i^>J^^d as the next exhibit. 

(The following document was marked as Exhibit 
GC-13 for Identification.) 
COMMITTEE INSERT 



[:MPi/i55ififii_ 



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BY MR. CAROME: 

Q I show you what has been marked as Exhibit 13 and 
ask you if you recognize what thadis. That may actually be 
more than one document that has been stapled together. 

A It is. It's -- the first one is what I recall to 
be the draft that was prepared when Dave Dougherty participated 
in figuring up what we had to do to get this thing moving. 

Q When you say the first one, which pages of Exhibit 
13? 

A The page, dated 17 January '86, 2:00 o'clock draft 
at the top right-hand corner. It is nine paragraphs, one 
through nine. There is a subsequent version which is oo 
top. It doesn't look like it has a date. 

Q But it is the front pages — 

A The front three pages of this thing marked Exhibit 
13. This, I think, was prepared by Jim Harris based on the 
one page dated 17 January '86. 

Q And who do you understand prepared the one-pager? 

A Dave, my understanding is that Dave Dougherty 
did, 

Q Does thiis exhibit or group of documents help re- 
fresh your recollection as to when this meeting in Sporkin's 
office took place? 

A I assume it was the 17th, since the draft is dated 
the 17th. 



HMeijlj^inni 




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89 

Q Was that actually drafted up during the meeting? 

A I think It was. I think somebody was taking notes 
and had them typed or that he did it and then he brought it 
back in and looked at it. 

Q Am I correct that what you are attempting to put 
on paper here is a blue print or a road map for how this 
Economy Act multi-country transaction was to take place? 

A Yes. I wasn't involved in drafting this, the purpose 
of it, though, was for those people who were involved in the 
operational details of carrying out these activities to 
sort of lay out something that the operators could live with 
to figure out how to proceed. That is my recollection of 
what It was. 

Q Was — 

A I had another question of how bank accounts could 
be set up, how money could be transferred, either to or from 
the Army or DOD. There was a problem of — well, there were 
problems it would show up on the books if it was transferred 
one way. There were all kinds of accounting issues that were 
discussed, I believe. 

Q What were. the problems with bank accounts? 

A Just that there had to be some way to explain how 
this money was falling in and falling out. That's the only 
thing I can recall. 



" "iKrara 



works for you? 



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90 

A HeMcfesn't work for me, no. 

Q What is his position? 

A He is the Chief of the Logistics and Procurements 
Law Division. 

Q What is his role? 

A He is the Chief of the division that handled all 
our procurement and logistics-related legal issues. This 
certainly was at this point a logistics-related issue. 

Q Did Mr. Sporkin play an active role in this meet- 
ing? 

A He was there. He participated in discussion, it 
is my recollection. 

Q Do you recall whether Secord's ncime came up during 
that meeting? 

A I do not recall it coming up. 

Q You think you would have remembered had it come 
up? 

A I think I would have. It's hard to say. 

MR. FEIN: He was not a household word at that 
time? 

THE WITNESS: No, he was not. 
BY MR. CAROME: 

Q The last page of Exhibit 13, do you recognize 
that? 

A There are two pages 



mmmii 



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91 

Q The last two pages, you say you don't recognize 
those? 

A I don't recall those. 

Q I am not quite sure why these documents are all 
together. In any event, you don't have a recollection of 
seeing that? 

A No, this certainly — 

Q Do they look like they cover the same subject 
matter that was being discussed at this meeting? 

A No, they sort of cover -- certainly the last page, 
the last page covers the policy-related questions about doing 
this. It gets into things like, there is precedent and" 
authority for doing it one way, when the FNS report is needed 
It is a straight covert action operation, there would be 
no unnecessary overlap, if we are going to use our authori- 
ties to get the weapons from DOD and pass it through the 
Israelis to Iran. 

Q Does that document seem to address the two options 
Sporkin had under consideration? 

A Right, it does. I don't recall having any role 
in preparing that. Maybe George Jsunison did. Some of the 
handwriting on it would appear to look like it is Sporkin 's 
handwriting. 

Q It appears to be something you would guess origin- 



ated at the CIA? 



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«RE»SaKfe' 



92 



A I don't know. I couldn't speculate on that. 

Q Other than this meeting, where these logistics 
questions came up, and the meeting for which you have the 
one page of handwritten notes, were there any other meetings 
that you attended on January 17 on this subject that you can 
recall? 

A Not that I can recall. 

Q Do you recall which of the two meetings came first? 

A The one — I am not really sure I attended a second 
meeting to discuss the longer version of that thing called 
"milestones". 

Q Could that have been the meeting attended by ' 
Juchniewicz , ^^^^^^H and 

A No. The meetings to discuss these two documents 
here on Exhibit 13 were held at the General Counsel's office 

Q There may have been a second meeting on this 
"milestones" document? 

A I don't know. The meeting I attended with 
was on the 22nd or 21st. It was on the 17th I got guidance 
from Sporkin, if there is anything more to do on this, you 
will be involved. That is consistent with the fact there 
were other things being done on the 17th to outline how to do 
things. 

It seems logical he would have said, if there is 



UNfil AS5lFlfJl 



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93 



anything to do, you go do it, Clarl«v and then I got a 
call for a meeting on the 21st or 22nd, at which I have out- 
lined for you I made one page of notes. 




-.■.#-'- 



"^ 



--«. — 



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WA^fifF^ 



94 



What was the general purpose of the January 21 or 
22 meeting? 

A I guess it was our people trying to figure out what 
they were supposed to be doing next. 

Were you aware of Secord becoming involved, talking 
to CIA people at any time during January? 

A I think that the meeting I went to on the 21st or 
22nd was the first time I heard Secord' s name mentioned in 
connection with any of this. 

After the meeting on the 21st or 22nd of January, 
I never heard another word about this until it broke in 
first the Lebanese press, Syrian press, and then subsequently 
the U.S. press in November of 1986. 

Q And why did your involvement stop? 

A Nobody called me for any advice. 

Q Did that surprise you? 

A Did it surprise me? No. For all I knew, I didn't 
know what happened to any of this stuff. It could have not 
come off, as far as I know. 

Q Were you aware of any tow or Hawk part transactions? 

A Absolutely nothing. I heard nothing about any 
of it. As a matter of fact, when the thing first broke, it 
took me a day to figure out that it was related to the same 
thing that I had been involved with back in January. 
Because when it first broke, it broke as a mission McFarlane 



!! KQIFirn 



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was involved in going to negotiating, and I never heard 
McFarlane's name in any of this, then I said wait a minute, 
and then they started talking about weapons involved, I said 
wait a minute, that sounded like something rings a bell. 
BY MP. FEIN: 

Q And the birthday cake and Bible was a giveaway? 

A I said oh, no. You don't have to put that down. 
That is off the record. I think you have exhausted my knowledge 
of this thing. 

BY MR. CAROME: 

Q When the matter came to public light in November of 
1986, did you become involved in the pulling together of » 
facts on the matter? 

A To a very limited extent. 

Could you explain what that was? 

A Well, I think people asked for documents anybody had 
on this to be sent to a certain location. I pulled my 
documents together and sent them off to those locations. 

Q Who did you send them to? 

A George Jamison. By that time, Jamison has left the 
he was me^^^^^^^^^^^^^^^^^^^^^f and 

gone over to take Ernie Merrifield's position as DO counsel. 
So, J^unison was heavily involved in pulling together a 
chronology of everything that happened, and so, Doherty put 
out a notice anybody who has any documents on thia,«end them 



I HiHltiiVVM •! *Vi 



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96 



to Jamison. 

So, I sent my documents to Jamison without making 
copies, which I later regretted. Then I couldn't find anything 
I had ever written. We had trouble locating these 
documents . 

Q Did you particioate in any meeting at this time in 
November 1986 where the story was trying to be pieced together? 

A Oh, yes. 

Q Who did you meet with? 

A The General Counsel, and George Jcunison,and there 
have been others. 

Q Can you recall when those meetings took place?" 

A They took place throughout November of 1986. 
They took place specifically in the days prior to preparing 
a statement for the DCI to use when he came up to first 
testify on the Hill on the 21st. 

Q Do you recall during those discussions preceding 
the Director's testimony whether the subject of CIA knowledge 
of a November 1985 Hawk shipment came up? 

A Yes, I think it did. 

Q Do you recall what was said on that subject? 

A Well, the people who were preparing the statement 
were people who didn't have direct knowledge of everything that 
had happened, so when we started reviewing the draft statement, 
we found out there_\^^rf ,^#p% j«i#t^irifBf%nent , we found out 



mmmr 



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iifWSffeE' 



97 



there were errors of fact in the statement, because they put 
somebody in charge of drafting the statement who wasn't involvejd 
in any of this, 

So, we started pointing out to them, to the people wf^o 
were involved in directing preparation of the statement, that 
there were errors. 

Q Was one of the errors the question of whether or not 
the CIA knew about the Hawk shipment at the time? 

A No, I think the error that I recall was the error 
that somebody said that CIA didn't know anything about any 
shipments until January of 1986. 

Q That was wrong? 

A Well, it turned out that as other people in the 
office started getting pieces of the story, theyprovided 
information to the General Counsel that indicated it was 
wrong, because he C2une into possession of information that 
indicated that there had been some kind of flight in November 
of 1985 that we had knowledge of, and there was a question 
of what was on that flight, and there was confusion as to who 
knew what was on the flight. 

So, he became concerned about any statement that 
said we didn't know anything about any shipment of missiles 
until January of 1986. 

Q When you say he? 

A The General Counsel tec^*ft,ta«»«rned that that was 



eral Counsel k<^£^^^f saMir 



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98 



mislaeding, so he got hold of the Director and it was changed. 

BY MR. FEIN: 
Wouldn't it have been true the November shipment 
was a shipment of Israeli tows, it wasn't in the November 
shipment any arms to the United States? 

MR. CAROME: They were Hawks? 

THE WITNESS: Hawks and parts. But Hawks are 
missiles, and the way the statement was drafted, I don't 
recall -- 

BY MR. FEIN: 
Q They weren't United States missiles, that was all 
out of Israeli inventory, wasn't it? 

A That may be the case, but the statement was drafted 
about when people in CIA had any knowledge of any shipment 
of missiles to Iran, and the statement said not until January 




A We interpreted it to mean U.S. missiles in which CIA 
may have played some kind of role. 

Q They weren't U.S. missiles, weren't they Israeli? 

A No -- well, they were in the possession of the 
Israelis. They may have been their property, but a Hawk missil 



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99 



IS a missile made in the United States, so we consider them, 
I would consider it a U.S. missile, U.S. -origin missile. 
We weren't making this fine legalistic distinction when we 
were discussing the statement. 

Here is a statement, said we didn't know anything 
about -- we basically interpreted when we first saw the 
statement as saying we didn't know anything about this until 
January of 1986. That was wrong. 

BY MR. CAROME: 
Q Could you mark that as the next Exhibit? This will 
be my last Exhibit, I promise. 

(The following document was marked as Clarke Exhibit 
14 for identification:) 

COMMITTEE INSERT 



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BY MR. CAROME: 

Q Mr. Clarke, I show you what has been marked as 
Exhibit 14, and ask you if you can tell me what that is? 
BY MR. FEIN: 

Q Could I back up one second? Vfho was it that prepared 
the initial draft of the Casey statement that you had to 
correct? 

A My understanding is that a^^^^^^^^^H prepared 
a chronology of events, of dates and just one-liners. That 
was given to somebody in the DDO's Office, and he was told, 
make this into a statement. Well, at that point in time, it 
was given to somebody who had no personal knowledge and no 
personal involvement of anything that had happened. 

So, it is quite understandable that he is being 
given a job to do, he said what do I do now, so he is out 
there trying to put pieces together, and he is doing the best 
job he can, and he didn't have any knowledge of what was 
going on. 

Q It was not prepared by someone who received his 
instructions from Director Casey? 

A To my knowledge, absolutely not. Director Casey was 
out of town until the day before the actual hearing, and as 
a matter of fact, when we and the General Counsel's Office 
started reviewing these and started seeing how many times they 

Eormation was coming in 



were changed and how much additionaj 



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101 

and how many unanswered questions there were, the General 
Counsel advised that the hearing be put off until we could get 
our act together and prepare a better statement, but the 
policy makers decided not to take that advice and they decided 
to go ahead, because there was a tremendous amount of pressure 
for a statement for somebody to get up there and explain 
things, even though the picture was unclear. 
BY MR. CAROME: 

Q Returning to Exhibit 14, Mr. Clarke, could you please 
tell us what that is? 

A It is a memorandum that an attorney who worked for 
me prepared. It deals with some issues, legal issues related 
to what has transpired with respect to the shipment of arms 
to Iran. 

Q And just so the record reflects what we are talking 
about, that is a memorandum dated November 19, 1986. 

A Yes. 

Q And do you know why it was that you asked that that 
be prepared? 

A I think the General Counsel asked that we prepare 
a memorandum that addressed these issues. 

Q Which issue is that? 

A Well, the issues of whether or not there was a 
requirement to give prior notice, whether or not that the 
activities that occurred in Novembac ^t^l986 , 1985, required 



)ccurred in November ^^1 

umiissra 



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a finding, and similar issues related to reporting requirements. 

Q Are you aware of any institutionalized process by 
which someone at the CIA monitors a finding for which there 
has been no notice to Congress, for the purpose of deciding 
when there ought to be notice to Congress? 

A Well, since there has only been two occasions, 
only one within the last eight years, the answer is no, 
I am not aware of any institutionalized process, but in light 
of the fact that there has only been one of those in the last 
eight years, that really doesn't surprise me. 

Nobody has had occasion to consider there should be 
an institutionalized process for it. 

Q Do you know whose responsibility it is to worry 
about that? 

A Well, that would depend in the first instance on wha : 
the President was supposed to say in the finding that the noti :e 
be withheld. If the finding said, I hereby direct the notice 
be withheld and not be given until I determine, or not 
be given until the DCI determines, then I think those official^ 
have to take the responsibility for giving the go-ahead for 
notice to be given. 

Q You are not aware of anyone at CIA doing any 
monitoring of this January 17 finding on the question of 
whether or not there ought to be some reporting to Congress, 



are you? 



Mimi 



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BNttASSIFiST 



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A I ain not aware of what may have been done in that 
regard. 

Q Where are findings normally filed after they are 
signed? 

A VJell, there are several copies usually filed out at 
CIA in various offices, the offices that have to deal with 
the program in question. The area division, the DO counsel 
office, the General Counsel's office, the Executive Registry, 
among others, the Comptroller's Office, the Office of 
Congressional Affairs. 

I think the original finding, original signed finding 
probably stays down at NSC staff. 

Q Do you have any idea why that normal filing procedure 
was not followed with respect to any finding relating to 
the Iran transactions? 

A Do I have any idea why? 

Q Yes. 

A I assume it was because it was a case where the 
President directed notice be withheld, they considered the 
subject matter of the finding to be sensitive, and because 
of security, they wanted to restrict dissemination of the 
information. 

Q Isn't it true that there are many matters that go 
on at CIA that are at least as sensitive if not more sensitive 
than this particular Iran arms initiative? 



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wKiissmr 



1 A Well, I certainly think there are a lot of sensitive 

2 activities that go on 

3 BY MR. FEIN: 

4 Q Wasn't the distinct feature if there is disclosure, 

5 it would threaten the lives of the American citizens that made 
5 this unique, and was the reason as you pointed out why there 
7 had been no prior notification only once in eight years? 
g A It is certainly reasonable to assume that? 

BY MR. CAROME 
■^0 Q Isn't it always the case that there is sources, et 

■J1 cetera, whose lives are always at stake if there is disclosure' 
12 A Well, if you are talking about covert action matters, 

•J3 specif ically»are you talking about all collection matters? 
-^ Q Just generally, I am sure that I am speaking more 

15 generally. 



A Well, generally speaking, I have to say that 
great precautions are taken within the agency not to let 
true names of sources and assets and people involved cooperatii^g 
with us get spread around very much. 

Q Yet, still the Executive Regis^try is a depository 
for documents that contain such things. I am trying to figure 
why it is such extraordinary non-filing occurred. 

A That is a good question. I don't think I can really 
help you on that. 

Q Other than the -- 



UMTllL^m. 



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1 A Do you nave any more questions about this Exhibit 14? 

2 Q No, I don't. 

3 A Because I want to say this memo was done at the 

4 General Counsel's direction. I don't know that it has ever 

5 been approved by him. I don't know that it reflects the 

6 position of the Office of General Counsel, and I don't know 

7 that -- I would not want to say that it reflects my position. 

8 Q Does it not reflect your position in some respects? 

9 A I would have to go over it specifically, I just 

10 want to make it clear for the record that just because the 

11 memo is addressed to me does not mean that I endorsed the 

12 legal conclusion in the memo. 

13 Q Are you presently aware of something in there that 

14 you don't endorse? I am not asking you to read it, because 

15 I am not sure it is worth the time involved. Is there somethirjg 
15 sticking out in your mind right now that is bothering you about 

17 the memo? 

18 A Well, I can't say about the memo, but I can say that 

19 in the course of considering the applicability of legal 

20 requirements to certain things that transpired, there was not 

21 unanimity of opinion within the Office of General Counsel about 

22 whether or not the various legal requirements were met. 

23 Particularly with respect to things that we were 

24 
25 



never advised of. 



Such as? 



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A Such as flights that occurred in November that the 
Office of General Counsel was never advised in advance of 
and never asked to render an opinion on. So I don't want to 
get in the position of being just this memo is addressed to 
me having it appear that I endorse any of the conclusion, 
because I would want to consider each and every issue that 
could arise in that regard separately. 

Other than the one telephone conversation on January 
15 when you spoke with North, was there ever any other 
time that you spoke to North that you can recall? 

A Not about this subject . 

Was there anything relating to hostages that ybu 
spoke to him about? 

A No. 

Q Other than that conversation? 

A I don't believe so. 

Q What were the other conversations? 

A Other covert action programs. 

Q Not related to -- 

A Not related to Iran or hostages. 

Q How frequently did you speak to him? 

A Infrequently. Not that I really spoke to him, but I 
was present at meetings where he was at. 

Q Were these meetings at the CIA? 

A No, theY.w^£,eLd|W|^a|.^h5^,-tl|<^ staff. 




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Q When did they occur? I don't want to get into the 
subject. 

A They occurred in previous years. Nothing in 1985 
that I recall. It could have been 1984. 

Q Okay. 

Do you have calendars from the period, say, October 
1985 through February of 1986, available that we could have 
access to? 

A Well -- 

Q I will split that into two questions. Do you know 
if you have them? 

A I may. I usually keep calendars for a year. -I thint 
I recall looking at my calendars for this period, and there is 
nothing there. If I would get called to a meeting in Stan 
Sporkin's office on a priority basis, because he wanted to se<: 
me real quickly, I don't put it down in my calendar. 

Q It may be, I guess I am not going to make the 
request right now, because I am not sure it is something we 
need to pursue. It may be that I will be getting in touch 
with the Congressional Affairs Office to talk about getting 
those. 

A I don't even know -- 

Q It is just a question of trying to piece together 
dates through that critical time period. I don't think I have 



anything else. 



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BY MR. FEIN: 

Q I have a few lines I would like to follow up. Is it 
your understanding, George, that the way in which this covert 
operation was structured, that as it turns out, the middleman, 
so-called, Richard Secord, would be acting basically as an 
independent agent once he obtained the arms from the CIA, 
and that that is what caused you some concern, that is what 
made that kind of covert action somewhat out of the typical 
mold, was that he indeed would be acting without any 
direction, supervision, association with the Agency, once 
he provided the money to buy the arms? 

A Well, I would have to say that based on the way the 
findings were, there seemed to be an authority for CIA to 
act through third parties in accomplishing any of the 
objectives of the finding, and General Secord seems to be 
a third party. 

Q So, the answer is yes, that is what made that so 
irregular, that the middleman would be acting kind of 
independently on his own, and CIA would phase out, so-called, 
legally, once the arms shipments were given to the middlemen, 
even though I suppose it is possible that the middleman could 
have taken them to Japan or some other place. 

A Well, I don't know that I can really answer that the 
way you have asked it because I don't know what the people 
who were involved in structuring this program may have said to 



in structuring this prpc 



461 



indl6 

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iifffiftsaaifcT 



109 



him that they considered bound him to follow certain directions 
or guidelines. 

Q In the use of weapons? 

A That is right. 

Q They could have sold the weapons on condition that 
Secord sell them to no other party than getting them to Iran? 

A That is right. 

Q And in fact, to your knowledge, once the arms 
transaction, you really didn't come back and become aware of 
anything once the finding was made in terms of operational 
details . 

To your knowledge, was it unprecedented that the 
middleman here would sell arms and obtain the kind of mark-up 
that Secord was able to obtain? 

A Well, I can't really answer that with respect to the 
mark-up question. I think I would have to say that I am not 
aware of any precedents for us using a guy like this to really 
to go out and sell the arms commercially sort of as a private 
individual. 

Q Did it raise any legal qualms in your mind, or was 
it your understanding that once the Agency got all the money 
it bargained for from Secord, and was that amount 21 million, 
I think? 

A Or 12-something. 

Q That once the Agency got the money it bargained for, 



IIWCLA^EIID.. 



462 



md 17 



Blffltlffi8ifR?T 



110 



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2 
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that was all the money to which it was entitled, where the 
money went after that was not a legal issue for the Agency? 

A I think the only legal issue for us is to make sure 
that we are going to get -- there is going to be a sales price 
on the arms that assures an amount of money coming back that 
will cover the cost of the arms to us. 

It is very important to know what I think was 
contemplated by those who obviously were more intimately 
involved in structuring this, and setting it up as to what, 
if any, kind of arrangements they had with General Secord. I 
don't know that. 

Q But the legal issue, once you got all the money 
you needed to cover, paid DOD, under the Economy Act for the 
arms, then legally, the CIA's obligations were satisfied; is 
that right? 

A I guess I would have to say I think the answer is 
yes. I don't see anything legally wrong. I wouldn't see 
anything legally wrong with using a third party and allowing 
him to make a profit on the sale of arros if that were sort of 
a condition that we had to use, or live with in order to get 
him to. 

Q To get his cooperation? 

A Yes, to do the deal. It seems to me if we are going 
to use third parties to do these things, they are entitled to 
make something on the deal if they are in the business of doing 



fMLii^^'iira_ 



463 



mdl8 



mmm 



111 



1 this sort of thing 

2 Even if they are not in the business, they may 

3 decide to go in the business because of some particular access 

4 they have to a government that is of foreign policy interest 

5 to us. 

6 Q Just one last line of questioning, George. 

7 Are you aware of the Office of Legal Counsel opinion 

8 prepared at the Department of Justice that concludes that the 

9 President's findings, whether oral instead of writing, 

10 applicable retroactively, satisfied the legal requirements? 

11 A I am not sure I understand what you asked. 

12 Q Are you aware that the Attorney General and then 

13 later on initially gave advice that an oral finding as opposed 

14 to a written finding is sufficient to satisfy Hughes-Ryan, 

15 and I think Chuck Cooper, Assistant General for Legal Counsel, 
15 authorized a very lengthy opinion examining whether or not 

17 the President's notification and conclusions with regard to 

•J8 Hughes-Ryan satisfied the legal requirements, and concluded 

•J9 that it did. 

20 A I am aware that there is an opinion written by the 

21 Department of Justice that deals with the question of the 

22 oral -- whether oral findings are permissible, and that it 

23 generally concludes that the way the notification issue was 

24 handled was appropriate and lawful or was lawful. 

25 Q Is there any reason, do you disagree with those 



|]Mil^I£lfJl„ 



464 



md 19 



"BfilUMISIr 



112 



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conclusions of the Department of Justice? 

A I do not disagree with the conclusion that an 
oral finding is permissible, and that there is an authority 
for the notification to be handled the way the President 
directed it to be handled. 

Q Do you disagree with other parts of the opinion? 

A Well, I don't recall everything that the opinion 
dealt with, so I don't want to be put in the position of 
agreeing or disagreeing with parts that I didn't specifically 
recall or have not really addressed. 

I do not think the opinion gets into this retroactive 
issue. Do you recall? 

Q Well, I suppose one could conclude that retroactivity 
is not a problem insofar as one assumes that the President's 
oral finding, say, the oral finding that he made over the 
telephone with Mr. McFarlane, authorizing this Israeli shipment 
in September and October, the first shipments, was tantcunount 
to an oral finding that all future arrangements were 
likewise intending to accomplish the same purpose, were likewis 
permissible, then you don't have a retroactive issue. 

A I guess I would agree if in fact there were an oral 
finding, there shouldn't be any issue of retroactivity, 
meaning a retroactive written finding. When the facts support 
that there was an oral finding, I am not really in a position 
to say whether I agree with that or not, because I hadn't real] 



P'H! ^Q\f\r^ 



465 



md 2 



mms' 



113 



1 followed it carefully, I haven't looked at the record carefully 

2 Q Let us just assume hypothetically that Mr. McFarlane 

3 reconunendation is correct in saying that the President called 

4 him and told him yes, he can give official approval. 

5 A Well, I think there are some factual problems with 

6 that scenario, as I understand it. I mean, the 

7 statute applies to CIA and expenditures of CIA funds. If the 

8 President tells another staff officer or another Cabinet 

9 officer to go down and do something, he is not really directinc 

10 CIA to do it. 

11 If that guy turns around and comes to CIA and says, 

12 will you do this, I think there is a question whether the line 

13 of authority for the President to direct that really contemplat 

14 CIA was going to do it 

15 Q My own recollection is that the Department of Justice 

16 memorandum did not address the retroactivity issue 
•J7 A I don't think it does. 

18 Q It simply goes to the question of oral findings. But 

19 let me ask on that point of retroactivity or not, had you 

20 discussed or done any research at length on the President's 

21 constitutional prerogatives and how they might override any 

22 statutory limitation on retroactivity findings, or was 

23 basically your research limited simply to an exajnination of 

24 the statutes, not considering whether they might have to bend 

25 to constitutional prerogatives^ 



UMP1I1SSIFIF11_ 



466 



mmm 



114 



md 21 

1 A We never did any research in advance of this 

2 problem coming to light about this issue. We have done 

3 research on the constitutional prerogatives of the President 

4 with respect to holding prior notification, but we have never 

5 examined the issue of whether the President has any 

6 constitutional prerogative to override a statute passed by 

7 Congress which puts a condition, a condition precedent on 

8 the expenditure of funds by an agency. 

9 We have considered that. We haven't written anything 

10 about it since November of 1986, and it is at least my 

11 conclusion that there are problems with arguing that the 

12 President has constitutional prerogatives to override such 

13 a statute that amounts to putting a condition precedence on 

14 an agency to expend money. 

15 As I say, we haven't written anything on it, and in 

16 all of my time considering covert action issues, which goes 

17 back about 10 years or so, we have never had occasion to have 

18 to address this issue or have anybody suggest that there is a 

19 need to examine whether the President has authority to order 

20 an activity requiring the expenditure of money when the Congres 

21 has said that there should be a report, a finding and report 

22 before the money is spent. 

23 Q Well, you are aware of the Duran and Holland and 

24 other Supreme Court cases suggesting the President has an 

25 inherent constitutional autho]^^4f»%<f ^^eed, an obligation 



tional authoiy.ti«ti»l<rRiee< 



467 



md 2 2 



mm^ 



115 



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to save Americans who are held hostage abroad, indeed American 
property, and if you consider what would be the constitutionaliltv 
of the Federal statute that told the President, you can't 
spend any Federal monies to accomplish the purpose that the 
Constitution requires you to undertake -- 

A Well, I think there is a different issue there. 
I think the issue is not so much whether or not that statute 
would prevent the President from doing that, as to whether or 
not the President would certainly be free to go ahead, he would 
have to make a report he made a certain kind of finding. 
The fact that he has to make a report doesn't 
prohibit him from going ahead with it, or certainly the -fact 
that he has to make a finding which he could choose to report 
or not doesn't prohibit him from going ahead with the 
activity. 

Q But one could, I suppose, under those circumstances 
maybe get into semantics, the fact that the President did it 
is almost tanteimount to the finding itself? 

A The fact that the President did what? 

Q Sought to rescue hostages would be tantamount to 
making the finding that the statute might require? 

A Well -- 

Q Otherwise he wouldn't? 

A I certainly would want to think long and hard about 
that before I decided to advocate that as the best position. 



iiMillL^Mi 



468 



md 2 3 



mmms 



116 



'' Q I am not talking about policy, just when things 

2 go amiss, that is when we end up in court. That is the end. 

3 BY MR. CAROME: 

4 Q I have actually thought of a couple short questions. 

5 Can you think of any purpose that was served from 

6 a legal point of view, either non-reporting or otherwise, 

7 by inserting a third-party agent such as Secord into the 

8 purchase and selling chain between the United States and -- 

9 A Any purpose? 

10 Q Any legal purpose served by inserting Secord in the 

11 chain as a link in the chain between CIA and Israel and Iran 

12 on the sale of these tows? Did it help you out from a le'gal 

13 point of view at CIA, help the CIA out from a legal point 

14 of view in any way you can think of? 

15 A I don't know. It might have made it possible to 

16 really carry the operation without any expenditure of CIA funds 

17 which would have to be budgeted for that purpose, and which 

18 might have to otherwise be appropriated, but I don't know 

19 how long they intended this thing would go on. I really can't. 

20 Q But assuming that funds were going to be fully 

21 available for the missiles being purchased, the equipment 

22 being purchased, therefore, you can't have this monetary 

23 authorization problem, can you think of any other purpose from 

24 a legal point of view that would have been served by inserting 

25 Secord into the transaction? 



uim!m£u;u:A 



469 



md2 4 



INtMFIW 



U7 



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A I really can't be sure. 

Q You can't think of any other? 

A It might have made it easier to conduct the activity 
because the money that is going to be expended initially 
wouldn't have to be up-front government money because in 
accordance with the normal results, if we are going to have to 
take money out of the reserve, we would normally give 
notification, so if you could accomplish an activity which 
that didn't require money coming from the reserve, you would 
obviously not need to worry about other notification requiremenjt 
that had been built up over time as a matter of policy. 

Q Would it have helped you out in terms of any 
reporting requirement to have scored in the link, would it have 
made it more justifiable to not report? 

A Once you have a finding that authorizes us to deal 
with him, I don't r^«^lly think it does. Once you go to the 
length of getting a Presidential finding to authorize us to 
be involved in procuring the weapons from DOD, then I don't 
think a third party relieves you of any obligations that 
you otherwise would have. 

Q What do you think was driving the decision to include 
Secord in that? 

A I can't tell you. I just have no way of knowing. 
Maybe he was in touch with people who had access to people in 
Iran who were going to be dealing on this matter. I have no 



UMHSi^lClFJL 



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md 25 




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if 



118 



way of knowing. 

Q One concern you had about not following the Economy 
Act route, but following, say, perhaps -- let me rephrase 
the question -- one concern you had back in January of 1986 
was the consent and reporting requirements of the Arms 
Export Control Act and Foreign Assistance Act, if you were 
not going to follow the Economy Act route; is that right? 

A I had a concern that if the idea was the missiles 
that had been shipped under Foreign Assistance Act provisions 
and given to a third country like Israel, I was concerned that 
transferring those weapons would create legal issues under 
those other statutes, the Foreign Assistance Act statutes, 
that required Presidential approval or Executive approval, 
and specifically issuing reporting to Congress. 

Q Do you have an opinion, or do you have an opinion 
then about whether or not a covert action finding would be 
able to supersede those consent and reporting requirements? 

A I didn't, I don't have an opinion on that. I didn't 
have an opinion then because I never Wcis aware of any 
contemplation of a coveiffaction finding that directed that 
missiles i^^ IsaBt sent to Israel be transferred to Iran. 
The thing I was working on was how can this be done in such a 
way to structure it so that we have the least amount of problejn 
legally, that was to get weapons DOD already had that weren't 
subject to any Foreign Assistant Act provision and get those 



jiwm tmiUL 



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to CIA under the Economy Act, and then to transfer them through 
agents or whoever they were going to be using, or do it 
directly. I wasn't aware of the details of it at the time. 

If you do it that way, you don't get into the Foreigr 
Assistance Act provisions. 

Q You were concerned that the Foreign Assistance Act 
provisions at least represented a potential obstacle to the 
transaction? 

A If we were going to be taking missiles that were 
already in Israel and sending them to Iran, I was concerned 
about that. 

Q You were concerned. I have no further questions. 
Thank you very much for coming down and talking to us. 

(Whereupon, at 4:35 p.m., the taking of the deposition 
was concluded.) 



jiMniiSSiEitll 



473 



[i 



'^ ''SSiflD 







Froa 




•horchand Dotti, 2} Nov«ab«r 198i 



> 



I iiaY* b««n br^«f«d on ch« tffortt being aadt by prlvtct ptrciti 



CO obtain cha ralaaaa of Aaarlcana hald hotta(a In cha Mlddla 

I 
Eait. I find \X in tha national Intaraac to provlda whatavar 

aaalataoea aocaaaary to aaalat lo that andaavor. AccordlD|Iy, 

I aa ^IrjctlBg tha CIA to provlda vhatavar atalatanca It can to 

thoia prlvata partlaa In t^alr attaapt to achlava tha ralaaaa 

of tha Amarlcana hald hoataga. Such aaalatanca la to Includa tha 

t>tovl>.o« of tranapor t at Ion , coajunlcat lona , anc othar aupport 

nacaaaary to achlava thla laportant objactlva. I undaratand chat 

■ 
aa part of thaaa afforta caruain foraign aatarlal and aunltlona may 

I 
ba provldad to tbt CoverBBont of Iran which la taking acapa to 

facllitato Cbo ralaaaa of tha Aaarleana hald hoataga. 

Bacauaa of tha axtraaa ■anaitlvity of thla oparaclon. In tha 

> 

axarclaa of ay cona t Itvc ienal authorltlaa I ordar tha Dlractor of 

V. _ 
Cantral lotolllgaaca not to brlaf tha Congraaa of cha Unltad Statas 

aa provldad for la aoctlen 301 of tha National Sacurlty Act of 

1947. aa aaaodad, uaell aach tlaa aa I aay dlracc ocharwlar. 

Thla wrictao finding radflaa all actlona takan by U.S. Covarc 

aant offlclala In furtharanca of thla affort. / 



'^ ^ E^ \ 



\ (® 



Partially Decia&r.ed/fielftSed ofl.^i^fi£il3^1 
i-nder prDvl'.;n? of E.a. 12356 
by 1. Peijer, N.-ticnal Secj.'iiy Council 



/ 



dlJ/i) J3S^ 



liNCiiSiinPO 



.35,Vfet 



474 



li?!«.iWIEBlif 







fln^l^nq Pursuant to Section 662 of the Fortig n 
A ssistance Act of 1961, At Amended. Concerning 
pej^ationg Undertaken by the Central Intelligence 



Agency in Foreign Countries. Other Than Those 
Intended Solely for the Purpose of Intelligence 
Collection 



~J 



\ have b«en brief^Q on the efforts being made by pi'ivate 
partieB^to obtain the' release of Americans held hostage in the 
Middle East, and hereby find that the following operations in 
foreign countries (including all support necessary to such 
operations) are important to the national security of the 
United States. Because of the extreme sensitivity of these 
operations, in the exercise of the President's constitutional 
authorities. I direct the Director of Central Intelligence not 
to brief the Congress of the United States, as provided for in 
Section SOI of the National Security Act of 1947, as amended,, 
until such time as I may dirict otherwise. 



SCOPE 

Hostage Rescue 
Middle East 



DESCRIPTION 



the 



to 



r 

Partially Dccbssifiej/.ieieased oniA,^i}3|2. 
lender prcvisio.is of E.O. I235f 
. -"^ 3- ■'^eger. National Security Council 



frhe provision of assistance by 
;entral Intelligence Agency to 
private parties in their attempt 
>btain the release of Americans 
itld hostage in the Middle East. 
Such assistance is to include the 
provision of transportation, 
communications, and other necessary 
support. As part of these efforts 
certain foreign material and 
munitions may be provided to the 
Government of Iran which is taking 
steps to facilitate the release of 
the American hostag< 




M 



•<v 



he American hostages. 

11 prior actions ](aken by U.S. 
ovcrnment officials in furtherance 

irfeb 



A 

Gov 

of this effort 

ratified. 



The White House 
Washington, D.C. 

Date: 




hcrfeby 



A 




CLi/s/ in^ 



wmmmi 




475 



ONCUSSIflEfl 






{,11 



i .»-.•.-• : H « 



SVaJECT: 



At(oc;i:« C*.-.«:al Cour.atl 



Ctr.trai Couraal 



Third Country Tranaftr of tquip»tnt Proviitd 
Undtr tbt for«i9n Aaatstanct or Arna tzport 
Control Act* 



1. A 

r«clpltnt 
■illtary 
■tchtnica 
thif quta 
ch« Porai 
•quiprtnt 
export Co 
constnt t 
Conqrtai 
•qu ipsttnt 



quaation hat aria 

of O.S. fortl^n ■ 
tquipaant provided 

to ■ third countr 
tion: on* in th* 
gn Aaaiatanca Act 

waa purchaatd by 
ntrol Act (ACCA). 
o a third country 
whtr* cartain doll 

art xnvolvad. 



tn undtt what clreuaatanetc a 
ilitary aaaiatanca can tranaftr 

through tha foreign aaaiatanca 
y. Tvo atatutory proviaiona addtaaa 
contait of grant aaaiatanca undtr 
(PAA) and tha atcond vhar* tb« 
a fortign country under the Araa 

Both Acta require Pceaidential 
tranafer and certification to 
ar anounta and apecific typea of 



P2rtia 



PAA 5 SOS, 22 O.S.C. S 2314(a) and (e) 

2. In order to be eligible for ailitary aaaiatanca on a 

(;rant baaia, the recipient foreign country auat agree that it 
will net transfer the equipaent to another country without tr^t 
conaent of the President of the U.S. and that it will return 
the articlea to the U.S. when they are no longer needrd, unlets 
the Preaident agrees to other diaposition. 22 O.S.C. 
S 2314(a) (1) and (4). 

3. In considering a request for approval of any tranafer 
by gift, sale or otherwise of any icpltaent of war to a third 
country, the President shall not give hia consent to the 
tranafer unleaa the United Statea itaelf would tranafer the 
defenae article under consideration to that country. The 
Preaident aball not give hia conaent to tha tranafer of any 
aignificant defenae articlea od tha O.f. Nunitiona Liat unleaa 
tha foreign country rfouesting consent agrees to deailitarise 






wmm^ 



a4 



r\i^ ^ r> "^ t^ 



476 



lJiiiui.r.3Sirli:i) 



V 



» . : • d ♦ : t • I • ♦ : : -. c. ♦ I ;::;: : c : r « ■ « 5 1 r , o : : M > • : ; : t * i 

:♦;.;.♦;:- tc: ti9r. cc. .-•.:> f:c\:i«« « cciiitttrt ;.-. •ruir? is 
: • » w - ; : t i S : • : « » t r a : it ^ ; 1 1 r, c : •.:»:.!!€.' • - c h ^ c f t .- 1 • 

*:::::»«, if noi <J«.-: 1 : : »r ; :*i , tc »r.y otr.tt rt:*.;.-. c:,r.::y o: 
p»r»c.- *i'. ;o.t f :.•••. c;-. t.r. ;.- 5 irt cor»»r. •. o£ t^.^ ?;«ii(J*r.-.'. 
(Cc.-s*.-.: •-•..'■.or i:y *»• i±*:«:«'.*d to t^t S»cc«:»ty of Stttt in 
tx»cut:vt C:i»r :::«3, S l-KK • )( 3 ) , ( «) , «nd (5), 
S»;-.tr:«: ;9, 1979, 44 ftd. R«9«, 56673.) 



a-:a S 3, 22 C.S.C. $ ;'53 . 

4. Sc deftrs* •rticit or dtftr. 
l«istd ty t.^• O.S. to 4r.y country 
ur.l««« tr.t country or inttrrat ion«l 
agretd not to transfer titl* to, or 
«rticlt, unlta* tht conaant of tha 
obtained. Tha Praaidtnt ahall not 
provicion of AECA unlaaa tb« O.S. i 
artlclaa to that country. In addit 
9xv« bia conaant to tba tranafar of 
artlclaa on th« O.S. Munitions List 
country a9raaa to daailitaris* tha 
nation agraaa in writing that it wi 
articlts. 



aa service ahall be aold or 
r international organ; tat ion 
organization shall bave 
possession of, any defer.se 
Praaldant ia firat 
9iva hia content under thia 
tsalf would transfer tha 
ion, tba Pr«sidant ahall not 
aignificant dafanaa 
unlets tha tranaftrring 
•quipaant or tha recipient 
11 not further tranafar tha 



5. Under both the AECA and tha FAA provition outlined 
above, tba Pretidant autt report a third country transfer to 
congratt after certain threthold requiraaents are reached. The 
Preaident say not conaant to a tranafar of aajor defense 
equipoient valued (in tarat of itt oriqinal acquitition cost) at 
more than $14 rillion or any defense article valued at sore 
than $50 Billion (original acquiaition coat) to a third country 
unless he subvits a certification to the Speaker of the Bouse 
and Senate Committee on Foreign Relations for congressional 
consent to the proposed tranafar. 

6. The written certification autt contain (a) the naze of 
the country propoting to sake the tranafar, (b) a deacription 
of the defense article or aervice proposed to be transferred, 
including itt original acquiaition coat, (c) the name of the 
proposed recipient, (d) the reaaont for the propoaed tranafer, 
and (e) tba data on which tha tranafar ia propoaed to be aadc. 
Such certification will be unclattified aicept that inforaation 
regarding the dollar value and nuaber of artlclaa aay be 
clasaified if public ditcloture would be clearly detriacntal to 
security of the United States. Consent to the transfer shall 
not becoce effective until 30 calendar days after the data of 
the aubir.ittal of the certification, and than only if Congress 
does not adopt a concurrent reaolution disapproving the 



mwsm 



477 



DNCUAiifiLy 



, i : 



S. 7 



5 :•.,•.; 

, 9 '. 3 . ) . 



S . : : « • 



tr«-sfer, t.-e s» 
c c - s w : : « 



icr.i 



Cc. 



: e s ; i » r, ' 






4 : ' 

' t . 



<( 



. r. c • r '. ." . J fz: 



; c - , <m.:r. 
— ., — , e;«-. »^ ic tr» 

Sc. 119S6, w'«n.»ry le, IS'', «; i 
t to cor.itnt to • th;rd cow.-.t:y 
• '.»:y ot Str' - - ■ ' ^ - - 



S •- « : t by E . '' * 



*: 



?*?. «:... ■;:.• :es?»ct to cor.itnt to • th;rd cow.-.t:y 
•^rt'stt: , t.-e s»c:»t«:y of St»tt is «-ihotiitd to fir.tf, ir 
cz-s^l'.a'.icn witr ct-t: fc^tral <iep*r: rtn*. i a-i 4;tr.c;ts, 
• - 1 •• r * r ; " • p r c p : $ * c : : a r. $ f • r will i -.: e .-:•.- 1 r •. r • j »:.:.-. > zi 
•..•• ■. . S . 4-.ii priro'.e *cr-c p«»c». 

Ct'er Co'.si dt rat : ;r.s 

6. Both the FAJk and AECA rtquir* that content bt 9iv«n to 
« third country transftc of dtftna* articlt* only if tht O.S. 
itsvlf would transfer the articltc >.o chat country. This 
caveat triggers a p4noply of general policy considerations and 
specific prohibitions relating to foreign ailitary assistance 
including : 

no Assistance to Communist countries unless the 
President finds and reports promptly to Congress that 
(1) such assistance is vital to O.S. security: (2) the 
recipient country is not controlled by the 
international Communist conspiracy; and (3) such 
assistance will promote the independence of the 
recipient country from Comirunism (22 U.S.C. $ 237C(f)); 

no assistance to countries engaging in or preparir: 
for aggressive military efforts directed againit tr« 
U.S. or FKS recipient nations, unless the President 
ceterir.ines that ir.ilitary efforts or preparat lor.s r»ve 
ceased and he reports to Congress that he has rec«.-.ei 
satisfactory assurances they will not be renewed. 'S: 
other FXA waiver provisions ray be used.) (22 U.S.C. 
S 2370(1); 

no assistance to countries that grant sanctuary to 
international terrorists; unless the President 
deterninet the national security justifies such 
assistance and reports his finding to the Speaker of 
the Bouse and the Senate Comwittee on roriegn 
Relations (22 U.S.C. SS 2371, (PXA), 2753( f ) ( AECA ) : 
and 

no assistance to counttiei who have severed diploratic 
relations with the U.S., or with whor. the U.S. hai 









'"'C 



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tfORKiNC PAPER 



lORANDUH POr\ Ccncral Counsel 
rftOH: 




SOIJKCT 



y 



Gcor9« w. Clark* 
Assoclat* General Counsel 

Proposed Iran Pindin9 (TS 



1. "^ b«lieve there is sufficient legal authority to support a 
covert action Finding that would result in the transfer of 
■ilitary equipacnt to Iran for the purpose of (a) aoderating 
Iran's hostile attitude toward the U.S., (b) preeapting possible 
Soviet influence in the region, and (c) obtaining a hostage 
release. Such authority would be based upon a Presidential 
Finding under Bughes-Ryan that the operation is iaportant to the 
national security, and upon the extraordinary authorities of the 
National Security Act. The Apeocy would purchase the equipncnt " 
froB OoO under the Econony Acfc and transfer the equipment abroad. 

2. Attached arc several peBos prepared in the past on related 
issues. At Tab A arc opinions of the Attorney General, the State 
DcpartBcnt, and this office stating there is authority for CIA to 
transfer equipment abroad outkide the foreign assistance 
mechanisBs. At Tab B is a 19 13 memo that indicates there are no 
general prohibitions that wou Ld preclude CIA's sending equipment 
to Iran. I have confiraed th it this is the case today. Further, 

I don't believe the Trading w ,tb the Eneay Act precludes the 
transfer, for two reasons. First, the Act itself aakes trade 
unlawful unless conducted 'with the license of the President.* 50 
U.S.C. App. S 3. Second, the Act siaply was never intended to 
preclude acts of the Executive. Tab C contains two opinions on 
the inapplicability of the Neutrality Act to conduct sanctioned by 
the President that ara relevant on this point. 

3. On* problcB could arise, however, if the equipaent to be 
transferred constitutes articles the O.S. has provided to a second 
country through the Foreign Assistance/Aras Export Control Acts. 
The BCBo at Tab D indicates a country aay use aabarial it has 
received through such O.S. foreign aid only for /•!< defense and 
aay retransfer it only in certain liaited circuutancM that 
require O.S. consent, notice to Congress, and thm aliglbility of 
the third country recipient for O.S. aid. Terrorist activities, 
aaong other things, can disqualify a potential recipient. 



PaftiSiy iiiiflJtuiiAllTBfimM M frrJ^Jb UtJ 
. undei D'ovisicis ol E 12356 
1 By K Johnson, National Secunly Council 



-tiNetm 




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481 



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482 



) 




TOP SECRET 




DRr 



HZMORAMDUN POR : C«o«ral Counsvl 
PROM: 



Destroy when acrplete 
WORKING PAPER 



SUBJICT: 



G«or9« W. Cltrkt 
A«soci«t« G«n*r«l Couni«l 

Pioposad Ir«n Finding (TS 



1. I b«li«v« tb«r« is sutficisnt 1*9«1 aut 
covsct action Plndinq that would rsault in th« 
military equipment to Iran for th« purpoa* of ( 
Iran's hostile attitude toward the U.S., (b) pr 
Soviet influence in the region, and (c) obtainl 
release. Such authority would be based upon a 
Finding under Hughes-Ryan that the operation is 
national security, and upon the extraordinary a 
National Security Act. The Agency would purcha 
from DoD under the Economy Act aod transfer the 



hority to support 
transfer of 
a) moderating 
eempting possible 
ng a hostage 
Presidential 

important to the 
uthorities of the 
se the equipment 

equipment abroad. 



2. Attached are several meaoa prepared in the past on related 
issues. At Tab A are opinions of the Attorney General, the State 
Department, and this office stating there is authority for CIA to 
transfer equipment abroad outsid* tJM foreign assistance 
mechanisms. At Tab B is a 1963 wmma that indicates there are no 
general prohibitions that would preclude CIA's sending equipment 
to Iran. I have confirmed that thim is the case today. Further, 

I don't believe the Trading witlktMi Enemy Act precludes the 
transfer, for two reasons. First;r-v>* '^ct itself makes trade 
unlawful unless conducted 'with tf)«^ license of the President.* 50 
U.S.C. App. S 3. Second, the Act simply was never intended to 
preclude acts of the Executive. Tab C contains two opinions on 
the inapplicability of the Neutrality Act to conduct sanctioned by 
the President that are relevant on this point. 

3. One problea could arise, however, if the equipment to be 
transferred constitutes articles the U.S. has provided to a second 
country through the Foreign Assistance/Arms Export Coatr*l Acts. 
The memo at Tab D indicates a country may use material- it has 
received through such O.S. foreign aid only for self-^Maaae and 
may retransfer it only in certain Halted circuasti 
require U.S. consent, notice to Congress, and ( U» jMMJWft\\/ of 
the third country recipient for O.S. aid. Terrorl6ipct|i]||Mes, 
aaong other things, can disqualify a potential r* 



Partially [Vc'assilieJ'nf based on I I l"e4S 8 
unflcf Diovisibis 01 f '23i5 
t>y K Joimson Maiionai Secunr/ Coi-ncil 



TOP SECRE 






483 



TOP Stent: 



4. rinally, •• yoa know, Congrts* rtctntly paastd tha 
Int«lii9«nc« Authoclxatlon Act to raqulra raporta of vaapona 
tranafara valued in'axcaaa of 1 Billion dollaca aa algnlflcant 
•nticipatad Intalllganca actlvltiaa 'for tha purpoaa of* and, 
tharafora« in accocdanca with, aactlon SOI of tha National 
Security Act. A copy of tha ralavant language la at Tab E. 



0597 



Caorga H. Clark* 



Attachnanta 



TOP sccxeTi 




[«Hw »nn"> 7/J?/ 



484 



l!fi[L'as:-IED 



OCC 83-0017& 

7 .' »••)*>»>? ' 






MEMORANDUM FOR: 

rHOM: 

SUBJECT: 




St«nl«y Sporkin 
C«n«ral Counft*! 

*. a*«rf • J«B«tea 
A»«lftean« ••ii«r«l Counsel 



Restrictions on Exports to Iran (S) 



1. At your request, I spoke with Jaoes H. Hichel, a Deputy 
L«9al Advl««r at the Oepartnent of State, to determln* If there 
are any legal restrictions on CIA's providing equipitent to, or 
otherwiso "trading' with, Iran. Baaed upon price reaeacch and ay j 
conversation with J la Michel, it is ay conclusion that thoio ara 
no le^al prohibitions applicable to CIA. You should be aware 
that O.S. laws merely restrict the private transfer of defense 
articles on the U.S. Munitions Control List, although a general 



policy eabargo is in existence to guard against actions that 
axght violate U.S. neutrality in the Iran-Iraq conflict. (S) 




State Departaent has legal concerns because of a general eabargo 
on transactions with Iran. Although I did not present any spe- 
cific facts to Mr. Michel, and spoke of Iran only in general 
teras, he confiraed oue view that the embargo is a aatter of 
policy, and that the restrictions on transfers to lean are those 
contained in 0.8. export control laws, in particular the Aras 
Export Control Act. These laws do not prohibit all exports, but 
establish a licensing scheae for approval of exports by private 
parties on a case-by-case basis. The executive orders issued 
during the hostage crisis to prohibit virtually all coaaercial 
dealings with Iran have been rescinded. (S) 

You aay recall that last year the State Oepartmer 




CIA's authorities under the National Security Act of 1947 enable 
the Agency to transfer aras notwithstanding aras control laws 
that aight preclude such transfers if aade by other parties. I 
did not raise this with Mr. Michel yesterday, but I believe the 



Panially De-claSfied/fieleased o.^^^iqn 



wmmm 



CL BY 675623 
UBCL OAOR 
DERV COL 1-82 



f DC- 



485- 



ll;.i;i"^!PEO 



point is s'tUl valid. CIA is not subject to thot* It9al con- 
cLiainLu. (S) 

4. Althou9b th«r« Is no broad legal provision that would 
preclude CIA's passing defense arti cles to Iran in the coursa of 
an euthor iied inte lli gence actjvitj 

__^^^^ irnishlng arma de"^ 

•pite the 0T¥. position of neutrality ll^he Irsn-Iraq conflict 
could be considered a non-neutral act and affect the legal dis- 
pute over U.S. refusal to export Irsnlan-owned ailitary aqulpntent 
currently in the United States. The U.S. position is that Iran 
does not Beet the criteria for an export license under the Arms 
Export Control Act, in part because it is a belligerent in an 
international conflict with respect to which the U.S. has aaln- 
tained neutrality. Agency dealings with Iran at thia tlae could 
weaken the U.S. position. (S) 

5. In conclusion there are no general legal restrictions 
that would preclude the CIA from providing equipment to Iran as 
proposed. Rather, the relevant constraints involve policy con- 
•iderationa that say have to be weighed before undertaking the 
activity propoaed. (S) 




wmm 



486 




.«=/ 



bniiLASSIFIED 



£~ Oct P- ) 

m ^•;^;r~-^^^^'^^i 1^1600 c? ''' 

Cacl7in5Um,Ii. (1211530 ' [jj 

OCTOBER i, 1981 

■ ^ - •' ;. 7' • 



S*"Kf*^ Intelligence Agency 
Washington, D.C. 20505 



Re: 



CIA Exchaoge 
^for/ 



Dear Bill; 




S. Weaponry 



Adviser%!;:rtS:*;o;frgn'1s'Lta: '\'^' department's Lega^ 
control Act were not JJJeiSed ^0^%?^' *"*" ^^* '^-'"^ Exoo^t 
Congress to be the e«ri.,«»« ' ° ^*^* "°*: b«en «ppi i«d s.. 
to foreign coJntrrerrJd^i^rt^JJeSj^IiSrir ^^ "-S^'-l^.^i' 
transfer outside the context of thof!f?^ ""'-'' •P?'^©-'* c 
I believe the exchange foriliUliiMilii''^^- Accordingly, 
pleted, based upon a deterffnfW!?^!^!^!"*^ ^* legally coi?- 
Acts cannot be Lsed and S^t Jhi " 1 ^?V'^*'=^ **'"»= that thj^e 
Act and National lecSJitfk^tiLi'^^'''t,4*' *=' ^>>* tcono^y 
significant intelUgS^^oEjicJKe^ ll'lH''^ V" achieve T 
congressional reporting reeGiremln;. f '^^'t'^ ^° satisfy the 
of Defense under DoD A|pJSSutTon« Ai^?«"^ """^ '^*'* Secretary 
(10 U.S.C. 133 Noh*) vLaiI^ Authorization Acts 

Act Of 198o"lo STi/<"?3r? ?S- SL^'* ;r?^^^r-* ever.:,- 
Commitcees should be infor;;d of t?is or=no:!?''*-^-'V'"-^^^5cr.ce 
President's deterainations. (S) P'^Po^*! *nG th» 



Sincere 




FR2NCH SHrriT 
Attorney General / 



ccorney c 



C 



Dodfrpiov&oiaofLo. ms6 

JK 9.jniMb^ Security Councn 

Cl«,ified by Dtft'lvative: State Depa^tnent 
RcvAc"w fc- Declassilxcation; Ao/Vrtoi. 



T 




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C ///V//7C» 



IMP- 

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QUI? 



t-'- »,fo-7 



487 




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13 J«n 1966 






The 
Iranians 
options: 
It thpou 
leqal st 
even th 
to handle 



l^ 






raells trt Mbiog ahead on their Tow for Hostage 
You will recall that In Sporkln's legal analysis 

one for OoO to do It directly with the Israelis. 
CIA. Sporkln feels that the most defensible way 
nt 1$ thrdffgK-CIA. We prefer keeping CIA out 

|h « Presldeotlal Finding would authorize the way 

" • transactions. 




deal with the 
there were two 

the oth^r to do 
to do It from a 
of the execution 

Defense would have 



Under thlT'-opt^on; the Idea was that the Israelis wool 
version of the Tow and ship to the Iranians the hasic Tows 
The Israelis would then replace those basic Tows by buying 
Unfortunately, there 1$ not enough money available to do th 
have placed S22 nllllon In an account In Switzerland. This 
basic Tows, but- 'or the Israelis to buy the Improved verslo 
about S44 nllllon. 



d buy the Improved 
they now have, 
the Improved version. 
Is. The Iranians 
is enough for the 
•» It would cost 



Therefore, they want to use the s 
4. one basic Tows from OoO for $21 mlUI 
^rchases would be for general CIA 



ec >nd 



I 



would be transferred to the Israelis, 
to a CIA account to pay for this purchas 
would move the Tows to the Israelis who 
The Israelis would keep their basic Tows 
the nev< Tows would ^e handled In the no 



Tie 



an told that tine is of the essen j^jin getting this don 



he situation in Lebanon Is deter 



option under which CIA would buy 
- A s far as Defense is concern ed 
jjses _^__^_^ 
h* money for the Iranian account 
Israelis would transfer that money 
of the Tows ^ron OoO, the shippers 
fould then nove them on to the Iranians, 
and the problen of upgrading them to 
1 Don. Israeli relationship. 



r u 



oral'ing jo that any 




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ri» i I nnnMifi i Malia ni / iH M f i ly C «a n «il 




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scBJBCTt rvlcfM** Call fro* 0«ii«r«l Cottnsvl ll*9«rdln« 

AMtb*ciiy i« H*«14« »««poii« to Thlttf y*rtl«s rurtuant 

to pi«iidMiti«i riMiMs 



1. At approximately 1410 b««r« ted«y I r*c*lv«4 • ••eura Una 
tclcphona call from the ••iMral Ce«ii*«l. ■« waRt*4 to tfiacuaa 
whether I saw any problens or r«p«rtiikt r«fiiiro*«iits vitb a 
propoaal to have DoD provide wia p ca* t« • CIA '•yoat* wbo «o«ld 
pay for the weapons with noney •ttpyli«4 by • friondly tbictf 
country. The a^ent would thea •«ppljr tiM — po— to tb« latondod 
recipient country. The agent would MV« •• •oiu»o«tlo« with CIA 
other than to act as a 'nlddle Ban* wikk oar •ntbocity. 



2. 
conf orta 
it would 
covert a 
this act 
stock of 
proposal 
secure t 
Irar. . A 
rissiles 
held by 
was auth 
out with 



I told the Gen 
ble if CIA wer 

be essential 
ction objectiv 
ivity were aer 

weaf>onE. (He 

to provide ni 
he return of D 
s originally c 

supplied by u 
Israel. Accor 
orizcd by a si 

Oliver North 



eral Counsel tiMt I we«14 fool aoro 
e directly involvotf la tbo activity and that 
that we act in foctboraaao o( a traditional 
e. I said that I ooold (oroaoo probloaa if 
ely intended to rotate a apoclflc eooatry's 

had been considering slnco 10 January a 
ssiles to Israel tkat woold, la part, be to 
.S. citizens held by or un^r the control of 
xplained, Israel would koop tlie newer 
s and give Iran older aissiles currently 
ding to the General Counsel, this activity 
gned Presidential rinding wkleh be worked 
on 10-11 January 1986.) 



3. Despite repeated urgings to concur in varlatioaa that 
would have DoO provide the weapons without other tban token CIA 
involvement, I did not do so. (At one point, Mr. Ik>rtli case on the 
line to 'clarify* the hypothetical facts for ae and then put Stan 
Sporkin back on the line.) I had previously urged both the 
General Counsel and Deputy General Counsel to obtain a copy of the 
Presidential finding froa Hr. North so we could deteralne what was 
intended to be authorized. These efforts proved unsuccessful. 



Partially OetijsatwamtKasM on /I t-&6i 

unof (KOnsions ol E 12358 

tiy K Joflmoo. National Secwily Coonci 



/"^nus. 



OGC TS0821- 
Copy 1 of : 
CL BY 

DECL 



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DERIVED PfcON 



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C«or9« W. Cl»rk« 
//• A^^...-Jk /feu 



UNCLASSIFIED 



491 



UNCLASSIFIED 






0f - 




•O*" lO ... 




EarlJally Declasified/ Released on :;^^^^5:^4:^'' 

undtr provitions of E.3. 12356 

by 3. Regw. National Secu:;t. CoupciI 



(^rx>i7 "^/of 



UKGLAoSIRED 



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493 



ONCL-itSSn 



•A-. 






ZK-.rzsz POINTS 



- 4 - ' • : 
•-.-.re 

a c:a 

CIA It 
e4:*r 1 
B4t«r I 

would 
froa a 
ust of 



: «i 

t'.t 

p » r : 

5 : • r, 

tut 
*1 I 
tl c 
• lea 

CIA 



; $ : . - 
r « •. r 

i?:;n 

n que 

brocg 

CO b 

41 at 

autfa 



ii ;r. 
i ir. 

• , «i 

ed to 
$t ion 
h an 
t tht 
andpo 
oritl 



wr.icr. t.-.» Do:; car. $el. •«!-:-« to 
;ss,t t.'.at OoD r.i: cf.trr:-.*. Pr;r 

net t^.•:^ is a p:ei:d*r>. tial fmiinq, 
assist in tht obtaining of tht 
If CIA actually took control of 

economy Act transftr by DoO, this 
prtfttrtd way to handle tht proposal 

int. This would providt tht aaxinuB 

• a. 



If CIA atrtly acta aa an accouiodation party and, in 
tfftct, rtqutsti DoD to dtal with a particular agtnt, 
tbia Bight also bt proptr but it would bt up to DoO to 
ttll ua whtthtr thtir authoritita would allow such a 
tranaaction outaida of tha Cconoay Act. Ha hava found 
auch pracadant. 



no 



Tht kay isaua in thia antirt satttr rtvolvts around 
whtthar or not thtra will bt rtports madt to Congrtss. 
Bach of tht Acts involvtd--tht Portign Assistanct Ace, 
tht Arms Export Control Act and indttd tha National 
Stcurity Act as artndtd--havt ctrtain rtpocting 
provisiona in tbat. Whilt tht National Stcurity Ac*. 
providta foe a cartain lisitad rtporting proctdurt, it is 
ry viaw that thara aay ba othtr ways of taking a suitaflt 
rtport by tiarciat of tha Prtsidtnt'a constitutional 
prarogatlvaa. 

Ont auch poasibility would ba not to rtport tht activity 
until aftac it baa baan auccasafully concludad and to 
britf only tba cbairaan and ranking ainority ctobtrs of 

OCat TS 0802-86 
Copy 1 of 2. 



dJ:XAf//0 



CL BY 

DECL 



098657J 



DEMVED fROH Original 



yNC'A5«FJilr 



4^4 



tiNm^'fir 



- • ♦ : I : 



: - i > . 



r.f^rr*: 



•*■. I 



:: ;*: • 

in >. r -. : : 



-i.': 4::tsi :c ; - t .-i^rr*;.;- 4-: 
: -c:» -ill c« p.: c. $:;;$.:• ol t.-« ;rf: 
4l:*r -.-• *c::.i-.v -.5 ^,4^ s.c:ess!.: 

r ^ 1 c i ". again : ' 1 : . : is •. ." • 'i 4 r : r , s :*:?::.*" 

:*•:..:*-»:.:$ •, • 1 -. s i ^ - t c : e i : r : a ; . - : - : . • t : j -. 

: : ; : e t c . li t .-. * : e r 4 - c s 4 -. a c : e e ' * -. : t ■ i : 4 : ^ ; : r : • : 1 1 

Zi - 4 ; 4 , It If ■.*:-; 2 • £ t r. e : :&*■ ; r, .- » : » r : ; r. 4 .-. ; s - c -. 
--:tfta»in5, arc tr.« way t.-.a: tht pro;ec: ;s carried o.t 
Con tr.«n be p.t on a less fractious oasis. 

Finally, whatever plan is adopted, such action should oe 
taken only after 't has been discussed with the Attorney 
General, the Secretary of Defense, the Secretary of 
State, and the Assistant to the President for National 
Security Affairs. 



: 



1/ As you know, the Act itself provides for a report to be 
liirited to the chairir.an and ranking minority members of the 
in-.el ligence cor-ittees, the Speaker and minority leader of the 
House of Representatives, and th« ma]ority and nnority leaders of 
the Senate. 







!& 



OCCR TS 0802-86 
Copy I of 2 



495 



^#> >. ■ - finding PuTtuant to Saetion <<2 of ki o n a 

^^^\^ y TK« »or«iqn Anitt«nc> Act of Itf T " oU6c 

^}~ .■f>^^-'" _ . K» Aa«nd«d, ConcTnino OpT«tlon« 

/V'*' A'-"' o"^ UndTt «k« n by t.h« C >ntr«i I nf lli q«nc» 

^ .Q* . -*^ ■ ■ ' ' 1 ■ — ■ * •— 



^^^^ ^V 



-^"^ <^^ v'"^ AqjincY in ror«iqn Countrl«», Oth«r Than 
/^ A^ ^"^ Tho»« Inf nd«d SoI«Iy for th« Purpof 

^^ s,- ^^^■^ of Inf lliq«nc« Coll«ction 

I h«r«by find th«t th« followlnq operation in • forciqn 
country (includinq all support nacaaaary to auch cparation) la 
iJBportant to th« national aacurity of th« Onltad Stataa, and dua 
to ita axtrasa aanaitivity and aacurity riaka, X datarvina it is 
aaaantial to ILait prior notiea, and diract th« Oiractor of 
Central Intalligane* to rafrain froa reporting thla Finding to 
th« Congraaa aa providad- In Sactlon SOI of th« National Security 
Act of 1947, aa aaandad, until X othavwisa diract.,^ 

SCOPt / DlSCmPTIOII / ^ 



^rlar 



-n 



Xran Aaaiat aalactad frlandly foreign liaiaon aervicea 

third countries, which have eatabliahed relationahlpe 
with Xranian alementa, groupa, and Individuala 
ayvpathetic to O.S. Covarnnent intaraata and which do 
not conduct or support terrorist actiona directed 
A V againat O.S. peraona, property or intereata, for the 

f purpoae of: (1) establishing a aora Boderate goverm- 

sent in Xran, (2) obtaining froa thea aignificant 
intelligence not otherwise obtainable, to detemine the 
current Xranian CovarnBent'a intentions with reapect to 
its neighbors and with respect to terrorist acts, and 
(3) farthering the release of the Aaerican hostages 
held ia Beirut and preventing additional terrorist acta 
by these groups. Provide funds, intelligence, counter- 
intelligence, training, guidance and comunicationa and 
other necessary assistance to these eleatents, groups, 
individuals, liaison services and third countriaa in 
aupport of these activities. 

The use will act to facilitate efforts by third parties 
and third countries to establish contact with aoderata 
elaaeats within end outaide the Governaent of Xran by 
providing these eleaants with anu, equipaaat and 
related aateriel ia order to enheace the credibility of 
these elements ia their effort to achieve • acre 
pro-O.S. governaent la Xraa by deacnstratlng their 
ability to obtain requisite resources to defend their 
country against Xraq and latervention by the Soviet 
Onioa. This support will b« discontinued if the 0.8. 
Governaent learns that these eleaents have abandoned 
their goala of aoderatlag their governaent and 
appropriated the aeteriel for purposes other than that 
provided by this Piadlag. 

The White House ...TAB omnrT^^^^* T^^fOl-K 
Waahington, 



Oatei 6 January 



^•i^m^^^^ 



496 



/ 



umssra 



/ '^ ^^^u 



rinding Purtuant to S«ction 662 of 
Tht rortiqn Aniif ne« Act of lT?T 
A« Aff«nd»d, ConcTnina Oprationt 

:•! Inf li 



H 



808s 



UndTt«)c«n fay th« CT>trl 



iq»nc« 



I 



III 

lit 

£°3 



Aq«ncY i.n Fortlgn dountri«« oth«r Than 

Tho«« Inf nd«d Sol«Iy tor th« Purpoi« 

of Inf lliq<ne« (bollaction 

I h«r«by find that th« 'follovinq op«r«tion In « for«i<jn 
country (including all support nacaaaary to aueh operation) xt 
ijapcrtant to tha national security of th« Onltad States, and dua 
to ita axtrcM sensitivity and aecurity rialia, I determine it ia 
eeaential to liait prior notice, and dire<t the Director of 
Central Intelli9ance to refrain Iroa reporting ttois Finding to 
the Congreas as provided ia Section SOI of the Nationai Security 
Act of 194 7, as aaended, until X othervlM direct. 

»COH DtSCMWIOW 

Iran Assist selected friendly foreign liaison services, 
third countries and third parties which have 
established relationships with Iranian elements, 

groups, and individuals sympathetic to O.S. Covernaent 
interests and which do not conduct or support terrorist 
actions directed against O.S. persons, property or - 
interests, for the purpose oft (1) establishing a a»re 
moderate governatent in Iran, (2) obtaining froai then 
significant intelligence not otherwiae obtainable, to 
dataraine the current Iranian Governikent's intentions 
with respect to its neighbors and with respect to 
terrorist acts, and (3) furthering the release of the 
Aaerican hostages held in Beirut and preventing 
additional terrorist acts by these groups. Provide 
funds, intelligence, counter-intelligence, training, 
guidance and cosMunicationa and other neceasary 
assistance to these eleatents, groups, individuals, 
liaison services end third countries in support of 
these activities. 






'' ^l 



tf) 




The OM will act to facilitate efforts by third parties 
•ad third cowatries to est«blish oontect with moderate 
eleaents within and omtside the Oovernaent of Iran by 
prowidiaf these eleamats with arm*, eqvipaent and 
related meteriel ia order to eaheace the credibility of 
these eleaents in their effort to achieve • more 
prO'O.S. goveraaent ia Xraa by demonatrating their 
ability to obtain requisite resowrces to defend their 
country ageiaet Iraq aad intervention by the Soviet 
Unioe. This support will be discontinued if the O.S. 
GoveriMMat learns that these elements have abendoned 
their goals of mederatiae their goverMMat aad 
appropriated the materiel for purposes other than that 
provided by tMs riadiag.^ 

The White House { ^' , . I . , ,^ OOCH Tt 0S01-i« 
WashingtoB, O.C.^ .. .^^Nrf^rtiirtrfrT'^Cowr ^ 

Date Jaauary 17, 



miii^ifif 






497 



UNCUSSIFIED 



MILESTONES 






I. 
II. 



' j ^ 

5 s — 



5.' 
J) 

00 



III. 



Executive decision to proceed. 

Negotiations with the acconurodat ing 3rd party and 
ultimate recipient regarding shipnent, delivery and 
payment . 



Possible scenarios: 



0405 



Arrange transportation/shipment with cooperating 

intermediary. 

Equipment will not be shipped directly to X, but to 
a cooperating intermediary. 

The Agency will receive payment in advance froa X 
for one-quarter of the equipment. 

The Agency will procure and deliver to X 
one-quarter of the equipment. 

After X receives one-quarter of the equipment, X 
will turn over to the Agency the materials it has 
been holding. 

X will then provide the Agency with funds for the 
remaining three-quarters of the equipment which 
will then be procured by the Agency and delivered 
to X. 

Punda will be transferred by X from its Swiss bank 
account to a foreign bank account established by 
the Agency but with no Agency overt connection. 

Funds will be transferred from the Agency's foreign 
bank account to the military in a manner consistent 
with the military needs. 

CIA Initiates Iconomy Act Transaction with DOD 
(statutory authority attached) 

A. Prepare Economy Act Agreement 

1) Oral or written 

Discussions with military to ascertain how it 
needs to book this transaction with respect to 
sale of its equipment and receipt of payment 
for the equipment. 




UElASafllB (^ 



498 



\mtmsw 



-2) What level within DOD 
3) Overt or cleasifltd transaction 

B. Arrangt for delivery of equipnent to CIA cuatody. 

Batablishaent of shipment nechaniav and necessary 
liaison with nilitary. 

1) ProB where to where 

2) Mode of tranaport '-tuq 

3) Schedule of delivery 

C. Agreement as to method and timing of payment to OOD 

1) Type of payment (cash or check) 

2) What will be the recipient OOD agency 

IV. CIA initiates positioningior delivery of equipment to 
ultimate recipient 

A. Nature of activity 

1) Overt - (military transport to accommodating 
party) 

2) Covert - Proprietary 

B. Prepare for equipment movement 

1) Location of deliveries 

2) Schedule of deliveries 

3) Mode of transportation (black or white) 

DOD transport 

Agency owned aircraft (Proprietary) 

Commercial (charter) 

4) Number of shipments 

C. Prepare for movement of funds 

1) Establish throw-away bank account for receipt 
of funds for procurement 



UNCLASsire 



499 



UNClASSiriED 



a. (Who will do It) 

b. (»i«rt) 

. c. (Nature of Account) 

1. Proprietary account 

2. Non-proprietary account 

3. Corporate/peraonal account | 4 07 
d. Role of Office of Finance 

V. Prepare plan for receipt of reciprocal iteas 

VI. Prepare plan for ahlpBient of reaainder of equipnent and 
receipt of balance of funda 



nmmm 



500 



^msm 



17 January 1986 
2:00 DRAFT 



BquipBttnt will b« procured by th« Agency from military and 
in turn delivered to X. 

Equipment will not be shipped directly to X, but t|o a f) 4 n 
cooperating intermediary. utuo 

The Agency will receive payment in advance tzou X for 
one-quarter of the equipment. 

The Agency will procure and deliver to X one-quarter of the 
equipment. 

After X rcccivea one-quarter of the equipment, X will turn 
ovac to the Agency the material* it hai been holding. 

X will then provide the Agency with funds for th« remaining 
three-quartera of the equipment which will then be procured 
by the Agency and delivered to X. 

Funda will be transferred by X from ita Swiss bank account 
to a foreign bank account established by the Agency but 
with no Agency overt connection. 

8. Funds will be transferred from the Agency's foreign bank 
account to the military in a manner consistent with the 
military needs. 

9. Equipment will be shipped out black: 

A. Agency procured charter. 

B. Existing Agency-owned aircraft. 

C. Military transport (requires discussion with military). 



UN^P 



501 



UNfUJStflED 



TO BE DONE: 



Dlicu««lon* with military to ascertain how It natda to book 
thia tranaactlon with respect to sale of ita equipment and 
receipt of payment for the equipment. 

Eatabliahmcnt of Agency foreign bank account for receipt of 
funds for procurement. 



1 0409 



A. (Who will do it) 

B. (Where) 

C. (Nature of Account) 

1. Proprietary account. 

2. Non-proprietary account. 

3. Corporate/personal account. 

D. Role of Office of Finance. 

Establishment of shipment mechanism and necessary liaison 
with military. 

Arrange transportation/shipment with cooperating 
intermediary. 



mm^ 



502 



I 

I 



UWUKIFIfO 



— &>Tt o ys~ 



r 



•v.: 



1. Use CIA authorities to acquire new weapons froB OoD and 
then pass them through Israelis to Iran. 



Pros 



I 0410 



— There's precedent/authority S«^i f /^ 
No PMS reports needed 

— No unnecessary overlap between PMS and covert action 

— It's a straight covert action operation 
Cons 

Failure to report raises political sensitivities 



2. Have Isr*eU-s pass the weapons they have and we replace 
tlrvB with new ones. 



Pros 

— Argue it's 
for U.S.) 

— Don't report unde 
to use covert actid 



Argue Presidential authorities are broad enough to handle 
situation not contempla^ii^^by current law 




in^'^C Israel acting only 
t would frustrate intent 



p laws instead of one 



even though 
.discussion under PMS 



mms^^^ 



503 




UNCIASSIFIED 



/f /v^ ^ ^G 



HEKORAMOtJM rOK: 



)RAMI>' 



FROK: 



SOBJCCT; 



V 



19 Novtmbcr 1966 



Panaiy Decusaliw/nwtaswl on |jp£6 88 
George W. Clarke under pn»»ns ol E O 123t6 

Aaiociate Deputy General CounseylK Joimson NauxusecuisyCouKi 

Kathleen M. Watson 
Office of General Counsel 



, Legality of DCI's withholding Prior Notice 
, of Agency's Expenditure of Funds for 
Transportation and Travel Costa Related to 
the Transfer of Military Equipment to Iran 




^HT 



1. Background ; Pursuant to a Presidential Finding, the 
Agency has participated in a covert operation in which arms 
were shipped to Iran. The President ordered the Director of 
Central Intelligence (DCI) not to inform the intelligence 
committees of this operation due to the extreme sensitivity 
generated by contacts with IranL The intelligence committees 
are now challenging the legality of the Agency's action, 
claiming that the Agency employed its funds to meet 
transportation and travel expenses related to the arms transfer 
and that this expenditure was not specifically authorized as 
required by section 502(a) of the National Security Act of 
1947. It is the opinion of thib Office that the funds were 
specifically authorized by the Congress for the purpose for 
which they were employed and that the President, pursuant to 
his constitutional prerogative,! had the authority to direct the 
DCI to withhold prior notification of the covert operation 

:o section 501(a)(1) of the National Security Act of 



pursuant tc 

1947, y 



2. Inapplicability of Section 502(a)(3) of the National 
Security Act of 1947 ; The intelligence committees have 
asserted that the DCI was obligated, pursuant to section 
502(a)(3), to notify the intelligence committees of his 
intention to make funds available to meet transportation and 
travel expenses which were incidental to the recent /United 
States arms transfers to Iran. The notification requirement 
contained in section 502(a)(3) applies only when ttte DCI 
intends to employ funds for a program which is dif^erer^t from 
the program for which the funds were specif ically/suthorizcd 



\_/ The applicable statutory provisions are att 



UNCUSSIFe 




504 



UNCUSSIFIED 



by the Congress 

the situa 

Near Eat 

? ecif ica lly author 
jadget for 



H.R. 106, 99th Cong., 1st Sess. (1985). In 
jhe Agency used funds contained in the 





the Agency spent 
ictivities related to Iran (transportation and 
invblved in the arms transfer), the Agency, in 
fact# spent its money on the sam^ type of activity for which 
the funds were specifically authorized by Congress. Thus, 
section 502(a)(3) does not apply in this situation because the 
Agency did not spend its funds on a different activity than the 
one for which those funds were specifically authorized. 
Accordingly, the DCI was not obligated to report this 
expenditure to the intelligence committees pursuant to section 
502(a)(3). . 

3. Applicability of Limitation on Prior Notice Contained 
in Section S01(a)(l) of the National Security Act of 1947 ; 
Section 501(a)(1) requires the DCI to give Congress prior 
notification of all covert operations to the extent such 
notification is consistent with the President's constitutional 
duties and authorities. Section 501(a) governs the situation 
at hand because the disputed trEnsportation expenses were part 
of a covert operation; therefort, the DCI would have been 
required to give prior notice to Congress had the President not 
exercised his constitutional au hority. The legislative 
history of section 501 clearly .ndicates that the President may 
decide to act without prior not .cc in those rare situations in 
which prior notice is impractic iblc due to the time delays 
involved. S, Rept. No. 96-730, 96th Cong., 2nd Sess. at 9 
(1980). The President, In this situation, ordered the DCI to 
withhold prior notice due to th t titreme sensitivity of 
contacts with Iran. Accordlngl >, the DCI did not violate the 
letter or spirit of section 501 a) -by withholding from Congress 
prior notice of the expenditure of funds for travel expenses 
related to the arms transfer due to the implicit recognition in 
section 501(a) that the President has the constitutional 
authority to direct the DCI to withhold prior notice of covert 
actions. 

4 . Conflict Between Reporting Requirements Contained in 
Section 501(a) and Those in Section 502(a) ; In theitvent 
section 502(a)(3) were applicable in this situation/because 
funds were employed for a different activity than tt^at which 
was specifically authorized by Congress, there woiud be a 
direct conflict between the reporting obligations^ontalned in 
section 502(a) and those in section 501(a). SecMon 50Z(«)(3) 
requires the DCI to notify the oversight commitues vhen, funds 
specifically authorized by Congress are employed for •' 
different activity than that which was speclfioally 



UNCLAfflED 



\ 




505 



UNClASSinED 



•Jthorized. Section 501(a), on tht other h«nd, indicates that 
prior notification of covert operation* nay be withheld from 
Congress in those very rare circumstances where the President 
exercises hi-s constitutional prerogative. 

5. Both the legislative history and language of section 
502(a) and the report language diecussing section 103 of the 
Intelligence Authorization Act for FY 1983 U indicate that 
whenyt'he reporting obligations set forth in sections 501(a) and 
502(4) conf lict , ., the result mandated by section 501 should 
prevail. The clear language of section 502(a)(2) indicates 
that when funds are withdrawn from the Reserve for 
Contingencies to use for an intelligence or intelligence- 
related activity, the DCI is to notify the intelligence 
committees in a jianncr which is consistent with the provisions 
of section 501. Therefore, section 502(a)(2) explicitly states 
that in case of a conflict between the reporting obligations 
contained in section 501(a) and 502(a)(2), the result mandated 
by section 501(a) is to prevail. 

6. Because the Executive has naintained his position 
regarding the supremacy of the reporting requirements set forth 
in section 501 since before the enactment of section 502, 
general principles of understanding and construction lead one 
to conclude that section 501 maintained its preeminent position 
after the enactment of section B03. According to the 
Conference Report on the Intelligence Authorisation Act for FY 
1986, 



concern was expressed that 
could be imagined in which 



extremely unusual circumstances 
prior notice to congressional 
committees of an activity i^ght not be required by Section 
501 of the National Security Act of 1947, but the method of 
funding the activity might kcquire prior notice to 
congressional committees uild«c Section 502 .... If [such 
an issue should arise], ceaolatlon of the issue should be 
guided by the principles or co«ity and mutual understanding 
as set forth in the atateaent of managers accompanying the 
conference report which included lection 501 of the 
National Security Act. R.R. 373, 99th Cong., 1st Sees. 
(1986). 1/ 

The principles of conatruction and interpretation clearly 
indicate that the result mandated by section 501 should prevail 
because it is siaiply illogical to say that when the* source of 
funds employ*<S for an intelligence activity is the/contingency 
reserve, the reporting obligations of section 501(A) arc 
supreme; and, that when the source of funds is fuMS 



27 Section 103 of the Intelligence Authorisatlofi Act 
1983 was the predecessor to section S02(a)(S) 



ior FY 



2/ The BPSCI report on the fiscal year 1983 Intelligence 

Authorisation Bill, the Bill enacting section 103 which was 
the predecessor to section 502, raised thk identical^ 
concern and *u^||te^ the same resolution of the potential 
conflict. ' '^~ 



igsffted the same resolut: 



t«c*i»thp),| ^^^5 



506 



\mmm 



«p«ciflc«lly •uthoriied for • different ectivity, the reporting 
obligations of section 502(a)(3) prevail. The principles of 
interpretation^ and the nutual understanding achieved, as 
indicated in the congressional reports, certainly mandate that 
in the case of either conflict, the resolution of the conflict 
should be the saac, and that is the resolution set forth in 
section-501, as ciplicitly mandated by the language of section 
S02(a)^2). In addition, even If section S02(a)(3) were 
appliilablc in thiA situation, the President had the 
constitutional authority, as acknowledged in section 501(a), to 
direct that prior notification of the covert operation be 
withheld from Congress. Moreover, the recognition in a statute 
of a '(constitutional authority of the President is not a 
condition precedent to his exercise of that authority. 

7. Although a portion of this ■emorandum is dedicated to 
explaining the resolution of the potential conflict posed by 
the reporting requirements contained in sections 501(a) and 
502(a), it is necessary to reemphasize that section 502(a)(3) 
does not apply to the situation at hand. First of all, the 
funds were employed for a program for which Congress had 
specifically authorized funds. Furthermore, in the event this 
was an NSC-mandated country covert action program, the 
reprogramming guidelines indicate that congressional 
notification is required only whnn • reprogramming increases or 
decreasis funding for the activity. No Increase or decrease in 
funding for the covert operation occurred as a result of the 
Agency (iCpenditures at issue. In the event the program at 
issue was not an NSC-mandated country covert action program, 
then the intelligence committee^ standing reprogramming 
guidelines may apply. Because toe expenditure of funds used to 
meet costs involved in the arms (transfer to Iran could be 
considered an item of special cwigressional interest or an 
action which, if disclosed, cou^ have signlgicant 
international policy implication, the guidelines would suggest 
that the committees be notified. However , it is the opinion of 
the Office of General Counsel that these guidelines do not have 
the force and effect of law because they are only contained in 
the text of congressional reports. Because report language is 
not law, the Agency la not legally obligated to follow the 
guidelines suggested In the congressional reports. Therefore, 
the DCI did not violate section 502(a)(3) by withholding prior 
notification of the expenditure of Agency funds. 

B. Conclusion ; The DCI did not violate the letter or 
spirit of section 502(a)(3) by withholding prior ndtice fron 
Congress of the expenditure of Agency funds to meeff i 
transportation costs which were Incidental to tt\t Mimu transfer 
to Iran. Section 502(a)(3) Is Inapplicable becaui* the vource 
of the funds use^t^nee^travel and transportation costs was 
the Near East^|BH^HH|^Boperating budget, lyie funds 



KNaA^SIflffl 



\ 




ji;.5tr> 7^V6 



507 



UNCLASSIFIED 




conttined in t hat 
Congress for| 
Th e trsni 

■ to ■^^^^■■■■■•ctlvltles to 
the Tunds were not used for an sctivity different from th«t for 
which the^anda w«re specifically authorized by Conqrcsa. Even 
in the ^vcnt that section 502(a)(3) did apply in this 
situation, the OCI would still not have been required to give 
prior .'^otificatiof^ of the activity to Congress, as it is 
unclear whether the reprog ramming guidelines would have 
required congressional notification of this expenditure. 
Moreover, the principles of interpretation and the mutual 
understanding achiaved prior to the enactment of section S02 
dictafc^ that in taa case of conflict between the reporting 
obligations contained in sections 501(a) and 502(a), those 
obligations contained in section 501(a) prevail. Section 
501(a) implicitly recognizes that, in very rare circumstances, 
the President has the constitutional prerogative to direct the 
DCI to withhold prior notice of covert operations. The 
President, in this situation, exercised his constitutional 
prerogative in order to protect the extreme sensitivity of 
contacts with Iran and the DCI merely followed this legally 
permissible executive direction. 



Kathleen M. Vatson 





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C^^\Q:>\t<i^'^ 



DEPOSITION OF 
DEWEY R. CLARRIDGE 



Select Committee to Investigate 

Covert Arms Transactions with 

Iran, 

U.S. House of Representatives, 

Wash4"J^<3"' D.C. 

Monday, April 27, 1987 










The deposition convened at 9:50 a.m., in Room B-352 
Rayburn House Office Building. 

Present: W. Neil Eggleston, Deputy Chief Counsel; 
George Van Cleve, Deputy Minority Counsel; and Richard Giza, 
Professional Staff Member, House Select Committee to 
Investigate Covert Arras Transactions with Iran. 

Paul Barbadoro, Deputy Chief Counsel; and Thomas 
Polgar, Investigator, Senate Select Committee on Secret 
Military Assistance to Iran and the Nicaraguan Opposition. 

Kathleen A. McGinn, Assistant General Counsel, 
Office of General Counsel; and John Rizzo, Deputy Director, 
Office of Congressional Affairs, Central Intelligence Agency. 



510 







^ Whereupon, 

2 DEWEY R. CLARRIDGE 

3 wa« called aa a witness and, having been duly sworn, was 
^ examined and testified as follows: 

5 EXAMINATION 

6 BY MR. EGGLESTON: 

7 Q Mr. Clarridge, so the record is clear, I am 

8 Neil Eggleston, Deputy Chief Counsel of the House Select 

9 Committee to Investigate Covert Arms Transactions with 

10 Iran. 

11 Also present from the House Committee today is 

12 George Van cleve. Chief Minority Counsel, and Dick Giza, 

13 who is Associate Staff with our committee at present, and 

14 he is also, as you know, a staff member with the House 

15 Intelligence Committee. Paul Barbadoro, Deputy Chief 

16 Counsel of the Senate Select Committee, should be here 

17 shortly. 

10 I intend to ask you background questions until he 

19 gets here. 

20 This inquiry is being conducted pursuant to 

21 House Resolution 12 and rules passed pursuant to that. 

22 It is an inquiry set forth in the resolution which 

23 establishes a committee to investigate both activities with 

24 regard to the arms aspect of United States dealings with 

25 Iran and also activities involving the contras. 






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So, It IS pursuant to that this deposition is being 
conducted . 

The Senate has a similar and analogous, and 
substantially identical in a lot of ways, resolution. 
If Mr. Barbadoro were here, his questions would be asked 
pursuant to that investigation. I think we previously 
provided copies of the resolution and the rules to the 
agency. 

I don't have them here with me. If you want a 
copy of them, I will be glad to provide them to you. 

MR. RIZZO: I have a copy. 

MR. EGGLESTON: I am sure the Senate will do the 
same thing. 

BY MR. EGGLESTON: 
Q Would you tell us essentially when you, just in 
a narrative form, when you began with the agency and the 
nature of your assignments up until, I guess, 1981. 




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A Until 1 October, or around that time, 1984. 




Q Sticking with you for a second, where did you go? 

A I went — then I went as chief of European 

division. 

Q Right. 
A 

Q 
A 

Q 
A 




How long did you remain there? 

Let's see. I guess officially — mid-February 



1986. 




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uMfiBisaeiST 




second. 



MR. EGGLESTON: Let's go off the record for a 



(Discussion off the record.) 
BY MR. EGGLESTON: 




Q Let me direct your attention initially to 
November of 1985. Did there come a time in November of 1985 
when you were contacted about a NSC operation? 

A That is correct. 

Q Do you recall when that was in 19857 

A It was -- I think the first call I had on it was 
on the 21st of November. 

Q Who was that call from? , 

A Ollie, 





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Q Do you remember what time of the day it was on 
the 21st? 

A I think it was in the night. 
Q Were you in your office? 

5 A No. I don't think I was in my office. I think 

6 I was at home. 

7 Q Do you know where he was? 

8 A I think he was in the office. 

9 Q What did he — 

10 A I can't be sure of that. I am sort of guessing. 

11 Q I take it you already knew Ollie North? 

12 A Oh, yes. 

13 Q What did he tell you during that phone call? 

14 A He just said that they needed to get a flight 

15 clearance for an aircraft coming intoj 

16 Q One aircraft? 

17 A At that time I believe it was one aircraft. 

18 Q Did he tell you why he was calling you? 

19 A Because I am — you know, if you are going to get 

20 anything done ^^^^^^^^H ^ ^^ ^^^ person that gets it done. 

21 Q Did he tell you where the flight was going to be 

22 coming in? 

23 A I don't know whether he told me on the first call 

24 or not. I can't be sure of that. , 

25 Q How much more — do you remember anything else he 



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told you during the first telephone call? 

A No. No, I don't. All I know is that I activated 

:o stand by for some traffic. 
Q 
A 

A 
Q 
A 
Q 
A 



After getting his phone call, what did you do? 
I believe I called the^^^^^Hbranch chief and 
asked him to go in the office. 

Q The^H^^^^fbranch chief is a person who works 
here at headquarters? 

A That is right. 
Q What did you tell him to do? 

A I told him -- well, I don't remember exactly what 
I told him to do except that I know that two messages 
were sent asking theJ 

Ito stand by. 

Q Before we get into that, let me ask you this 
question first. 

There are a series of cables sent then between 
November -- I think the first one we have may be November 22 
in the very early morning hours, at least zulu time, in the 



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early morning hours, late afternoon of the 21st, a series of 
2 cables sent between that time and mid-December of 198 5. 

In preparing for your testimony here, have you had 
a chance to review those? 
A No, I haven't. 

6 Q So, you have not looked at those? 

7 A In some time. 

8 Q When is the last time you looked over these 

9 cables? 

10 A ■ Oh, I would guess it is back in December, maybe. 

11 Q Back in December? 

12 A Yes. 

13 Q Was that in preparation for testimony before anothe ■ 

14 body? 

15 A Actually, I think I just — when I asked for 

16 European division, if they still had the cable traffic, 

17 they sent up the cable, and I think I saw it — looked 

18 through them, you know, any great detail. 

19 Q And you maintained them, then, in your files? 

20 A No. They were turned over to — I don't know — 

21 the IG. 

22 Q When you got them in December of 1986, from the 

23 European division, where did you get them from? How did you 

24 get them from the European division? where were .they 

25 physically? 



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' A I don't know. I simply asked my secretary to call 

2 the secretary down at the EUR division and say did they still 

3 have that file. By good luck, she did. 

4 Q Is this a file you maintained at the time yourself? 

5 A Well, you know, I really can't say. I may have 

6 put some cables into it. The secretary did. We both did. 

7 Q What I am asking you is how did this — how did 

8 this file happen to be maintained in the European division? 

9 What is it? Is this a standard process that this file would 

10 be maintained in the European division? 

11 A Yes. This was — all of this cable traffic was in 

12 our — what do you call it — the privacy channel, and has 

13 a special slug. 

14 Normally, we maintain files usually by station 

15 on that traffic for a period of time, and in this case,- 

16 because it was sort of ongoing, we just kept a file on this 

17 particular case, I guess. 

18 Q On a cable such as this, how many copies of the 

19 cable are made, both the cable sent from headquarters out 

20 to the station and copies of cables from the station to 

21 headquarters? 

22 A Well, I don't know. 

23 When we are sending it outgoing, we type up a 

24 cable and take it down to the cable secretariat. , They then 

25 distribute -- as we call it, the come-back copies. 



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In this case, I think the come-back copies came 
to the European division and also to the DEO and may in some 
cases have gone to the DCI or the DDCI. 

Q Can you tell by looking at each individual cable 
where the copies might have gone? 

A Yes. 

Q You can -- is there a central file where these -- 
where copies of these cables would have been maintained, 
an official file? 

A Well, I don't know that much about the whole'cable, 
you know, set-up, js"' far as privacy traffic is concerned, 
whether there is a central point or not. 

Q If these privacy channel cables, I take it, are 
cables that are of the highest sensitivity — that is why 
they are labled "privacy channel"? 

A They are sort of like a telephone call, or in 
lieu of a telephone call. That is usually the way they are 
described. 

Q But they must — it is not routine matters that 
are dealt with over a privacy channel? Certainly this 
wasn't a routine matter? 

A No. True. Often times, they are personnel 
matters. 

Q Okay. ; 

You mean they may. be sensitive for various 





521 






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1 different reasons. 

2 A Yes. 

3 Q It may be because there is a sensitive operation. 
^ A Or it could be because of personnel. 

5 Q A sensitive personnel problem? 

6 A Yes. 

7 Q Assuming it is sensitive because of a sensitive 

8 operation, I would think it would be important for the 

9 agency to maintain a copy of what it has done as it is 

10 proceeding through the course ^of the sensitive operation. 

11 A That is why we maintain the file. 

12 Q So — but the question that I have for you is. 

13 did you -- are you^ the person who maintains the file? 

14 Are you the person who creates, then, and holds what would 

15 be regarded as the official agency file on this operation? 

16 A In this case, as I said before, I don't know 

17 whether I caused the file to be set up or the secretary 

18 caused the file to be set up, who, you know — who, in each 

19 case, put each piece of paper in there. I simply can not 

20 say- 

21 Q Do you have a recollection as to this matter there 

22 was a secretary who was involved in maintaining this file; 

23 A Yes. I think we both were, probably. 

24 Q Both you and your secretary? 

25 A Yes, ^i>«^ as I can recall, 



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Q So, this was not an operation that was so 

2 sensitive your secretary was not involved in it? 

3 A That is correct. 
^ Q If copies went to the DDO, would the DDO also 

5 maintain an official file? 

6 A Well, I guess that is up to them. 

7 Q As a matter of routine, do you know whether they 

8 would maintain an official file? 

9 I take it there are various cables that must be 

10 distributed. Somebody must be designated as the persorr who 

11 is maintaining the file. Other people may get copies. They 

12 can either put them in the file or not, but someone must 

13 be designated or there must be some point at which official 

14 agency traffic is deemed a place where that traffic is 

15 filed. 

16 As to this operation, was the — were you, as the 

17 chief of the Europeem division, that person? 

18 A Well, on privacy channel traffic, as I say, we 

19 usually maintain it for a period of time, yes. 

20 Q And I don't mean to be obtuse in this. Does that 

21 mean there would have been a period of time where you would 

22 have destroyed this traffic? 

23 A No. I don't see any reason there. It could have 

24 been destroyed. Fortunately, it wasn't. , 

25 Q Okay. 



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So, there may have been an agency decision. 
Although in this particular case there wasn't, there may have 
been an actual agency decision to destroy this traffic? 

A No, I don't think there is an agency decision. 
I think it seems like every division sort of has its own 
procedures on how long they keep traffic in this 
particular channel, and they don't. 

Q Did the European division have a particular time 
as of that time? 

A It usually depends on the secretary or the 
division chief or both to sort of decide. 

Q What I am hearing from you, then, is that — is 
that It is possible that as to any particular operation, 
even one covered by the privacy channel, there may be 
a decision to destroy the official file. 

MS. MCGINN: Oject to the question. 
I think there is confusion here, Mr. Eggleston. 
These are not considered official filings. I think that is 
where -- as I understand it, I think that is where the 
confusion comes from. 

BY MR. EGGLESTON: 

Q Is there some other place where the official file 
of this operation is maintained other than the European 
division? I asked him that earlier. I thought he said -- 

A To my 



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Q As to this particular operation, if there is an 

2 official file, the file maintained by the European division 

3 was the official file? 

* MS. MCGINN: I think the question is whether 

5 there is an official file of prive^ry channel communications, 

6 I think that is where the confusion comes from. 

7 MR. EGGLESTON: I am willing to ask that. 

8 THE WITNESS: The question is, is there an 

9 official file? 

10 .BY MR. EGGLESTON: 

11 Q The question I am asking — 

12 A I am not trying to be obtuse on this thing. 

13 Q No. 

14 A Apparently, the agency does not have in privacy 

15 channels, there is no sort of official file. Is that 

16 correct? 

17 MR. RIZZO: Right. 

18 THE WITNESS: What you have is informal files. 

19 I guess you would call them that. 

20 BY MR. EGGLESTON: 

21 Q Okay. 

22 So» if there is an informal file maintained — 

23 A This was the informal file. 

24 Q This was the informal file? 

25 Do you know whether — do vou know whether anyone 



u know whet he r_ — do_you kr 



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else -- let me ask you this. Let me withdraw that and ask 
you this question. 

Let me show you the first file. So the record is 
clear, for the purposes of this, when I refer to a 
document, rather than having them marked by the court 
reporter each time, because I think that will end up taking 
us forever, there is a number at the bottom of each one "hat 
is CIIN. I will refer to the document by its CIIN number. 
I may forget to say "CIIN." If I do, I am talking about 
the numbei^. 

The first one I have is number 2130. Could you -- 
at the very top of this, it makes reference — 

A In other words, the director -- deputy director 
of operation received three copies. 

Q What is the next? It says "info colon." 

A "File." 

Q What does that mean? 

A I haven't any idea. 

Q Does that mean that it went into a file? A copy 
of it went into a file? 

A You have to talk to some records expert. 

Q You don't know what that means? 

A No. 

Q How about the next designation, ^^^^| Do you know 




what that means? 



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A No. 

The next is "DDO records." I suppose that is DDO 
records. 

"Chief EPO" -- I have no idea who EPO is, unless 
that is a misprint of 

"Chief EUI^H Chief EUI^^H — that would be because 
it went to 



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Chief EUF^Bneans? 




Who is that? 

A Let's see. At that time, that was a lady. What 
is her name? I just don't recall her name right now. Now 
you see, this one is not a privacy message. 

Q Okay. I will get to one of those. I thought I 
would start with this one, since it was the first one. 
^^^Hmeans -- dash three? 

A Chief, European Division, ^^^^^H Branch. 

Does that mean they got three copies? 

A That is what it says, yes. 

Q What is the next one? 

A I have no idea. ^^^^M No. Print and^^Hfile, no 
idea. 

Q You don't know what they mean either? 

A No. 

Q And I think that you told us this before, but 
by looking at each of these, how can you tell they are a 
privacy channel? 

A It is that^^^H^^^^I I don't know which one you 
are looking at. 

I have another one I can show you which is number 
2152. 

A Yes. That one is a privacy channel message. 



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Q 
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You can tell that because it saysl 



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What IS the next? 

I am sorry. I haven't got the foggiest. 
The next? 

That sounds like — that looks like it is advance 
notify chief EUR registry eyes only. 

Q What does that mean? 

A The Chief EUR registry, that is the registry which 
receives the cable traffic within the division, was -- had 
advance notification that this cable had come in and it was 
eyes only. 

Q You can tell from the face of this, I take it it 
comes from^^^^^Hto the Director? 

A That is correct. Chief EUR got three copies emd 
DO got three copies. What the rest of that means, I haven't 
a clue. 

Q The info, colon, print comma, ^^Hand file, comma, 
you don't know what they mean? 

A No. 

Q If I v&re to ask you whether the file designation 
means they were placed in some official file, you would tell 
me you don't know if those, what it means? 

A I am sorry, I don't. 

Q Before I continue with this, let me as'k you the 



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state of your knowledge about this initiative as of the time 
Colonel North called you on November 21? Did you have any 
knowledge as of that time that the NSC was involved in an 
operation that involved arms and hostages? 

A No, I did not. 

Q At that time, did you know Charlie Allen? 

A I just knew the name. 

Q You did not know Charlie personally? 

A No. 

Q There comes a time later when Mr. Allen ends up 
assigned tol^^HH ^^ *=^^^ right? 

A Assigned to^^^f those -- he actually was never 
assigned there on paper. He remai.-s the NIO for 
Counterterrorism. 

Was he physically located? 

A Physically located with us, yes. 

Q Where was his office during that time with 
relation to your office? 

A You mean 1985 or now? 

I am talking about as of the time that the^^Hwa: 



Q 

created. 
A 
Q 



Two doors down from mine. 

Did you know -- excuse me. Tow missiles had been 



sent from Israel to Iran in August and September of 1985? 

I 

A No, I didn't. 



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Q YOU had not knowledge of that? 

A No, I did not. 

Q Were you aware there had been intelligence collec- 
tion during the fall of 1985 which related to this initiative 

A I was only -- became aware of that when Charlie 
Allen showed me ^^^^^^^^^^^^^^^| that something was going 
on in regard to Iran. I frankly do not recall what it was 
that he showed me. 

Q Before we get to this -- when were 
shown to you? 

A I cannot be precise on that. I suspect though, 
it must have been Friday morning. 




Q 
A 

to 

seen the 



Friday would have been -- I am sorry. 
In other words, if we had started sending traffic 
the — on Thursday, then I suspect I would have 

Ithat he had on 




Friday. 

Q Before I get to that, did the name Ghorbanifar 
mean anything to you as of late November of 1985? 

A No, it didn't. 

Q Did the name^HH|^Hmean anything to you as of 

that date? 

A No. 

Q Had you ever heard that neune before? 



No. 



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Q Did you — did you know anything about a 
fabricator notice having been sent out on Ghorbanifar as 
of that time? 

A No, not as of that time. 

Q Did you know a man by the name of Cyrus Hashemi? 

A No. 

Q That is not a familiar name to you? 

A I only heard that some time later on in — I 

don't know, February, March, of 1986. 

Q But prior to -- in or about the summer of ',85, 

that was not a name familiar to you at all? 

A No. 

Q Let me show you CIIN number 1034. Before I ask 
you to read it, would you just take a look at the top of it 
and tell me whether that is a document that would have come 
through you? 

A Well, first of all, it wasn't tq^^^^H was going 

originated 
Authenticated by Chief NE and coordinated with 
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^'and so on. 
ed by European Division Chief of^^^^^K 

Q Okay . 

A Now, the chances of roe seeing this would have been 
in the come-back copy, but considering the volume of traffic 
in EUR Division, unless there was some reason for me to 




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focus on this, I probably would have. 

Basically, what we were doing was sending out traffic 
from NE Division in support of whatever they were doing. 
Therefore, I wouldh^vehad less interest in it, as I say, 
unless there would have been some reasons for me to have 
looked at it. 

Q To ask it in a specific fashion, you have no 
recollection of having seen that cable? 

A No, I have not. 

Q On or about the summer of 1985? 

Prior to the time I am showing it to you right now 
ha* you ever seen this cable? 

A No. 

Q This reading of the cable doesn't bring anything 
back to you about having participated in any discussions 
regarding a fabricator on Manucher oi^^^^^^^Hin the summer 
of 1985? 

A No. 

Q Let me ask you to take a look at 1032 as well. 
Is that what you would call — what you refer to as the come- 
back copy? 

A No. This is an incoming from^^^^H No. Again, 
I have the same reaction to that one. 

Q No reaction at all? 

A I don't remember seeing that. 



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Q Never seen it? No recollection of any instance? 

A NO. 

Q Let me ask you to look at 1033, which is dated 
11 July 1985, if you could read this and tell me who it is 
addressed to and who it is from and whether you had any 
participation in that event? 

A Well — would that be 

Q 

A Yes. 

Q Who is| 

A 

MR. RIZ20: 
THE WITNESS; 

It would sound to me like it would be likely he 
Branch and he may have been. But 
this is largely an NE. 

BY MR. EGGLESTON: 
Right. 
Yes. 

There is a reference there to again as I recall, 
nd Manucher. There is a reference to the 
initiative having some direct involvement by Mr. Casey, as 
I recall this one. 

A It was so recommendations to Casey that the 
Hashemi connection be dropped. I didn't even kndw we had a 




ws the Chief of 



Q 
A 
Q 



Hashemi connect 



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1 Q So this is — you don't recall participating in 

2 any discussions about this in the suminer of ' 85? 

3 A No. 
. Q You told me you had some knowledge of Mr. Hashemi 
g in February of '86. What was that? 

g A Well, that was the first time I ever heard of 
- him. It seemed to me Hashemi caine up in some context about 

some scam that was being run. I don't know whether it was 
-- I can't be sure it was in February or March, but just some 
sort of -- and I don't know whether it was Cyrus Hashemi or 
who it was. It was Hashemi. 

Q Let me get back. So you have no recollection of 
any participation in anything involving Cyrus Hashemi, 
Manucher or^^^^^^^Hin the summer of 1985? 

A Not to my recollection at all. I am quite sure 
I didn't see those cables. 

Q Let roe get you back to ^**tmber 21, You received 



a call from Colonel Norths •'^Bo you personally go into the 
18 ^^^ 

office? -- ' " 

A I don't think I personally went into the office. 
That was the — if that was Thursday, I think I asked the 
JBranch Chief to go in. 

Q So you do not go into the office until Friday 
morning? 

A I don't believe so. 



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Q Which would have been the 22nd? 

1- 

I think what would make sense is I made a copy 

of various cables that I want to ask you specifically about 

and some 'qo) them prompt questions about things that must 

have happened when cables, where you are responding or asking 

questions or giving instructions that you must have received 

from someone else. 

I think it would be convenient if I put a set of 

them in front of you and just ask you about the ones that 

I am interested in, and then it might help you focus. 

There is a stack of them. I am not going to ask you 2ibout 

each and every one. 

A Okay. 

Q If you could -- you may not b^ used to this, but 
to the extent you can, if you refer to an individual cable, 
if you could refer to that number at the bottom. Otherwise 
the transcript is going to be hard to follow. 

A Okay. 

Q Is number 2130, which is the number that is on 
top here, is this a document — is this a cable sent bv vou, 
or is this the one that vou indicate was sent bv someone else: 

A I suspect it was sent bv the^^^^^^Hsranch 
Chief, who I sent into the headquarters to end it. No. That 
is 22 November. Or is that a Zulu time? 

Q I think it is Zulu tinM. 



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A Obviously I saw the come-back copy. 

Q What do you mean by come-back copy? 

A This IS the copy that was sent out. In other 
words, it was typed up on a different piece of paper, sent 
down to cable secretariat. They transmitted it and sent us 
a copy of it. This is what we call the come-back copy. 

Q What happens to the document that is -- so there 
is something separately typed up? 

A That is correct. 

Q Then this is what is actually put into the 
transmission system? This is the way it looks when it is in 
the transmission system? 

A I can't tell you that. This is what we get back 
of what we sent down there showing distribution that this 
copy received inside the building. 

Q All right. So this was your document which 

that ^^sH||[|^|Hm^H||^H^^°^^^ ^y 
to assist the^^^^^^^^^^^^^Hon a special assignment? 

The next document as well, which is 2131, refers 
also, I take it, to having the^^^^^^B^^H ^^P°^^ ^° 
the office. Here you are referring to the 



A Right. I don't quite understand why that 
happened. 

A What do you mean, why they appear to be in 




, UNeiAssira 



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reverse order? 

A Why I asked the^^^^^Hto stand by unless I had 
some reason to thin)i the^^^^^^asn' t there. It seemed to 
me -- well, that was no ref. Came back. 

Q The first I want to ask you about is 2132. Do 
you have that in front of you? 

A Yes. 

Q This was a Zulu time of^^Hon 22 November of '85. 
It makes reference to — it is a cable, as I understand it, 
from 

A That is right. 

Q A flash cable to the director per reference 
contacted Richard Copp at 4:50 hours 22 November. Offered 
all assistamce. 

I take it -- actually there is an indication 
right on this document, 2132, that the reference number is 
missing. 

A That is correct. 

Q Is that your handwriting? 

A No. 

Have you searched to determine whether or not 
this one is missing? Or is this someone else who is doing th« 
compilation? 

A I guess someone else. I don't know. 

Q Let me -- in any event, let me get to' the 



JINCUSSim 



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the substance. Obviously, by this cable from^^^^^lback to 
the Director, which I take it means back to you, he is 
indicating that in accordance with your instructions, he has 
contacted Richard Copp? 

A That is right. 

Q What occurred that led you to cable and we must 
be missing a cable -- what led you to cable to the] 
to contact Copp? 

A I recall what this 625103 said in part. What it 
was is I told them -- and I don't know whether I said you 
will be contacted or you should contact. I can't say. But 
that whatever it is, that Richard Copp, who also is Secord 
-- and that was both names were ir. that message. "will 
either contact you or you will be contacted by him about' ' 
— and I think it may — I can't say this for sure, may 
have spelled out that it has to do with getting a clearance 
for an aircraft and it may have even said El Al aircraft 
coming intol 

Q Okay. 

A I can't be sure about all of that. 

Q Did Colonel North tell you about Copp and Secord 
in that first telephone conversation? 

A Well, I can't say that for sure. Whether it 
was first one or there was a second one, all I know is 
obviously information has to come from Colonel North. 



UNttiSSlBEH 



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Q Do you remember what else he told you about Copp 

or Secord? 

A No, I don't. 

Q As of the time of the cable it must have been numb 
25103, did you have any knowledge of what this operation was 
about? The reason you were helping 20 grant clear answers?'^ 

A No, I don't think I did at that time. I may have 
said something. Again, I can't recall a telephone conversa- 
tion back that far. He may have said that it had something 
to do with the YX or Z. I simply do not know. 

Q I take it you don't recall what the XY or Z 
may have been? 

A I don't think so. I dcn't think I learned that 
specifically until I got to the office. Again, I can't be 
absolutely sure. 

Was it difficult at this time to get a flight 
clearance for an El Al flight coming into^^^^^H What is 
the reason that the agency had to get involved in obtaining 
a flight clearance for the flight that was coming in? 

A I don't know whether I knew at that time because 
I just can't recall, but it certainly becaine clearer later 
on that whatever arrangements had been made for the flight 
clearance had come a cropper. But I don't think I learned 
that until much later on, although I cannot be sure. 

A It is your recollection that there had been some 



<ir 



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tltKL/^Wr 



14 iiUM iKkALnnHi 32 



y prior arrangement for the flight clearance? 

2 A That becomes clearer as this thing goes along. 

g Q Did you know General Secord as of this time? 

4 A No, I did not. The one time that I met him, he 

g said nice to see you again and I don't recall ever having met 
g him ever before. That was — I don't know, September '86 
- or something. 

g Q Not until September of ' 86 ft^at you ever actually 
met him? 

A Yes. 

Q What was that in connection with? 

ad gone out of town for four or five days and 
the NE Division was handling the logistics part of this, as 
you know. And^^^^psked if I could sort of just oversee it 
while he was out of town and there was a meeting called. 
And I don't recall whether I called for the meeting or 
Colonel North called for the meeting or who called for the 
meeting, but it was a meeting to -- I guess rectify lists of 
spare parts. There was a lot of confusion about what had 
been shipped, what had been received, what was broken, et 
cetera. At that meeting, Secord was there. 

Q That is the only time you met Secord? 
A The only time I know of, although as I say, he 
said nice to see you again. 

Q All right. Did you — but you had not — you 



mmm 



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don't recall, at least as of November '85 having any prior 
professional contact? 

A I didn't even know who he was when the name was 
raised. I don't follow events, I guess. Secord was not the 
sort of a name that meant anything to me. 

Q Do you recall alMM^ around this time, around 

November 22, you asked Colonel North what it was that 
General Secord was doing, involved in operations? Why it 
was you were helping get a flight clearance for General 
Secord? 

A No. It was explained that there was an El Al 
plane coming in, would be coming in, I guess it was already 
at that time, had departed. It was over the Mediterranean. 
I think it was a 747. And they needed to get the flight 
clearance and whatever arrangements they had made hadn't 
worked. Could I do anything to help. Eventually, we had to 
get the embassy involved such to see what they could do. 

Q But you don't recall asking what it was that 
General Secord was doing involved in this operation? 

A No, I don't. 

Q Okay. 

A In fact, I didn't even know he was a general or 
former general. 

Q Do you think Colonel North referred to him as Mr. 

« 
Secord? 



iBWSML 



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A I r««lly don't know. I don't rememb«r it 
coming up and hitting ma ha was a general or a fonner 
general . 

I am not going to obviously take you through each 

and every one of these. Let me just have you look at 213 3, 
paragraph 4. This is a cable from, again .^^^^^fto the 
Director talking about difficulites aa the flight is 
beginning to -- 

MS. McGinn : The witness may want to read the 
entire cable to get an idea of the context. It may be roore 
helpful for you. 

MR. EGGLESTONi I f he wants to he is certainly 
welcome to do so. 

THE WITNESS: Okay. 
BY MR. EGGLESTON: 
Q Do you know what time Zulu time is? Is that 
Greenwich time? 

A Zulu is Greenwich, isn't it? 

That was my understanding. I wanted to mJce sure 
tha record was clear. 

By the time of this cable, which is at^^^|zulu 
time on November 22, obviously thej 
becoming fairly heavily involved 

[in order to get this flight 

clearance taken 






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35 



A Y«s. 

If th«r« it a 

would b« approxim4t«I'/ 




time difference, this 
r so, I guess,! 



A Right. 

Q Of the 22nd? 

A Yea. 

Do you think you are in the office by this time? 

A Oh, ye«. 

Q Do you recall whether you had had any conversation 
With Colonel North by this time^^^^^^^^^^^lon the 22nd? 

A Well, I can't say for sure. 

Q I guess my mor -- my more detailed question is 
this matter of starting to become -ore significant 




not ]ust a routine call to a flight to you in order to get 
clearance for an airplane? 

A Yea. 

Do you know anything more at this time about the 
reason that thla flight clearance requaat had come to the 
agency and what was really going on? 

A Well, I can't say for sure whether I knew. I 
knew by sort o f^^^^^^^^^^^^^^^^^H 
still trying to get an airplane in. I would suspect, and I 



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can only say I suspect, that by this point in time that 
Charlie Allen had showed me whatever he was going to show me, 
but I can only guess at that. 

Q Do you have any recollection of which day it was 
Allen you ^^^^^^^^^^^^H 

A Not specifically. I cannot say precisely, but I 
have to assume that it was on Friday. 

Q Which would be the 22nd? 

A Yes . 

Q Let's just go to that meeting, whenever it m^ght 
have taken place, whether it was Friday or Saturday, whenever 
you recall. You recall though there comes a time when Mr. 
Allen brings you various materials? 

A Well, I can't really recall how much he brought 
me. He must have brought me something though. 

Do you know -- how did he get to you? Did he tell 
you why that he had come to you? You didn't sununon him, I 
take it? 

A No. I think Colonel North told him to brief me. 

Q Okay. 

A I have heard that. 

Q Did Charlie Allen tell you that as of the time 
he showed up? 

A I am sorry. I can't recall whether he appeared at 
my door and said Colonel North told me to brief you or not. 



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I simply do not know. 




Q Do you recall as best you recall, what is it he 
showed you? 

A I haven' t got -- I have no idea whatsoever what 
he showed me. 

Do you recall whether {»e showed you| 

A Yes. They were -- yes. They were! 
There is no question about that. 

Q Do you know how many | 

A I have no idea. 

Q Do you recall the! 

[prior to the time that you saw them? 

A Again, I haven't got a.-.y idea. 

Q Do you have a recollection of the I 







A I don't know at this time. And you know -- I know 
a lot of things now that I didn't know at that time in a lot 
more detail. I would be pimply speculating if I said what 
waa in it. 

Q Do you recall in addition 
Charlie Allen must have given you some sort of a briefing, 
both about the substance of what had been going on and I 
take it he would also have told you essentially 

Do you recall what it was he told you about 
the operation? 







82-696 0-88-19 



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A No, I don't. 

Q Do you recall if he told you it was an operation 

that involved hostages? 

A I think that came later when we had -- at some 

point, there ^^s^^^^^^^^HI it seemed to me, wanted to 
know what this was all about, and I was told by Colonel 
North that I could only talk about this with^^^^^Vas a 
humanitarian effort and not hostages. 

So, I must have known — been told at some point 
prior to that time, but again, I can't say when — that- it 
involved the hostages. 

Q Do you recall that the intelligence^^^^^^^^^| 

[made reference to weapons in exchange for 

hostages? 

A Again, I can't say. I sort of doubt it, because 
I think that would have changed my approach to this thing. 

I don't believe it mentioned -- it mentioned 
negotiations maybe. At least that is what I have been told. 
Again, I do not recall. 

Q You don't recall whether Charlie Allen told you 
that there was some element of — there had been discussions 

weapons the intelligence.^^^^^^^^^^^^^^^^^H prior 
to that time? 

A No. I don't think even he knew. , 




Do you 



wmmi 



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A As I have testified before the SSCI, there was all 

of ^^^^^^^^^^^^^^^^m not 
that Charlie apparently was working with, indicating that 
there were weapons deals going on with Iran. 

I mean, there were just a number of -- you 
couldn't even follow them. They were all over the place. 




Q Right. 

You don't have any recollection that any of these 
related to release of American hostages? 
A No. 
Q Did -- I 3ust lost my tram of thought. 

Do you remember anything else that Charlie Allen 
told you in that briefing? 

A No. Frankly, I don't. 

Q And let me direct your attention to 2135. 
2135 is from you to^^^^^fsubject NSC mission. 
A Yes. 

Q It is a^^^Vzulu, which means later in the 
afternoon, maybe around! 

"If charge becomes involved in this matter and 
feels compelled to report any aspects, request ha send his 
messages and we will insure they get to AmbassadCfr Oakley." 
How is ai^^QU J^ajppened to send this message? Who 




516 



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40 



' told you that this is the way this should be handled? 

2 A Well, I think probably if charge becomes involved 

3 in this matter that may have been referring back to that. 

I guess in that message, the implication was we might have to 

5 bring the charge in. This is sort of normal procedure in 

" this kind of a situation that you want to hold the message 

7 traffic only to our channel and not have it fly all over the 

8 State Department. 

^ But to make the charge feel warm and fuzzy about 

his own -- you know, his own department I said in there 
Ambassador Oakley could be — would be informed. 
^2 Now, the only way I would have known that is if 

13 01 lie North told me he was the guy in the State Department. 

14 That is all I can — 

15 Q You knew Ambassador Oakley as of this time, 

16 I take it? 

17 A Well, I had known him over the years, but I hadn't 

18 had anything to do with him really since mid-1975, 1976, when 

19 he was at the NSC in the Near East area. 

20 Q Let me — as of this time, as of the date of this 

21 cable, 2135, have you yet been told what the purpose of 

22 this flight is? 

23 A Well, again, I can't say specifically when I knew 

24 what the whole thing was about, but I would assume that by 

25 this time that % iWtVki^ t^9^ tftfF^^'VI ^° ^° with Iran and 



• 4 



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hostages or something, but I can't say for sure. 

Q Let me direct you to 2137. That is, again, a cable 
on November 22nd, at^^^^Hzulu time, which would be about 
i' clock in the afternoon. 

You can review the whole thing. I really want you 
to pay particular attention to paragraph two. 

A Yes. 

Q Let me — by this time you are aware that it has 
gone beyond the level of Ollie North and McFarlane is 
involved. He is going to be pulled out of some meeting. 
People are being pulled out of meetings with Popes and 
various other things. 

What had you done as of this time? Had you 
checked with anyone at headquarters about whether or not 
this level of participation is authorized or are you at a 
level to make this decision yourself? 

A Well, at this point — again, I don't know 
whether I talked with Ed Juchniewicz or not. Be that as it 
may, at this point I felt this was something that basically 
getting a flight clearance may involve high level people, 
but still within the purview of my position. 

Q So, you did not, at least as of this point, feel 
that, in fact, it was reaching a really — almost the 
levels of both^^^^^^^^^^^^^^^^Ha^d 



United State 



imCTlED 



he point 



518 



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42 



1 Mr. McFarlane is being involved, that this is an area 

2 where you should be checking necessarily with 

3 Mr. Juchniewicz, Mjr. George, Mr. Casey? 

^ A No. As far as McFarlane being involved, I think 

5 I may have been aware by this time that McFarlane had 

6 worked this problem. 

7 I can not say that for sure, but it — at some 

8 point later on I certainly was. 

9 Q As of this time, or as of any time on the day of 

10 the 22nd, had you spoken to anyone except Colonel North 

11 from the NSC? 

12 A No. I hadn't spoken to anybody, and I can't "say 

13 that it happened at this time or after this point or before 

14 this point, for that matter. But he had been receiving 

15 phone calls passed through the White House switch, 

16 transferred over to my office from Poindexter. 

17 I don't know whether he ever got through to 

18 McFarlane. He certainly was trying. Again, I can not say 

19 before, now, or after. 

20 Q Did I understand you to say Colonel North as of 

21 this time or around this time was actually in your office? 

22 A I think he probably was. At some time on the 

23 22nd he was in my office. 

24 Q What is the reason he comes to your office? 

25 A ' Well, l=>«<Vift4fM ^'^^iDtL 11 ^^^^ problem. 



INIWSSIRED - 



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I guess it was simpler if he was right there. 

Q Who else from your staff or at the agency is workimi 
on this problem?' Anybody else in your immediate staff 
working on it other than yourself? 

A I don't know. The chief of the^^^^^Ht ranch 
obviously had been before. I don't know in this case. 

Q So, you think, at least as of this time, you had 
not personally spoken to Mr. Poindexter about this matter? 

A No. I never spoke with Mr. Poindexter, I don't 
believe, throughout this whole thing. 

Q You don't think he ever called you? 

A Not me directly. 

Q Were you skeptical at first that you should be 
forming this level of activity for Colonel North? 

A As far as getting a flight clearance? 

Q Right. 

A And >jetting the embassy to get involved? 

Q Yes. 

A No. 

Q Did — at some level, it becomes more than 
just the embassy. It becomes McFarlane, Foreign Minister 
becomes a very high level thing. 

A Well, you know, that really ijn't ail-_that big^ 
a deal, frankly. 

For a flight clearance? 



ally isn't all that Dig 

UNCLASSIFIED 



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2 
3 

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44 



A Well, obviously for a flight, it must have been 
pretty important. 

Q That is what I mean. 

A Yes, but the fact that the Foreign Minister ^^^H 
^ ^^^^^^H^^ being involved and McFarlane, you know, those 
" things happen. 

7 Q Okay. 

8 You did not regard it, then, as of this level, as 

9 something you should take to a higher authority than 

10 yourself before getting the agency involved? 

11 A Correct. 

12 Q Let me refer you to 2141, if you could just review 

13 that one. 

14 This is November 22. The time is^^^^Bzulu. 

15 A Right. 

16 Q Two questions, first about paragraph one, per 

17 instructions from Admiral Poindexter. I take it this is 

18 not a conversation you had? 

19 A No, it was not. 

20 Q This is a conversation Colonel North had with 

21 Admiral Poindexter? 

22 A Yes. 

23 Q Was he in your office when he had this conversation ' 

24 A Yes, I would imagine he was. ; 

25 Q Did you have any conversation with Colonel North 



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about the fact that only Mr. Shultz and Mr. Oakley were 
aware of the operation? 

A I don't recall. 

Q Paragraph two of this cable refers to putting 
together a special flight for the 23rd or 24th. This 
takes place after the time that the few cables back it had 
aborted out? 

A Yes. 

Q What do you recall talking about with Colonel North 
about putting together another special flight? 

A Well, I don't recall talking to him, but clearly -- 
what we actually said — but clearly, from this, there 
must have been some discussion about trying to repeat 
what was being tried on the 22nd. 

Q Do you have any direct contact with Mr. Secord 
during this time? 

A No. I don't think I ever spoke to him. There 
was one telephone conversation with^^^^^^| but I don't 
think it was with him. I think it was with! 

Q You don't remember speaking to General Secord? 

A No. 

Q Let me refer you to the next one, 2142. It was, 
again, November 25, the time^^^Hzulu. 

A Yes. ; 

Q By thi» tim«, you- ar^ Jt^ yi/ig to do it through 



522 



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|or -- excuse me -- have other flights. 

A Okay. Right. 

Q By this time, we are talking about three flights, 
three commercial DC-8 aircraft or similar aircraft. 

A Yes. 

Q What has occurred between — this is the first 
cable, at least that I have seen, that makes any 
reference to more than a single flight. 
Do you have — 

A At this point, right. This is the — all right. 
Well, what it looks like — I don't know. There was some 
talk about some -- getting — maybe that is what these 
DC-8s were, some^H^^^Hairline. I can't recall what 
company. I think it was a charter company that was going 
to make some -- make the flights, it seems to me. 



I don't know whether what was coming on the El 
Al airplane was being transferred to some other airplanes 
and then being flown to Tabriz. I don't simply recall what 
that all is here, but you know, clearly it is referring 
to three flights from^^^^^H smaller aircraft. 

Q By this time, it is apparent to you that we are 
not just talking about a clearance of a flight intol 
but you are also talking about flying things on ,to Tabriz? 



A Yes. 



Mmmi 



523 



mtuissifKeT 



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And we are talking about -- right. We are talking 
about clearance over^^^^^^^f 

Q Right. . That is for the flight, then, that would 
take place f rom^^^^^Hinto Tabriz? 

A Right. 

Q Do you know -- have you been told as of this 
time what it i* that is going to be in those three aircraft? 

A I can't say for sure, but I would suspect. 

Q What do you think you were told? 

A Well, when finally talked about flying things into 
Iran, I was told it was sophisticated oil drilling equipment. 

Q When IS the first time that you learned that it 
was something other than sophisticated oil drilling 
equipment? 

A You mean when I find out it is arms? 

Q Yes. 

A Well, I am told by Charlie Allen that I probably 
knew sometime between the 27th — even as early, he says, 
on the 26th, 27th, 28th, somewhere in there, that he could 
see ^^^^^^^^^^^^^^^^Ithat 

the — I guess -- the way he puts it — again, I do not 
recall seeing this, but he recalls telling me that on the — 
that sometime on the 26th, 27th, 28th, along in there, I was 
aware that there was at least suspicionl 
that something had QOne in there at around the time of 




f 





524 



1 

2 



W/I^tlt^ 



48 



the 25th. 

Q And — 
** A And by. that time we also had received from the 

^ cable traffic here ^^^^^^^Hhad made mention to us. 

5 Q That the crew had indicated it was weapons? 

6 A Yes 

7 Q When is the first time Colonel North tells you 

8 that what was sent in was Hawk missiles? 

9 A Oh, I don't know when he did that. I don't know 

10 whether I ever did. I don't know whether he ever did, • 

11 I mean specifically tell me it was Hawk missiles. 

12 Q Do you remember whether there ever came a time when 

13 he told you it was military goods as opposed to oil 

14 drilling equipment? 

15 A Well, I think I learned that a lot later. 

16 Whether I learned it from him, I don't know. 

17 Q How much later? 

18 A Well, all I can say is that the suspicion that 

19 what went in on the 2Sth was weapons of some kind, I am 

20 told I was told — 

21 Q Right. 

22 A When I was officially told, in fact, I really 

23 don't know. It may have been as late as January. I simply 

24 do not remember. » 

4 

25 Q As late as January of 1986? 



MiSMII- 



525 



IRffiB^BifcT 



49 



1 A Yes. 

2 Q But you don't remember there came a time where 

3 North tells you that it is actually missiles? 
^ A I can not say that. 

5 Q [)o you recall any discussion with him where you 

6 discussed with him the fact that it was -- that he had told 

7 yo<i that it was oil drilling equipment, but, in fact, it 

8 was not, that it was weapons? 

9 A I just don't know whether we ever had a discussion 

10 of that or not. 

11 Q Would it have upset you to have been lied to 

12 about the contents of the aircraft? 

13 A Well, It was compartmentation. That is 

14 compartmentation. You have a need to know only so much. 

15 Q By this time, though, you are helping deliver 

16 material — by thi« time, late on the 22nd, 2 3rd — 

17 A Wait a second. Here we are — you are talking 

18 about CIIN 2142. 

19 Q Right. As of this time, you know three airplanes 

20 worth of something are going into Tabriz? 

21 A That is correct. I am being asked to get an 

22 overflight clearance. 

23 Q By this time I take it you know it has something 

24 to do with the release of the hostages? ; 

25 A That is probably true. 



526 



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InwLnwufi iwD 



50 



Q Did the need for a finding occur to you around 
this time? 



^ A No, not at this point. 

* Q If you had been told that what was being sent in 

5 was military equipment, would the need for a finding have 

6 occurred to you? 

7 A Well, that is hard to speculate on. The Tower 

8 Commission asked me the same thing. You know, it is hard 

9 to speculate on something at this point in time about what 

10 you would have done then. 

11 Q Right. 

12 A There are just so many factors that come into.it. 

13 Q Let me just push that another step. 

14 Do you think that you may or may not have sought 

15 a finding if you had known that Colonel North was in the 

16 process of sending three plane loads of weapons into Iran 

17 and doing that with the help of the agency? 

18 A Well, again, I would just be speculating on 

19 that. Whether I would or I wouldn't have at that time, 

20 it is impossible to say. 

21 Q Well — today, if Colonel North, although he 

22 wouldn't do it — if someone else at the NSC called you and 

23 asked you to do the same thing Colonel North asked you to 

24 do back then and you had known it was weapons, would you 

25 seek a finding? 



JII^SIFIEO, 



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A Well, I would go upstairs to my superior and see 

what he wanted to do. 

Q Did you talk to anybody on the 22nd or 23rd about 

getting a finding? 

A You mean in connection with this particular cable? 

Q Yes. 

Well, in connection with what you now know about -- 
what you knew as of the 22nd. 

A No, I did not suggest that. 

Q That a finding was necessary? 

A Yes. 



mmsm 



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Q Let me ask you to go to the 2149. 

A Okay. 

Q Do you remember receiving this cable? 

A Well, I obviously did. I don't specifically 
remember receiving it. 

Q This cable generally reports that a meeting had 
taken place between the^^^^^^^^^^^^^^fand Copp in a 

Before I get to questions about that, let me ask 
you — 

A A car? 

Q Paragraph three -- we are referring to cable 
number 2149, which is the 23rd of ^lovember; time,] 
Zulu. 

A Twenty-third? 

MR. VAN CLEVE: Saturday. 
THE WITNESS: Saturday. 
BY MR. EGGLESTON: 

Q Before I ask you about the meeting reflected in 
paragraph three, let me ask you about paragraph four, which 
reports that! 




involving the transit of a shipment involving the U.S. 
Israel, and Iran. 



Did you know whol 



«(as? ' 



A I don' 



- >^» >* 



MASSIFIED 



529 



UNSei^fFT 



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mpting 



Q In addition to receiving this, the 
commented ^^^^His serving as Copp's right arm in attempti 
to arrange the transfer. 

What, if anything, did you do? 

A We may have traced him. I just don't know. 

Q Did you -- did this cause any concern? 

A I can't recall whether it did or didn't. 

Q Do you remember -- as of this time, you have 
testified you didn't really know who Copp was or Secord 
was. ■ 

A That is correct. 

Q You now are learning that someone closely 
connected with Secor 

[with regard to this operation. 

Did you discuss at or around this time with 
Colonel North who in the world Copp is and what he is 
doing? 

A I may have, but I don't recall. 

Q You don't recall? 

A I may have done a lot of things. I mean, 
I just simpl y o a n ' tr l e catl " tir '^f I did. 

Q So, you don't remember responding or asking 
Colonel North why you were involved with this man 

A I don't recall having asked him anything about 



It, 



UNCUSSIFIED 



530 



mag 3 



*2a 
fls 



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l)NS»SSt»T 



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Q Did you know Copp was operating out of| 

office? 

A No, I did not. 

Q This would strike me as a fairly significant 
event that someone who appears to be involved in this 
operation, an operation that the CIA is providing some 
assistance in. 




Q That could be, but this one apparently didn't — 

^^^^^^^^^^^^^^^^Hand may be causing 
problems. 

Do you recall whether you discussed it with 
anybody in headquarters? 

A I can't say that I recall. 

Q Let me ask you about paragraph three, which is 
a reference to a meeting at a car at 1130 hours. 

Do you whether the^^^^|^^^^^^^|informed 
you about the subject matter of this meeting in the car 
other than as reflected in this cable? 
A No, I don't. 

Q Do you recall whether you received any other cable 
relating to this meeting? , 

« 

A No, I don't ever recall. 



iKieMi^iixn 



531 



*2a 

mas 1 1 

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IS 

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A 

Q 



HNStASMST 

Oh, this IS the one the IG talked about. 

Probably . 

That^^^^^^^His talking about? 

Right. 



A No, I don't recall receiving any cable where 
apparently^^^^^^Hsays that he outlined what -- what 
this car conversation was about and arms were mentioned 
and all that? 

Q Right. 

A 'No, I do not recall that cable. I think it i's 
a little bizarre that I don't, given what was supposed to 
be in the cable. I also think it is a little peculiar that 
the DO, the Deputy Director for Operations, plus his 
own cable board readers, plus himself and presumably 
McMahon, when he must have reviewed this traffic at least 
by the 25th wouldn't — that wouldn't have come to their 
attention. So — 

Q ^^^^^^^^^^Hwa s town fairly recently. Did 
you talk to' him when he was in town? 

A No, I did not. 

Q Have you ever talked to him about this issue about 
whether or not there was a subsequent cable or cable that 



made reference to this? 

A No, I have not. 

Q Never talked to him about it? 



eNClASSIHED 



532 



tittS^BttH^T 



56 



m2 1 A Never talked to him. 

2 Q It is your recollection that you never received 

3 from the^^^^^^^^^^^Hin^^^^Hthat informed 

4 you about the contents of the aircraft? 

5 A That is correct. 

6 Q So as of the November 23rd, you still had no 

7 knowledge whatsoever that the aircraft were going to be 

8 carrying weapons? 

9 A No, I did not. 

10 Q And if there was a subsequent cable, a cable "that 

11 outlined that meeting with Copp, I take it you to the best 

12 of your recollection have never seen such a cable? 

13 A To the best of my recollection, I have not. 

14 Q Based on what you said about the other people 

15 who would have received copies, I take it it is your posi,- 

16 tion that there wasn't such a cable? 

17 A Well, you know, I can't say that^^^^^^Hdidn' t 

18 think that he sent the cable. You have a situation like 

19 this going on, you sometimes think you did something you 

20 didn't do. It is also — would not be unheard of that the 

21 system didn't get the cable or something happened to it. 

22 It wouldn't be the first time, unfortunately. 

23 Q Let me address your attention to page 2 of this 

24 document, 2149. There are two parts of that tha^ are 

25 heavily bl-*cked_out^_ Dj ^ou. bay*_aQy recollection what is 



\mm 




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in those two sections? 

A No, I don't. It IS a continuation of para 4. 
MR. EGGLESTON: Mr. Rizzo is here. I guess I 
would say this probably would be a cable where we would like 
an opportunity, unless you have it in an unredacted form, 
to review the whole cable to insure this part of the cable 
does not make some reference to arms or weapons or HAWKs or 
whatever. 

BY MR. EGGLESTON: 

Q Let me direct you to 2154. This is a cable 
to^^^^^Hfrom you with regard to the overflight 
clearance over^^^^^^f is that ricr.t? 

A Yes. Now this -- I don'- know, since I haven't 
looked at all of these, by this time maybe the proprietary 
was involved. I don't know when that all begins. 

Q I think if you take a look at the next one, it 
has some reference to the proprietary. 

A Yes. 

Q The question I have about 2154 is by this cable 
now, it appears that we are talking about three aircraft 
in the next 24 to 48 hours, and then paragraph 3 of this 
cable, it makes reference to an additional two aircraft 
sometime in the next week. 

Do you have any recollection of discus«ing with 
Colonel North how we are now up to five aircraft? 




MAAJ 



534 



UtlfitAfiStflffir 



58 



in4 1 A I don't recall how we got up to five aircraft, 

2 but the five became consistent from here on out. 

3 Q Right .- 

4 A But I don't recall having discussed it. I must 

5 have gotten the information from hiro since he's the only one 

6 that can provide it. I don't remember discussing it. 

7 Q Paragraph 1 of this at least also indicates by 

8 now it is clear that the flights are directly related to the 

9 release of the hostages? 

10 A Correct. 

11 MS. McGINN: May we take a few minutes break, 

12 please? 

13 MR. EGGLESTON: Sure. 

14 (Recess.) 

15 MR. EGGLESTON: Let's get back on the record. 

16 MR. BARBADORO: I have a few questions. 

17 MR. EGGLESTON: How soon are you leaving? 

18 MR. BARBADORO: I will call in five minutes. 

19 MR. EGGLESTON: I am almost done with this section. 

20 Then I was going to give it to you if you want to ask those 

21 questions. Is that all right? 

22 MR. BARBADORO: That is fine. Why don't you 

23 finish. 

24 MR. EGGLESTON: I will finish this and# give it 

25 to you so you can _d£ ^wh^ t^j/AM. Mi*^ •« do before you have to 




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go. 

BY MR. EGGLESTON: 

Q 2155 makes reference to the 
and^^^^^^^^^^^^Hwas the 
Agency proprietaries actually used. 

Are you -- at what point is it that Colonel North 
asks you or asked the Agency to get a proprietary, to ask 
for the use of a proprietary? 

A He didn't ask for a proprietary. 

Q What did he ask for? 

A He asked if we could reconunend a reliable charter 
company. 

Q Okay. 

A It seemed to me that that was -- what date are 
we on? The 23rd. That is Friday. 

Q Saturday. 

A It seemed to me that it was on Friday that he 
made that request. 

Q Did he make that of you? 

A He made it of me. He said can you recommend — 
can the Agency recommend a reliable charter aircraft? I 
asked^^^Branch if they could recommend on. And -- 

Q That was on Friday? 

A I believe it was on Friday. That is tp the 



best of my recollection, on Friday, and late on Friday. 

HMM JLCo inrn 



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When I say late, I mean towards the end of business hours. 
That IS the best I can do. 

Q Was It on Friday as best you recall then that 
you provided Colonel North with the name of 
airl ines? 

A I don't think I ever provided him with the 
name per se. ^^^Hbranch said after some deliberations 
that they could not come up with a name of a reliable charter 
at that time of day. That is why I tend to recall it was 
sort of after business hours. They recommended the 
proprietary. 

At that point -- because at this point I saw it as an 
excalation. I talked to J|uchniewicz . 

Q It was at the point that you are providing the 
name of the proprietary to Colonel North that you decided 
you have to talk to Juchniewicz. 

A Yes. At the point where the Agency's proprietary 
was going to be involved, if that is what Juchniewicz 
was going to decide to do. 

Q Right. 

A Then that is why I pushed it up. 

Q Do you remember when it was you talked to 
Juchniewicz? 

A I believe it was on Friday because I tfiink that 
was when the request^ came. 




HI nili 



537 



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Q Okay. Do you have a recollection whether it was 
Friday or Monday or over the weekend, your best recollection 
IS on It was a Friday? 

A My best recollection is Friday. If 23 is Saturday, 
already the name is here, which would suggest to me that -- 
yes . 

Q By this time you have actually provided Colonel 
North with the information? 

A Either I provide it to him or it was provided 
by someone else. I cannot recall whether I actually provided 
hijn with the name. 

Q But you don't recall Colonel North prior to 
Friday asking you for the name of a reliable commercial 
airline? 

A No. 

Q Let me direct you to 2164 which is dated 
November 23, the time is 

A 217 

Q 2164. 

A Yes. 

Q In paragraph 4 of this one, this involves 

from^^^^^Hto 

A Yes. 

Q It deals with the overflight request. , One of the 
things in paragraoh 4 that ^thfii .flJi)^— 5Af is information 




538 



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about what the airline would be carrying. Did you do 
anything other than -- did you talk to Colonel North 
specifically to insure you knew precisely what was on the 
airline? 

A I can't say that I did. As I recall, at some 
point — and again, I don't knew whether it goes back to thos 

[flights or when the proprietary is going to be 
involved, as to when I knew it was sophisticated oil drilling 
spare parts. 

I cannot give you precision on that. 

Q Okay. But as of this time, you know you are 
going to have to respond to this request? 

A Yes. 

Q Right? So you think -- would you have gotten 
the information from anyone other than Colonel North about 
what was in — going to be in the aircraft? 

A I can't imagine. 

Q Only Colonel North? 
Okay. 

A As far as I can tell. I can't imagine who 
else would have had it. 

Q Cable No. 2168 appears to be your response to 
the cable that we juat spoke about. 



Yes. 



Whic 



'msBi 



the early morning 



539 



BNttH^fflfflT 



63 



m9 1 hours of November 24. 

2 A We are talking about — yes, that would be 

3 Zulu time, sometime Saturday evening. 
* Q Right. 

5 In paragraph 1 ot this cable, you are advising 

6 that it involves sophisticated spare parts for the oil 

7 industry. And again you don't recall -- as far as you 

8 knew, as of this time, that is all you knew; you didn't 

9 speak to anybody other than Colonel North what might have 

10 been in the aircraft? 

11 A Well, as I have said before, in the SSCI 

12 testimony, it wasn't that I was -- I was aware there 

13 were other kinds of things going on in the world. 

14 I cannot say that it didn't cross my mind it might 

15 be something else. This is what I was being told. 

16 Q And — 

17 A And it made a certain amount of sense. The 

18 Iranians needed spare parts for the oil industry. 

19 Q I am just not sure I understood you. You 

20 suspected it might be something other than oil drilling 

21 equipment? 

22 A I didn't say that. You learn in this business 

23 you don't ask a lot of questions. You know, you -- there 

24 are certain things of compartmentation. I was tald, 

25 presumably — I #4ft#«^thv ^oA4. ojl i A^'^*'* *^ some point in 




540 



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this chronology what was involved here; and I was told 
spare parts for the oil industry. 

Q And what you are really telling us now is that 
that is what you were told and you -- although might 
have had some suspicions it was something else, 
didn't ask further questions? 

A Suspicions is too strong a word to use. Being in 
the kind of business that I am in, you know, you know what 
is going on in the world. It isn't that nothing else 
ever crosses your mind. 



UNCUSSIFIED 



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magi 



DNtCASSIIIST 



63 



1 Q If you had some other instead of suspicions, 

2 concerns? 

3 A No, if I had concerns, I would have done something 
^ else, I presume. 

5 Q I guess my only question is, even if you had 

6 anxieties about what it might have been -- looking for 

7 a word you are comfortable with — the fact that now a 

8 proprietary of the agency might be taking weapons to Iran 

9 would seem to me to cause you some real concern. 

10 A Yes, but apparently I didn't have that concern. 

11 Q Okay. 

12 So, you don't think — let me just ask you this 

13 question. 

14 Do you think you were -- you did have the sense 

15 that these could possibly be something other than spare 

16 parts? 

17 A No. That is speculating beyond what I can 

18 speculate about. 

19 Q Well, except I am not now asking you to 

20 speculate. I am asking you sort of the state of your mind 

21 as of this date. 

22 A It is hard to recall the state of my mind a couple 

23 of years ago. 

24 Q It seems you might recall, though, if 4s of the 

25 time this operatitl ■i^fiOATifc ><>f»*f #"»t^e very fact we are 




542 



IWI!E^§SfFIKT 



66 



1 sending things to Iran at a time when there is a complete 

2 embargo on sending anything to Iran. 

3 A But the President can decide that he wants to 
^ break the embargo. 

5 Q That is right. But this certainly must have been 

6 regarded in your mind as to be a highly unusual event. 

7 A Well, I deal with highly unusualy events and have 

8 over a number of years. 

9 I will tell you, in real fact, this didn't seem 

10 to be all that big a deal. 

11 Q Sending even sophisticated oil drilling equipment 

12 to Iran? 

13 A If the President of the United States decides he 

14 wants to break his own embargo, he has the right to do that. 

15 Q How did you know the President of the United 

16 States had decided to break his own embargo? 

17 A I would assume when he — McFarlane must have 

18 been talking to somebody. 

19 Q Did North ever tell you he talked to the President? 

20 A No, he never did. 

21 Q Did you ever talk to McFarlane during the course 

22 of this? 

23 A No, I did not. 

24 The best I recall, I never talked to Poindexter, 

25 either. 



UNCLASSIFIED 



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Okay. UllULnOOll 

There comes a time in early December when you 
leave town. Do you recall that? 

A No, I don't recall. December? Yes, I think 
I went tol 

Q Let me direct you to 2185, several cables further 
on. 

There is a reference in this cable tol 
I s ^^^^^^^^^^^^^^^Ha 1 so a 
A Where are we? 

Q Paragraph three. I will let you read the whole 
thing. 

think^^l^^^^^^^^^^^^^Bis a Other people 

would have to answer that. 
Q Okay. 

Do you have any recollection of how they got 
involved in this whole thing? 
A No. 

At some point I think I even speculated to 
somebody that -- see, the proprietary was only going to be 
used once, as I recall. 

Q By the "proprietary," you are talking about 
and some other airline was going to do the 
remainder of the flights? 



UNCUSSi'FIED 



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A Yes. It seems to me at one point in one of these 
cables I speculated it was^^^^^^^^^airline . 

Q I think you make a reference to| 
being^^^^H^^H proprietary? 
A That is possible. 
Q You don't have more information aboutj 

low than you did then? 
A No, I don't. 

Q You don't have any recollection, I take it, of 
why it is that a CIA proprietary was going to be used for 
the first flight? 

A No, I don't know, except that North had asked for 
a reliable charter. We ended up giving him the proprietary. 

Q Actually, I em going back and directing your 
attention to 2195. That is the cable that makes a 
reference to your speculation that^^^^^^^^^Bnight be 
[proprietary. 
MR. VAN CLEVE: Neil, I have to leave. I want 
to take this opportunity to thank Mr. Clarridge. I look 
forward to reading your testimony. 

THE WITNESS: Very nice to meet you. 
BY MR. EGGLESTON: 
Q Let rae direct you to number 2205, a cable 
dated November 27, 1985, and the time is^^Hzulu. 

By this time, that flight, the flight had gone in 



llCliSSiElEIL. 



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on the 24th. I think it actually had come back out. The 
first paragraph here is, "Operation is still on, and we are 
regrouping. Will advise additional details tomorrow." 

This IS a cable to^^^^^^fand^^^^H I guess, 
from you? 

A Yes. 

Q I guess what I would like now is the entire 
series of cables that take place between the time this 
flight is over and December 11 of 1985. I would like to 
take you through a number of these cables and ask you what 
it was that was happening. The cables become very 
sparce now. 

Essentially, all you are doing in this cable 
traffic is telling them to "Stand by, stand by. We are not 
sure what is happening. We don't know if we are on. We 
don't know if we are off." _. -^ 

What is it that ])appens after the flight goes in 
and before — up to the 27th7 What discussions are you 
having with North and the people in the agency about what 
the next step is going to be? 

A The way it — again, the way I can recall it to 
the best of my ability, is that you had the flight went 
in -- I don't know whether early morning hours of the -- 
I forget which day, 24th or whatever it was. , 



On the 



JMMIQL 



it know whether it 



578 



111101 vt^irjrn 



70 



1 was a stand-down or whatever. In other words, whatever was 

2 supposed to happen next wasn't nappening. 

3 All right? 

* So, North kept postponing doing anything further 

5 because whatever was going on on his end wasn't working, 

6 Q At this time, is he still working out of your 

7 office? 

8 A No. 

9 Q He is back in his own office? 

10 A Yes. 

11 Q So, your best recollection is that whatever 

12 he was doing was not coming through? 

13 A That is correct. 

14 Q Did you understand that to mean the hostages were 

15 not being released? 

16 A No, I did not. I did not. At that point — and 

17 I don't know all the ins and outs, because I wasn't 

18 involved — apparently there were other things going on in 

19 the building in connection with all of this. And I was 

20 not involved. 

21 The only thing that I continued to be involved in, 

22 a* you can see here from the cable traffic, is either 

23 getting flight clearances frorol 

24 or whatever, and then, as the cable traffic points out 

25 here, nothing happened. 



UNCLASSIFIED 



579 



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Q Any time between November 21, 1985 and December 11- 
did you have occasion to speak with Mr. Casey about this 
operation? 

A No. 

Q You never briefed him on what was happening? 

A No. He was out of town. 

Seems to me — the only conversation I had on this 
besides Juchniewicz, upwardly, was — I had two 
conversations with McMahon, one when I took him a cable, 
was to^^^^^^^^^^^^^^^^^Bor- 

something, came in with a message saying for the director -- 
the director wasn't there — saying should I continue 
with my efforts. I drafted a message for McMahon which 
said, "No, stand down." 

At some point on the 25th — is that Monday? 

Q It is Monday. 

A The 25th, McMahon called me fairly late in the 
day and said, "You know, I think that this, whatever was 
shipped, doesn't make much difference whether it was oil 
spare parts or gun powder -- it is embargoed matter, and 
therefore, maybe we need a finding." 

Q Do you recall that ho used the word "gun powder"? 

A He might have used "weapons", "gun powder". 

In other words, something other than "(jil spare 
parts", something ^^t^ljad to do with weapons, ammunition. 




mmsL 



580 



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72 



1 He may have used that word. 

2 Q Did you brief Sporkin then on what had happened? 

3 A No, I didn't. 

* Q Do you know who did? 

5 A No, I don't know. I never talked with Sporkin 

6 about this at all. 

7 Q Let me pursue the finding for a minute. 

8 As of the 25th, McMahon has informed you or 

9 told you, at least, that it is his view that since it was 

10 embargoed items, some finding is going to be necessary? 

11 A May be necessary. 

12 Q May be necessary. 

13 Do you know what McMahon then does? Do you know 

14 who he contacts? What steps he takes? 

15 A No, I don't. 

16 Q Do you know whether a finding was ever prepared? 

17 A I have heard much later that some finding was 

18 prepared. When it was prepared, what it said, I don't 

19 know. 

20 Q When you say "much later," later in December of 

21 1985? 

22 A Oh, no. We are well into 1986, now well into 

23 1986. Certainly not until January of 1986. 

24 Q Have you ever read the finding? , 

25 A I readl|^|i|U|LnA,iM^lfBftf8n — what is it — 



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73 

uiivfc-nuv/ii iLU 

17th finding? 

Q You read that one? 

A Yes. 

Q Are you aware that there was an earlier finding 
that was prepared by Mr. Sporkin? 

A I am not aware. I have heard much later, like 
middle of 1986 or later on that there may have been another 
finding. 

Q Just to pursue that for a second, do you know who 
you learned that from? 

A No, I don't. 

Q Do you know whether the first finding was ever 
signed? 

A I don't know. 

Q So, moving back to the cables now, as of the 27th 
of November, you are essentially just in a hold pattern? 

A Correct. 

Well, I had to straighten something out withj 
at some place. I don't remember that. They shifted around. 

Q Changed the dates? 

A Yes. 

Q Where the flight was going to go? Going from 
Ito someplace else? 

A Yes. ' 



Q There 



iMASsm: 



r 2215, I think. 



582 



UMEI^SSIflEftT 



74 



1 which is dated the 3rd of December, and the time is| 

2 Zulu. Again, it is to^^^^^Hand^^^^H and this is from 

3 you, I guess? 

4 A Yes. 

5 Q "Key meeting of principals will take place this 

6 weekend with earliest possible aircraft deployment sometime 

7 mid to late week of 8 December." 

8 This weekend would have been the weekend Saturday 

9 was the 7th. 

10 What is it that you knew that led you to send 

11 this cable about a meeting of principals that was to take 

12 place this weekend? 

13 A I don't recall. 

14 Q Do you know who the principals were? 

15 A No, I don't know whether the principals were U.S., 

16 foreign, or what. 

17 Q You have no recollection? 

18 A No, I am sorry, I don't. 

19 Q There was a meeting which took place among various 

20 American key principals, including the President of the 

21 United States on Saturday, the 7th. 

22 A The 7th? 

23 Q Do you know whether you knew that? 

24 A No. < 

25 Q Do you«ftqpJ^c| iVMW^IlP*l\^^3^ ^^ ^^' meeting 






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you are talking about? 

A No recollection. 

Q There was a meeting then which took place in 
Europe with Mr. Ghorbanifar as of -- on the 9th or so of 
December, with Mr. McFarlane. 

Did you know that meeting was taking place? 

A No. I didn't know it until I heard it from 
you right now. 

Q Again, there was another meeting of principals, 
including the President, which took place on the 10th.- Did 
you know that meeting took place? 

A No, I didn't. 

Q On the 10th there was a cable which you send 
again, which is 2216. 

A That is coming in froml 

Q I eun sorry. Is it coming in from^^^^l It is -- 
where he indicates to you — 

A Yes. What he is saying there isl 
might not be on their toes if you have to do something over 
the holiday period. 

Q Right. 

The next cable I want to ask you about is 2217, 
which is — is this sent out by you or by your deputy? 

A This was sent out by acting chief EUR. , 

Q Would blMt. Udve J3«en.^^^^^^^^^^|as of this 
time? 




bee n^^^^^^^^^^Bd 

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emm fls 17 

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A Yes. He was my deputy in EUR at that time. 
Q Where do you think you are during this time? 
A I think I went to -- what are we talking about? 
10 December? I think I was in^H^^HHfor the -- yes, 

I am not sure whether I went to| 
somewhere else. I know I was inl^HH|toin December. 

Your trip tc^^^^^^Bhad nothing whatsoever to 
do with this initiative? 

A Nothing whatsoever. 

MR. EGGLESTON: Do you want to jump in now? 
MR. BARBADORO: No. I didn't want to rush you. 
MR. EGGLESTON: I wasn't rushed. 
MR. BARBADORO: I have a few questions about the 
cables, Mr. Clarridge. Maybe it would be a good time to 
jump in and ask about them. 

EXAMINATION 
■» BY MR. BARBADORO: 

Q If the U.S. Government was assisting another 
government in shipping military equipment to Iran in 
November of 1985, that would have been a significant event, 
wouldn't it? 

A If the U.S. Government was assisting another 
country in shipping military equipment to Iran? , 



Yes. 



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L 77 

Q Is It fair to say if somebody had told you 
that this operation you were assisting was going to 
involve the transportation of military equipment to Iran, 
that you would have remembered it? 

A Yes. I think I would. Yes. Just like if 
that cable, that so-called^^^^^Hcable , if ic said what 
I have been told it said, I think I would have remembered 
it. 

Q Did Colonel North tell you in November of 1985 
that military equipment was going to be on these flight* 
that you were helping to get the flight clearance for? 

A No, he didn't. He told me it was sophisticated 
oil drilling equipment, at which point I, in all of this, 
I can't precisely pin down. 

Q Colonel North told you that there was going 
to be military equipment on this flight? 

A No . No . 

your ^^^^^^^^^^^^^^^^^^^^^Hsver 
send you a cable that toldyou that military equipment 
was going to be on those flights? 

A To the b€St of my recollection, I never received 
such a cable. 

Q I want to show you a State Department cable. 
Maybe the safest thing to do is mark it as Clarridge 1. 



UNCUSSIFIED 



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IfflttA^B^T 



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(Exhibit DRC-1 was marked 
for identification.) 
MR. BARBADORO: It is a cable on 22 November, 
|zulu time from the embassy in^^^^^Bto the Secretary 
of State. 

BY MR. BARBADORO: 
Q Mr. Clarridge, you probably haven't seen this 
before. Why don't you take a minute and read it? 
A Okay. 

Q Let me just confirm this. You have never seen 
this cable before, have you? 
A No, I have not. 

Q As you know from reading the cable, Mr. Clarridge, 
it is from the embassy in^^^^^Hto the Secretary of State 
and it refers to a meeting between^^^^^^^^^Hof f icial 
and I believe the Ar*-ing Deputy Chief of Mission on 
November 21, 1985, in which the Acting Deput" Chief o; 
.Mission ia told of an approach that was made by aj 
official on November 20 concerning a flight from Israel 
to Iran carrying arms. 

Were you told in November by any State Depart- 
ment source that a — that there was a proposal to ship 
anas from Israel to Iran? 

A No, I waan't. To the best of my recollection. 



I didn't talk to 



DimssinEir 



epartment. 



X .:': ~: -^rsj* 



587 



UN8tAS$lfliff:T 



79 



'' Q Were you ever told by anybody at the CIA about 

2 a proposal to ship arms from Israel to Iran in November 

3 of 1985? 

4 A To ship arms from Israel to Iran? No. 

5 Q Let me show you a CIA cable and probably we 

6 should mark this one, too. I don ■ t have the sajne numbering 

7 system Neal does. 

8 This is a cable dated 26 November 1985, | 

9 Zulu time. It is to you, I believe, fron 

10 (Exhibit DRC-2 marked for. 

11 identification.) 

12 BY MR. BARBADORO: 

13 Q Mr. Clarridge, please look at this exhibit and 

14 tell me if you recall receiving it. 

15 A I have reviewed it. 

16 Q Did you receive that cable? 

17 A Well, I don't recall it. It says that I did. 

18 But I can't recall just like I can't recall all these 
ig cables in here. Certainly it says I did. 

20 Q It says that you received it? 

21 A That is tru«. 

22 Q You have no memory of having received it? 

23 A Right. 

24 Q On page 2 of the cable, about midway down, 

25 



and -- 



UNCLASSIFIED 



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A I don't understand that. This was from the DCM; 
is that what it is? 

Q Take a look at it again. It is my understanding 
it IS from your officer ir^^^^^^|to you concerning a 
meeting that the Deputy Chief cf Mission had with -- 

A It is actually from the Deputy Chief of Mission. 

Q It IS? 

A Yes. Using our channel. 

Q Do you recall receiving any messages from the 
Deputy Chief of Mission during November of 1985? 

A I clearly don't recall, but — I don't recall, 
but clearly that's marked for me. I think there is 
another one also that was received from the DCM at some 
point as well as the ambassador. 

Q So you do recall receiving some messages from 
the Deputy Chief of Mission? 

A I can remember one that came in from 

He was the ambassador. That's on the 26th. 

Q Let's go back to Clarridge Exhibit 2. Would 
you agree with me that the quoted portions of the cable 
which are on page 2 refer to quotations from one of two 
notes given to the Deputy Chief of .Mission] 
by ^^^^^^^^foff icial on November 

A In other words, these two notes? These advise 
us — these two C9t4AWvri,«-^»il|«Bf ^^ut these two notes? 



mmm 



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Q The quoted portions of the cable. Would you agree 
what they purport to refer to are quotations from one of 
two notes given tp tre Deputy C^l.ef of y.ission by a 
)fficial? 
A That's correct. 

Q Let me refer your attention to midway uown the 
second page. Excuse me a minute. What — can you tell 
me what has just been shown to the witness? What is that 
that's just been put in front of you? 

A Says for DCM chief, EUR unfortunately received 
too Late. 

Q What is the reference? 
A 

Q So the cable you are reading from now -- let's 
make sure the record is clear on this. You have been 
shown a cable by your counsel, John Rizzo, and that cable 
is dated 27 November, ^^H^ulu time and is a cable to 

[from you and it concerns DCM meeting with Foreign 
Ministry. 

MS. McGINN: That cable is also referred to 
as No. CCIN-2206, and is included in the packet of cables 
that the witness was shown this morning by Mr. Eggleston. 
MR. BARBADORO: Okay 
BY MR. BARBADORO: 



UNCLASSIFIED 



Tell me what does that cable say and what is 



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its significance? 

A I don't know what the REF is referring to. 
Is your cablel 

Q Clarridge Exhibit 2 isl 

A All I can say is that apparently he was talking 
about having a meeting with somebody as best I can under- 
stand it. The DCM was going to meet somebody? 
was going to meet with somebody? 

Q The Clarridge Exhibit 2 refers to a meeting 

between DCM^H^^^^^^^^^^^^^^^Hof ficial. 
It doesn't refer to a proposed meeting. Strike that. 
It says at paragraph five: "DCM then noted 
that Ambassador^^^^^^^^^Hwas scheduled to call on the 
Prime Minister, afternoon of November 26. 
said if U.S. still interested in the meeting with the 
Prime Minister would provide excellent opportunity to get 
PM's agreement. Ambassador call set for 4:30 local time. 
If DSM has not found — we believe meeting offers 
excellent opportunity to get it. Please advise us at 
opening of business, November 26, if there is any interest 
in reviving" — well, "in reviving^^^^^^^Bcooperation 
and if so, on what terms. 

Can you explain_the_ cable it^-^2 J*i2^ shown 
to you by your counsel? 

A It says, "Unfortunately REF arrived in time 



1 the cable that was iust 



591 



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for m« to respond to meeting he was going to have. My 
ability to respond to your message prior to this time is 
a result of bureaucratic snafu of the last 14 hours. I'll 
fill you in tomorrow." 

I frankly don't know what the bureaucratic 
snafu was. 

Q But the signifiance of that cable, is it not, 
it demonstrates you did receive^^^^Hand did readj 
it that right? 

A Correct. 

Q Let's turn to the Clarridge Exhibit 2,1 
aad let me quote something to you On the second page of 
tAat cable. It says in the middle Of the page, "On the 

afternoon of November 2, the fij 

informed the Minister 
of Foreign Affairs that it had been asked to 'assist' 
is the transit of defense it had with the administration 
oi the U.S. The company said the material to be trans- 
fivred would arrive in^^^^^fthe following day to be 
transported by two aircraft." 

Do you recall reading that paragraph? 

A No, I don't recall it. 

Q Would you agree with me there is a suggestion 
m here that defe**^ m^erial is involved in the ,ship- 

-■ mussm ... 




592 



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A Well, you could interpret it, but you could 
also interpret it that it was spare parts for the oil 
industry. They can be handled by the siune company. 

Q Would they be called defense, transit of 
defense? 

A "Transit of defense, what does it say? Transit 
of defense? As)(ed to assist in the transit of defense. 
I don't know what transit of defense means. Transit of 
defense it had. 

Q Obviously, something is missing from the cable*. 

A Or missing from the translation ofl 



Q Would you agree with me whatever it is, defense 
refers to the contents of the aircraft? 

MS. McGINN: Object to the question. 
BY MR. BARBAOOROt 
Q Go ahead and answer. 

MS. McGINN: If you can answer. 

THE WITNESS: I informed the Ministry of Foreign 
Affairs that it had asked firmi 
^^^^^^^^^^^^^^^^^1 inform the 

•ey^^^^^^^^^^^^^^^H fust 
Inform the Ministry of Defense that it has been asked to 
assist transit of defense. / 

It could be defense isn't necessarily the right 




Id be defense isn't necess 

JIN£liSSlEltlL 



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word. I can't comment on that. Defense what? 
BY MR. BARBADORO: 

Q My question is, whatever defense is, does it 
refer to the contents of the aircraft? 

A I don't know. The material to be transported 
would arrive in^^^^^^lthe following day. 

Q How long were you Chief of the European 
Division? 

A From October, 1984, until February, 1986. 

Q During that time, did you learn that 
is one of the leading^^^^^^^Harms dealers? 

A I may have. It is something -- it is not 
something that sort of hit me between the eyes. 



You know that now, don't you? 

Oh, yes. 

When did you learn that^^^^Hwas an arms 



Q 

A 

Q 
dealer? 

A Well, I may have known, but I can't say for 
sure, while I was Chief of the EUR Division. 

Q Wouldn't you receive reporting of activities 
of major arms dealers in Europe in your capacity as chief 
of the European Division? 

A In some cases I may have; in some cases I 
didn't. I just can't say. ; 

Q And you can't say for sure whether you knew 



llNRUSSIHEa_ 



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\Kmmw 



86 




[was an arms dealer back in November of 1985? 

A No, I can't. I may have known, but I mean I 
can't say for sure. 

Q When did Charlie Allen show you the 
^^^^^^^^^^^^^^^^^^^^^^^^^^■what has been 
to as the^^^^^^^^^^l 

A Well, I oon ' t know whether it was the^^^^^^^^^H 
that he showed me on Friday morning or whenever this 
thing started. 

Q He showed you some^^^^^^^^^lon the 22nd of 
November ? 

A He showed me ^i^ ^^^^^^^P^^| Whether it had 
to^^^^^^^^^^^^^^^^^H I 
recall . 

Q Prior to the 22nd, you had never met Charlie 
Allen? 

A No, I had not. 

Q Did you ask for him to come into your office 
aand show you this^^^^^^^^^H or did he come in on his 
own? 

A I think he came in on his own. I think Ollie 
probably asked him to. 

Do you recall whether he told you Ollie asked 
him to come in? » 

A No, I don't. I think suhseauently I heard that — 



». .t.*.. 



lon't. I tninK sucseouenti^ 

MASSIEIQL 



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BNOMSSffSBT 



87 





not at that time. I can't recall. 

But subsequently, I think I have heard that that's 
what was said. 

Q On the 22nd, Allen came into your office, intro- 
duced himself, and told you that he had some 
that he wanted you to look at; is that a fair summary of 
what happened at the start of that meeting? 

A I don't recollect how it happened specifically 
but that's probably as good an explanation. 

Q And did he tell you why he wanted you to look* 
at this? 

A No. I think Ollie had said to me that there's, 
some material you should see to understand what's going 
on . 

Q Were you curious at that point to know what is 
going on? 

A Well, no. Well, whatever you are told, you 
are told. 

Q In any event, you were told by North you should 
look at this^^^^^^^^^Hso you would know what was going 
on; is that correct? 

A Correct. 

Q Allen brought ^^^^^^^^^H in and you read| 
lis that right? , 

,i""(iiUisgM':'""" 





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Q You recall him bringing in | 
right? 

A Frankly, no. 

Q What is the basis for your earlier testimony 
that you recall them bringing! 

A I am told he brought it in. I recall Ollie 
North saying that Charlie Allen would bring me something 
to read. But youare asking me specifically to recall 
Charlie Allen walking in a room. Frankly, I can't. 

Q you reading ^^^^^^^^^^^^Hon the 
22nd? 

A No. I mean, a lot of thir.gs -- you have to 
remember something. This wasn't the only thing I was doing 
all day. 

Q How many NSC initiatives do you respond to in 
the course of your daily work in a week? 

A In my old job, I used to respond quite freqently 
the^^^^^^^^^^Hoivision . 

Q Was the NSC involved in these kind of initiatives 
frequently when you were in the^^^^^^^^^^Hoivision? 

A No. I would get NSDD ' s instructing me to do 
X, Y and Z. 

You would agree with me this was an unusual 
event? , 

A I would agree it was a somewhat unusual event. 



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Believe me, in my career, it is not that big a deal 

Q Mr. Clarridge, I have reviewed that 
and it is clear to me as a novice that arms were referred 
to in exchange for hostages. 

Do you recall having that impression after 
leviewinc 

A No, I don't. Because I can't recall what I 
reviewed. Are you talking about ^^^^^^^^^H prior to -- 

Q ^^^^^^^^^Hyou saw on the 22nd of November? 

A Then you know what I saw and I don't. 

Q Charlie Allen has testified in his depositions 
that based upon ^^^^^^^^^Hhe received between September 
and November, he has serious -- he had serious suspicions, 
maybe even stronger than suspicions, that arms were 
involved. 

Do you recall — were involved in this November 
shipment. Do you recall Charlie Allen ever raising that 
concern with you? 

MS. McGINN: Object to the form of the question. 
If you want to introduce what Charlie Allen said, that's 
one thing. Your characterizing it and asking him to 
comment on that is a very different matter. 
BY MR. BARBAOORO: 

Q Please answer the question. 



About? 



UNCLASSIFIED 

— fc. •j<ir« ^»^™ ■ I ■ > ^M»^ 



598 



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1 Q Could you read my question back? 

2 (The reporter read the record as requested.) 

3 THE WITNESS: No. I don't recall him raising 

4 it. As I have said, I was aware of a lot of arms deals 

5 going on in the world involving Iran, but I don't recall 

6 Charlie Allen saying that to me. 

7 BY MR. BARBADORO: 

8 Q Did Charlie Allen ever tell you that he thought 

9 arms might be involved in this November shipment? 

10 A You mean ever? 

11 Q Correct. 

12 A Well, as I have said before, I am told — 

13 again I don't recall seeing^^^^^^^^^^B -- but I am told 

14 by Charlie Allen that^^^^^^^^^^^^he had -- and I can't 

15 give you the specific date -- the 26th, 27th, 28th of 
1g November, which he says that he showed to me although I 
17 don't recall it mentions arms, or mentions having to do 
13 with a flight on the 25th; I would imply that the flight 
^9 on the 25th carried something other than oil drilling 

2Q spare parts. 

21 Q [)o you recall Charlie Allen having said that — 

22 something other than oil drilling parts might have been 

23 involved in the shipment at any time during November of 

24 1985? 

25 A Do I Vf:^il^Chaj:l^e_Al^en saying --no, I do 





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not recall . 

Q Charlie Allen has told you since that he told 

you that but you. have no memory of it; is that right? 

A No. The earliest memory I have is sometime 

in January. 

Q Okay . 

Mr. Allen, could you turn to cable CIIN No. 
218-A. 

There is another CIIN 2180. I know from 
having looked. 

MR. EGGLESTON: No wonder. 
BY MR. BARBADORO: 

Q You might want to read also 2184, which I 
understand is the response by you. 

Do you recall receiving 2180-A? 

A Well, yes, I must have received it. I sent 
out an answer. When you say, do I recall receiving the 
cable, yes; when I read it over, yes. 

Q Your recollection Ls refreshed when you read 
the cable? 

A Yes. 

Q Would you agree with roe that that cable 
expresses some confusion as to what the cargo of the 
airplane was? / 

A Yes. 'K^MFfoJ-^ ipt\ig ^\acg in here where they 





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say pilot told the ground controllers they were carrying 
military equipment, although Senator Bentsen does not 
believe that ever happened. 

Q Mr. Clarridge, would you agree paragraph two 
of that cable expresses some confusion as to what the 
contents of the aircraft was? 

A That's correct. 

Q The^^^^^^^^^^^^^Htold someone was 
industry spare parts, the telex from the carrier stated 
medical supplies were involved, and the pilot told ground 
controllers he was carrying military equipment. 

A Right. 

Q After you received this message, did you make 
any inquiry to determine what the cargo was? 

A I don't recall. But from the wording of this 
other cable, the answer going out, I may have. 

Who would you have aslced about what the cargo 
was? 

A Hell, again the only person that could gi\« 
me that answer — again, I do not recall talking with 
him — would have been Colonel North. I do not specifically 
recall speaking with him. 

Q In any event, on 25th of November, you thought 
the cargo was oil parts; is that right? , 

A Correct. 



UNCUSSIFIED 



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Q That's basically all I have. 

Mr. Clarridge, so you understand the basis for 
my questioning, from what we have seen so far, the Acting 
Deputy Chief of Mission in^^^^^Hhad information that 
arms were involved in that shipment on the 20th of 
November. Your ^^^^^^^^^^^^^| in ^^^^^|s ays on the 
2 3rd he was told arms were involved and that he sent a 
cable to you telling you there were arms involved. 

We know 01 lie North knew that arms were involved 
on the 20th and we know from Charlie Allen's testimony . 

su spec ted, ^^^^^^^^^^^^^^^^^H some or 
which he gave you, that arms were involved, and my 
questions -- 

A When did he say that he knew that arms were 
involved? 

Q He knew prior to the November shipment that 
the initiative involved here, he had reason to believe 
involved the shipment of military equipment in exchange 
for the release of hostages. 

MS. McGINN: Object to characterizing the 
testimony that way. 

BY MR. BARBADORO: 
Q In any event, so you understand the basis 
of my questioning, I think it is something we have^ to 



pursue when all 




to have knowledge 



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of It and you claim not to. 
A At this time. 
Q That is right. 

MR. BARBADORO: Go ahead. 

(Whereupon, at 12:20 p.m.. the deposition was 
recessed, to reconvene at 12:35 p.m., this same day.) 



UNCLASSIFIED 



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INiEHSSKIElT 



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AFTERNOON SESSION 

(12:40 p.m. ) 
Whereupon, 

DEWEY R. CLARRIDGE 
was called as a witness and, having been previously duly 
sworn, was examined further and testified as follows: 

EXAMINATION ON 
BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. EGGLESTON: 
Q Mr. Clarridge, there comes a time I take it 
in early December of 19 -- actually, there was another 
question I had which was a quick question. 

One of these cables makes reference to a tele- 
phone you have the^^^^^^^^^^^^^^^H 
Do you recall calling him on the phone? 
A No, I don't recall calling him. 
Q Is there a reason that you would have called 
him on the phone as opposed to sending a cable? 

A Well, it must have been some time factor is 
the only thing I can think of. I don't know that that was 
the case. That would be the only reason I can think of. 

Q There comes a time in early December of 1985 
when I take it you have a lengthy discussion with Colonel 
North about where this operation is going to go. , Is that 
correct? Do you recall a conversatisiL with him where he 





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tells you that there are going to be now explicitly an 
arms-for-hostage deal with the transfer of TOWs, various 
things like that? 

A I don't remember a conversation about that. 

Q You don't have any recollection about that? 

A No. All I can remember is discussing with him 
his on/off-again arrangements that I was making for 
clearances . 

Q Do you recall an early December meeting with 
Michael Ledeen? You and Charlie Allen meeting with 
Michael Ledeen? 

A I don't recall one in December. Wait a 
second. After Ghorbanifar was here sometime. I don't 
know when that was. I can't recall. 

Q Okay . 

A But I know that sometime either when Ghorbanifar 
was -- he was either — met after he was here or while 
he was here. Yes. There was a meeting. 

Q You don't recall, though, a meeting with 
Michael Ledeen about Ghorbanifar in early December of 
1985? 

A Well, I don't know that it was in early 
December. I know that at one point — I didn't know 
Charlie Allen was there. But I couldn't say who, was, 
that Ledeen — I saw — Ledeen saw me about Ghorbanifar ' s 



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credentials . 

I really didn't do anything about it. The 
ins and outs of the whole thing. But Ghorbanifar had 
spoken about some other things that had to do with the 
European area. 

Q You don't have any recollection of being 
explicitly informed by Michael Ledeen in a meeting th?t 
you had with him and Charlie Allen about the November 
shipment and that it was Hawks? You don't recall that 
taking place? 

A No. ' 

Q Let me show you a memorandum and ask if you 
would look this over. It is dated December 18, but 
refers to a meeting on the 4th of December. If you could 
read the first line and tell me whether that refers to 
you? 

MR. EGGLESTON: This is CIIN-587. 
THE WITNESS: I remember this thing. I guess 
it goes on — 

BY MR. EGGLESTON: 

Q He goes on on one of the pages to describe 
the previous deal, though, as a transfer of Hawks? 

A Well, I don't — I remember a meeting with 
Ledeen. I can't say who else was there because I don't 
recollect. It seemed to me it was about the time that -- 



lu^uccinm.. 



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98 



1 when Ghorbanifar was in town. I don't know whether there 

2 was a time they had him on the polygraph or what. 

3 Q There comes a time on about December 22nd 
when^^^^^^^^^H meets 

5 A That's right. I remember hear ing^^^H met with 

6 him. I think Ledeen was meeting with him also during the 

7 time he was here. I seem to recall that. 

8 Q Let me get back to 587 here. Is this in the 

9 first line -- 

10 A That's me. 

11 Q Chief DO Europe? 

12 A That's me. 

13 Q This memorandum reports -- and maybe if I 

14 could have it back for a second, it might help the 

15 record, in paragraph four, page 2, it states: "Subject 

16 explained that the four hostages were expected to be 

17 released just before Thanksgiving because of the Hawk 

18 missiles that had been delivered with intermediaries 

19 (who include, among others, David Kimche of Israel). 

20 After delivery of 20 of these missiles, Sutherland, 

21 Anderson, Jenco and Jacobsen were to be released in 

22 West Beruit. Once these four were released, another 

23 100 Hawk missiles were to be delivered to Iran. This 

24 did not occur because there were disagreements over the 

25 particular model of the Hawk missile that was delivered." 






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And then it goes on. 

Do you have a recollection of him telling 
you? 

A I don't recollect anything about that. This 
wouldn't have been my business also. By this time -- 
what are we talking about, early December? 

Q December 4 is the date of the meeting according 
to the memoranda . 

A By that time, as I say, the only part of this 
that I had anything to do with was, as the cable traffic 
specifies, is getting clearances for the next X number 
of sorties. 

Q Let me make sure I understand your position 
on this. Could you think -- I mean, I take it if this 
would have been assuming you participated in this conver- 
sation, this would have been the first time that you had 
learned that there was a transfer of approximately 20 Hawk 
missiles in return for the hostages and that this had 
occurred right before Thanksgiving. You must have known 
this was the operation you had been helping with? 

A Yes. If I had been told all of this. 

Q I would think that if you had been told this 
in the meeting with Ledeen, this would have been an event 
that would have fairly much stuck out in your mipd. 

A Yes. a<At^ y<atf see, the thing is, I know a lot 



•♦*««^ 



•* 4. 





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iJiiOi AOOirifrn.. 



100 



1 of things now that I can't recall necessarily knowing or 

2 not knowing then. It is sort of hard to say specifically 

3 what I knew then and what I -- or the timing of what I 

4 knew and when I knew it, frankly. 

5 Q Let me just make sure -- I am not quite sure 

6 what you are telling me. Do you not recollect this 

7 meeting? 

8 A I recollect a meeting with Ledeen having to do 

9 with the bona fides of Ghorbanifar. And some proposals 

10 that Ghorbanifar had which had nothing to do with this . 

11 side of the operation and that's all that I recollect. 

12 Exactly when that meeting took place, I can't 

13 say except that I recall that it seemed to be that 

14 Ghorbanifar was in town or had been in town. 

15 Q So you do not remember being told in early 

16 December of 1984 about a delivery of 20 Hawks, a follow- 

17 up of an additional 100 Hawks? You don't have any 

18 recollection? 

19 A A hundred — the 100 Hawk thing surprised me 

20 when I heard you read it off. All I can say is I don't 

21 recollect it. I think I would. 

22 Q You think you would? 

23 A I think I would. 

24 Q Do you think -- let me also ask you on — and 

25 you don't remember similarly having any conversations 



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with Colonel North about deliveries of weapons -- the 
conversations with North that took place in early December 
about the delivery of weapons in exchange for a receipt 
of the hostages? 

A No. No. As I say, at that time, my piece 
of this thing was ]ust as reflected in cable traffic. 

Q This may take you a minute to review. It may 
take you more than a minute to review. 

This is what is referred to as a PROF note. 
I am sure you have seen them. It is dated 12/4/85 and it 
has got the date on it -- or the time on it of 20255. 
It is from North to Poindexter and it has to do in some 
detail with this operation. 

Maybe if you could review it. You are mentioned 
specifically near the end of it. 

MS. McGINN: Are you entering this as an 
exhibit? 

MR. EGGLESTON: I was going to mark it. 
THE WITNESS: Is this something I an supposed 
to have seen? 

BY MR. EGGLESTON: 
Q No, sir. I don't know whether you saw it or 
not. This is -- I wanted to show it to you and then ask 
you questions about it. 

A Oh, yes. The FBI asked me about this Operation 






610 



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Recovery. I never heard about that terminology until they 
mentioned it, frankly. 

MR. EGGLESTON: Before I ask questions, let me 
ask It be marked DRC-3. 

(Exhibit DRC-3 was marked 
for identification.) 
BY MR. EGGLESTON: 

Q Mr. Clarridge, this memorandum or PROF note 
from North to Poindexter, which you have just had the 
opportunity to read for several minutes, makes reference 
to a fairly elaborate scheme for the sequential delivery 
of weapons followed by the release of American citizens. 
On one of the last pages it says, "Dewey and I have been 
through the whole concept twice looking for holes and 
can find little that can be done to improve the 'trust 
factor' with the Iranians." 

Do you recall having in early December of 1985 
discussions with Colonel North about this — the operation 
that is described in DRC-3? 

A No, I don't. 

Q So it is your position that North's statement 
in this document that he's been over the operation with 
you twice is not accurate? 

A That's right. The use of the^^^^^^fair field 
also mystifies me because -- when did you say this was? 




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Early December? 

Q December 4, right. 

A By December 4 , we had clearly gotten the 
^^^^^^Honboard . So why would we have been -- why would 
he even be mentioning using^^^^H He's talking about 
isn't he, there? 

Q Yes.^^^^^^Bcontrolled airfield. 

A That doesn't make any sense as of that time 
either. 

Q So your best recollection is that this is -- . 
he never discussed this operation with you? 

A Yes, he did not. 

Q He did not at any time discuss this operation 
with you? His statement in there he's been through it 
with you twice is not an accurate statement? 

A Not an accurate statement. 

Q I want to ask you now — I am not going to 
take you through any sort of chronology, but I would 
like to ask you about a number of different events that 
then take place in January through November, really, of 

1986. 

When is it that you became Chief of the 



A Mid February, 1986. 

t 

Q I take it from your earlier testimony that 




UMCkAWiiori?^ 



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around late December of 1985, you recognized that Mr. 

[had met with Ghorbanifar? Or did you indicate to 
me you couldn't quite place when that had taken place? 

A I don't know when it took place. It seemed to 
me -- in other words, I believe Ghorbanifar was in the 
States sometime in late 1985. 

Q Yon have a recollection that someone at least 
from the Agency met with him at that time? 

A That's right. I remember hearing, I think, that 
[saw him. 

Q Was Ghorbanifar by this time a name that was 
familiar to you? 

A It had become familiar around that time. 
Sometime in December was the first I ever heard about 
him, to the best of my recollection it was -- could have 
been December. 

Q On January 17, 1986, there is a Finding 
signed by the President. You mentioned that earlier. 
Does there come a time after the Finding is signed that 
you become involved once again in the operations, the 
execution of the Finding? 

A No. Well, not that way. In other words, from 
about -- I don't know quite when it was. The last ten 
days in January. The Director asked me to take six, 
seven weeks off and examine what our problems were with 






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handling terrorism. So I -- I think I came back from a 
trip to^^^^^Hor something. The last few days of 
January . 

And after X number of days, I produced a paper 
on the problems and the solution, the solution as I saw 
It. That, resulted in setting up the| 
Ln mid February. 
Q Did you become involved, though, in the 
execution of the Finding? 

A No. I did not become involved in the execution 
of the Finding. 

Q Could I have this marked DRC No. 4? 

(Exnibit DRC-4 was marked 
for identification.) 
BY MR. EGGLESTON: 
Q Let me show you DRC-4 and ask you to take a 
look at this. This is a memorandum for Poindexter 
drafted by North on January 24, 1986. 

I assume this is not a document that you have 
seen before. So I am not suggesting that you have seen 
this. It is sort of an outline form. 

This document, on the first page of it, reflects 
you are one of a number of people, including one of four 
people at the CIA who are "completely cognizant of this 
schedule." Do I take it from your response -- were you 



TrW-Wwafiur 



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completely cognizant of this schedule? 

A No , I was not. 

Q Had you, in January of 1986, had any discussion 
with Colonel North about a notional time line for the 
release of hostages? 

No. 

Q This document on page 2 of -- actually it 
assigns you a particular task which is that you and 
Copp will proceed to rendezvous ir^^HHto establish a 
command post. I take it you had no discussion with 
Mr. — 

A No. Why would we go ^°^^^^M Unless that -- 
unless this was still connected with the use ofJ 
airfields. That would be the only thing that I can see 
any reason to go ^°^^^^^M ^° • 

Q He never discussed -- 

A It was never discussed with me. I never saw 
that time line. 

Q This document also refers to various sort of 
logistical and financing arrangements for the financing. 

A Which I had nothing to do with. 

Q You had no knowledge of? 

A Never had in the entire time from whenever you 
want to put the date on it, 17 January, when the logistics 
business was assigned to any division until November. 






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Only one occasion did^^^^^^^^Hask me when he went off 
on a trip for a few days to oversee the matter and I 
mentioned before where there was a discussion about spare 
parts, those delivered, those not delivered, those broken, 
so on and so forth. 

Q That you think was around September of 1986? 

A I think September. Yes. It was sometime around 
there. Might have been earlier. 

Q Let me ]ust leap to that for a second. Was 
there any discussion -- was there any — was any part of 
your assignment or request from Mr .^^^^^B involved in 
having to do with the pricing of the parts? 

A No. 

Q Did you know the pricing of the parts was a 
fairly ma^or item by that time in 1986? 

A Oh, yes. George Cave would come by and chart 
with me about what was going on. There was a lot of 
confusion about the pricing. I was aware of that from 
talking with him. 

Q So you were aware there was confusion over 
the pricing of the Hawk parts? 

A Well, I can't say specifically Hawk parts, 
but confusion over pricing in general was the impression 
I had, that I took away from all the discussions and 
confusion specifically over what spare parts had been 



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shipped, what ones were apparently broken on a rifle, 
and the parts that were missing. 

I did not spend very long on that subject, 
because it was the bean counters all getting together 
to discuss that. I left the meeting. 

Q Did you have any participation or any role in -- 
did you have any knowledge that the Iranians had obtained 
a microfiche which reflected a price list for various 
Hawk parts? 

A I remember George Cave talking about that. 

Q Did you have any role in attempting to prepare 
another microfiche which would reflect different prices 
from the ones the Iranians had? 

A None . 

Q Let me ask you a couple of quick hits through 
this time period. 

In January of 1986, Charlie Allen is told -- 
and I can show you the document, if you will accept my 
characterization of this -- is told that out of another 
operation, told by Ghorbanifar, that out of some other 
operation, there might be money available for Ollie's 
boys in Central America. 

Assuming that Charlie Allen was told that by 
Ghorbanifar, did he ever mention anything like that to 



you? 



PPSSIFIED 



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WttWlW 



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A No. He mentioned that only that he had come 
across those notes. I don't know. That was not too long 
ago. But that was the first I had ever heard of it. 

Q That was as probably best you recall sometime 
in 1987 he mentioned that to you? 

A Yes. 

Q Not at or about January of 1986? 

A No. 

Q Did you have a conversation with him at the 
time that he indicated to you that he had found the 
notes? 

A No . I think he just mentioned they were in 
there, and wasn't that bad luck that he had just found 
them or something. 

Q George Cave, was George Cave actually located 
in your area? Is that where his desk was? 

A No. He didn't really have a desk. I don't 
know if he had a desk down in NE. He'd use Charlie's 
desk sometimes when Charlie wasn't there. 

Q But you would talk to him periodically about 
how this operation was going? 

A He would come to me and it wasn't that I sort 
of went to him. I am not trying to throw it on to 
George. He dropped by and he'd say. This is what's going 



on; what do you 







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Q I wasn't putting a sort of who went to who 
first. On occasion, the two of you would talk about how 
the operation was going? 

A Yes. 

Q At a meeting in March which he had, Mr. Cave 
had with Ghorbanifar, Ghorbanifar told him, and it is 
reflected in the memorandum that Mr. Cave wrote, that 
profits from the deal could go tol 
and might also go to the Nicaraguan rebels. 

First, did Mr. Cave ever tell you that? 

A No. 



UNCLASSIFIED 



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HI 



Q Assuming that that is properly characterizing 



it: 



A No. The only thing connected with 

[l ever heard, and I cannot say where I heard it, 
was that the Iranians werel 



Q How about the Nicaraguan rebels? 

A No. I never heard that. 

Q Did you have any knowledge whatsoever of 
diversion- of funds out of this initiative to the 
Central American rebels? 

A No. 

Q Nicaraguan rebels? 

A NO. 

Q Contras? 

A NO. 

Q None whatsoever? 

A None whatsoever. 

Q Never discussed it with Colonel North? 

A No. 

Q There comes a time in October of 1986 when 
Charlie Allen and George Cave meet with Roy Furmark. 

A Correct. 

Q And at one of the meetings which I think takes 
place in late — ««^t«»kat«i«Q(»(*pt»,W*vmark mentions that 




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Mr. Ghorbanifar had not been paid what he should have been 
paid, or Kashoggi, various things. Furmark tells Cave and 
Allen that he suspects the reason is because the money 
had been diverted to Central America. 

When did you first learn that Furmark had told 
that to Cave and Allen? 

A Well, I can't recall specifically, but I — and 
I can't recall actually seeing what they wrote up, but I 
know that -- I say they, because it could have been they, 
but I can't recall specifically that it was, that this- had 
come out in their conversation in New York. 

Q So do you think you learn about it shortly 
after it takes place? 

A I would think probably but I cannot say for sure. 

Q Did you ever talk to Colonel North about whether 
or not that was possible? 

A No, I did not. 

Q Did you ever talk to Mr. Casey about it? 

A No. 

Q Did you know Mr. Casey met with Mr. Furmark as 
well? 

A It depends on when did I know it. I don't know 
whether I knew it when it happened or right after it happened 
or whether I learned it afterwards. I just don't know. 



Q Did you take any steps or take any action after 



'ou uaKe any seeps as. T.aK.c e 



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learning that there was this allegation by Mr. Furmark that 
the money involved in this initiative, that you had actually 
been involved with approximately a year previously, the 
general initiative, may have gone to Central America. 
Did you take any steps? 

A No, I didn't. 

Q Did you talk to anybody about it? 

A No. 

Q Any investigation conducted by you? 

A No. It wasn't really my business. 

Q On November 21st of 1986, Mr. Casey testifies 
before various congressional committees and the process of 
preparing this testimony, as I understand it, began several 
days prior to that time. Directing your attention first 
to this process, did you have any role whatsoever in 
preparing Mr. Casey's testimony? 

A No. In the sense of writing things or pulling 
material together? 

Q Well, yes. Let's start by pulling material 
together? 

A No, I didn't. I believe to the best of my 
recollection, I believe I participated in one large meeting. 

Q When was that? 

A I cannot recall exactly when. 

Q Do you recall how long it was prior to the time 






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that Mr. Casey testified? Casey's testimony was on a 
Friday, the 21st. 

A No, I can't recall precisely when it was. 

Q How will it have been within the week? 

A I'm sorry. I just know that I participated 
in a meeting. 

Q Do you recall who else was at the meeting? 

A Well, it was a large number of people relatively 
speaking. Let's see. 

MR. RIZZO: Let me just say I was at that 
meeting as well with him. It was the night before the 
testimony. 

MR. EGGLESTON: Evening of the 20th? 
BY MR. EGGLESTON: 

Q Who all was at the meeting, if you recall? 

A I can only recall some people there. I think 
Charlie Allen was there, Clair George was there. I don't 
recall^^^^^^Hbeing there, but I assume he was. 
I as only guessing now. 

Q Here there any non-Agency personnel present? 

A NO. 

Q Was one of the matters discussed at this meeting 
at what point in time the Agency had knowledge about the 
contents of the flights for the November 1985 shipment? 

A Excuse me. Would you repeat the question? 



litff v^ IT? ^v^^tkAP ' ' 



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Q Was one of the topics that was discussed at this 
meeting, was one of the issues that was raised, about at 
what point in time the CIA, the Agency, had knowledge -- 

A Of what was -- 

Q -- what was in the November shipments? 

A I don't recall that coming up. 

Q Had you been consulted prior to that tir'e about 
what the Agency knew? You were kind of the principal guy 
at the Agency who was involved in these November '85 
shipments. 

A You are right. 

Q Had anyone in preparing the CIA's chronology 
consulted with you about what people knew? 

A I don't recall anybody consulting with me. 
I would assume they would have had to. 

Q It would strike me that you were about all 

they got? 

A Yes. No. But, frankly, I cannot recall 

anybody consulting with me. 



MCUSSIflEL 



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Q I take It if they had consulted with you, though, 
you would have obviously said that as far as you knew at 
the time, it was sophisticated oil drilling equipment? 

A Oil drilling equipment. 

Q But you don't recall one of the principal 
matters discussed during this meeting which may now have 
taken place on the 20th of November being the state of 
knowledge of the Agency as to the contents of the flights 
in November? 

A No. I don't remember that being a big issue. 
Do you remember? 

Q That's all right. 

MS. McGINN: He's not being questioned today. 
MR. BARBADORO: We'll take his later. 
BY MR. EGGLESTON: 

Q Did you have any consultations with anyone 
at the NSC about preparing their chronology? 

A No, I wasn't involved with that. 

Q Not at all? 

A No. 

Q No discussion with Colonel North about what 
the NSC knew or any role? 

A None whatsoever . 

Q Any role in preparing for the President's 
press conference which took place on November 19th? 



IMASSML 



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SlffiCi^tFlfl^ 



117 



1 A No. 

2 Q During that week, the week of November 18th or 

3 so through the 21st, were you ever in Colonel North's 
^ office helping prepare the chronology with him? 

5 A No. 

6 Q Did you attend Casey's testimony? Were you 

7 there on the 21st? I guess he testified in the morning 

8 before HPSCI and later that day before the Senate 

9 committee. 

10 A I was at the HPSCI testimony. Wasn't there 

11 a Foreign Affairs -- wasn't there testimony before 

12 Foreign Affairs? 

13 MR. GIZA: Earlier. 

14 THE WITNESS: Was that earlier? 

15 MR. GIZA? May have been a day or so. It 

16 is very confusing. 

17 THE WITNESS: The only one I recall being 

18 there for was HPSCI. 

19 BY MR. EGGLESTON: 

20 Q Later in the day on the 21st, Mr. Casey 

21 testifies before the Senate select committee. Do you 

22 think you were not present for that testimony? 

23 A I don't recall being there. 

24 Q Let me ask you about a few other aresa. You 

25 had, I take it, a device called a KL-43? 



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lUUII It" ^^^ 

A Yes. 

Q Where did you get it? 

A Some fellow showed up with it one night. 

Q When was that? 

A Well, X can't recall specifically what time it 
was, what day it was, even what month it was. 

Q Was it in 1985 or 1986? 

A Seems to me it was in 1985. 

Q Okay. 

A I believe it was in 1985. I can't tell you 
when in 1985. 

Q Who showed up with it? 

A I don't remember the fellow's name. 

Q Was he a CIA employee? 

No. ^^^H^IJH^^^^^^^^I ^ 

Q Did he tell you why he was giving it to you? 

A Yes. I guess -- the best of my recollection, 
he said Ollie North thought I ought to have it so we 
didn't have to repeat what we did with the Achille Lauro 
on the phone because we didn't have any secure telephones 
in the home at that time. 

Q Did you ever talk about this KL-43 with 
Ollie North? 

A No. And I never used it. 

t 
* 

Q You never used it? 




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A Never used it. Never even had the key. 

Q There comes a time when you take it out of the 
building, doesn't there? 

A I was supposed to have it at home. 

Q And -- 

A At least that's what the whole idea was. 

Q Do you still have it? 

A No. 

Q When did you give it back or give it up or 
get rid of it? 

A Well, I brought it back from home almost 
immediately and it sat around in my safe until, I don't 
know, six weeks ago, whatever. 

Q My understanding of these devices is that what 
is -- pardon the layman's use of the word -- 




A The key? 

Q Is it called a key? 

A No. I guess it is called that. That's the 
only thing I can think of you are referring to. 

Q My understanding is those are changed on a 
fairly regular basis. 

Did you receive new keys periodically? 



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A 
Q 
A 



I never received any key. 

So you did not have a key at all to this? 

That's right. 



120 



Q Did you receive this from Colonel North before 
or after your involvement in November of 1985? 

A I can't recall whether it was before or after. 
I believe it was in 1985. 

Q But you cannot place it any better than 1985? 

A I'm trying to -- seems to me it was more 
connected with the Achille Lauro thing. The Achille 
Lauro was October. Seems to me it was because of so much 
talk on the home phones, but I can't be precise about that 
because I just don't recollect. 

Q I'm not sure I understand your answer. Did 
you ever talk to Colonel North about the reason he had 
sent you one of these things? 

A I don't recollect talking to h im specifically 
about ii 




Q Did you know who else had them? 

A No, I didn't. 

Q I take it you knew or assumed Colonel North 
had one? 

A Well, yes. 

Q Did you know whether Admiral Poindexter had 



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one? 

A No, I didn't. 

Q Did you know whether anyone else inside the 
Agency had one? 

A No, I didn't. 




Q Did you know whether General Secord had a -- 
had such a device, a KL-43? 
A No, I didn't. 




--^ - ^^ - v> « - 



pinntinmigKi 



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sarenthetically , when in 1984 did this 
take place? 

A It was -- the best of my recollection, it 
might have been late March or April. 

Q Do you recall any discussion with officials 
o f ^^^^^^^^^^^^^^Hcover nnent 
providing assistance to the contras? 

A No. 

Q Did you ask any official in thel 
Government to provide assistance to the contras? 

A No, I didn't. 

Q Any request to provide monetary assistance? 

A No. 

Q Any request to provide munitions, materiel? 

A No. 

Q Training-type assistance? 

A No. 

Q So you did not ask that the 
provide any type of assistance whatsoever to the 



-»■• r . 



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HNfi^SSKt^T 



124 



1 contras? 

2 A That's correct, 

3 Q Did they inform you or tell you at any time 

4 that they were already providing assistance to the 

5 contras? 

6 A No, they didn't. 

7 Q Did they tell you they were willing to provide 

8 assistance to the contras? 

9 A No. 

10 Q Have you discussed with any -- with officials 

11 of any other country the providing of assistance to the 

12 contras? 

13 A No. 

14 Q Have you ever solicited funds from officials 

15 of any other country? 

16 A No. 

17 MS. McGinn : Can we get a date on these? 
^g You are asking him questions about what time frame? 

19 MR. EGGLESTON: I am willing to say from 1980 

20 to the present. 

21 THE WITNESS: Have I — 

22 MR. RIZZO: That certainly narrows it down. 

23 MR. EGGLESTON: It is ever. I am taking it 

24 he's answering these questions no. If he were to answer 

25 yes, there's so many occasions I can't delineate them. 



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I would probably do it in a slower one-at-a-time 
fashion . 

I am anticipating his answer to the question. 
Ever IS going to be it. 

MS. McGinn : I want to make sure he understands 
the time frame you are talking about. 

THE WITNESS: Solicit -- go back to that 
question again. After we have lef t^^^^^^^^^^^^f 

BY MR. EGGLESTON: 




Q After January 1 of 1984, did you make any 
requests of any countries outside ofl 

^[for assistance to the contras? 

A No. 

Q Have you heard of a ship called the Erria? 

A No. 

Q In the spring of 1986, did Colonel North 
discuss with you a ship that he had available for use 



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by the Agency? 

A There was some connection. I don't know whether 

he discussed it with me or people in NE Division discussed 
it , 

Q Do you recall -- but you don't recall what 

ship it was? 

A No. 

Q Did you ever discuss it directly with Colonel 
North? 

A No. I don't recall ever discussing it — 
you know, it seemed to me it ceune up as a^^^^^Hoperation 
in some context. 

Q I just wasn't sure about your answer. You 
don't think you ever discussed it directly with Colonel 
North? 

A No. 

Q Or anyone else on the NSC staff? 

A No, and I never heard the name. 




82-636 638 



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Q Never heard the name. 

Did Mr .^^^^^^^H assuming this is true -- he has 
testified that he had a brief conversation with Colonel 
North about it. 

Do you recall whether you ever discussed the 
ship with Mr. 

A Whether I discussed it with Mr. 

Q Did he consult with you on whether it would be a 
good idea to use it, buy it, or rent it? 

A 




and at some point — and I don't Icnow who 
raised it — whether it was Ollie North or whomever -- the 
question is of having a shipl 

I don't even know what kind of ship it was. Could 
possibly — that Ollie at least had some control over -- 
could be used for thi; 

Q You just generally recall this being discussed at 



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1 a meeting, I take it? 

2 A Right. 

3 Q And you don't — you were not -- you don't have 

4 any greater knowledge of it than this knowledge you are 

5 relating to us that was imparted to you during the course 

6 of this meeting? 

7 A No. It was in that meeting. I feel quite 

8 confident that is where. 

9 Q Do you recall that the ship was used in November 

10 or December of 1986 with regard to the Iran initiative? 

11 Do you have any knowledge about that? 

12 A It seemed to me that a ship was going to go — 

13 and I didn't know whether it was this ship — that some 

14 shipment — ship was going to go to someplace. Bandar Abbas, 

15 and pick up a T-72 tank. 

16 Q Did you understand that to be part — did you 

17 understand whose ship that was? 

18 A No, just that the ship was going to go. 

19 Q Did you think it was a CIA ship? 

20 A Frankly, you know, it wasn't something I was 
2\ involved in. It is just something I learned about 

22 peripherally. 

23 Q Do you know whether the ship ever did it? 

24 A No. 

25 Q In 1984,^^^^^^^^^^^^^^^! the LA division. 



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there comes a time in the spring of 1984 when the agency 
reaches the cap on funds that are allowed to be expended on 
behalf of the contras. 

What steps did you take at or about that time in 
order to prepare the contras for the fact that they were 
going to be running out of funds? 

Did you meet with the contra leaders? what did 
you do, if you recall? 

A Well, at that point in time, there was still — 
we are talking about — the funds were getting ready to .sort 
of run out. 

We had worked out a plan to stretch them out into 
July, I think, or the first of August, or certain payments. 
And I think basically we didn't do very much about getting 
ready for the cut-off, frankly. 

There was still the hope that the President 
would pull it out of the bag as he had before, and there was 
no real planning for contingencies. The planning for 
contingencies went the other way. We were planning for 
draw down on personnel i'^^^^^^^^B ^i^*^ ^ plan was drawn 
up, indee<i for that purpose. 

Q WhAt do you mean by "draw down"? 

A In other words, you aren't going to need^^^people 
to work with the contras if you aren't going to have any 



money. 



MUSSIfJEIL 



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Q Were there any plans developed at the agency to 
provide additional or other sources of funds for the 
contras? 

A None that I was aware of. 

Q Did you have any discussions throughout 1984 with 
Mr. Casey about other ways to fund the contras since the 
CIA money had either run out or been cut offh. 
A No. There never was any discussion. 

MR. EGGLESTON: I don't have anything further. 
MR. BARBADORO: A few quick points. 

EXAMINATION 
BY MR. BARBADORO: 
Q Picking up on what Mr. Eggleston is asking you 
about, any point^^^^^^^^^^^^^^^^^^Vthe 
American division, were you aware of any discussions in the 
agency about soliciting aid from third countries? 
A NO. 

MS. MCGINN: For the contras? 
THE WITNESS: What time period are we talking 
about? 

BY MR. BARBADORO: 
Q 




So, let me put a cut- 
off of between January 1, 1984 and the time you left the 

« 
Latin American dii 




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A In October. 

Now -- ask me the question again. 

Q The question is, during that period of time, to 
your knowledge, were there any discussions in the CIA about 
soliciting aid from third countries? 

A No. Soliciting aid for third countries never 
came up, to my knowledge. 

was^^^^^^^^^^^Breplaced as the 
the Central American task force? 

A At that time, we are talking about October. He 
wasn't going to be replaced. I wanted him to stay on until 
the spring of — what year are we in? 1985? I sort of 
wanted a phase-in with^^^^^^^^^H Those two in the same 
room for more than three days is ]ast impossible. 

The plan had been for^BHHto leave in the 
spring of 1985, anyway. 

Q He was being asked to leave before his normal 
tour was up. Do you know why? 

A I don't know whether he was being asked to leave 
before hia nonnal tour was up. If a phase of a transfer 
had happened the way the director wanted it to happen at 
that time, there would have been a long overlap into the 
spring of 1985, which %#ould have been when he wanted out, 
anyway. 

Q Why did they plan to have a period of overlap 






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be t wee n^^^^^^^^^Ha nd J 

A Because the director, in particular, thought it 
would take somebody a good bit of time to learn the ropes. 

With my departure, having been with it all the wav 
along, they wanted to keepf|^^|in there as long as 
possible to provide the continuity. 

You know why^^^^^^^^^^^^Bwas — was 
decided ^^^^^^^^^^^^Bshould leave the Central American 
task force? 

A You mean early? 

Q At any point. 

"ft 
A No. 

Q Do you know why it was decided he should leave? 

A No. There was a certain 2ui>ount of tugs and pulls 
in that place, but I don't think that was the — there 
was — it was anybody's intention to have him leave eirly. 
It was th« intention to get somebody in there to under- 
study him for a long overlap, at least in the director's 
mind. 

Q Were you responsible for doing performance 
evaluations for^^^^^^^^^^^^Hn your capacity| 
the LA division? 

A Yes. 

Q Was there anything wrong with his performance 
as head of the Central American task force? 



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A No, none whatsoever. 

Q Between June of 1984 and October of 1984, it is 
my understanding you were replaced ^^^^^^^^^Bt he Latin 
American division; ^^^^^^^^^^^^^^Vwa s as 

chief of the Central American task force; thej 

was replaced; and th£ 
was replaced? 
A Yes, because he was coining up on three years. 
Q Is that unusual for the -- all of the main 
actors with regard to the contra program to be replaced^ 
within a three or four-month period? 
A Well, no. 

In the best of all worlds, you wouldn't want to 
have that happen. You have to remember that I was coming 
up on three and a half years in that job. I already 
made it clear to the director, given my medical history, 
that I had had enough. And I think some other people 
downtown here had had enough of me. 

Dick, you can speak to that. 
MR. GIZA: You had been kicked around long 
enough. 

THE WITNESS: There was a certain amount of 
momentum there from all sides. 

The^^^^^^^Hl thing probably^^^^^^^^Hbeirrg 
I — is much more sensitive, and it — may have let 




mm. 



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It be known that he was upset with the way the whole thing 
was handled. 

In fact, as far as the director was concerned, 
he wanted^^^^^^^^^to stay there until April and the guy 
[from October to April. 
Now, the] 
BY MR. BARBADORO: 
^^^^^^^^^^^^^^^^^^^H I can 
^^^^^^^^^^^^^^^^^^^^^^^H came because 
that man was about ready to kill himself down there. He 
had been down there three years. 

In the case of^^^^^^^^^^B he had come out -- 




But the answer to your generic question — yes, 
it isn't the best of all things to have happen. 

Q But the changes of personnel, to your knowledge, 
had nothing to do with the fact that after October of 1984 
there were going to be restrictions on what the CIA could 
do vis-a-vis the contras? 

A Not to my knowledge. 

Q Oo you know a DEA officer namedl 



with him 



I have heard the name. One of my people has worked 



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Q Are you aware of a plan to gain the release of 
the hostages that involved DEA officers? 

A All I am aware of is that there were some DEA 
people ^^^^^^^H who were working — trying to collect 
information. 

Q When did you become aware that there were some 
people — DEA people^^^^^^^^trying to collect information? 

A I thinJc that came up at the operational support 
group. I can't recall exactly when. But I started going 
to those meetings in March of 1986. 

Q Who would have raised it at the operational 
support group? 



I don' 




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Q Did Colonel North ever discuss a proposal with 
you that involved gaining the release of the hostages through 
the use of DEA officers and their informants? 

A No, I never heard of an operation to gain the 
release of anybody through DEA. Collection of information, 
yes. 

Q Do you know whether anybody in the CIA paid money 
to DEA agents for expenses and for informants' expenses in 
198 5 in connection with an operation to gather information 
concerning the hostages? 

A No. 

Q Are you familiar with a plan in 1986 that 
involved these DEA officers and their contacts! 

|to gather information about the hostages? 

A I can't say about contacts. I was aware that 
there were DEA people^^^^^^^^Hthat were working on 
collecting information on hostages. 

Q What were they doing? 

A I don't know. I just know they were collecting 
information. 

Q How were they collecting the information? 

A Presumably from informants. 

Q Who was paying for the informants? 

A I don't know. 

Q When were they^ collecting, ti»fi- information? 

*■■> 





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A All I can say is that I went to the OSG meetings 
beginning about March 1986, and some time during the course of 
one of those meetings I learned from somebody or somebody 
stated at the meeting that there was a collection effort 
going on. 

Q And you know nothing more about it than that, ]ust 
there was an effort to collect information concerning the 
hostages that involved DEA sources? 

A That is right 




Q Do you know anything about a plan in 198 6 
involving these OEA officials and their contacts to pay 
bribes to certain of f icials^^^^^^^^Hto gain the release 
of the hostages? 

A No, I do not. 




mmmiL 



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Q Have you ever heard the name Rafael Quintero? 

A Was he one of the felJows that came to Cyprus 
when the Jacobsen — 

Q In November of 1986? 

A Seems to me I heard the name for the first time 
then. 

Q What can you tell me about that? 

A That is all I can tell you. He was there at the 
time. 

Q How about a guy named Dutton? 

A Never heard of Dutton. 

Q Do you know what Quintero was doing there? 

A It had something to do with an airplane that was 
brought down there. 

Q Who sent Quintero? 

A I have no idea . 

Q What was he supposed to do there? 

A I don't know. 

MR. BARBADORO: Let me mark as Clarridge Exhibit 5 
a cable from the^^^^^^^^^Bdated 11 November 1986. 

(Exhibit DRC-5 was marked for 



UNCUSSffi 



identification. ) 



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tMt»$gtFIEST 



139 



1 BY MR. BARBADORO: 

2 Q Please take a look at that and tell me if you 

3 recall receiving it. 

4 A This IS all this traffic having to do with -- 

5 yes. 

6 Q Do you recall reading that cable? 

7 A I don't specifically recall it, but I probably 

8 read it. All that stuff was coming in. 

9 Did you make any effort to determine who Outton 

10 and Quintero was? 

11 A No, not one iota. 

12 Q Did you ever discuss Dutton and Quintero with 

13 Oliver ^^orth? 

14 A No, I never did. You see, again, this is one of 

15 these cases — is that at first this — well — 

18 Q Go ahead. 

17 A AU.S is another one of these cases, initially we 

Ig were asked to provide comno support. So, we were providing 

19 comno support, passing messages. Pretty soon I began to 

20 understand the White House was passing their own messages. 

21 I called them up and said, "What the hell am 

22 I doing this for? This is ridiculous. You are sending them, 

23 I parallel." 

24 I ceased. But they didn't cease informing me on 

25 all this stuff. 



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MR. BARBADORO: That is all I have. 
MR. EGGLESTON: I think Dick has five minutes 
worth of questions. 

EXAMINATION 
BY MR. GIZA: 
Q Dewey, when the director asked you in late 
January 1986 to look at this counter-terrorism problem, 
you went ahead and looked at it? 
A Yes. 

Q Did you ever talk to Ollie North about it at" 
the time? 

A I interviewed a great many people outside the • 
building and inside the building. I had a list that 
I appended to the paper I wrote which listed everybody 
I talked to. 

Maybe I talked with Ollie and maybe — but 
I simply don't know. If I had detailed discussions with him, 
his name would be on that list. 

The^^^^H^^^^^^^^^H^^Hp^ e t s 
mid-February. 

A Correct. 

Q You become a principal focus within the Central 
Intelligence Agency for counter-terrorism matters, and, in 
part, you become a principal focus within the overall 
Washington community for looking at this counter-terrorism 



UMl^mn. 



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problem. You start attending meetings of the OSG or the 
T-WIG? 

A OSG. . . 

Q Operation Support Group. 

In all of these meetings that you attended within 
the OSG and others, is this sort of the clearinghouse 
for knowing what the hell is going on in town? Is this 
where people kind of share their thougrhts about operational 
problems? 

A You mean in general? 

Q Yes. 

A No. I wouldn't say that. I wouldn't say that. 
The matters were confined to terrorism and spin- 
offs of terrorism, the hostage problem. There is, however - 
there tends to get to be a blurry line sometimes as where 
overall policy towards the country — use^^^^Has an 
example. You have an overall^^^^^Hpolicy, and policy 
toward s^^^^Hon terrorism overlap. 

That has created some confusion in the OSG, and 
we have tried to get other components, other interagency 
groups to deal with the overall^^^^^p>olicy, if you will, 
with participation of people who deal with terrorism. 

Q YouK'e beginning to put thi! 
■^^■together at CIA. Charlie Allen is the NLO for 
counterterrorism. He predates the establishment of the 



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Did Charlie Allen ever report to you that he was 
having meetings of a substantive nature with eitherj 

)f the DEA? 

A No, he didn't. 

Q You had no idea that Mr. Allen was having 
discussions and/or meetings with these individuals? 

A No, I did not know that. 

Q In response to Mr. Barbadoro's questions, you 
indicated you had no knowledge that DEA was going to 
conduct an operation or was planning or thinking about 
conducting an operation paying bribes to get our hostages 
released. 

(No audible response.) 

Q In the context of the OSG, you indicated somewhere 
along the line you heard about DEA, or there was a 
possibility there were DEA people^^^^^^^Hcollecting 
information? 

In the OSG, were there any references made to this 
Iranian operation of arms for hostages or the efforts being 
made to deal with Ghorbanifar ,^^^^^^^H and others? 

A I don't remember — there was certainly an aware- 
ness that an effort was being made to get the hostages out, 
working certain channels to Iran. Never in any qreat 
detail was it ever discussed in there. 



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You had a latter point about Ghorbanifar. I don't 
remember their names sort of coming up specifically. They 
may have. I don't recollect it. 

Q Was it kind of generally acknowledged in the 
counterterrorist community that one way you could go about 
obtaining the release of the hostages was to pay them off, 
to pay off bribes, to get the hostages released? 

A No, that was not the position. 

Q That was not the position? 

A No, it was not. 

So, it was never kind of generally acknowledged 
that there was non-governmental money available for these 
kinds of activities or operations? 

A No. 

Q Never? 

A No. 

Q Never formally discussed, informally discussed? 

A No, never either in an OSG meeting or any other 
forum that I was ever in. 

Q Did you have occasion after the time frame that you 
became the head of the^^^Bto discuss this terrorist issue, 
this terrorist problem with Ollie North? 

What were these main kinds of things you had to 
get at to focus at to get -- to put a stop to terrorism, 
to get the hostages released? Did_yay ever have these kinds 




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of discussions? 

A Sort of philosophical discussion? 

Q Yes, sitting over a beer, whatever. 

A No, never saw him that way. Very occasionally 
over the years. I can say that I never had a philosophical 
discussion with him. 

Q Did Ollie ever talk to you about the need for — 
to pay bribes to get hostag^es out? 

A No, I never heard him ever, ever say that. 

Q Never heard him say that. 




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-jii 




MR. GIZA: That is all I have. 

Thank you. 

MR. BARBADORO: One other thing quickly. 

EXAMINATION 
BY MR. BARBADORO: 
Q You worked in the Near East division at one point, 
didn't you? 

A That is correct. 

Q How familiar are you with the Wilson case and the 
people involved itx the Wilson case? 



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max. 



A I am not familiar with it at all. 

C 

Q Did you know Thomas illines? 

A ^4o. I may have met him once when he was the 

lof the DEO, but once is probably about the 

Q Did you know Ted Shackley? 

A Yes, I know Ted Shackley. 

Q Did you know in 198 5 when you first heard the 

name Secord that Secord had been associated with Shackley, 

C 

#linea, and Wilson? 

A I did not. 

MR. BARBADORO: That is all I have. 

MR. EGGLESTON: That is all I have. 

Thank you very much, Mr. Clarridge, on behalf of 
the Mouse and Senate Select Committees. We appreciate your 
time today. 

(Whereupon, at 2:00 p.m., the deposition was 
adjourned. ) 



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ANSCRIPT OF PROGEBOINCr 



*■'- 



V.' 



SELECT COfflUTTKB OR 



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TO IBAN AND TBI fOXWVJt^ OPPOSITION 






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SELECT COMMITTEE TO INVESTIGATE COVERT 

ARMS TRANSACTIONS WITH IRAN 

U.S. HOUSE OF REPRESENTATIVES 

AND 

SELECT COMMITTEE ON SECRET MILITARY ASSISTANCE 

TO IRAN AND THE NICARAGUAN OPPOSITION 

UNITED STATES SENATE 

Wednesday, June 17, 1987 
Washington, D.C. 
Deposition of RAY STEINER CLINE, taken on behalf of 
the Select Committees above cited, pursuant to notice, com- 
mencing at 10:10 a.m. in Room 901 of the Hart Senate Office 
Building, before Terry Barham, a notary public in and for the 
District of Columbia, when were present: 
For the Senate Select Committee: 

CHARLES KERR, Esq. 
Associate Counsel 

For the deponent: 

Pro se 

Partially Declassified/Released on /- ^-^ -^^ 

under prov,:ions of E 0, 12356 
by N. Manan, National Security Council 



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UNCLASSIFIED 



C ONTENTS 




Examination by counsel for 


Page 


Senate Select Committee 


3 


EXHIBITS 




Cline Exhibits 


Marked 


1 


3 


2 


7 


3 


10 


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5 


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6 


28 


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PROCEEDINGS 
Whereupon, 

RAY S. CLINE, 
was called as a witness and having first been duly sworn, was 



5 examined and testified as follows: 



6 

7 I 

8 

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EXAMINATION BY COUNSEL FOR THE 
SENATE SELECT COMMITTEE 
BY MR. KERR: 
Q Dr. Cline, if you would state your full name, 
please. 

A Ray S--which stands for Steiner, S-t-e-i-n-e-r--and 
the last name is Cline. C-1-i-n-e. 

Q Where do you live. Dr. Cline? 




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Q And your present employer? 

A The U.S. Global Strategy Council. 

Q And what position do you hold with them? 

A I'm chairman of the institution, or the council. 
The CEO. 

Q Would you give me a very brief description of what 



the council does. 



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A Well, let me read it to you from right here, so we 
don't confuse the record. 
Q All right. 

A "The Global Strategy Council is a nonprofit, tax- 
exempt educational research foundation. Its purpose is to 
promote global strategic planning and decision-making in the 
U.S. Government. ■' This brochure spells out some of the 
concepts. Perhaps it would be helpful to add to the record: 
The Global Strategy Council is basically a, quote, "strategy 
network", unquote, of specialists with expertise in every 
region and aspect of international conflicts. 

MR. KERR: And I think, so we can keep the record 
clear, I'm going to mark as Exhibit 1 to your deposition the 
brochure for the U.S. Global Strategy Council that you were 
just quoting from. 

(Whereupon, the above-referred 
to document was marked Cline 
Deposition Exhibit No. 1 
for identification.) 
THE WITNESS: That's why I brought those in. 
MR. KERR: Very good. Thank you. 



UNCLASSra 



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UNCLASSIFIED 



M' C SuoT N I 
WulwiftM C 

mil i n < «»> 



BY MR. KERR: 

Q Would you describe your educational background, 
please. 

A I have three degrees from Harvard University, AB, 
MA and Ph.D. I also was a fellow at Oxford University, 
Balliol College, many years ago. At present I am adjunct 
faculty member at Georgetown University. 

Q You received your AB degree when? 

A '39. MA, '41. Ph.D., '49. 

Q And your Ph.D. was taken in what area? 

A History of international relations, and at Geor- 
getown, I am a professor of international relations in the 
adjunct faculty of the school's foreign service. 

Q When did your association with Georgetown begin? 

A In 1974. Well, December 1973, if you want the 
precise date, shortly after I retired from Government. 

Q I'd like you to go through with me your employment 
history, and if you can take me, chronologically, through the 
jobs you've held, I would appreciate that. 

A Well, quite a few of them are mentioned in my 
biographical sheet, which I wonder if we couldn't enter as 
Exhibit 2, and then I'll be able to briefer than that-- 



UtmSSIFIED 



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UNCLASSIFIED 



Q You refer to whichever biographical piece you 
prefer. 

A This is the one. 

Q All right. 

A It is a biographical sheet. Early — to summarize — I 
left the university in 1942 to work as an intelligence 
officer for the U.S. Navy; transferred to the Office of 
Strategic Services in 1943, where I completed the war period. 
I, as this says, I subsequently served 30 years. I was in 
the Department of the Army as a historian from 1946 through 
1949. I went to CIA for 20 years, from 1949 to 1969, with 
several overseas assignments, but with different titles, but 
always employed, paid by CIA. In November 1969, I was 
appointed director of the Bureau of Intelligence and Research 
in the U.S. State Department, where I worked until November 
1973. I retired from the civil service as an annuitant at 
that time, and within a few weeks took up employment at the 
Center for Strategic and International Studies, CSIS, which 
is described in this pamphlet, and, shortly after that, 
agreed to serve as an adjunct professor at the university. 
Adjunct means you don't get paid, essentially. 

MR. KERR: Please mark the biographical sketch as 



UNCLASSIFIED 



665 



^rt? 



UNCLASSIFIED 



1 ; Cline Exhibit 2 



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(Whereupon, the above- referred 
to document was marked Cline 
Deposition Exhibit No. 2 
for identification.) 
THE WITNESS: And perhaps you'd like to add the 
description of the CSIA. 

MR. KERR: We'll come to CSIA in just a minute. 
THE WITNESS: It's not very useful, but, you know, 
it gives you an idea, if you want it, and it does refer to my 
resignation. 

BY MR. KERR: 
Q With regard to your CIA career, what position did 
you hold with the CIA at the time of your retirement? 



At the time of my retirement? I was the, what we 



call 



^0• C ium N E 
Vulunfion C 

:aii i4«.6tM 




And you held that position 

during what period of time? 

^^^^^^^^^^^^^^^^^^^^^^H Almo?' four 
Q And your position immediately prior to taking the 



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iwas what? 

A That was in Washington as deputy director of CIA 
for intelligence. It's usually called the DOI. 

Q And you held the position as — 

A I held that from aid — sometime in the spring of 
1962 until niid-1966 when I went immediately tc 

Q The distinction between directorates, operations 
versus intelligence, was that distinction recognized in the 
'60s when you were there? 

A Oh, yeah. I helped invent it. 

Q All right. 

A It goes back a good distance, and the DDI is 
essentially the chief full-tiae analyst, research-oriented 
person in CIA, whereas the Operations Directorate is mainly 
concerned with overseas activities, primarily in the intel- 
ligence collection field as distinct from research and 
analysis. 

Q The bulk of your CIA career, was it spent in the 
intelligence directorate or the Operations Directorate? 

A That's a little hard to answer because I'm a fairly 
unique person and shifting back and forth — 



I gather. 



BHtUiSSW 



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UNCLASSIFIED 



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A — from these departments. I had three major 
overseas assignments which are viewed as operational assign- 
ments, but the greater number of years were spent in the 
directorate of intelligence which is the research and 
analysis part of the Agency. 

Q Ail right. Your three overseas assignments were 




Q Thank you. 

A Other than that, my work was always--within the 
CIA, was always as an analyst or director of research of some 
sort. Because of my academic background, people think of me 
primarily as a research-oriented person, although I did have 
ovarasas experience. 

Q During the period of time that you were DDI, can 
you tell us who the director or directors were during the 



period. 
A 



John McCone had become director shortly before I 



UNCUSSIFIED 



WT C iuxwr N £ 



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W C Sum N E 

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10 





returned to take that post, returned from overseas to take 
that post. I came directly from the position of 

The only other DCI in my period was Admiral "Red' 
Raborn, R-a-b-o-r-n, who had a very short tour in 1965 and 
1966, and who left that job shortly after I went tc 
Those are the only two DCIs I worked for. 

Q Who was the DDO when you were ir 

A Well, it was mostly a man named Fitzgerald, who is 
now dead. The DDO, when I was DDI, was, for a time. Helms, 
and for a time, Fitzgerald. Fitzgerald stayed on most of the 
time, as far as I remember, all the time that I was in 





MR. KERR: The November-December 1986 CSIS publica- 
tion that you gave us will be Exhibit 3. 

(Whereupon, the above-referred 
to document was marked Cline 
Deposition Exhibit No. 3 
for identification. ) 
BY MR. KERR: 
Q You became associated with CSIS when? 

A In December 197 3. 



And you would have resigned-- 

UNCUSSiriED 



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I IM UJTWa CO . MC 



UNCLASSIFIED 



11 



A I don't think it says there. It's October 1st, I 
believe, 1986. However, resignation means I go off the 
payroll. I'm still called a senior advisor at CSIS. These 
"think tanks" have a lot of interlocking members as you can 
understand. 

Q With regard to CSIS, again, if you can give me a 
thumbnail sketch of what CSIS is. 

A Well, it is a private nonprofit research group 
concentrating on strategic and international issues with a 
view to public education and academic type influence of ideas 
in the U.S. Government. Its objectives are very similar to 
the Global Strategy Council which I described to you earlier, 
which is a smaller and newer organization with many of the 
same purposes . 

Q With regard to CSIS, it was associated, at one 
time, I believe, with Georgetown. Is that correct? 

A Yes. As a matter of fact I think it still is. 
It's just separating itself from Georgetown. It may now be 
separated, but I think probably it's more like the end of 
July before it's effective, but it was always an independent 
autonomous operation at Georgetown, separate from the faculty 
there. But associated with the goals and personnel of the 



»^ C Seem N I 



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CO.. •■ 
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UNCIASSIHED 



12 



university. Last year, it was mutually decided that CSIS had 
become so big, that it was better for it to have an indepen- 
dent corporate structure, separate from the university, and 
that process has been taking place for about a year. 

It was always independent in the sense that it 
raised its own funds, and spent its own money, paying fees 
for administrative services to the university, not a normal 
department of the university. 

Q With regard to the Central Intelligence Agency, 
could you describe your relationship with the Agency, after 
you left the Agency in 1973-74. 

A Yes. The answer is it was minimal to nil. When I 
retired, I criticized Dr. Kissinger for the way he used the 
intelligence agencies, and the state of the intelligence 
community, and I wrote a book on this subject a little later, 
which made me pretty much persona non grata with--not the 
individuals, but the institutions of Government during the 
Ford and Carter period. 

And I had no contacts during the end of the Nixon 
period, either. So from the time of my resignation to 197 3, 
because of my views about the Nixon-Kissinger administration- 
-they were less unfriendly toward Ford, but of course 



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Secretary of State Kissinger was pretty unfriendly at that 
time. I had very little contact with the Government at all, 
devoting myself to this private research activity. During 
the Carter administration, again, I offered some advice but 
it was largely rejected, so I had very little contact. 

My only acquaintance was with George Bush when he 
was, for a short time, director of Central Intelligence, but 
that was purely personal. I gave him advice based on my book 
which was published in 1976, I believe. I brought a copy of 
my book in but I don't want to give it to you. It's out of 
print, but, if you want to mention it. 
Q Let's get the title of it. 

A It's called "Secrets, Spies and Scholars", subtitled 
"Blueprint of the Essential CIA", printed by Acropolis Books 
in Washington, D.C., and the date was 1976. So there are 
several subsequent editions but that was the first one, and 
pretty well established, that while I had a great respect for 
th« intelligence community and the CIA, I felt that it tended 
to be misused by Government authorities in the '70s,. 

Q All right. With regard to your contact with the 
Central Intelligence Agency after your retirement, did you 
have a contact or a case officer? 



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A No, not in those early years. I don't recall any 
at all. You know, l know so many people who used to work for 
me, thousands, literally, in various capacities, that people ■ 
may have talked to me about intelligence matters. If so, it . 

was always in a personal and not official capacity. After the i 

i 
Reagan election in 1980, and the appointment of William Casey j 

as head of intelligence, I then accepted a contact--not a | 

case officer, because it's different-. I 

Now let me be sure to explain that to you, in case | 

i 
you don't know. 

Q Yes. That would be helpful; if you would do that. 

A When I was the deputy director of intelligence, I 
was the supervisor of a special office which we then called 
the^^^^^^^^^^^^^^^^^^^^^l I honestly know 
they call it, now, it's been changed a little I think, but it 




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So, once I in effect became more sympathetic with 



I 



the administration, and the intelligence community, beginning 
in early 1981, from time to time, then, I began receiving in I 
my office perfectly openly, a visit from a member, a series 
of members assigned to that task, from the staff which I still ! 
call, 




And I actually brought the names of those people in, , 

i 
I 

somewhere. ] 

Q That would be helpful. 

A I think I brought them in. At least I have them 
somewhere. I can give them to you. 

Q All right. 

A Okay? 

A Let's do it this way. During the period between 
'74 and '81, did you have a contact, or contacts with the 
Agency? 

A No. Not official. As I say, I don't mean to say I 
never saw-- 

Q No. I understand. 

A --or talked with Agency employees, because they 
were my friends, but I deliberately maintained a distance 



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from them, and the only one that I could contact, that I 
could consider quasi-official, was with George Bush, the 
director, and that was limited. 

Q All right, when Director Casey received his 
appointment in '81, a t that time, do you recall bein g aware 
of r 




name 
subsequently. I was not aware of that title. 

Q If you can give me the names that you recall, of 

your CIA contacts, that would be helpful. 

A Yeah. I Just found them. 

Q Great. 

A ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^1 was the 
first one, as I recall. 

Q Okay . 

A 




ind fairly recently then she was replaced-- 
these people all rotated, did different jobs. 
Q I understand. 
A She was replaced by a man named^^^^-I presume he 




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MLLIM —X JHI— O CO nc 
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But that's why, as I say, I just sort of blocked 
out what happened to it, administratively, from the on, 



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artia 



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The concept, when I was I 

in charge — and I think it's still the concept--was that it is 

natural that citizens acquire national security information 

by accident sometimes, and they should report it to the CIA ; 

I 
in the same way that a citizen should report to the FBI if he i 

observed a crime being committed, or evidence that a crime 
might be committed. 





and that's why I agreed to keep in touch i 

with them. 

Q All right. Help me attach dates. The 
contact, what period of time would you have dealt with 

A Well, you know, I really can't space them out. 

Q Best approximation. 

A I probably didn't begin very quickly, so I would — 
but let's say 1981, 1982, 

Q Okay. 

A ^^^^^^^^^|wasl think probably a longer period. 
Again I would guess '82- '84. 

Q 




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A Very briefly, a few months in maybe 1985. Then] 
was foil owed by- 

Q ^^^^^^^^^^ 

A ^^^^^^^^^^^^^H who was from most 

1986 

A ^^^^^^^^H X would guess very late '86 or early '87. 
I've really only been seeing him a few months. 
Q All right. 
A From say, '86-'87. 

Q Let me work back. In terms of^^^^^^^Hcan you 
describe for me the types of things that you would have met 
w i t h ^^^^^^^Ha bo u t ? 

A Yes. It happens that the — of course he — let me say 
15 i| first, the types of things that he is interested in are 
16 
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hava a very broad range of conversations with him. 

His job is to find out if any of that information 
is useful to the intelligence community, and if so, record 
it, and I don't know what he does with it. I simply describe 



my own activities and my own friends. 



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ONCUISSIFIEO 



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It happens that the principal discussion during 
th^^^^^^^Hperiod, which is mainly this year, 1987, had to 
do with the project of a friend, an acquaintance of mine who 
was working for a company that wanted to sell arms, foreign 
arms to any kind of customer they could get, but thought that 
perhaps there would be an interest from CIA in such arms ' 
purchases . i 

That person, who asked me for advice on this i 
subject, which contact I reported to--possibly toj 

but probably only tq^^^^^^H-I can't remember when 






the shift took place or the exact dates--was Robert Schweit- | 



zer. 

Q And this is retired Lt. Gen. Schweitzer? 

A Retired Lt. Gen. Schweitzer, who was working for the 
woman whose naine is in the subpoena which I received. 

Q That would be Barbara Studley. 

A Barbara Studley. S-t-u-d-1-e-y. And I did 
describe the activities of Studley 's office insofar as I knew 
them, which were fairly limited, and almost entirely as 
passed on to me by General Schweitzer, whom I know has been 
debriefed at great length on these subjects. 

I did describe them, briefly, to the CIA contact, 



mxiK mromnta t 
«: c Sum N E 

»2I %4».o«M 



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art21 



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whoever it was, and most recently tq^^^^^^^l f rem the view 
that international arms sales are a matter of prime concern 
for technology transfer, and overseas operations. 




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would be something that would be important for the Agency to 
know about, that Studley said that she had the capability of 
importing foreign arms, both Russian and Chinese, wherever 
they were wanted abroad, or, if appropriate, presumably into 
the United States. 

But that would have been, obviously, only if the 
Defense Department or the CIA wanted them brought to the 
United States. She was essentially in the foreign arms sales 
business . 

Q How many occasions have you had to meet withl 




«)" C SuCTi N E 



D C .'0001 I 



',■0:1 I't MM 



A Only two or three. Only two or three. Two in 
March I believe were mentioned in the subpoena, and I checked 
them. They are on my calendar. Perhaps it would be helpful 
to you if I also put into the record right now the fact that 
because I am very familiar with this CIA process ol 




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itLLIM nvotrrwo < 

^fl' C Sum N E 
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and I want to keep my relationship with the 
Agency non-operational, I don't keep records of what I have 
told them. I give them documents, anything I have that 
they're interested in, such as conference reports, or 
proposed business contracts, if they come to me and in a way 
in which I think it's honorable to pass them on, and possibly 
useful to the US. Government, I do so. 

I do not keep a file of what I've given to them 
because it's their job to decide whether it is of any 
relevance to U.S. Government security. If they do, then it's 
in the CIA files. I never ask for feedback. 

I never get much information as to what they do 
with it, and, frankly, I don't want it, because I know how 
the system works, and if it's useful it'll be used. If it's 
not, vt's not my responsibility. 

Q All right. While we're on that point, the subpoena 
did ask you to produce a variety of documents relating to 
meetings and activities specifically going to Barbara 
Studley, GeoMiliTech Consultants, and the like. 

A Yes. 

Q All right. With regard to the documents that were 
requested in the subpoena, have you had occasion to look for 



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those documents? 

A Yes. 

Q Have you found any that were responsive to the 
subpoena? 

A I've found some. You can imagine, with the 
activities I have, I have very large files. I try to keep 
very little in the way of my private papers, and nothing in 
the way of CIA documents because I don't want any classified 
material. I have clearances for discussing classified 
material still valid fron the Defense Department, which has 
nothing to do with these operations, but separately. 

I do not keep a classified repository. If I 
somehow see or get hold of a classified paper, I would 
destroy it inmediately, but if I thought it affected security 
or intelligence, I would refer it to the FBI or the CIA. 
Occasionally I volunteer infomation to them, but I do not 
ke«p a file, I do not keep an archive, so I have no real 
record of what — 

Q The documents you did find, can you produce those 
to us now so we can see what they are. 

A Yeah. Let me see. I think I gave you everything 
you want out of here. Let me go immediately to two documents 



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UNCLASSIHED 



24 




that I think are relevant to the only formal contact I've had 
with the Studley corporation, the GMT, as they call it. I 
have here a request to her. Actually, it's to Robert 
Schweitzer who was then her employee. November 24, 1986, 
requesting a fee for research and advice given to General 
Schweitzer, primarily, on how to make contacts for possible 
sales of arms, a particular type of arms to a foreign 
country, friendly foreign country. 

Q Would this be I 

A In fact it wasl 
-and I think I would want to go off the record to explain it 
to you. I know that it has been explained to you by General 
Schweitzer. He told me he'd been asked about it. 

There is some political delicacy about the par- 
ticular weapons involved, but they're not mentioned in here. 
Is there any way you can copy these documents? 

Q Sure. The first is a letter dated November 24, 
1986 from yourself to General Schweitzer, isn't that correct? 

A Yes. 

Q Let me ask you a question about it before we go on 
to mark it. SIFT, Inc. Now that is a wholly-owned corpora- 



tion of yours? 



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I' C Su««i N I 

'i^mfWi D C 
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A Yes. And here is the card for it. You remember, I 
gave you that as the commercial entity. 

Q That is a for-profit corporation, correct? 

A That is a for-profit. It is the only for-profit 
corporation that I have. Let me explain that most academics, 
especially those who are in international research, are 
expected to and allowed to spend about 20 percent of their 
time in consulting or commercially value advice-giving, 
without detriment to their normal academic job. 

I felt that it was important for me, with my CIA 
background and everything--people tend to be very suspicious 
of old CIA people--to compartment that activity so that it was 
clear when I was working for public service research, and 
clear when I was working to give advice. 

So I organized this. My wife is the vice president 
and treasurer. 

Q Are there any stockholders besides yourself? 

A My whole family. My children. 

Q Okay. 

A And we of course have been filing taxes for a 
number of years. 



When was SIFT, Inc. incorporated? 

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A I'm sorry, I can't tell you, but it's been — 

Q But it's been a number of years? 

A It's more than five years; yes. 

Q And in what jurisdiction is it incorporated? 

A It's in Virginia, I believe. 

Q A Virginia corporation? 

A Yes. 

Q With regard to the relationship with GMT for 
payment of expenses and fees, and things of that kind--was 
the relationship between SIFT and GMT? 

A Technically, yes, but of course that was simply the 
way I give my personal advice in a commercial capacity, rather 
than an academic capacity. 

Q Now with regard to the employees of SIFT, are you 
the only employee of SIFT? I'm not talking about officers, 
now, but employees? 

A There are no employees . 

Q No employees . 

A The officers are the entire cadre. 

Q And they are all family? 

A Yes. And when I pay fees to employees, it is 
almost always to my daughters who do research for me. 



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Q I understand. 

A They could be construed as employees, but they're 
not at the office, or, they're doing tasks rather than--on 
assignment rather than being regularly employed. 

Q I understand. In terms of the tax treatment, do 
you give them 1099 forms because they're independent contrac- 
tors, or, do you know? 

A My wife does all that and I don't know. 

MR. KERR: Let's mark the November 24, 1986 letter 
as number four. 

(Whereupon, the above-referred 
to document was marked Cline 
Deposition Exhibit No. 4 
for identification.) 
THE WITNESS: The second letter is only an indica- 
tion that Barbara is correct when she says she isn't making 
much money because she couldn't pay me for a number of weeks. 
MR. KERR: Let me just get the document identified, 
first. The December 19 letter is a letter that you received 
from Mrs. Studley, correct? 

THE WITNESS: That's right. 

MR. KERR: And that will be Exhibit 5. 



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(Whereupon, the above-referred 
to document was marked Cline 
Deposition Exhibit No. 5 
for identification.) 
BY MR. KERR: 
Q With regard to the fees that are discussed in that 
letter, have they ultimately been paid? 

A Yes. It did take a while and I-- 
Q But you have been paid in full? 
A I have been paid in full, to the best of my 
recollection. I did not check the bank receipts but my 
impression is that was closed out. 

Q Now let me show you a letter dated March 9, 1987, 
which is a letter to you from Mrs. Studley, and that is a 
letter that you received from Mrs. Studley, is that correct? 
A That's correct. 

MR. KERR: Let's mark that as Exhibit 6. 

(Whereupon, the above-referred 
to document was marked Cline 
Deposition Exhibit No. 6 
for identification.) 
THE WITNESS: Perhaps — would you like to know? — 



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M7 C Sinn. N E 

*l*npni, DC 



that the occasion for that discussion and that letter was the 
departure of General Schweitzer from her firm. 

MR. KERR: I understand. It's my intention to take 
you, chronologically, through a series of events. When we 
get to this period of time, late February or early March, I'm 
going to take you in some detail through questions that I have 
on that matter. So if we can hold on that, that would be the 
best way. 

THE WITNESS: All right. 

MR. KERR: The next document we have is an undated 
retainer agreement between GMT and yourself. This is a 
proposal that was given to you by Mrs . Studley? 
THE WITNESS: Yes. 
BY MR. KERR: 
Q And it's my understand, from what you said off the 
record, that this agreement has never been executed between 
yourself and GMT? 

A This agreement was never executed. 
Q Is there any written agreement memorializing a 
continuing relationship between you and GMT, or SIFT and GMT? 

A No. I've made it clear to Mrs. Studley that I 
thought pursuing these suggestions was inappropriate at this 



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time when I knew that her company was being investigated, and 
I wanted to find out what the results were before we discussed 
it further. 

MR. KERR: Let me have marked as Exhibit 7 the 
draft retainer agreement. 

(Whereupon, the above-referred 
to document was marked Cline 
Deposition Exhibit No. 7 
for identification.) 
MR. KERR: Exhibit 8 will be a letter dated March 
9, 1987 to you, Dr. Cline, relating to certain helicopters 
that were, I believe being offered for sale to the Central 
Intelligence Agency, is that right? 

THE WITNESS: That's right, and other military 
equipment . 

(Whereupon, the above-referred 
to document was marked Cline 
Deposition Exhibit No. 8 
for identification.) 
BY MR. KERR: 
Q All right. This March 9 document was provided to 



you by Mrs. Studley? t 



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1fl» C Sum N E 



A I believe it was actually handed to me by her son, 
named Marx, Mike Marx, but it was from, on behalf of Mrs. 
Studley . 

Q Would you have received it at or about March 9? 

A I think so. 

Q All right. And the categorically reorganized list 
of quotes of March 4, was that part of the package that you 
received on about March 9th? 

A Yes. 

Q All right. 

A This is given to you just as I received it. 

Q All right. So you received it as--they were 
together at the time you received it? 

A That's right. And there was a lot of scrappy, 
loose documents of early drafts and things, which I, frankly, 
showed to^^^^^^^^^^^and threw away. 

Q You may find yourself revisiting them as we go on 
this morning. 

A I wouldn't be surprised if some of them you have, 
but-- 

MR. KERR: Let me have that document marked as 



Exhibit 8. 



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Mioix XKxmMa CO mc 
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BY MR. KERR: 

Q All right. Dr. Cline, let's go back and talk a 
little bit more about your contacts with the CIAJ 
folks. 
Is that what they call it now? Off the record. 
That's my understanding. 
Okay. That's their function. Okay. 
Now with regard to^^^^^^^^ you ' ve mentioned- -and 
we'll go into more detail--the conversations you had with him 
about GMT. It's my understanding that your meeting with him, 
at least of March 19, or thereabouts, did not have GMT as its 
primary subject matter. Is that-- 

A You know, I don't remember. 

Q You don't recall. I will come to that, but maybe 
you can give me a sense of the kinds of things that you would 
discuss witl^^^^^^Bon the two or three occasions that 
you've met with him. What kinds of topics are you discussing? 

A Well, I can give you examples. As I say, I 
deliberately don't keep files on these matters because I 
think it's up to the Government, if it's interested, to keep 
the file. 

The kinds of thing I may have discussed, and have 




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discussed in the past, are, for example, the views of a 

retired^^^^^^^^^^^^^^^^^^^^^^^^^^Hwho made a 

of coming to me and giving me an appreciation of his views of 

the state of political affairs in thi 

and the probable course of events unde 

and, in his view, a great deal of civil unrest lying 





•lajjK xvooTwa < 
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ahead. 

That is a more typical kind of thing that I would 
feel important for the U.S. Government to know. In other 
words, it's a good source of information that comes to me 
privately. I think it's ridiculous not to pass it on to the 
Government . 

I think I probably discussed this wit^^^^^^^^^H I 
have with some of the contact officers. There was a collec- 
tion of information about arms sales that Mrs. Studley passed 
to me--actually, her son passed to me. 

Q This would be about the Lavis? 

A Yes. 

Q The Lavi brothers? 

A That's right. And it was sourced to some other 
person who wanted this information to be surfaced publicly. 
You know, I don't quite know why they brought it to me in the 



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first place, and I didn't do anything with it except hand it 
to Mr^^^^^^^Has I recall. He was then the case officer, 
the contact officer. And I said, you know, I don't have any 
interest in all this, but there are names mentioned there that 
relates to international arms transactions, and seems to be 
rather critical of the--or even suggests criminal behavior on 
the part of an Iranian, whose name I don't remember anymore. 

So I just thrust this bundle of stuff on^^^^Hl 
believe it was, and said, you know, do something with it if 
you want to; don't bug me anymore because that's all I know 
about it . 

So that's the way I customarily did business with 
the contact officers. There may have been some other 
subjects. I really don't know the agenda on those two 
meetings . 

Q Are there any particular areas of expertise, or 
types of acquaintances, that you've run across, that cause 
you to talk to the CIA? For example, is your area of contact 
primarily Southeast Asia, Latin America? 

A Unfortunately, I am a geopolitician, and I study 
conflict areas all over the world, primarily where Soviet and 
Chinese, or other communist countries, like Cuba, involve 




n;^ 



J 



693 



art35 



35 



UNCLASSIFIED 



1 themselves in countries that are of strategic importance to 

2 ' the United States. So I study almost all of the conflict 

3 I regions . 
4 



5 

6 

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17 (the table for CIA. 



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CO « 

VukiOfiM o c :om 
< .'Oil m tttt 



Oh. Another subject which I have discussed very 
reluctantly with CIA, but I felt they should know about, was 
the proposal from some Latin Americans whose names the CIA 
know, concerning Nicaragua^^^^^^^^Hand communist infiltra- 
tion there, and the possibility of defections from the 
Nicaraguan government. 

This is the kind of information which, if I feel 
the source has any real value at all, that I should put on/ 



Q This reference to Latin America, this relates in 
part to a Soviet helicopter which was also being — 

A Yes. One of the men who approached me, who is a 
Latin American, said that he felt confident he could cause a 
helicopter to be defected from Nicaragua. 






(;LASSIFIED 



694 



art36 



UNCLASSIFIED 



36 



1 Q All right. We will touch on that, but you discussed 

2 ; these matters with General Schweitzer, as I recollect? 

i 

3 ! A Because I thought General Schweitzer knew a lot 

4 I about them, I did discuss them with him, and he discussed 

5 ' them with both CIA and the DIA, to my best knowledge, and I 

6 'I simply reported those discussions to--I think it was tc 

7 ^^^^^^^^Hactually. 





8 

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MLLIK •■rOtrTMO CO >HC 
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VuftiAfteii D c :ooo: 



Q We will touch on that a bit further on. If I 1 

understand you, then, basically, you can find yourself talking; 

with people around the globe, I think, but-- ' 

A I have a stream of foreign visitors who come to my ' 

office. I am invited, so that I could be abroad, almost i 

i 

i 
every day, and I do go to many foreign places and meet 1 

i 
interesting people who tell me their views. Ninety-nine j 

percent of that information I don't think is very important I 

and ignore, but if some tidbit seems to me to suggest a novel 



idea that the American Government should be aware of, 
intelligence agencies should be reporting, or a source of 

more information which might be usefu l^ I usually try to just 

f ac t ^^^^^^^^^^^^^^^^^^^^^H wh i c h 
important for citizens to do. 

the fact that I'm an old CIA guy just means that I 



iiN'CUSSiriED 



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UNCLASSIFIED 



bly 1982. It had 



lOT C Su«r< N E 
VuAMifToa DC :000J 
.-Oil <W.MM 



know how to do it, not thdt I do anything that anyone else 
shouldn't do. 

Q All right. With regard to your relationship with 
the Agency since 1974, have there been occasions when you've 
earned fees, been paid expenses, or otherwise received 
remuneration from the Central Intelligence Agency? You or 
your firm? 

A Only once. 
Q And when was that? 
A I think that was in 1981, 
to do with a single trip tol 

which I made only because I checked it out with Bill Casey, 
who thought it was a good idea for me to talk to someone whom 
otherwise I wodld not have been able to see. 

Q And you were reiinbursed for expenses and paid a 
fee, or simply reimbursed for expenses? 

A No fee. Just reimbursed for my travel. And that's 
the only funding I have received from CIA since 1974. 

Q And authorization for that trip came direct from 
Casey, is that right? 

A It was his personal approval. I then dealt with 
another officer, of course, who made the arrangements. 




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UNCUSSIRED 



Q I might touch on this in a number of other ways 
along the line, but if you could describe your relationship 
with Casey for me, in general terms, I'd appreciate that. 

A Okay. 

Q Was it a relationship that went beyond occasional 
business contacts to a social context, or what? 

A The relationship with Casey was based on three 
levels of relations. Mainly, it had to do with our both 
being old OSS veterans, and we both belonged to a group 
called the "Veterans of OSS" and we met, socially, nearly 
always in that context, but sometimes a couple times a year 
in that context. 

The second level had to do with our working 
together in the State Department when I was the director of 
INR, and part of that time he was the undersecretary for 
Economic Affairs, I believe. 

So we had a rather close professional exchange of 
viaws during that period, and then, I was on the issues 
advisory staff for the Reagan-Bush campaign in 1980, having 
been originally on Bush's campaign staff, and I joined with 
Reagan and Bush in June 1980, and as you know, he became the 
campaign director so I saw him a few tiroes. 



MT C iom. N I 

Wilt nil I. DC 
(Mil 1 






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ONCIASSIFIEO 



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Then I was also on the transition team for CIA, and 
talked to Casey a few times in that interim period in December 
1980, before the new terra began, and of course knowing that 
he was going to become head of CIA, we, in a desultory way, 
discussed ideas in my book, and his general concepts of what 
to do with CIA. 

And in effect it was very simple, though. He said 
he agreed with my book, and that he was going to try to 
restore CIA to its pristine vigor of the period when I was 
active in the Agency. 

Q Your relationship with Casey, after he became DCI, 
can you describe that, the degree to which you would have met 
with him, worked with him, talked with him, your access to 
him. 

A Yes. Well, quite limited by my design. I made 
suggestions to him on how to do things with the Agency, or 
for the Agency on a few occasions. I raised wi th him this 
possibility of its being useful for me to 




^0- C Sum N £ 
Tu/uAfio<i D C 



I suggested to him ways of improving the estimates 
process at CIA, but I did not make any effort to monitor his 



UNCLASSIFIED 



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art40 



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W C Sutrt N E 
Vuhiflfion C 



general performance, and I deliberately stayed away from 
classified information. I gave them information. I never 
took any from the Agency. I could have had briefings. As I 
say, I was cleared for briefings, but I never received any 
briefing of classified intelligence, and I deliberately did 
not discuss those matters with Bill Casey. 

Q With regard to friends and acquaintances of Casey's 
in the OSS days, do you know, or did you know his acquain- 
tance, John Shaheen? 

A Yes. I knew John, not well, but in a general way, 
social way. 

Q Did you know him in any context outside of the 
gatherings of OSS veterans? 

A Yes. On one occasion, John Shaheen contracted with 
my consulting company about the possibility of oil exploration 
of fshore^^^^^^^^H Nothing came of it, and it was a very 
brief relationship. That's the only thing I can think of. 
Q Can you place that, roughly, in time? 
A Well, roughly, say, in 1984, but I could be a 
couple years off. 

Q Were you aware that Shaheen was in contact with 
Casey, from time to time, offering information that he thought 



mmm 



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m.mm 



would be of value to Casey? 

A I was not aware of that. It doesn't surprise me. 

Q Do you have any knowledge of Shaheen's relationship 
to one Cyrus Hashimi? 

A Never heard of that name. 

Q My you ever become acquainted with Shaheen's 
employee, fellow businessman, Roy Furmark? 

A No. Was Furmark associated with Shaheen? I didn't 
know that. I've heard his name since, of course. 

Q And I take it you were not familiar with the 
relationship Shaheen had through Furmark to either Khashoggi, 
Hashimi, or Ghorbanifar? 

A No; no. Those names have all become known to me 
since. 

Q And Casey never had occasion to discuss with you 
information that was being relayed to him by Shaheen about 
Khashoggi, Ghorbanifar, et al? 

A That's not the kind of thing I talked with Casey 
about. 

Q That's what I'm trying to get a sense of. 

A I would hav« avoided that, and I don't think he 
would have told me about it. We were interested in the 



M. 




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■aiai nm owT w a co.. nc 

)07 C Jam. N E 
WMtfUil. C 10002 
1 2011 M«-MM 




42 



Structure of intelligence activities, and the efficiency of 
intelligence activities. We talked about those in general 
terms whenever we met, but not about operations. 

Q I have been told that from to time you do discuss 
things like terrorism. 

A Well, yes, in recent years I have written two books 
on terrorism, one of them under contract to the U.S. Army, and 
naturally, I gave that information to Casey as I was develop- 
ing it. I would normally, to many of my friends, pass along 
my results of my research. 

Q My assumption would be that you became acquainted 
with some of the personalities and players in the Middle 
Eastern terrorism scene. Is that correct or incorrect? 

A I'm not sure that's true. I don't know what kind 
of things you're talking about, but I did not become involved 
in the CIA operational dealings with terrorism. 

Q In that context, however, did you become familiar 
with Mr. Ghorbanifar's activities? 

A No, because I had never heard of him. 

Q Do you know Michael Ledeen? 

A Yes, I know Ledeen because he was at CSIS. 



Yes, sir. 



BiliiSSIREB 



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ilCUSSIFlEO 



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A But I did not, until later, learn anything about 
his connections with this Iranian caper that you are all 
investigating. 

Q All right. You did not have occasion to discuss 
with Ledeen during his tenure as a consultant to the NSC, the 
kinds of things that he was involved with at the NSC? 

A I'm absolutely amazed that he was involved in those 
things. 

Q All right. Have you ever had occasion to discuss 
with Ledeen his contacts with, his relationship to Italian 
intelligence services? 

A Yes. I have discussed that in an academic way with 
him because I have had conferences and meetings with Italian 
politicians, and who were concerned about controlling ter- 
rorism, and that's where I would consider Ledeen an expert, 
but, really, is based on his earlier years in Italy as a 
journalist, is my knowledge of Ledeen's. 

Q You are familiar with Ledeen's involvement in 
articles that were published relating to the "Billygate' 
scandal, is that correct? 



Yes, vaguely, but I'm not very well informed about 



them. 



iilUSSIFIED 



702 



art44 



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mxiM itiro<rTMO co . mc. 

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Vuiuitfuit C :oao] 

:01] >4«.666« 



b'NCUSSIFIED 



44 



Q Have you ever discussed with Mr. Ledeen his 
contacts with, connections to Israeli intelligence services? 

A No. No, I never have. 

Q And Mr. Ledeen's longstanding relationship with 
Ghorbanifar is something you were or were not familiar with? 

A Absolutely unfamiliar. As I say, I never heard of 
Ghorbanifar until recently. It shows lacunae in my contacts, 
but that's very natural because I don't pursue them systemati- 
cally. They come to me. 




was what? Do you have a social as well as business relation- 
ship with him? 

A In '86? 

iCLASSil 




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mxw mpornma co mc. 

NT C Sum M E 
VukiafVMt C .0001 



Q Yes. Last year. 

A A very limited social, I suppose. I might have had 
some participation in a conference we both attended, but I 
don't remember anything in particular. You tend to meet 
people interested in the same field in a variety of private, 
academic, or "think tank" exercises, but I don't remember any 
special connection with him that year. 

Q To what extent, last year, were you familiar with 
his relationship with Barbara Studley and GMT? 

A I was told 




"hat was my next question. Have you ever discussed 
is relationship to Studley-- 
A No. It seemed to me a conf idential--the information 
passed to me I considered to be confidential/commercial, and 
I'm very reluctant to deal with commercial information because 
I like to keep it compartmented in my academic and research- 



I 



UNCLASSIFIED 



704 



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oriented activity. So I just never brought it up to 

Q Did you ever discuss with Studley the relationship 
of her company and herself tc 

A Yes. At least she discussed it with me. I 
believe she did. 

Q What were you told in that regard by her? 
A I wa s told 

for the purchase of the military weapons she was 
asking me to be helpful on, and that she expected to give a 
very large commission to^^^^^^Hif that transaction occurred. 
That's all — 

Q What was the nature of the connection? 
A A connection with a person associated with the firm 
that would make it — that would make the sales of the weapons 
involved possible. 
Q All right. 

But that's all I — 

Do you know the identity of the firm? 

Yes. I do. 

what firm was that? 

The firm was--well, the firm, in connection with 

I can't remember the name of the person, now. 



W C Suttt N E 
VlikuiflM. DC 

:o:i M6-MM 




ONOUSSinED 



705 



.irt47 



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OmSSIFIED 



The firm was a corporation called Whitehead, and it was owned 
by a much larger Italian corporation whose president, or 



3 ichairman of the board was 



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■LLJJI r<VO«nMO CO MC 
!«• C Sue»i S £ I 

VufuafTor C :000J 




according to 



General Schweitzer and Mrs. Studley. I'm not really familiar 1 
with those business relationships. 

Q All right. You would have had these conversations i 

with Studley when, in time? | 

I 
A I would guess December 1986. i 

I 
Q All right. With regard to your relationship with I 

Studley, when did you first meet, or become acquainted with 

I 
Mrs. Studley? : 

A It probably was in November 1986. \ 

Q And what were the circumstances that caused you to 
meet or become in touch with Mrs . Studley? 

A Well, General Schweitzer, who approached me about 
helping the Studley firm, wanted to introduce me to Mrs. 
Studley. In addition to urging me to helpful to General 
Schweitzer, she asked me to appear on her radio show that she 
was doing, and which I did. 

Q Now which radio show is that? 

A As you know, she has a--had--maybe she's given it 
up--at that time, a small program, a program of interviewing 



ivlASSIFIED 



CO cna r\ oo o < 



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VtihMffna. DC 
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yNcussra 



people on a station, single radio station here In the 
Washington area, and I don't remember the name of the station. 

Q All right. But it was a O.C. station as opposed to 
a Florida station? 

A Yes, yes. It was an attempt to do, in Washington, 
what she had evidently done in Florida. 

Q And you did in fact appear on her show? 

A And I did in fact have one session with her, 
answering questions about this and that. 

Q Prior to your introduction to Studley by General 
Schweitzer, you had not met, become acquainted with, done any 
business with Mrs. Studley? 

A No. Never heard of Mrs. Studley until he introduced 
me, and it was a very fleeting contact until after the 
disappearance of General Schweitzer because it was Schweitzer 
whom I knew something of, and was willing to cooperate with. 

Q All right. Just a few other people, with regard 
to retired Lt. Gen. Daniel 0. Graham, do you know General 
Graham? 

A Yes, know him quite well because he was chief of 
DIA when I was still in Government. 

Q All right. And could you characterize your 



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IJiiSSIFIED 



W C SufT< N E 



relationship with Graham in the last several years. 

A Well, in recent years it's been purely personal, 
social, and, in a sense, political, in that we're interested 
in some of the same political ideas, military, security 
affairs. As you know he also is active in a number of 
nonprofit foundations like High Frontier, and I've tried to 
keep in touch with him and be supportive of some of those 
programs, which I believe in. 

Q Have you assisted in raising funds for High 
Frontier? 

A No. 

Q Have you had contracts with High Frontier? 
Anything of that kind? 

A No, no. I've given money to it, modest amounts, 
which is all I have. 

Q All right. What is your knowledge of the relation- 
ship between General Graham, and Mrs. Studley and GMT? 

A I didn't know there was any. At least I don't 
remember anybody ever mentioned it. Perhaps they did. Mrs. 
Studley is inclined to speak about her military friends. She 
has a number of generals who are her personal friends, I 
gather, but that's all, just casual, and perhaps I heard that 



inji^ 



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DNCLASSIHED 



50 



M7 C SoCTT N E 
VuhtAfton. D C 
(2011 UtiU* 



Danny was one of them but I don't remember. 

Q Have you ever had occasion to discuss with General 
Graham his relationship to Studley — 

A Never . 

Q --or GMT? 

A No, no. I don't have in my mind a close association 
between them, so it wouldn't have occurred to me. 

Q All right. You've indicated that you do know 
General Schweitzer. Schweitzer is a friend, social acquain- 
tance, as well as a business acquaintance? 

A Yes, but only because of our becoming acquainted 
when he was on the NSC staff back in 1981. 

Q And how did you become associated with Schweitzer 
when he was on the NSC staff? 

A Through having been introduced to him by my son-in- 
law who was also on the NSC staff at that time. 

Q And that would be? 

A That would be Dr. Roger Fontaine, who was — he's a 
Latin Americanist, and was on the NSC staff studying Latin 
American, which General Schweitzer was keenly interested in, 
and I have a very slight--I don't even know whether I ever 
talked to Schweitzer when he was still in office, but I knew 



OIUSSIFIEO 



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>0'' C 5»»n N E 
Wutuaftoo D C 



about him from that time, and had a rather high regard for 
his personal and political integrity. 

Q One of General Schweitzer's subordinates at that 
time was a Marine lieutenant colonel named Oliver North. Did 
you have occasion to become acquainted with Colonel North? 

A No. I regret to say, in some ways, that I didn't 
know 01 lie North. I may have heard his name, but I don't 
remember him. 

Q With regard to Colonel North's relationship with 
Mrs. Studley and GMT, do you have any knowledge of that? 

A I have no indication that there was ever any 
connection. 

Q And you never had occasion to discuss that relation- 
ship with General Schweitzer? 

A No. 

Q Do you know a retired Army general named John K. 
Singlaub? 

A Yes. I know John, much the same way I know Bob 
Schweitzer. They're rather heroic figures in the Army and-- 

Q Over what period have you known Jack Singlaub? 

A I've known Jack a little longer, though not terribly 
long. I would say only since--well, since he was retired 



UNCLASSIFIED 



710 



art52 



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Waitua(to<l. O C 20002 



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UNCLASSIFIED 



from his job by — 

Q It would be roughly '78- '79? 

A '78- '79. And I'm not particularly close to 
Singlaub. I'm not particularly close to Schweitzer, but I've 
followed his career with some interest since he stepped down, 
under pressure from President Carter. 

Q Have you ever had any relationship to, done any 
work for the organization with which he is associated, the 
World Anti-Communist League? 

A The only relationship I had was to appear at one of 
their meetings and give a talk for a modest fee, I believe, 
though perhaps I did it for free. I don't know. 

Q When would that have been? 

A Well, that would have been several years ago, maybe 
1983, perhaps. I don't remember, exactly. This was when he 
had just started taking it over and was trying to build it up 
a little. I agreed to give a talk because I thought it was 
probably a worthwhile organization. 

Q What knowledge do you have of Singlaub' s relation- 
ship to Mrs . Studley and GMT? 

A Well, I understand that in the period before I'd 
ever heard of either Studley or GMT, that he had been an 



UNCLASSIFIED 



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CNwssife 



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)07 C Sotn N E 

(nil ! 



officer in her firm, or a consultant to it, or, in aome way 
associated with her, and that they had done some business 
together. 

Q And your knowledge of that is coming from what 
source? 

A Primarily from very limited knowledge passed on by 
Schweitzer. I never discussed it with General Singlaub 
himself. 

Q Did you ever discuss it with Krs . Studley? 

A No. My principal information about their relation- 
ship came from a newspaper story which Studley and Singlaub 
apparently gave an interview for last year some time, or 
maybe this year. I don't know. It wa this year, I guess. 

Q All right. 

A But I'm sure you know the story I mean, saying that 
they had worked together on an arms sale. 

Q This would be an arms sale to the contras? 

A To the contras, yes. That surprised me because I 
didn't know about that. 

Q Do you know a gentleman by the name of Werner 
Glatt? G-1-a-t-t. 

A I do not know him. I do not know anything about 



UNCLASSIFIED 



712 



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I. Nl 
. DC 



54 



ONCLASSiriED 



him except a very limited statement about him as being the 
source of some of the arms purchases which Mrs. Studley had 
made for the contras. 

Q And you developed that information from whom? Who 
told you that Glatt was the source of Studley 's arms? 

A Hrs . Studley told ne that herself. 

Q And when would she have told you that? 

A I think when she was — probably it was in the 
iBoetings in which she was trying to get me to continue to 
help her sell aras, generally. 

Q This would have been February-March 1987? 

A Yes. 

Q All right. You have never net Glatt? 

A Ho. I don't even know Glatt exists. 

Q Never had occasion to visit his farm, or farms in 
Virginia? 

A Ito. Has he got on* in Virginia? 

Q He calls It the Black Bagle. 

A For haaren's sake. 

Q Do you knov tuiythlng about his career with the 
Luftwaffe during World Nar II? 

A Mo. I'B afraid I'a — the only information I have on 



>Mm\m 



713 



artSS 



tC 



UNCLASSIFIED 



55 



Glatt IS what Mrs. Studley told me, was that he was able to 



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20 
21 




buy weapons, I believe, ^^^^^^^^^^ and that they were new, 
efficient weapons, and she could make them available wherever 
they were needed. 

Q Do you know of Mr. Glatt's relationship with 
General Graham? 




22 



I mt^oirrmQ co mc. 



*M1> «JA AAA A 



(Whereupon, the above-referred 
to document was marked Cline 
Deposition Exhibit No. 9 
for identification.). 



BY MR. KERR: 



yNCUSSIRED 



714 



UNCUSSIFIEO 






UNClASSiriED 



715 



arts? 



UNCLASSIFIED 



57 



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TutuAftoo c :oao] 

roil 'M-MM 




Q With regard to your relationship with the Central 
Intelligence Agency and the Center, were you advising the CIA 
of personnel at the Center that might have information that 
would be of interest to them? 

A I don't recall doing so, but of course if someone at i 
the Center had said to me, "Hey, we have an interest in 
foreign contact, foreign source of information, I want to tell 
you about it, and I wish it--it might be important for U.S. 



UNCLASSIFIED 



716 



art58 



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yHCUSSlFlED 



58 




Government people to know", I wo uld have suggested that they 
receive a visitor from this 

I wouldn't have hesitated to do that. I don't 
remember any discussions of it at that early period. 

Q Let me shift gears for a moment. Looking to the 
period of Casey's service as DCI, were there any particular 
people in the Operations Directorate with whom you had 
contact? 

A Yes. I met several in that period. The principal 
one was a younc 




Q Yes. I'm not going to be able to help you with 
that. 

A Yes. I of course knev 
but I don't remember having any very serious conversations 




ilNCUSSIFIED 



717 



.art59 



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'O' C Urm N E 
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llNCUlSSIflEO 



59 



with him. I think something may have come up that I talked 
to him about. I know Clair St. George. Clair George. 

Q Clair George? What kind of contacts would you have 

with George? 

A The only one I can think of was that at one point, 
I was approached--and this is a weird story which I reported 
to the Agency, and I'm a little vague about now. I was 
approached by a person who said he was representing the 

of ^^^^^^^^^^^1 and was 
me that he didn't have the right contacts with the Agency to 
be having the political benefits for U.S. policy that he 
should, and I spoke to Casey about that, and I think I spoke 
to George about it. 

But it turned out that the approach was kind of a 
that I indeed meet^^^^^^^^Honce--he 
came to see me--the man who was trying to build up the 
relationship turned out to be something of a fraud himself, 
and both Bill Casey and I realized that this was not a useful 

relationship. 

Q Do you recall the name of the person who approached 

you? 

A Yes. His name was Eliscu, E-l-i-s-c-u, who has 



aa^sslfe 



718 



artSO 



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>l-ib 



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acKM wtp o nrw ii co . cmc. 
W C imrt S E 
Wuhmfnai O C lOOO] 

•-" •4A.AM6 




been in litigation since, and has a lot of problems. It 
turned out he's really a liar. 

Q And you had been approached by Eiiscu approximately 
when? 

A Oh, dear, I can't tell you. Probably--! would say 
it was about--I'd guess '84. 

Q Okay. 

A And he wanted me to insure that Casey knew about 
the possibility of closer cooperation witf 
which was a very sensible idea, and indeed I did talk to 
Casey about it, but nothing ever came of it. 

Q All right. Do you recall meeting with Casey in 
early 1985, with Mr. Eiiscu? 

A Yes. I do. 

Q And who else attended that meeting, if you recall? 

A I think that was the meeting attended by the Latin 
American that I spoke about earlier. Was it Pearson? You 
know, I'm vague about those things. Personally, I've been 
out of Government for so long, I don't have to try to 
remember them, so I don't. Eiiscu went to the meeting-- 

Q Was it Guy Pearson? 

A Guy Pearson. That's the one. He's the man whom I 



UNCLASSIFIED 



719 



arte I 



OilSUSSIFIED 



61 



1 put in touch with Schweitzer, and who was interested m 

2 ' Nicaraguan military policies, personnel. 

3 Q Would a Hr. Alonzo have also participated in that 

4 i|n»eeting? 



A My recollection is that Alonzo was--I made an 
appointment for Alonzo to have that meeting, but that he, he 



7 [j didn't make it somehow. Maybe he got to one, I don't know. 



8 
9 

10 
11 



There was a period when they very much wanted to explain 
their views--it was Pearson who really wanted to explain 
these views to Casey, and actually, I finally came to the 
conclusion that Pearson was a good source of information, but 



12 that Alonzo, who was his lawyer, in effect, was not. And 



13 
14 

15 



that Mr. Eliscu was phony as a $3 bill. So the whole thing 
sort of collapsed. 

But t.hat was a subject of my conversation with the 




Ion a number of occasions, that 

17 I kept trying to tell them what Pearson was saying, which 

18 seaaed to me to have some merits, and I believe that is the 

! 

19 ': subject that I called Clair George on once, to say, hey, I 

20 don't know what you guys are doing with these latinos but I 

21 just want to give you my professional judgment, personal 

22 - judgment, that this guy Pearson knows a lot of interesting 

" r 



•C C 5ti»n s I 



mmm 



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art62 



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liiSSIFIED 



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■ujH fufofnwta CO . wc 
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people and ought to be a good source of information. 

My impression is that because they were so turned 
off by Alonzo, they didn't do much with him, didn't do 
anything with him as far as I know. 

Q Casey's records reflect that you met with Casey and 
Eliscu on February 14, 1985. 

A That probably is right. 

Q Can you give me your best recollection of what was 
discussed at that meeting. 

A My best recollection of that one was that I was 
suggesting that we discuss 

Now Eliscu was a contact with both of these. 
Eliscu is also the person who brought Pearson and Alonzo to 
see me, and so they are mixed up in my mind. Thus I don't 
know the dates, but-- 

Q Do you recall ever entering into any business 
ventures with Eliscu? 

A No. I was told by Eliscu that he anticipated a 
business relationship on behalf °^^^^^^^^^^^^^M "^^i-ch 
would involve my tutoring him in political, international 
politics, in a way that would be useful to him, but that that 
money--and I said, well, you know, if that money doesn't come 





OiliSSIFIED 



721 



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UNCLASSIHED 



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M- C Sam V E 

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from CIA, but from somebody else, I would consider it. 

And he talked about it for a long time, as if it 
were, you know, sort of taken for granted that it would take 
place, but it turned out, again, that he was involved with 
some sort of fraudulent financial shenanigans in New York 
which I never really understood. 

All I did was go to New York a couple of times, and 
did^^^^^^^^^^^^^^^^^^^^in my for very 

normal discussion of Iranian affairs. 

Q The meeting that ypu had with^^^^^^^^^^^^l would 
have approximately when? 

A Well, it probably was early '85. 

Q Was up in the January, February, March period of 

'85? 

A Would have probably been after the discussion with 
Casey, if I'm correct, that that was the date of that 
conversation. 

Q Did you or your firm receive any remuneration? 

A No. 

Q You did not? 

A Never received anything. As a matter of fact I 
never got paid for my travel expenses. I think once I did, 



yiUSSIFIED 



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UNCUSSIHED 



64 



You m ean a lot of crooks if you're in the consulting 



but mostly, I was not. 

Q Okay. 

A 

business in international affairs. It's amazing how prudent 
you have to be . It's even worse than being at CIA. I 

Q Do you knew a gentleman by the name 




Q Do you recall meeting with Casey 
of 1984? 

A Well, I think I did meet with the two of them about 
this^^^^^^^^H^onnection. I don't remember when it was, as 
I told you. 

Q All right. 

A I thought it was earlier, but it may have been '84. 

Q Do you recall discussions wit^^^^^Hand Casey in 
March of 1984 which related to counterinsurgency in Central 
America? 

A I don't recall that, and I wouldn't have thought 



INCLASSIFIEO 



723 



4ct65 



."ILASSIflED 



65 




1 ^^^^^b'ould be involved in that. I think o 

2 las an Asian expert. 




ntirely 



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Q Do you recall any discussions during that period o£ 
tinie--March of 1984--with Casey, or anyone else, relating to 
contributions for the contras^^^^^^^^Hor any other foreign 
country? 

A No, no. That subject I never discussed. If anyone 
raised it with me, it was so obliquely that I didn't under- 
stand it because I never undertook to do anything in this 
field. 

All right. Have you ever had occasion to talk with 

at the Operations Directorate? 
No. I don't know who that is. 
Okay. 

Unfortunately, most of the people who worked with 
me over the years have retired by now, so there's a whole new 
generation, that often, they know me but I don't know them 
because I don't even register on their names. 

Q You have no recall of discussing with^^^^^H Mrs . 
Studley, Mrs. Studley's interest in becofning an arms vendor 
to the Central Intelligence Agency? 

A No. I didn't know Mrs. Studley at that time. I 

ONCLASSIFIED 




724 



•srt66 



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iJNCUSSiriED 



66 



never heard of Studley until Schweitzer introduced the 
subject, which I think was late in '86. Maybe I'd have been 
smarter if I'd been out trying to make money on some of these 
deals, as I gather some people have, but I wasn't on the ball 
on that. 

Q Okay. Let me show you some documents, ask you 
about some events, and see if you know anything about them. 

A Okay. 

Q Were you aware of a meeting that took place on 
December 20, 1985, between Mrs. Studley, General Graham, 
Director Casey, and Casey's special assistant. 




fKLtf nromma CO . wc. 
'O' C Sii«»i N I 
Tulunftoo. C :0002 



A 

Q One of the documents that we've been told was 
presented to Director Casey at that December 20, 1985 meeting, 
is a memorandum from Mrs. Studley to Colonel North, which 
describes, among other things, Mrs. Studley 's role, and that 
of General Singlaub in purchasing approximately S5 million 
worth of weapons for the benefit of the contras . 

Let me show you her memorandum which is dated 
October 30, 1985, and it's been previously marked in General 
Graham's deposition as Grahcun Exhibit 1. I'd like you to 



aiussinED 



I 



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art67 



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iMxiK ii^ um w u CO . nc 

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Wiiluifiaa. O C 20001 



UNCLASSIFIED 



67 



scan it, tell me if you've ever seen the document, or if 
you're familiar with any of the matters that are referred to 
in the document? 

[Witness reviews document.) 

THE WITNESS: I don't believe I have seen any of 
these papers. I don't know anything about--! have a little 
trouble deciphering what they're talking about, but I'm not 
aware of the transactions that they seem to be describing. 
BY MR. KERR: 

Q The arms broker referred to as "W" in that document 
is Werner Glatt. 

A That's Werner, huh? 

Q Any knowledge you have about these matters? 

A No. The only thing that comes to my mind as a 
result of glancing at these papers is the information that 
Singlaub has been giving in public recently. Some of it kind 
of — I have the impression that Singlaub and Mrs. Studley did 
arrange a shipment by Werner to the contras in 1985. That all 
comes from the information that's emerged at the inquiry 
which Congress has just been holding. 

Q Okay. Another document which we have been told was 
provided to Director Casey at the December 20, 1985 meeting 



m 



u 



[^CLASSIFIED 



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KNCUXSm 



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wu.ll) avooTsra co mc 
V)7 C Sum N I 
Tukiafion O C .'0001 



is a memorandum which relates to a three-way transaction | 
designed to put armaments in the hands of various insurgencies ' 
around the world--in 

It was a program that was intended to put such armaments into 
the hands of these revolutionaries without the consent or 
knowledge of the State Department, or the Congress of the 
United States. 

And the document in question has previously been 
marked as Schweitzer Exhibit No. 11. I would like you to 
look at this document. This particular version of the 
document came into the hands of the two Committees through 
the FBI's review of the files and papers of Colonel North, 
that is, those which were not shredded by Colonel North and 
his secretary* Fawn Hall. 

I would like you to look at this document, and tell j 
me if you have ever seen it before. 

A You mean this has not been in Fawn's bra? 

Q As far as I know it did not-- 

A You are destroying the interest I have-- 

Q --did not ever repose there. 

A I've never seen this, and I don't really know 
anything about the subjects, the subject involved, though, as 



UNCLASSm 



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I say, subsequent knowledge suggests to me there was an 

[Connection at some point, but I have no idea 




%OTC ! 



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OC nm 



how concrete it was, or what really happened. 

Q But you do not recall ever having seen this 
document before? 

A No. I have not seen it. I am very positive I have 
not seen this document nor that one. 

Q Okay. In August of 1985, a letter was sent from 
General Singlaub, acting on behalf of GMT, to Director Casey, 
which related to a list of amaments, ostensibly prepared with 
the assistance of Colonel North, that were being offered for 
sale to the Agency by GMT, and GMT through General Singlaub I 
was proposing to arrange financing for the Central Intel- 
ligence Agency for the purchase of these armanents. 

Do you have any knowledge of auch a latter? 

A No, but it's not implausible because this clearly 
is an early phase of the discussions which later, Mrs. 
Studley was talking to me about, selling anas to CIA. I 
assume this is for their earlier attempts but I was not 
consulted about them. And as I say, I didn't know Mrs. 
Studley, and I didn't know Schweitzer very well in 1985. 

Q The courier of the letter, who delivered it to 



Vi 



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728 



ar;:70 



UNCLASSIFIED 



70 



1 iCasey, apparently was 

i 

2 'discussions with 
I 

3 i this manner? 




Now did you ever have any 
bout his role in assisting in 



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A I never did, either then, or later, though I told 
you that Studley indicated that^^^^^^B was a contact. 

Q All right. Let me show you several versions of the 
letter that have been provided to us by various sources. One 
version of the letter was found in the safe of Colonel North 
by the Federal Bureau of Investigation. 

This collection of documents has previously been 
marked as General Graham's Exhibit No. 2. I would like you to 
look at Graham Exhibit 2 and tell me if you are familiar with 
any of the documents that are incorporated in that exhibit. 

[Witness reviews documents.] 

THE WITNESS: Are these duplicates? 

MR. KERR: Yes. They are duplicates. There are 
several versions. 

THE WITNESS: Better printing of the same thing, 
yes. 

MR. KERR: And they come from various sources. 

THE WITNESS: Well, as I say, I have seen — I have 
never seen any of these documents. No. It's before I would 



MLLiK ntponraia co 'mc. 
"Of C Stnrt N E 
Tuhuiftod D C :000] 



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UNCLASSIFIED 



71 



have had any contact with this sort of thing. I have seen 
drafts of lists like this, later, in December 1986, and early 
in 1987, with respect to trying to sell arms to CIA, but I 
didn't retain any of those documents. They were mostly waved 
at me by Schweitzer, explaining what he was trying to do at 
that time. I presume that's a follow-up on these approaches. 
BY MR. KERR: 
Q This particular document, at least the version 
stamped 'confidential", which appears to have been generated 
by Mrs. Studley, does make reference on its cover page tc 




VMhtffua. O C :oaoi 



A 

Q Do you have any knowledge of the role tf 
played in this matter? 

A No. I do not. I do not. I can tell you that Mrs, 
Studley puts "confidential" on some of her correspondence, 
though, and I inquired once, what does that mean. She said, 
'Well, it's GMT confidential, we classify our own papers", 
which has nothing to do with law, as far as I can tell. 

I don't think it does. But as to this incident, 
you have no familiarity with the-- 

A No. That is all before I became involved in it. 



OSLASSIFIEB 



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UNCLASSIFIED 



Anyway, anything I would have heard about it would have been 
hearsay much later, and I do not recall any such hearsay. 

Q All right. This" material did get into the hands of 
the Central Intelligence Agency. Let me show you what has 
been marked in another deposition as^^^^B Exhibit No. 1, a 
version of the price list, in handwritten form. It is the 
same nine items, spread, so that they now become fourteen. 
Are you familiar with^^^^Hsxhibit No. 1? 

A No. What is its date? I don't see it. 

Q It is not dated. 

A Not dated. 

Q However, it is the same price list that was dated 
July 28th, 1986 by GMT. 

A Yes. 

Q You're not familiar with that document? 

A I'm not familiar with this document. 

Q Are you familiar with the handwriting? 

A No. I'm not. No, I can't--I would have to compare 
it with something to see if I thought it was similar, but I 
don't remember. I'm not able to identify the handwriting. 

Q At the same time that this document was prepared, 
appears to have been prepared, and, indeed, at the same time 



■ttxiD atrotrmM co mc 

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iCLASSIFIED 



ui — u ii m ieo, II 

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■*«■«■ c noei 



that the price list was submitted to the Central Intelligence 
Agency, among others, Mrs. Studley was involved at the 
instance of Mr. Rob Owen in pursuing information on a vessel 
known as the Pia Vesta. 

Do you have any knowledge of the role that Mrs. 
Studley played in obtaining information on the Pia Vesta? 

A No. That's news to me. 

Q Okay. I'd like to show you a collection of 
documents that have been previously marked as Exhibit 3 to 
General Graham's deposition, which relate to the Pia Vesta, 
and to Ron Martin, Dan Cummings, and David Duncan, along with 
a rather mysterious gentleman by the name of Patrice. 

A Patrice? 

Q Patrice. Do you have any knowledge of the role 
that Duncan-- 

A Those names ring no bell with me. 

Q — Patrice, at all had? 

A No. 

Q No. Okay. Let me show you what's been previously 
marked as Graham Exhibit 3. I ask you to look at those 
documents, scan them, and tell me if you've seen any of them 



before. 



ilUSSIFlEO 



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[Witness reviews documents.] 

THE WITNESS: 




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THE WITNESS: Max Gomez was placed in Salvador by 
Sanchez and Gregg. These guys talk too much. They all talk 
about things they don't know about, you know. I tell you, 
being in the clandestine business so many years, you learn to 
be very skeptical of what people say, and I hope you're 
discovering that. 

MR. KERR: I'm discovering that people say a number 
of "wild and wooly" things. 

THE WITNESS: They sure do. They speak from the 
ego rather than the interests. But no, I have not seen these 
documents, unless there's something back there that I haven't 
come to yet. "Neither honest nor prudent". Some good sole 
was trying to protect Barbara there. Is that Schweitzer? " 

MR. KERR: That's General Schweitzer. 

THE WITNESS: It sounds like Schweitzer. I don't 
know his handwriting. Schweitzer is a real rare character. 
That's why I tried to help him a little, because I thought he 
was into something that was generally useful, and he's one of 



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a kind. He's a very moral guy, a very religious person, as 
you probably know, if you've talked to him. 

MR. KERR: Yes, sir. These documents are not 
familiar to you? 

THE WITNESS: No. No, no. 
BY MR. KERR: 

Q And the transaction that they relate to you are not 
familiar with? 

A I don't know anything about, no. 

Q All right. 

A I mean, I can't tell from those documents that I 
know anything about such a transaction. It's a little hard to 
tell what the hell they're talking about, but — 

Q With regard to the personalities, Dan Cummings, do 
you know Mr. Cummings? 

A No. The only names I knew in there are the vice 
president and Gregg, and I know, vaguely, Nestor Sanchez. 

And Patrice Genty de la Sagne is not something that 
you're familiar with? 

A That sounds like a romantic novel name to me. 

Q Likewise, Mr. Cummings you are not familiar with? 

A No, no. Sorry. 



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W7 C Sam. N E 
WMluatiMi. D C 20001 



Q All right. And the adventures of Hrs . Studley in 
the pursuit of the Pia Vesta is not something she shared with 
you? 

A She never told me about that. 

Q Do you know Rob Owen? 

A No. I don't. I've heard about him, recently, but 
I didn't know him. 

Q All right. And Rob Owen's connection to the Pia 
Vesta is also something you don't know about? 

A No. I don't know about that. 

Q Now General Schweitzer was interviewed by General 
Singlaub for the purpose of entering the employ of Mrs. 
Studley and GMT in August of 1986. Did you have any role in 
that process? 

A No. 

Q All right. 

A It was after he accepted employment that he came to 
me. 

Q According to General Schweitzer, he was hired in 
that period of time, and one of his first assignments was to 
go with General Singlaub and visit with Colonel North on or 
about September 2nd, 1986, in Colonel North's offices in the 



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OlLASSIflEO 



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I. NI 

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Executiva Office Building. 

Do you have any knowledge of what transpired at 
that meeting? 

A I didn't know about it, no. This is all just prior 
to my coming into the act. 

Q Immediately thereafter, on September 3rd, 1986, 
General Schweitzer got in an airplane and joined with General 
Singlaub, and others, on a trip that was made by various GMT 
folks to Europe. Do you have any knowledge of that trip? 

A NO. 

Q All right. According to the records of the Central 
Intelligence Agency, you made a telephone call to Director 
Casey on September 29, 1986. Do you have any recollection of 
what transpired in your telephone conversation with Director 
Casey on September 29, 19867 

A I'm sorry, I don't recall. I probably could, if 
you could give me another hint about it, but I don't remember. 
It Bay well have been something that wo were concerned about 
at the tine. The Veterans of OSS was having a meeting on 
World War II, reminiscences of "Wild Bill" Donovan. I was 
actively arranging it and Bill Casey was keenly interested 
and attended the meeting. 




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MUja DVOMTMa CO . mc 
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I've forgotten the dates, but it could have been 
something at that time. 

Q All right. Do you have any recollection of 
discussing with Director Casey GeoMiliTech and its interest 
in becoming a covert vendor to the Central Intelligence 
Agency? 

A At some point in that period I did, after Schweitzer ' 
introduced me to Mrs. Studley, and explained to me her ! 

a with^^^^^^^^^^^^^^^^^^H She, 

herself, said, "I have, in addition, a business relationship 
of some duration where I need help on offering arms for 
purchase by CIA", and that was just out of a cold sky. 

At some point in that period I did do one thing for 
General Schweitzer and Mrs. Studley. I checked with Casey. 
I called Casey and explained that I knew General Schweitzer 
and I thought he was a very honorable guy, that he was working ; 
for--I don't know whether I used Mrs. Studley' s name--but for 
that company. 

And that I didn't know what they had to offer, and 

didn't want to get involved in it, but that I thought 

i 

probably it was worth examining what they had to offer. And 
I was given a--if I remember correctly, I was given a phone 




T^y 



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number later, and I gave it to General Schweitzer. And 
that's all I had to do with the arms business in that early 
period. 

Q Let me come back and take it piece by piece. You 
do have a recollection of making a telephone call to Director 
Casey in which you discussed General Schweitzer's connection 
to GMT? 

A Yes, yes. 

Q All right. And it would be your recollection that 
that conversation may have taken place in the fall of 1986? 

A It was the fall of 1986. I just don't remember the 
date. 

Q All right. Did Director Casey indicate, during the 
course of that telephone conversation, that he was familiar 
with Mrs. Studley and GMT? 

A Yes. My reaction is that that was his statement-- 
oh, that's the Studley case, or something. 

Q Do you recall Casey telling you how it was that he 
was familiar with Mrs. Studley and GMT? 

A No. We were talking over a public telephone, and I 
was speaking in very general tema, and simply saying here's- 
-I felt that this was such a high-level problem at that time 



UNCLASSIFIED 



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that Casey ought to know about it. So I wouldn't call 
someone lower than him on it, and I was simply dropping it on 
his desk, and he did in fact then, at some later date, 
somebody called me and gave me a number which I passed on to 
Schweitzer. 

Q Do you recollect who it was that called you? 

A No, I don't. I think the person who called me was 
probably a secretary in Casey's office. I used to know those 
girls all by their names .^^^^^^^^^^H was his 
principal secretary. I don't know. She might have called me. 

Q Do you recollect whose name was attached to the 
telephone number that was given to you? 

A Yes. I recollect it, though I don't think I have 
it anymore. It was a person I didn't know. At one point I 
confirmed it just to be sure I wasn't doin g the wrong th ing, 
and the name, as I remember it. 




M- C Sum N E 
DC 



Q All right. 

A I probably do know him, but I don't remember him. 
Q And if I understand you, you passed^^^^^^^^^lname 
and telephone number to General Schweitzer? 




That's right. 



UNCLASSIFIED 



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VuAiAfioa o C :oao: 




Q All right. 

A That was the service I performed, without fee, for 
Mrs. Studley and GMT. Sort of en passant, while I was al so 
advising her on how to get in touch with people 

Q All right. And if you were to try to place when in 
time this name ,^^^^^^^^^^^^Hname and telephone number was 

passed to you, you would put it in the fall of 1986? 

j 
A Yes ■ I would guess like October '86. You see, I | 

went to^^^^^B!.n November, and I also went to 

I had a rather interesting time in 

which had nothing to do with the Studley's, and so I remember 

going out there. And I would guess it was either--! would 

guess it was shortly before that trip that I made this contact 

for Mrs . Studley. 

Q Do you have any further recollection of the nature 
of the discussion that you had with Casey in late September 
1986? 

A No. I don't have any further recollection, and my 
impression is it was very succinct and very simple, because he 
did seem to know something about the subject, you know, and 
he and I have been in--dealing with these kinds of issues so 
long, that it wasn't necessary to explain anything to him. 



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Waaftiaiiea. C :oaol 



iwssm 



82 



It was that there was a company that was interested 
in foreign arms sales, interested in doing business with the 
Agency, and that I thought they were worth talking to because 
I had a high regard for General Schweitzer. That's essential- 
ly what I said. 

And my recollection is he may have said, well, is 
this the Studley firm, and I said I think that's her name. 
So that was it. 

You yourself did not talk ^'^^^^^^^m ^^ that 
correct? 

A Not at that time. As I say, I think maybe much 
later, once I got a little alarme d about what was happening, 
and I did check to be sure 
not some outsider or something, you know. Normally, if I 
were Government, I would check phone numbers pretty carefully, 
but this came from Casey's office and I assumed it was okay, 
and I did not talk tc 

Q All right. So I understand, did t here ever come a 
time, later on, in 1987, when you talked witt 

A Yes. I called^^^^^^^Honce, to say that Schweitzer 
and Studley had been urging me to help them in their applica- 
tion to the Agency, an I think what I told him was what I had 






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W C Sum N t 



told Casey, that I had the impression that Schweitzer was a 
very honest guy, and that they were indeed capable o£-- 
according to him--I was operating on his hearsay, essentially- 
-according to him and Mrs. Studley, they were able to purchase 
arms abroad, particularly fro 

By that time somebody had told me about Werner, 
and, that I believed they were serious contenders for Agency 
purchase. But, you know, I'm not an expert in this field, and 
I don't think I would have made a very strong pitch. 

I certainly did not view myself as an agent, or a 
representative of Studley. I was an informant, a person who 
was giving information to the Agency, that I wanted to be 
sure was properly understood. 

Q Can you place wh en, in time , y ou had th is conversa- 
tion wit 

A I would have guessed that was more like February ' 

'87. 

i 
Q February '87? ! 

A Yes. I don't know whether it's relevant, but in ; 

the brief I had^^^^^^^^^^^^|l got the 

impression that he was very reluctant to do business with GMT. 

1 
Q That's my next question. What did^^^^^^^^tell 




CNcussife 




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>«• C Sue«i N E 

VufunfioA. C :0002 



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you? 

A what^^^^^^^Bsaid was that he did not chink that-- 
contrary to my general impression, which was all I could give 

him that this was an opportunity that they would want to ; 

I 
explore, and that he did not think that he wanted to have ■ 

! 
anything to do with Mrs. Studley's firm, and I got the | 

impression, although I do not recall any very clear statements i 



by him, that the reason was that he did not like Werner, 
whatever his name is, Glatt, as the source. That he didn't 



I 



trust him, and he thought he probably was, perhaps a--well, I j 

I 
think I'm just making the inference that he thought he might 

be a foreign intelligence penetration rather than an impartial . 

contractor. i 

But what I simply recall is a general statement of 
reluctance to deal with him them, and a feeling that if he ] 

! 

did talk to Schweitzer or Studley, or anybody again, that it | 

I 
would be out of courtesy to me, and because he knew that I 

had recommended it to Casey, rather than that he intended to 

go ahead. 

Q Did you have this conversation^^^^^^^^^^^Hbefore 

you discussed with^^^^^^Hyour desire to pass on a price 



list? 



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iMjjii KcrotmM CO . mc 

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Vu«wi|ta« o c :oao: 



I don't honestly remember. It was around the same 
period of time--February-March '87. 

Q But it may have preceded your contact] 
A I had a feeling it preceded my contact 
Q Okay. 

A But I could be wrong about that. 

Q Is there any writing which you know of, that will 
memorialize the contact that you hadJ 

A No . I didn't make any record of it. 

No notes? 

No. 

No jottings? Letters? 

No. 

No nothing? 

No. Just made a telephone call. 

Ail right. How did you getl 




Q 

A 

Q 

A 

Q 

A 

Q 
number? 

A 1 got it back from Schweitzer. 

Q And you would have gotten it back from Schweitzer 
after Schweitzer had left the employ of Studley? 

A I think Schweitzer was still around but was 
leaving. At any rate, he was separating, and I think it was 




[telephone 



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mxiK KVomMi CO . mc. 
»0' C ium N E 

VuiuitToa c :oaoi 

•"■1 1M uu 



86 




•a '". 4 



at that time because I knew that Schweitzer was not going to 
continue. I don't believe Mrs. Studley had asked me to 

continue the contact, or do anything for her, but obviously, | 

i 
she was trying to keep me involved with her in some way, and | 

I think at that point I wanted to be sure who^^^^^^^Bwas and ! 

simply confirm that this was a legitimate Agency contact. l 

And so that was the purpose of my call. | 

Q But so that I understand. You would have called 
Schweitzer. This would have been at, or somewhat after the 
time Schweitzer left the employ of Studley? 

A That's my recollection. 

Q And Schweitzer gave yov^^H^^^^^^telephone number? I 

A Right. 

Q And then you would have used that telephone number 
to contact^^^^^^^^yourself ? 

A Yes. 

Q Okay. Is there any further recollection that you 
have of the matters that were discussed between you and 

uring the course of that telephone conversation? 

A No, and the reason that I'm reconstructing this in 
my memory as I do, is that my impression was that I was 
surprised by what I thought was a somewhat hostile attitude 




.^ClASSIRED 



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ICMSSIflED 



87 







part toward the contact, and that that's why I 
decided to explain the whole material ^<^^^^|^^^^|So that the 

Agency would have the information and they could do what they j 

i 
bloody well wanted to with it, which was my attitude. ! 

i 
See, I think people might believe that I was going 

to get a lot of money, or a big commission from proposing the 

I 
I 

arms sales with the Agency. At that time I had made no ar- j 

1 

rangement with Barbara, and we hadn't even discussed my 
representing with the Agency. I never did. I would never 
really have accepted a contract relationship for dealing with 
CIA, because even after 15 years I might think it could be 
construed as a conflict of interest. 

So, I want my relationships with CIA to be purely 
intellectual . 

Q Did you advise^^^^^^^Hof your prior telephone 
conversation with Casey? 

A I don't know. I don't-- 

Q You don't remember, one way or the other? 

A I don't remember. No. 

Q All right. Oid^^^^^^^Hdiscuss with you the 
nature of his discussions with Schweitzer about CIA pursuing 
this matter? 




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A No, no. He did not discuss the Schweitzer thing. 
He did not dispute my comments on Schweitzer, but, as I say, 
we both probably knew that Schweitzer was withdrawing, if not 
withdrawn, and that was not the point. The only impression X 
got was that he felt that Studley's main interest was in using 
Werner Glatt as a source, and that the Agency did not want to 
do that. 

So I had a feeling this was going to be a dry 
exercise from then on, and that's when that impression was 
formed, and from then on, my interest was simply in being 
sure that the data about contacts and arms availability, and 
so on, was available to the Agency despite my calculation 
that no contract was going to be forthcoming. 

Q All right. Now, you had occasion to travel with 
General Schwei tzer in early November to, first,] 

that ^^^^^^^ 

then 





I CO . ■■ 
10' C Sur«i N E 
VulMnfnxt : C :000: 



Q All right. And that trip— 
A I believe. I don't know. Maybe I've got it 
backwards, but, never mind. 

Q That trip was paid for by GeoMiliTech? 



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ituj* *vo«rwa co . nc. 
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A Yes; finally. That's what my letter was about. It 
took me a long time to get my money bade. 

Q Describe for me, please, how it came to pass that 
you made this trip for GeoMiliTech, and what you and General 
Schweitzer did on that trip? 

A The total purpose of the trip as far as GeoMiliTech 
was concerned was to go tc 

matter of personal interest to myself and Schweitzer, not 
really relevant, though it was a very interesting time to be 
there. The purpose was simple. It was to make a proposal to 
the defense ministry ^^^^^^^^|f or the purchase of a certain 
type of advanced weapons^^^^^^^^^^V This subject had 
obviously been discussed before, but it had languished 
somehow, and Schweitzer thought that if I explained that they 
were serious and competent, that my^^^^^^| friends would be 
more receptive. 

I did discuss it in Washington with their represen- 
tatives here, there was some interest, and Mrs. Studley and 
General Schweitzer felt that, whereas they had not received 
any very good responses in the past, that if I went along and 
associated myself with their advocacy, that they would do 



better. 



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MI C SoTCt N I 



So I did because they paid the way, go along. I 
introduced General Schweitzer to several^^^^^Hof f icers , 
primarily, who were interested in the weapon concern, might 
have been interested in it, and they had a number of rather 
technical discussions during that week, some of which I sat in 
on, though I didn't fully--! didn't attempt to be involved. 
I was there as a political contact, not a salesman. 

And we had rather useful discussions explaining 
what GMT thought it could do, and why they thought it was 
important, and there seemed to be some receptivity, but the 
senior authorities were unwilling to make a commitment until 
they had studied further the subject. And that was the net 
result of the trip. 

Q All right. I'm going to try to help you focus in 
terms of dates. I have a invoice from the travel agency that 
billed GeoMiliTech for this trip, which suggests that the 
trip began on November 4th out of Dulles Airport, and 
continue d through the 15th, or thereabouts, of November, with 
a return ^^^^^^^^^1 to San Francisco, and then by way of San 
Francisco to Washington, D.C. 

Let me show you the invoice. I suspect you've never 
seen that one before, but I may be wrong. Have you seen that 



DNCWSSIflEO 



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invoice? 

A No. I haven't. 

MR. KERR: We will have that marked as our next 
exhibit which is ten. 

(Whereupon, the above-referred 
to document was marked Cline 
Deposition Exhibit No. 10 
for identification.) 
THE WITNESS: Well, now, are you sure this is the 
actual trip? 

MR. KERR: No. I am not. That's my next question. 
THE WITNESS: My feeling — I know that we reversed 
the order of travel, and whatever the original plan was we 
did the opposite, and my present, rather hazy recollection, 
though I think I could check it ou t myself with my calendar, 
is that we in fact went^^^^^^^^l first and came back through 




mjjji KvoaraM co mc. 

10" C S.r«n N E 
Vulwf|T0O C :oco] 



MR. KERR: Okay. 

THE WITNESS: But there's no point in arguing about 
that. I don't remember, for sure. They were such discrete 
missions and activity. 



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BY MR. KERR: 

Q The reason for showing this to you is to try to 
focus in on your recollection of what actually transpired. 
Let me ask you this question. The cost of the flight, I take 
it, was paid for by GMT? 

A Yes. 

Q So you would not have the invoicing on the flight? 

A No. That's right. 

Q Okay. Your passport, however, would hav e been 
marked at the time that you got to both^^^^^Hand 

A I think so. 

Q You still have your passport, I trust? 

A Yes. 

Q So that your passport would tell you when you 
entered and left^^^^^^^nd^^^^^^ll assume? 

A Right. 

Q If I may make this request of you: I would be 
grateful for the entries in your passport that would show when 
you got there and when you left, if there are such entries in 
your passport. 

A I'll be able to determine when I went. I may have 



a-- 



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■«jj« avomto CO . MC. 

'O- C iutn N E 




Q Your recollecti on, thoug h, is that you went to 

before you went to^^^^^^^K.3 that right? 
A Well, I'm beginning to doubt it, now that I look at 
this, because of the dates. I think I was^^^^^^^^Kon the 
7th of November--that '3 my recollection--and this looks as if 
I would have been there at that time, and have gone on to 

surprises me because the main purpose of our trip 
was to gd^^^^^^^^Hand that's what Mrs. Studley wanted, and 
what I expected. 

But I now would guess perhaps this is the final 
trip, rather than--we did reverse it once, and that's what's 
confusing me. 

Q All right. Now the date of this-- 

A This is about the right amount of time. We spent a 
week^ 

Q The date of this invoice is late October 1986, so 
it should have been relatively close to the time that you all 
left. 

A Yes, yes. Okay. Unless I can prove the contrary, 
let's operate on the assumption that this is the right travel. 

Q The main thrust of my questioning is a way of 
trying to focus your memory in on sequences. 




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llilLASSIFIED 



A Yes. 

Q You and Schweitzer would have travelled together? 

A Yes. 

Q No one else went with you on this trip? 

A No. 

Q All right. And if this is correct, you would have 
gone to^^^^^^H first? 

A Right. 




■CK* aoowTvia co mc. 
lor c Sum N E 
VuhinfToo D C :0002 



Schweitzer said that he would like, for the same 
r e a s o n s ,^^^^^^^^^^^^^^^^^^^^K nd 
with me, so we did in effect piggyback, and he accompanied me 




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W C Sum N I 
Wutwifton C .'000) 



our commercial plan at no extra cost to Mrs. Studley. 

Q All right. Did you advise the Central Intelligence 
Agency before your trip that you were going? 

A I probably would have told the contact people that 
I was making such a trip, yes. It's a big trip and I would 
probably let them know I was going to be out of town. 

Q All right. Did you arrange to meet with General 
Singlaub on this trip? 

A No. 

Q Did not? 

A I did not arrange to meet with him. 

Q Did you in fact meet with him? 

In he was in^^^^^^^^^^^^^^^and 
the airport, much to my surprise, and he explained that he 
was there on an entirely different operation, activity, which 
was interesting but not relevant to anything I was doing. 

Q All right. And he was there for what purpose, as 
you understood it? 

A I had it very fully explained to me, by both him and 
General Schweitzer, that he was there exploring for the 
recovery of gold and precious objects that had been buried in 



I 



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ich I knew about, and that he had found clear in- 
dications that he could recover some of this treasure, and 
that he was representing a group of people there who were 
trying to do so. 

Q And did you have occasion to meet with either Mr. 
Cummings , or Mr. Cunningham, names that we talked about 
previously, when you met with Singlaubl 

A Not to my knowledge. I didn't meet with anybody 
whom I identified, except] 





MIAUt KVOXTINO CO . MC. 
50 • C Sltt«1 N £ 
WiilunfToa. C lOOOI 




Q I take it Mrs. Studley's adventures on the Pia 
Vesta were not discussed when you happened to meet with 
Singlaub] 

A No. I discussed nothing with Singlaub except the 
treasure. I thought he was crazy, frankly, but I still am 
not sure whether he is right, or not, but, at any rate he was 
persuaded totally and had been working for months, he said. 
And he showed me a lot of--told me things that made me 
believe that, that he felt he would be able to recover from 

buried sites^^^^^^^^^^^^^^^H a 
money, and that was his sole objective, as far as I know. 



UNCLASSIFIED 



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Wuiwi|io« C :oooi 



Q Did Sinq laub go with you and Schweitzer when you 
went on tol 

A No. We left him ir 

Q Did Singlaub discuss with you his previous tri 
n behalf of GMT for the purpose of selling like 
equipment? 

A No. He did not. I mean, I knew that he had been 
associated with Studley. I knew that Schweitzer, in a sense, 
was picking up some of the Singlaub account, but there was no 
discussion of that. You could n't talk about anything with 
Singlaub except the^^^^^^^^Btreasure that week, and I only 
saw him a short period, of course. 

Q So that I understand you: Singlaub did not discuss 
with you his previous endeavor to sell torpedoes ^^^^^^^^^H 

A No. No. I was at that time being exceedingly 
sensitive about the subject of torpedoes, and which I didn't 
want to discuss for international political reasons. 

Q I understand. 

A And at that time, also, I was really just engaging 
in my first consultative arrangement with GMT. I didn't want 
to discuss what they were up to at all, so the subject did 



not come up. 



ONCUSSIFIED 



756 



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UNCLASSIFIED 



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ltll.L0l tr OKTIO CO . MC. 
10' C Stren N £ 
VuhiAfToa D C J0002 



Q So that I understand you: neither Singlaub nor 
Schweitzer discussed with you Singlaub's prior suggestion to 
the ^^^^^^^^H that they purchase torpedoes through GMT? 

A No ; no . 

Q Nor did he discuss with you the proposal that he 
made^^^^^^^^^^^^^^Bon that prior that they use 

that purchase as a way of generating funds which GMT would 
then pass onto the contras? 

A I did not discuss that at the time. I did not know 
about the concept at the time. I was very shocked when I 
learned much later, quite recently, that that had been 
discussed, and I gather that, not in connection with GMT, but 
in some way, in fact, he had encouraged the people! 
to provide some funds for the contras. 

I realize now, that the sensitivity of my old 
friends ^^^^^^^|about my trying to promote GMT's interests 
unquestionably related to that earlier period, but at that 
tijne I simply did not know about it. 

Q Bear with me. Your mission on behalf of GMT, as 
you understood it, then, in November of 1986, was not related 
in any fashion to using a sale of arms^^^^^^^^Has a mecha- 
nism for generating monies of any kind to be used by GMT for 




ONCLilSSIFIED 



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IMJJM KVOtrTMO CO HC 
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lOll 1 



any other insurgency around the world? 

A That's absolutely right. I had no such idea. I 
would not have approved of such a device, and would not have 
been involved in it. 

Q During the course of your travels with Schweitzer, 
you were with Schweitzer a number of days, isn't that right? 

A Yes, yes. That's when we really became well 
acquainted. Before that, it was a rather casual relationship. 

Q And at no point during your November trip did he 
apprise you of the fact that General Singlaub had previously 
made an to develop funds ^^^^^^^^^^^^^^^^f or use 
other insurgencies? 

A Absolutely not. All I knew was that he previously 
represented GMT in trying to sell torpedoes, but I didn't know 
any of the details, and nothing came up in my conversations 
with Schweitzer. I'm convinced Schweitzer did not know about 
it. 

Q Was the! 

or previous potential source of th"-- torpedoes, 
discussed between you and Schweitzer on this trip? 

A I suspect it was mentioned either on the trip, or 
prior, when we were discussing the whole concept. I knew 





mimm 



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UNCLASSIFIED 



100 



10' C So«n N E 
Xulunpofi. DC : 



that there had been a previous approach, you see, and that it 
had failed, and I knew that the^^^^^^^Hwere involved because 
that was the--they felt, perhaps, that was the reason that it 
had failed. That there was some sensitivity about doing 
business with the^^^^^^^^H So that general subject was 
discussed, but only in a very vague way, and there was no 
discussion of any contra connection. 

I've thought often, that if I could recollect any, 
and there was not. 
Q Not? 
A No. None. 

(Brief break. ) 

MR. KERR: Back on the record. 

THE WITNESS: I'd like to interrupt to say that I 
have studying this travel invoice of GeoMiliTech concerning 
my trip to^^^^^^^^^^^^^^^^nnd am now my 

memory enough to say that this is almost certainly the right 
travel dates. That we did go t^ 
because I'm quite confident I was" 

of November, nd it now appears that what we had done was 
change earlier plans which would have taken us t 
first. So this is the correct travel schedule. 



on about the 7th 



IJNCLASSIFIEO 





759 



artlOl 



UNCLASSIFIED 



101 



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. msm ■vonrwo co . mc 

MT C Sum S E 

ViaiwitnHi C :oaa2 



BY MR. KERR: 
Q To try to use this November trip aa a way of 
focusing your recollection on other events, we have documents 
to indicate that Mrs . Studley and a Graham Low--do you know 
Mr. Graham Low? 
A No. 

Q That Mrs. Studley and Mr. Low went to Switzerland 
immediately after your trip. This would be mid-November. Do 
you have any knowledge of what transpired on their trip, after 
trip^^^^^^^^^^^^^^^^Hlater on November? 
A No, I have no recollection. The only relevant 
memory I can give, which is not very helpful, is that 
Schweitzer was concerned ^^^^^^^^1 about the possibility of 
having to go directly to Switzerland instead of returning 
with me. In fact he did, I believe — I think he returned with 
me, at least. I don't know how that came out but that was 
the subject discussed. 

Q Well, General Schweitzer has indicated to me that 
he did indeed have such concerns, got such a summons from 
Mrs. Studley-- 

A And didn't go, I think. 

Q And didn't go. However, one of the things that he 



UNCLASSIFIED 



760 



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Mm\m 



102 



mentioned was that perhaps Mrs. Studley was meeting with 

Werner Glatt at that tinrie on that trip. 

Did you have occasion to discuss Mr. Glatt with 

General Schweitzer, while you and he were on this trip ' 

toge t he r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H 

A No. I 

Q Did not? j 

A No. You see, Glatt didn't figure in the subject we I 

i 

were discussing, and I'm not even sure whether I knew about 
Glatt at that time. That all came up more in the context of j 
the CIA connection. i 

Q All right. Let me shift, then, to the other 
direction. Let's look back to October. It's my understanding 
that Schweitzer went to the Central Intelligence Agency, and 
provided the Central Intelligence Agency with plans with 
regard to attempting to, euphemistically, recover an MI-24 
Soviet helicopter from Nicaragua, on October 16, 1986, which 
would have been about two weeks before you and he went on 
your trip 

A Yes . 

Q Using that incident as a way of trying to focus 
your recollection, did you and General Schweitzer discuss on 




■•t.Lii< mrotrnMo co . hc. 
SOI C Sum N E 

ViiAiofiM D c :ooo2 



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MixO nvotrnMO co . nc 

>«• C iutn N I 

C ;<iooi 



UNCLASSIFIED 



103 




your trip General Schweitzer's program for recovering a 

Soviet helicopter^ from Nicaragua? 

A I don't think so, certainly not in detail. We had 

discussed it earlier. I had referred him--told him he would 

have to deal with it, and I did advise 

the Agency of what I knew about the matter, and I was trying 

to disengage myself as much as possible. I don't remember 
discussing it further. 

Q Is it you that introduced Schweitzer to Pearson and 
Alonzo? 

A Yes, yes. I asked Schweitzer to comment on this 
proposal because that was when I was discussing other things 
in our trip, and he sijnply helped me by, (a) speaking Spanish, 
which Pearson spoke only, and (b) being extremely knowledge- 
able about aircraft, helicopters, things of that sort. 
Weapons. And he characteristically took a great deal of 
interest to make sure that if there was a recovery of a 
helicopter, that it would not be wasted, that somebody would 
know about it and receive it, and that was exactly my 
interest, too. 

But in fact, as you know, from earlier discussion, 
the general attitude was negative on the proposal that Mr. 



UHCIASSIFIEO 



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Pearson had made. 

Q All right. Did you discuss with Schweitzer a 
gentleman by the name °i^^^^^^^^^^^^m ^rid his role with 
regard to this helicopter? 

A The name rings a bell with me. I think I probably 
did, but I don't remember what I might have discussed. I 
think that was a Miami contact of Mr. Pearson's. 

Q Did you ever have occasion to meet with Mr. 




•.<>• C Sirttt N E 
Vuiu>lion C :ooa2 



A No. I never met anybody but Alonzo, initially, and 
then Pearson. 

Q All right. 

A And my object was not to get involved, operational- 
ly- 

Q Did you receive any encouragement from the Central 

Intelligence Agency, at any time in 1986, to involve General 
Schweitzer in the plans of Pearson and Alonzo to try to obtain 
this helicopter? 

A No. I got a distinct feeling of coolness about it, 
though that was juat vibrations. I tried to avoid becoming 
involved in the operation itself, but I wanted to know whether 
I should encourage Pearson or discourage him, and they 



UNCLASSIFIED 



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artlOS 



UNCLASSIFIED 



105 



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(■UJM atroMTMa CO . mc 

'0' C Such N E 

OC 20001 



definitely gave me the signal to discourage him. 

Q Discourage? 

A Discourage Pearson. 

Q All right. Did you apprise the Agency of your 
alerting Schweitzer to the possibilities of obtaining a 
helicopter? 

fully informed ^^^^^^^^^^^^^Has a 
matter of intelligence interest, not as a matter of opera- 
tions. But I told them what Pearson had said, and that 
Schweitzer had been extremely interested, and wanted to 
pursue it, thought it ought to be pursued, and I said I 
simply stood ready for any reaction that they wanted to pass 
back to Pearson, but that I had no way to control him, and 
that was that. 

Q Did the Agency ever advise you that Pearson and 
Alonzo were individuals who should be handled, quote, "with 
caution", close quote? 

A Yes, yes. That was their reaction. 
Q And they would have given you that advice some time 
in October? 

A I would think so. I think so. As a matter of fact 
I think it was probably Just before our trip, that I told 

yNClASSIFI[D 



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them--I did on the strength of that kind of comment, which was 
rather vague, but clearly not positive, that I told them to 
postpone any such plans. 

Q Did you have knowledge at this time of any bounty 
that was being offered by anyone to acquire this helicopter? 

A Yes, yes. General Schweitzer, who was extremely 
enthusiastic about the possibility and importance of getting 
a helicopter, said that he felt that from some sources, or 
other, there would be a fairly large amount of money avail- 
able, and that obviously interested Alonzo and Pearson, and 
that there was some discussion of sums of money ranging from 
one million to S3 million, which Schweitzer said was clearly 
a bargain for the intelligence value of getting a hold of such 
a helicopter. That's something I'm not an expert on. 

Q Did the Agency ever discuss with you a bounty that 
it might be willing to pay for such a helicopter? 

A NO. 

Q Did not. Did Schweitzer ever discuss with you an 
interest that GMT would have in trying to obtain such a 
bounty for acquiring such a helicopter? 

A No, no. I did not associate that with GMT. 

Q All right. Were you aware of a plan, or a program 



lINCLilSSIFIED 



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W7C Su*n N E 



(INCUSSIflEO 



107 



that was put together by Schweitzer to try to obtain such a 
helicopter? 

A No. What I recall is that Schweitzer said that he 
alerted not only the CIA but the Defense Department, I 
presume the-- I don't know what part of the Defense Depart- 
ment--to the possibility, and had discussed in some detail 
with experts in the region what a helicopter should do, if it 
came out of Nicaragua. In other words, where it should go, 
how it should fly, and that sort of thing. 

And he told me about that, and of course if someone 
had decided to pursue the subject, as a Government matter, 
urgently, it would have been important to pass all that 
information on to the people concerned. 

So I was interested in it, but I did not retain 
that information nor never--in fact I told Mr. Pearson and 
Mr. Alonzo to "cool it". 

Q Did you ever see a written plan dated October 16, 
1986, prepared by Schweitzer, outlining recovery of an MI-24 
helicopter from Nicaragua? 

A I think I may at one time have seen such a thing. 
It had some maps attached to it, and he showed it to me, and 
it was for the purpose of briefing whoever it was that might 



UNClASSinED 



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IINCIASSIFIEO 



108 



have recovered the helicopter, but I never used it and I 
destroyed it. 

Q I was going to say: were you ever in possession o£ 
a copy of such a plan? 

A I believe I had such a copy, but, if so, I destroyed 
it. 

Q Do you recall when you destroyed the plan? 

A No. 

Q But it is your testimony you do not have such a plan 
at the present time? 

A I do not have such a plan. 

Q All right. Did you have any discussions with the 
of ^^^^^^^^^^^^^^^^^^^^^^w^f the 
ligence Agency about such a plan? 

A No. My contacts were all through t 




Q Did Messrs. Pearson and Alonzo ever discuss with I 
you certain Mig aircraft which they had^^^^^^^^H which they 
desired to sell? 

A No. That's a garble, I think. They told me, and I 
told the Agency, through the^^^^^^^^^^^^^H that the 

had accepted Mig-23s in their country to store for 




•■■J.IJI KVOOrwO CO INC. 
!»• C Sjcct N E 
Vulii0|ion D C :0002 



iwmssifiED 



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UNCLASSIFIED 



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TiiiunfTMi C :ooaj 



the benefit of the Nicaraguans, but this was a piece of 
information they were wanting, and the Agency apparently 
thought that was erroneous information. So they again sort 
of pooh-poohed Pearson's sources. That's my recollection of 
that. 

Q An ability on the part of Pearson or Alonzo to 
obtain such aircraft, with the desire on their part to sell 
such aircraft, never came to your attention? 

A No, and I don't think that was anybody's intent. I 
think, as I say, that report sounds to me like a garbled view. 

Q All right. Did you ever discuss on your trip to 

ith Schweitzer, an offer that 
Schweitzer made to^^^^^^^|in late October 1986, to sell 
seven UH-IB helicopters? 

A I do not recall discussing it on that trip. 

Q Do you recall ever discussing that until February 
of 1987? 

A No, but I'm familiar with the concept, and it's 
conceivable that it was mentioned earlier, but I don't 
recall. We were focused on the torpedoes on the trip. 

Q Okay. Let me show you a letter dated October 30, 
1986 from General Schweitzer tofl^^^^^^^^^H which has 





UNCLASSIFIED 



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artllO 



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no 




■LLU •trotmra co . mc. 

10- C iurrt N E 

TulunfTon C :0C0] 



previously been marked as^^^^BExhibit No. 3, which I'd like 
you to review. Tell me, first, if you've ever seen the 
document; second, if you're familiar with its content, at the 
time, October-November 1986. 

[Witness reviews document.} 

THE WITNESS: No. I haven't seen it. I think it 
obviously relates to the seven helicopters that were mentioned 
to me much later, in the documents that we looked at earlier. 
BY MR. KERR: 

Q So that I understand: you were not contemporaneously 
aware of this transaction? 

A In October '86, I did not know about this transac- 
tion. 

Q All right, were you aware, after your trip with 
Schweitzer, that Schweitzer had met with^^^^^^Hon the 17th 
of December 1986, to discuss various items which Schweitzer 
was offering to sell? 

A I don't know the date, but I know that after the 
trip Schweitzer did talk tc 

Q And how did you know that? 

A He told me. 

Q And did he tell you contemporaneously, or at a 




mikmrn 



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later date? 



'MlMSim 



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A I can't remember. It was after the fact, but I 
don't know how much after the fact. 

Q Can you give me your best recollection of what he 
related to you about that meeting witf 

A Well, I don't think he told me much of anything 
7 I about it. I think he just said he had made contact with 
S^^^^^^Hhe always called him, and I didn't knowM^^^Hbut I 
9 ! knew that that was the person whose contact he had established 
as a result of the telephone number that I gave him. 

And I don't remember the substance at all, at that 
time. General Schweitzer is a very communicative fellow and 
he talks about things that he's doing, and the CIA arms 
contact I was not very interested in. At that time I didn't 
feel I had any obligation to GMT on it. 

My interests at that time were entirely on the 
and my opening up that contact was a favor to 




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Viiiw>|to« D C :oooj 



Studley and Schweitzer, simply because I was interested in 
their other activities . 

So anything he would have told me would have been 
rather incidental, and casual, and I didn't focus on it very 
much. I don't remember any of those things. 







..olilEO 



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WUSSIFIED 



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Q All right. Specifically, do you have any recollec- 
tion or knowledge, that you would have had in the fall or 
winter of 1986, of efforts being made by Schweitzer on behalf 
of GMT to sell eight or more Mig-21s to the Central Intel- 
ligence Agency? 

A No. 

Q Do you have any recollection of knowledge that you 
would have had in the fall, winter of 1986, of efforts that 
Sc hweit zer was making on behalf of GMT to sell 
o the Central Intelligence Agency? 

A No. It wouldn't surprise me but I didn't know about 

it. 

I 
Q Let me show you a memorandum of a December 17, 19 86 i 

meeting between Schweitzer and^^^^^^^H and ask you if 

you've ever seen the memo, or if you're familiar with any of 

the matters that apparently were discussed between Schweitzer 

lat that time. 

In conjunction with that, let me a lso show you a 

December 23rd, 1986 memo from Schweitzer to^^^^^^H regarding 

offers by GMT to sell^^^^^^^^^^^P UH-IB helicopters, and 

Mig-21 aircraft. 

A What is this? 



an 





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UNCLASSIFIED 



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IM.1.UI aaraxrvMC 

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Q This is a memo prepared by-- 

A "Physical condition of one individual"? 

Q He's referring, I think, to the condition of 
Director Casey who, as you'll recall-- 

A Is this when Casey had his stroke? 

Q That's correct. 

(Witness reviews documents.] 

THE WITNESS: No. I have not seen that cable nor 
do I have any fajniliarity with the details of it. 
BY MR. KERR: 

Q The document that you're referring to isj 
Exhibit No. 4, and your testimony is that you never saw the 
document, nor were you familiar, at the time, with the 
matters discussed in the document? 

A That's right. And the same is true of^^^^Hs. 

Q ThanJc you. Let me show you what's been previously 
marked as^^^^HExhibit No. 6. This is a list of munitions, 
Soviet bloc, primarily, munitions, that were received by 
Schweitzer f ron^^^^^^^fon the 29th of December 1986 for 
pricing by GMT. I ask you to look at it, tell me whether 
you've seen the document, and whether you were familiar with 
that list of items at the time. 




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ONCLASSIFIED 



A Well, at the time, I don't know. I think I have 
seen this document at one time or other in connection with 
the preparation of the so-called recategorized list, which I 
gave to you. I'm not even sure. This, conceivably, could be 
an attachment to that one. 

Q Not in that form. 

A Not in that form. 

Q The list continues, you're right, all the way 
through March. 

A So some time between this time and March, I believe- 
-this looks familiar to me but I don't know when I saw it, and 
I gather it was a--yes, I think it was a statement of interest 

on the °^^^^^^^^^H 

Q ^^^^^^^^^^^^B^ ^hc Agency? 

A Yes. But my recollection is I probably knew about 
that at a later period, more like March '87. 

Q In conjunction with that — and if you'll just hang 
onto it--let me show you a memorandum to^^^^^^^^^^^dated 
December 31, 1986, which amounts to the response of GMT to 
this request for prices. I ask you if you've seen that 
document before. It's been marked as^^^^HExhibit No. 7. 
[Witness reviews document.] 




UNCLASSIFIED 



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artUS 



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US 



1 ' THE WITNESS: I don't believe I have seen this 

2 ^document; however, I have heard the phrase about 'items of 

3 ^^^^^^Horigin ' being available later, rather than from other 



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sources. That I have seen in some document, I suspect in the 
March material that they gave me. The specifics of the 
subsequent pages about terminology and specific weapons, I 
don't think I've ever seen or heard of. This is probably a 
repetition of thi^^^^^^^Velement . It's the only one that 
happened to stick in my mind. 
BY MH. KERR: 
Q Okay. 

A But I have not seen this document as such. 
Q All right. Let me show you a memorandum dated 
January 9, 1987, prepared by General Schweitzer for Mrs. 
Studley regarding a meeting that Schweitzer had with 
on January 8th, 1987. I ask you, first, if you've ever seen 
the memorandum. 

Second, if you were familiar, at or about the time, i 
with the matters that are set forth in that memorandum? 
(Witness reviews document.) 

THE WITNESS: Now here's this^^^^^Bitem again 
Somewhere, I've seen this discussion about availability of 




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Vuluiftoa C ;0002 



Q 
A 

Q 



material. I don't remember these, this blue chip. 
And isn't this-- 

MR. KERR: That's another version of it. 

THE WITNESS: Another version. I have a feeling 
that I probably was briefed on this memo, and may well have 
seen it. 

BY MR. KERR: 

You would have been briefed by whom? 

By Schweitzer. 

And you would have been briefed, you think, at 
approximately when in time? 

A I would think — well, not too long after this. End 
of January, probably, after his meeting. My feeling is that 
all of this material about contacts with CIA on selling 
weapons began to be discussed seriously with me whenever it 
was that Schweitzer decided to leave GMT. 

In other words, he wanted to let me know what he 
had been doing as a result of my opening up a channel for 
him, and I think that was more a courtesy to me than anything 
else. 

He wanted me to know what he'd done, and what he 
hadn't done, because he was beginning to "bail out", in a 



OlUSSinED 



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yNCLASSIFIED 



117 



sense, and I didn't know then that Barbara was going to press 
me to try to continue the same efforts, and I never was very 
interested in that, as I told you, and while I never said I 
wouldn't do it, I didn't say I would. 

At some point or other--! don't think this is the 
copy, though. I saw something more like this, just a plain 
printed — 

Q "This', referring to what? ^^^^HExhibit? 

A ^^^^^- 
Q Okay. 

A At some point or other, I think I have seen 
something like^^^^H6. I definitely, at some point or 




rnKxMt mfctmta co «c. 
Wl- C Su»»t N t 
»uliun.o<i D C .•0001 





between^^^^^^^^^Hmaterial and^^^^^^Hmaterial . This 
little sheet here, page, whatever it is. 

Q That is part of ^^^^Kxhibit — 
^^^■ll. 

Q Eleven. 

A It says "G-56, page 13". The numbers don't mean 
anything. Anyway, that page somewhere I have seen. I don't 
think, necessarily, in context with this particular memo. 

Q You're telling me, though, that you think that you 



i/NMsm 



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UNCLASSIFIED 



118 



have been familiar with these dociiments at the time Schweitzer 
was leaving GMT, rather than before that? 

A That's right. My impression is that I did not know 
about any of these subjects until he had decided, definitely, 
to leave GMT. 

Q All right. Were you familiar with an effort by 
Schweitzer and Studley to obtain alternative prices from 
other arms dealers in the mid to late January period? 

A Well-- 

Q Let me come at it another way. Did they come to 
you, to ask you for the names of arms brokers they might go 
to? 

A No, no. My familiarity with that question of 
alternative sources came only when they presented me that 
final recategorized list, indicating that they had other 
sources . 

Q So you »rere not one of the sources, or sources that 
th«y went to? 

A No. I was not a source. No, no. 

Q Okay. And it would be your testimony, that you 
were not conversant with the "grey arms" market, and them who 
peddled in it at that time? 



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A I was not. I was not anxious to become so. I only 
followed most of this discussion so as to be sure that any 
useful information the CIA otherwise did not know would get 
to them. 

Q Okay. All right. Specifically, a meeting that was 
held on January 12, 1987, with another arms broker, would not 
have been a meeting that you set up, would not have been a 
meeting that you helped arrange? 

A I never arranged any meetings with arms brokers. 

Q All right. And you are not familiar-- 

A Unless someone's an arms broker, that I don't know 
is, but, you know, I mean, I was not aware that I set up such 
a meeting. 

Q Let me put the question to you another way. 

A If you have the name of someone that I would react 
to. 

Q I have a name, but it's a sensitive name. You are 
not familiar with, I take it,l 




A 

Q You are not witting oi 
friends across the river like to say? 



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A 
Q 
A 



UNCLASSIFIED 



That means nothing to me. 
All right. That's fine. 
Okay. 



120 



Q Le t me show you a letter dated January 14, 1987, to 
from General Schweitzer, and I ask you if you've 





22 



■••.LU rairOOTIMI CO . MC 
•0' C Su»«T N E 

VuAui|to<i c :oao2 



ever seen it before. It's been previously marked as^^^^|i3. 

A I believe I saw this at some point. Again, it may 
have been among the briefing papers that Bob used when he 
said now we--you know-- "Barbara wants you to continue on, and 
I want you to know what I've been doing". This looks 
familiar, but I don't have it anymore. 

Q Okay. 

A I threw away most of t hat sti ^^^a^soon as I 

often to^^^^^^^^^^^^^^^^^If 

they didn't take it, I usually tore it up because this is not 
something I needed. 

Q All right. So that I understand, then: if you saw 
this, again, it is most likely that you would have seen it at 
the time Schweitzer briefed you when he was leaving GMT? 

A Yes. That's right. 

Q And that would have been late February 1987? 

A Is that when it was? 



I 



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muLMK nvomato CO . «c. 
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"'fmms 



121 



Q Yes, sir. 

A Yoii see, I don't remember when he left. 

Q According to his testimony it was late February. 

A Well, then, it's definitely after this. 

Q Okay. That's fine. You were not familiar, 
contemporaneously, with^^^^HNo. 13, then? 

A No. 

Q Okay. Now we've already talked about your version 
of the March 9, 1987 document. 

A Yes. I think that's the same one. 

Q All right. Just another copy of it. 

A That's when I really began to learn something about 
these weapons things. 

Q All right. Let's go back to the m eetings in March. 
The meeting of March 19, with^^^^^^^Hyou do you 
recall the meeting? 

A I know I had such a meeting. 

Q Your calendar confirms that it was about March 19th? 

A Right. It was, exactly. X have the time. It was 
a morning meeting, ten o'clock. I just checked that. 

Q All right. In terms of what was discussed at chat 
meeting, you do recall discussing, at that meeting, GMT's 



UflCU.SSinfp 



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<irtl22 



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UNCLASSIFIED 



122 



interest in pursing the potential for contracting with the 
Central Intelligence Agency? 

A Yes. And I gave him access to a lot of papers 
which were related to that, and I don't recall what they 



5 I were . As I say, my standard practice would have been to give 



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them to him or to throw them away. I think, mainly, it was 
the one that you just showed me, categorized. 

Q In the context, then, of your letter of March 9, 
1987 — excuse me--of Mrs. Studley's letter to you of March 9, 
1987, she makes mention in that letter of a lunch on March 
3rd, 1987? 

A Yes. 



Q 
A 

Q 
A 

remember 

Q 
A 
Q 
A 



You and she did have lunch? 

We did have that lunch. 

Was anyone else present at that lunch? 

I don't believe so. I could be wrong. I don't 



Schweitzer was not present at the lunch? 
No. Schweitzer was definitely not. 
The purpose of the lunch was what? 
The purpose of the lunch was to ask me if I would 
continue efforts to sell the torpedoes^^^^^^^lwhich she 



tRS« 



to ask me i 

F 



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CO.. « 
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DNClASSm 



123 



knew I was keenly interested in, and I said, well, I don't — 
you know-- I don't think it's a very "hot prospect", but I'm 
willing to do what I can for you. She said, well, I want to 
retain you, I want to have you really work for me now. i 
realize you've been doing this all for free, in effect, after 
that first contact, and then she said, I also want you to 
take up the possibility of selling things to CIA, because you 
know better than anybody else how to do it. 

I said, you know, I'm not very interested in that, 
Barbara. Hell, will you consider just being a general 
representative of my company? That was the gist of the 
conversation. And I said, well, at the right time perhaps I 
will. Let's see how things turn out, what's going to happen 
with Bob, and, you know, already I knew then that they were 
being investigated. Bob was beginning to tell me that they 
were, or would be. 

Q To put it in context, the story that broke in the 
newspapers broke in late February, around the 19th through 
the 20th of February 1987. 

A Yeah, that's right. 

Q I take it you would have discussed with her that 



publicity? 



ONCUSSIFIED 



782 



artl24 



UNCLASSIFIED 



124 



1 A I suppose, though the recollection I have of that 

2 publicity was from my discussion with Schweitzer, and 

i 

3 I Schweitzer called me around that time when that publicity 

4 ! broke, and said, my God, Singlaub and Barbara have gone to 

5 I the press and told the story about previous activities that I 

6 I didn't know about, and you didn't know about, and it's no 

•i 

7 |l wonder we couldn't do better than we did in working out 



8 I 
9 
10 




something with^^^^^^^There was a whole back history there 

we didn't know. I 

I 
And I said, oh, that's fascinating. That probably i 



11 explains what I thought was a rather odd resistance to going 



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ahead with GMT at the time, and so it was undoubtedly when 

that newspaper story broke that Bob talked to me about it. I 

don't doubt, then, that some reference was made to it in my 

I 
lunch with Barbara, but I probably wouldn't have pursued it ' 

because I had already discussed it with Bob. 

Q All right. Let me pursue what you did discuss, as 

I understand it. She says in the letter, that she appreciates 

your willingness, apparently expressed at this March 3rd | 

meeting or lunch-- I 

A Yes . Right . i 

i 
Q --to proceed on behalf of GMT to conduct the ; 



I 



■••.Lfii mrourma CO . imc 
Vub^AfiM C :ooo: 



IJNGLASSIFIEO 



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UNCUSSIFIED 



125 



CO. M 
WT C S<i»n N E 

Waikat(t<ai D C iOOO] 

rail \ 



ongoing negotiations through, what she says is your corpora- 
ticn-- 

A ClinExpo. 

Q ClinExpo. Right. First question: what is ClinExpo? 

A ClinExpo is a coiranercial corporation set up about 
three years ago, when I was being persuaded by some Italian 
wine and cheese merchants to try to import Italian com- 
modities, of a variety of kinds, to this corporation. Like 
so many of these proposals, I went into it as a way of 
keeping contact with some interesting people, and nothing 
every came of it, commercially. ClinExpo. 

Q ClinExpo continues to exist, is that right? 

A It continues to exist, and has had two or three 

clients who may have paid as much as a total of 20 or $30,000 

A 

for consultation on opportunities to invest in trade and do 
things. 

Q Who are the stockholders of ClinExpo? 

A I think my wife and I are stockholders, and our 
children are in some companies, and not in others. I do not 
think they are in ClinExpo. The principal stockholder is a 
man, now about to die, I'm afraid, in Italy, an Italian- 
American, who's the one who got me involved in all these 




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— iJlllll- O C 10002 



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126 



commercial deals, and we set up the company for his con- 
venience, primarily, so that — 

Q His name is what? 

A His name is Nisi. N-i-s-i. Marcello. M-a-r-c-e-l- 
l-o. And I believe that he and his wife, Mrs. Nisi, are the 
principal stockholders of ClinExpo. It's never made any 
money and it's never dispensed any money, so it's a shell 
corporation. 

Q It's state of incorporation is what? 

A Delaware. 

Q Delaware? 

A Yes. 

Q And it was established approximately when? 

A I think approximately three years ago. I'd guess 
it was 1984. 

What attorney incorporated the company? 

A I can't tell you now, but it was — it's one of the 
big Washington firms. I can't tell you. I forget. 

Q All right. The letter says that you were willing 
to proceed on behalf of GMT with the torpedo negotiations 
through ClinExpo, is that correct? 

A That is an exaggeration of mv position. I said I 



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UNCUSSiriED 



127 






was willing to try to help her continue to keep this project 
alive. She asked if I would undertake it under some auspices 
other than GMT, since I think she felt, probably correct, 
that GMT was kind of damaged as a result of the Singlaub 
publicity, and she asked if I would simply represent her in 
any corporate capacity that I had. Well, I was unwilling to 
offer SIFT, which is the commercial company I use for 
consulting, and I said, well, if I am going to do this, I 
would probably want to use a separate corporation that has 
nothing else to do. 

So that if we happened to be able to pull something 
off for your benefit, it would be a very narrowly identified 
thing, and that's the way the subject of ClinExpo came up. 
But her statement there, as I say, is an exaggeration. It 
was a subject we discussed. I did not refuse. I did not 
accept. 

I told her, frankly, I wanted to wait and see what 
happened before we went ahead. 

Q Are there any other corporations that you have — 
pardon the expression-- "on the shelf"? Are there any other 
corporate entities that you have? 

A Yes. That's one which was originally intended, &s 



'illASSIFIED 



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CO.. M 
M7 CSam. NE 
Vuluiftao D C iOCOl 



UNCUSSIFIED 



128 



I say, to make it possible for Italian firms to import things 
into the United States, and help develop trade between Italy 
and America. That was the concept. A second one, which was 
set up at the same time--the only other one I have anything 
to do with--is a going concern called Arbor--A-r-b-o-r — which 
imports Italian wine to this country, and is now — 

Q That sounds like a good operation. 

A Well, it was a good one, but it got started exactly 
when the scandal about Italian wine being poisoned came, and 
we lost our shirt on that, and I'm now trying to close it 
out. Those were set up at the same time, with the same burst 
of enthusiasm from Mr. Nisi, and they were my efforts to keep 
any purely commercial activity separate, not only from my 
nonprofits, but from my private consulting, which is intellec- 
tual activity. 

Q This company is Arbor, Inc., is that right? 

A Arbor — yeah--Arbor Imports, Inc. 

Q It is also a Delaware corporation? 

A Yes. 

Q Its stockholders are also Nisi, Nisi's wife? 

A Nisi's wife. 

Q Yourself? Your wife? 

•mmm 



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I'NCIASSIFIED 



129 



A Yes. Possibly my two daughters or their husbands, 
but I honestly--oh, at one point, there was a young man who 
was trying to help me sell wine, was a president, but I don't 
believe a stockholder. These are all minor--you know--not 
very successful financial operations. Nobody profited very 
much from any of it. 

Q She makes reference to banking arrangements that 
have been established through an exceptional attorney, 
Laurent Levi, what banking arrangements is she talking about 
in this March 9 letter? 

A I assume that she's talking about — my recollection 
from the lunch is she's talking about the banking arrange- 
ments that would be used to facilitate an exchange of funds 
in connection with the torpedo purchase. That's the only 
banking I ever had any discussion with her about. 

Q And do you recollection what bank, what Swiss bank 
sha was talking about? 

A I do not. 

Q Do you recall why It was, that this transaction 
required the services of a Swiss as opposed to a U.S. bank? 

A Well, 1 think she thought that this purchase would 
be a foreign weapon, would not go through the United States, 



Ml C Sam N I 



ONCLASSIFIED 



788 



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UNCUSSIFIED 



130 



would be transferred 




nd that it would be better 



2 'I for conf identiality--which was desired by all concerned--the 



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seller, the purchaser, and everybody else--to handle the 
banking outside the United States. I don't think there was 
anything particularly devious about it; it was just to use a 
foreign bank rather than a U.S. bank. 

Q All right. Well, I'm just curious, what's coming 
down here, because she's also talking about a third country. 
What other country would she be talking about? 



I think I know. Let me see. One from the third- 



yeah . 



Q 
A 
Q 
A 
Q 
A 




ll understand, what was the third country? 
The third country isl 




Yes. 

All right. 

There was a discussion of "other third countries", 
and that's why we used the term "third countries". At one 
point, they were suggesting another, actually 
country, but by the time she had lunch with me, she was 
thinking that the way to do this was only through^^^^^^l and 
that also was my view, and limitation, that th« 




■ •-LIK KVOKTwa CO . IMC 
'0- C iurr\ N E 
Vuh^lTon C :0002 

:o:. utiu* 



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WLASSIHED 



131 



'0- C Sut»i N ! 
Vutuifi** C :oooi 



not exactly the people that we wanted to do business with at 
this point. But again, her memo and her letter--and that's 
why I showed it to you, particularly--is a one-sided proposi- ' 
tion . ' 

This was sort of the proposition she was making at 
the lunch, which I did not reject, and I said in principle, 
"Barbara, you know I'd like to help you, but now that Schweit- * 

! 

zer's gone, I don't know whether I can even spend the time on 

it. He did all the work. I just introduced him to people, | 

and I don't know that it's worth continuing, but let's let it j 

ride for a while, and we'll discuss it later". | 
So that's why I showed you the letter. It sounds as; 

if we had a more contractual relationship than we do. i 
Q Bear with me. You must understand, in light of the 



document that vro saw from December 20, or thereabouts, 1985, 
that talked about a three-way transactio n, which on that 

t he^^^^^^^^^^^^^^^^^^^^^^^^^^^^^l GMT 
as the arms broker, and then a vast array of revolutions 
around the world that were going to benefit from it-- 1 have 
an abiding interest in transactions that Mrs. Studley is 
involved with with "third countries". 

A Well, let me explain to you: this is entirely 



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WUSJIflffl 



132 



different. This was a proposition that the weapons involved 
be sold from a European country to a third country--in this 
casel^^H|B--possibly another country, which would have been 
a near-Eastern country--and transferred ^°^^^^^^| '^here was 
no association in any of my discussions, with either Schweit- 
zer or Studley, with Central America. 

Q All right. But she says there are four brokers and 
four countries involved. I'm just curious as to what she's 
talking about here. Do you recall? 

A I assume the fourth country would be the United 
States, her, in other words. 

Q Okay. 

A 

Q 

A ^^^^^^^^^^^^^^^^^ 

Q ^^^^^^^^^^^^^^^^^H I take 
A ^^^^^^^^^^^^^^^^^^^^^^^^^^^Has the 
mediary, willing to purchase the weapons and then transfer 

them to^^^^Hj^^^^^^^HThe fourth county, the only 
one I can think of is U.S., which is GMT. As I say, another 
country in the^^^^^^^^^fwas discussed, but by the time I 
had lunch with her, she had said, you know, that just won't 




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UNCLASSIFIED 



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t^ork, we'd better just stick with^^^^^H so I assunte that 
she's referring to herself. I'm only interpreting the 
language. I don't remember what she said. 

Q This contract is March 9 of 1987. She's talking 
about a meeting that subsequently would take place in Geneva. 
Did that meeting ever take place? The meeting to discuss 
this deal, this torpedo deal. You don't know whether it took j 

place? 

A I don't know. I don't know. 

Q All right. In terms of pursuit of this transaction, I 
did you in fact pursue it? i 

A I discussed the subject with my friends in the 
sentation here 




•O- C Jam N I 




meaningi 
A ^^^^^^^^And frankly, I said to them, I don't 
imagine you will want to pursue this now, but I want you to 
know that the GMT still wants to do it, and if I were useful 
in helping you do something y ou wanted to do, I' m very 
politically supportive the^^^^^^^^^^^^^^^B and 
you know, let me know--in effect--let me know, if you think 
there's something still to be pursued. And in effect, what 
my friend here said was, not now, and that's where it stands. 



yNCUSSIFIED 



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Q All right. Did that imply to you, that after 
Congress went on its way, and the publicity settle down, they 
might be willing to pursue it? 

A Frankly, I don't think so. I think they were just 
being polite to me. 

Q Or just not liking to say "no", directly. 

A They don't' like to say "no"--f rankly , not--but 
again, that's why I left it open-ended with Barbara. Why 
tell her that there's no opportunity. 

Q I understand. All right. But there has been no 
action on this matter-- 

A There has been no action on this matter and I — 

Q And as far as you're aware, this matter was not a 

matter that was designed to generate a 'slush fund" that 
would be used to buy weapons to engage in revolutions 
elsewhere? 

A I can guarantee you that no one ever suggested to 
me that idea. 

Q All right. The cable that was prepared by the 
Agency on its meeting of March 19, 1987, relates essentially 
to what you've told mo. 

A Did I talk about anything else? I can't remember. 



iwussra 



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UNCUSSIHED 



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Q Well, there is a mention of what's contained in the 
March 9 materials about a T-72 tank, and the like. 

A Yes. Okay. 

Q But then there is a reference to an individual 
described as an Israeli-born arms dealer who works out of 
Brussels, Belgium, who gave an envelope to you, which you 
then passed on to the CIA agent, whose name I keep butcher- 
ing. Mi stj 

A 




That's right. 

And that you passed that envelope on to him? 
That's right. I did not retain it. 
All right. In terms of the Israeli-born arms 
dealer who works out of Brussels, Belgium, did you at that 
time know the identity of that arms dealer? 

A At some point I did know the name, but it didn't 
mean anything to me. 

Q Do you know the identity of that ariiia dealer at 
present? 

A No. 

Q Do you know anything more about that arms dealer? 



»■ C imr< N E 

Vti«uifTeo O C 



UNCLASSIHED 



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A No . He just was someone that Barbara thought was a 

"good guy' and therefore was evidently trying to do a favor 

to, is why she'd made that--those materials together. I 

asked about it because I said what the hell does he gain by 

this? What's he trying to do? Is he trying to blackmail 

somebody or torpedo somebody? And said, well, she thinks 

that the U.S. ought to know that the guys are "bad guys", and 

that's why he gave the material to me. 1 

I 
And actually, she gave that material to somebody t 

else as well as to me, so I--someone in the Customs Service, 

that she told me she had given it to. So when her son brought 

it around to me, I just turned it over ^^^^^^^Kl said I 

don't want to get into this; if you want it, take it. If you 

don't, let it go. i 

Q Do you know, in the arms of what country this 
dealer dealt? Were they Eastern bloc, Soviet bloc arms, or ' 
what? Do you know? 

A No. I just don't know. I just didn't get into 
that, you see. It was only a source of information about 
Iranian arms merchants who were in this country, and apparent- 
ly--and I thought that was an internal security affairs. 

Q Let me show you a collection of documents under a 

Hi 



MMAlff WC^Om-INQ CO , MC. 
>0* C Sum N E 

XftihiOfion. D c :ooo: 



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UNCLASSIFIED 



137 



"Washington Post" logo which I'd like you to look at, and 
tell me if these are the documents that you passed on to the 
Agency at the March 19th meeting. 

[Witness reviews documents.] 

THE WITNESS: Lavi. Yeah. These are the — the 
first one is. I assume they all are. This Tufanian — "It is 
decreed that the imperial armed forces will refrain from any 
contract with this company". Yeah. I think this is the same 
stack of documents as — certainly, the ones I recognire are. 
MR. KERR: These we would like to have marked as 
Exhibit 11. 

(Whereupon, the above-referred 
to document was marked Cline 
Deposition Exhibit No. 11 
for identification.) 
THE WITNESS! And, incidentally, that's characteris- 
tic of what I do for the Agency. If somebody hands me 
soaathing I think might be of security interest, I pass it 
along, but I don't take any interest in it because I'm not in 
the business any more. 
BY MR. KERRi 
Q You were given these documents by Michael Marx, is 



M7 C S<mi 



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507 C SowT NE 
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UNCLASSIFIED 



that correct? 



A Michael Marx. That's right. 

Q And Michael Marx is Mrs. Studley's son? 

A Yes. 

Q And the documents relate to the Lavi brothers. L- 
a-v-i. Do you know anything about the Lavi brothers? 

A No, it was all news to me, but they sounded like 
fellows people should know about. 

Q One of the Lavi brothers is a Houshang Lavi. H-o- 
u_s_h-a-n-g, Lavi. You don't know anything about Mr. Lavi? 

A No . I don ' t . 

Q You were not aware that Mr. Lavi is one of the 
witnesses that the U.S. Customs Service intends to utilize in 
its case against various folks from Israel and other coun- 
tries, who ostensibly were engaged in purchasing arms for 
delivery to Iran? The case is now pending in New York City. 

A Well, I'm not aware of that. I think there's some 
reference to the arms, illegal arms purchases for Iran in 
those documents, but I didn't retain them so I didn't study 
them very carefully. 

I don't know anything about Mr. Lavi, or the Customs 



case. 



y^CLASSIFIED 



797 



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UNCLASSIFIED 



22 



Q The Customs case is a case that was made by Cyrus 
Hashimi. It's the "sting" case up in New York. 
A I see. 

Q And !tr. Hashimi having met an untimely end. Do you 
know anything more about why Mrs. Studley was interested in 
your passing this information on to the Central Intelligence 
Agency? 

A No. I don't. I was curious about it, but when she 
told me she'd passed it on to the Customs Service, and 
thought it ought to be of general interest, I say, well, okay, 
let me have it. I'll see if my^^^^^^^fr lends are inter- 
ested, and, somewhat to my surprise^^^^^^^^^^^Hseemed to 
be quite interested in it, and took it, and that's the last l- 
-I said don't bother to give--I don't want a copy. 

Q Have you had any subsequent conversations witl 
about these materials, the Lavi brothers, the New 
York "sting" case, Cyrus Hashimi, or anything else relating 
to this matter? 

A No. I just don't follow up on those things unless 
there's something I need to do to get more information. 

Oid^^^^^^Vever tell you what, if anything, eh did 





with this information? 



^0• C Sum vi £ 
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:07 C Sum y. E ' 

TuhiAfioA c :ooo] 
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A I don't believe so. 

Q All right. Have you have any subsequent conversa- 
tions witl^^^^^^Kbout this matter? 

A I don't believe so. A kind of comment these 

eople make is, there was some interest in information 
you gave us. He may have said that, but, if so, that's all I 
know. There was no follow-up, no additional information 
imparted. 

Q You were not asked to determine for the Agency who 
the Israeli-born arms dealer might be? 

A No. I was not. 

Q You were not asked to obtain any further infor- 
mation on this matter? 

A No. 

Q And you have not in fact done so? 

A I have not, no. 

Q All right. 

A As I say, I think Barbara did at one time tell me 
the name, but I've forgotten it. 

Q If that name comes to you, I would be grateful if 
you would relate it to us. 



Okay. 



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UNCLASSIFIED 



Q All right. I 

A She was very secretive about it, so that's why--I | 

i 
have a great skill at forgetting the things that I don't need | 

to know, because I've lived 45 years with a lot of information' 



that I want to keep very carefully compartmented in my mind 



Okay. You do recall advising 




hat the ( 



hcliii trommo co mc 
lo- C Sum s E 
VwuAfio* C .'Mo: 
.'0)1 ^<« »aM 



arms dealer, source "A", whatever it was, that was referred 
to, was Werner Glatt? 

A Yes. The source "A". The^^^^^^^Vpapers , yes. 

Q Yes. And in that regard, di<^^^^^^^Kay anything 
to you about the Agency's view of Werner Glatt? 

A I believe he confirmed to me the impression I had 
form my brief conversation with^^^^^H which was that Werner 
was a "bad man", but that's about all I got. That was just, 
I think, a personal impression of^^^^| who seems to know 
something about these things, more than I do._ I think he had 
been involved in studying^^^^^^^^^^^^^^^^Ha 
certainly knew a lot more about Werner than I did. 

Q Do you telling^^^^^^^^^Hon March 19, 
that if you were unsuccessful, through him, in making renewed 
contact witl^^^^^^^^Hyou were prepared to make conta<tt with 
acting CIA Director Gates, to ask him to re-establish the 



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UNCUSSIFIED 



relationship? 

A I don't remember, exactly, that conversation. I 
think what I said was that if he had difficulty getting a 
response--which is often the case with the^^^^^^Hpeople-- 
that I was willing to talk to Gate about it, but that I'd 
prefer to treat it as an information problem, because I didn't 
want to become an advocate. I wanted to be simply informed 
as to any real interest by the Agency. 

I was afraid that, in view of what I thought was 
ather negative attitude, that just nothing would 




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someone in a senior position should know that there was an 
allegation that this capability existed and could be used. 

And it was so confusing to me as to prices, and 
sources, and so on, that I just wanted to be sure someone was 
paying attention. That was the "drift" of my comments to 

You've got to remember ,^^^^^^Hseemed to be a very 
young man to me, and I was sort of coaching him how to get 
the response he need, bureaucratically. 

Q Do you recall advising^^^^^^^^that it was you who 
had previously put Studley in contact wi 
result of your contact with Casey? 





as a 



yiUSSIFIED 



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143 



A Yes. Yes, I think I told him that. 

Q And your understanding was that that was true, is 
that right? You are the one that opened the door for 
Studley, through your contact with Casey? 

A Well, not initially with Studley. I put Schweitzer 
in contact with^^^^^^^^ on behalf of Studley. It turns out 
she had been in contact with Casey a long time before. What 
I'm talking about is the November-December 1986 period. 
That's what I told ^^^^B You 've got to remember--I didn't 
know who Barbara was before some time--October or November 
1986. ^^^^ 

Q Do you recall telling^^^^^^Hat the March 19 
meeting, that Studley had been actively supporting the 
contras , and possibly the Afghan resistance? 

A I don't remember about the Afghan, but by this time 
I think I was reflecting the Singlaub-Studley story about 
their '85 arms transaction. 

Q Do you recall saying or implying anything to 
that Mrs. Studley and GMT would be particularly 
worthy of CIA contracts, in light of Studley' s good works for 
the contras in the past? 

A I may well have said something like that. I would 




UNCLASSIFIED 



802 



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UNCLASSIHED 



144 



have been referring to what she told me, after the Singlaub 
news story, and I think perhaps I discussed with Schweitzer 
that they had successfully transferred arms in 1985, in a way 
that they considered totally legal, and internal to the United' 
States, and therefore, not faulty in any way. And I would 
have concurred in that, as long as no laws were broken. 

I felt that arms for the contras were a matter, a 

benefit to U.S. strategic interests in the Caribbean. | 

i 
Because that is my judgment on a strategic issue, I might j 

well have volunteered that 

Q All right. You did in fact meet with 
the 27th of March? 

A Yes. Were the two dates that were mentioned in my ' 
notice. I did meet. I 

flJUH 

Q And where did you meet with^^^^^^Hat that time? ! 

A In my office. I always met in my office. \ 

Q Who else was present when you met with^^^^^^| on i 
the 27th? i 

A I don't remember. I don't remember what we talked 
about on that occasion. The two dates are mixed in my mind. 
I don't recall, exactly, what the purpose of those two 
conversations was. Had I just come back from a trip, or 




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something? 

I cant-- 

A You can't tell-- 

Q --tell you that. 

A I would have to do some research to do that. I 
didn't have time to do that. 

Q Do you recall, that when you and! 
meeting on the 28th, that Michael Marx came into your office? 

A I believe he did, yes. I think I introduced him to 
t some time, in a meeting, when I was--it was 
accidental, as far as I know. 

Q Do you recall what it was that Marx told you in 
resence at that time? 






INAJ« KCrOOTMO CO (K. 
1«- C Sum N I 
Vulwi(io« O C .'0001 



A No. I don't recall, now. 

Q Do you recall that Marx told you that Mrs. Studley 
and GMT had just been served with a subpoena from the House 
Select Committee? 

A Oh, I think that might have been what happened, 
yes, and I may have advised--if so, I probably would have 
advised ^^^^^^^B because I thought he would be interested to 
know that the firm I'd been telling him about would be 
subject of inquiry. I didn't remember I'd done that, but I 



UNCLASSIFIED 



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ilClASSIFlEO 



146 




probably did. 

Q Do you recall what you told Marx in the presence of 
egarding the House of Representatives' subpoena? 
No. No, I don't. 

Do you recall telling Marx, in the presence of 
that he, Marx, should tell his mother, Mrs. Studley 
that she had not been in contact with the CIA, since she had 
only been in contact with yourself, and that the whole affair 
had been very tentative? Further, that you advised Marx that 
his mother should not mention discussing with you the 
possible arras purchase, because that, too, had been tentative? 

A Well, I am sure that what I was saying is what I've 
been saying to you about this contract, that — and, see, this 
is after — this is probably after my luncheon with her, right? 

Q Yes, sir. This was March 27th. 

A I think what I was saying was, look, don't say that 
we have an arrangement to sell arms to CIA because I have not 
agreed to do so for you, and my approaches to them were 
tentative, and so far inconclusive, and I don't expect--I 
don't know that we'll be able to do what you hope for. That 
would have been the gist of the message I was trying to give 
to Mrs. Studley, which is what I had given her (earlier, and 



I! 



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had nothing to do with thei r bein g under investigation. 

Q If the CIA agent ,^^^^^^^^^^Bunderstood you to be 
telling Mr. Marx that his mother should not--his mother, Mrs. 
Studley--should not comply with the subpoena, and should not 
identify to the House of Representatives, that she had been 
endeavoring to contract with the Central Intelligence Agency, 
he would have misunderstood what you were telling Mr. Marx, 
is that correct? 

A Yes. All I could have possibly been trying to say- 
-and I don't remember the words, I don't remember the 
conversation, particularly — was to say, do not exaggerate 
because of your wishes, and hopes, your chances for selling 
arms to CIA. She was very--I think she tended to believe 
that if I supported her long enough, and earnestly enough, 
she would eventually be able to succeed. My personal opinion 
is that that's unlikely to happen. 

So, I was talking about her actual contractual 
relations in the 1986-1987, and future period. 

Q At that, or any other time, have you told Mrs. 
Studley, in conjunction with the House of Representatives' 
subpoena that was served upon her, that she should not be 
fully truthful and forthcoming with regard to her relationship 



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148 



to the Central Intelligence Agency? 

A No, no. Never told her that. I don't even read 
that sentence that way, although it's a little elliptical. 
It could be interpreted as suggesting she not say anything 
about her contacts. I don't think that's--I wouldn't have 
said that because, you know, it's on the public record. I 
called Bill Casey. I know that those matters are matters of 
record. 

what I was saying is that you don't have a "live" 
contractual relationship, and therefore, be careful to 
distinguish that you don't. Now I wasn't telling her what to i 
say about 1985 because I didn't know anything about that. I 
was talking about our current relationship. 

Q All right. One of my objectives in issuing the 
subpoena was to try to make clear, on the record, for both 
the Senators and the Members of the House, what it was that 
you were doing on March 27th. One way that this incident 
could be construed, quit4e frankly. Doctor, is that you were 
telling Mr. Marx to convey to Mrs. Studley that she should 
not comply with the subpoena insofar as the CIA was concerned. 
That, I take it, was not your intention? 

A Of course not. I wouldn't give her advice on that 



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»l C So«n N E 
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subject anyvay. She had lawyers to advise her on what to do. 

Q She sure as not does. A whole passel of them. 

A A whole passel of them, yes. And, you know, I'm 
not that close to Barbara. I was doing a favor for Schweit- 
zer, and ended up with Barbara on may lap, is what it really 
amounted to. I think she is probably a patriotic woman. I 
don't know much about her performance, but her views are that 
she thought she was doing something in the national interest 
which some people disagree with, and I tend to by sympathetic 
with people who try to do that.. 

Q So we're clear: you did not tell Marx that his 
mother should not mention to the House of Representatives, 
that she had been in touch with you about an arms contract? 

A No, no. I imagine I might have said to him, as I 
had said to her, do not misconstrue our discussions to 
indicate that we have a contractual relationship of any kind. 
I did not want it to be implied that I was actually working 
for GMT, and if there was going to be an investigation of it, 
I hoped that that would be clear, which is the fact. 

Q Do you have knowledge today, of any documents that 
Mrs. Studley has not provided to the Senate and the House in 
response to the subpoena, at your instruction? 

V' 

?.' 



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OfiSlASSIflEO '■■ 

A I have no such knowledge at all, and obviously, not 

at my instruction. Actually, the only two documents that I 
was concerned about are the ones I just gave you--the draft ! 

contract and the draft retainership, which looked to me as if . 

I 
people might construe a closer relationship than I considered j 

i 
to exist, and therefore, I want to be very careful about that i 

documentation . 

Q You indicated in your March 27, 1987 meeting with 

apparently, that you were planning to have lunch with 

Gates in April. Did you in fact lunch with Gates? 

A Yes, I did. That had been long scheduled, and I'd 

been trying to arrange a lunch with him for some time, and, 

again, I have a firm policy to not let your junior officers 

be upstaged by their bosses, and I told him about it. In 

fact we did not discuss any of these things, seriously, 

because things had changed. I was really concerned about 

Casey's death, and — 

When, in April, did you meet with Gates? 

With whom? 

With Gates. 

Well, I can't remember. I probably gave the date t^. 

[but I don't recall. I'd have to look it up in my 



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DtiCLASSIFIED 



151 



CO . •• 
»' C Sum N I 
Vaikiafwi. O C lOOOl 

'nil u*-ttu 



calendar. It was changed several times, but I finally did 
have lunch with him quite a bit later than I'd originally 
expected. 

Q Who else was present then? 

A Nobody. 

Q I'd like you to give my your fullest and most 
complete recollection of what you discussed with Gates at 
that time. 

A Well, you've got to remember that I was--I hired 
Gates for the Agency, although he was-- 

Q I didn't know that. Is that right? 

A Well, he was a, what we called a career trainee, 
and he remembers that I brought him in when I was Deputy 
Director, and spoke to the group. I don't remember that. 
You know, I hired a lot of people. But he did come on board 
when I was still DDI . So we have a kind of avuncular 
relationship. 

I was mainly trying to find out from him how he felt 
the Agency was prepared to deal with what seemed to me to be 
another time of criticism and, perhaps, excessive negativism, 
like the period in the mid-1970 's, when I felt that the Agency 
suffered a great deal tjrpm the "fallout" from the Church 




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152 



Cononittee. The Church Committee had a good purpose, but in 
my view committed some investigative indiscretions that did 
the Agency a good bit of deimage . I wanted to find out 
whether Gates thought this was a danger, again. He didn't 
really know and didn't express any opinions on that. I 
mainly asked him what his own personal intentions were. I 
told him I thought that the Adminstration had handled his 
situation very badly. He's a career officer. He should not 
have been put up as DCI unless they were, for some reason, 
prepared to fight it through and get him appointed. 

That putting him up, and taking him down was 
humiliating, and I hoped that he wouldn't take it personally. 
I said, you know, it's just part of the climate in Washington 
these days. You should not take it personally. I hope you 
will stay on in your OOCI job, and help this new man who's 
coming in — he was not yet in — because the Agency has to 
survive no matter what the problems are, and it's going to be 
a rough time. And he told me that he intended to survive. 
That was the main thrust of our conversation. 

Comments about Casey. I forget. Casey had not yet 
died. He was very low. I asked him about Casey's health. 
He had seen Casey since I had. It was a sentimental conversa- 



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ONClASSIflED 



153 



I 



tion, for the most part, quite different from what would have | 

taken place if it had taken place several weeks earlier, as I 

had anticipated. 

I 
Q Was there any discussion of the prior meetings that ' 

^^^^^ 
you'd had wit(^^^^^^|about GMT? 




10* C Sum N E 
Wulwifna C .'OCOl 



A I don't think so. I don't remember bringing it up. 
I wouldn't guarantee it wasn't mentioned, but this was not 
much a business meeting. This was a philosophical, historical 
discussion, ranging back 25 years. 

Q Do you have any recollection of making a request of 
Mr. Gates that the CIA reconsider its decision not to do 
business with GMT? 

A No, no. I'm sure I did not do that. I could 
conceivably have mentioned that they were interested in it, 
but I don't think I did that, either. 

Q I have taken you way over time, but let me try to 
wrap this up real quick. I'd like you to look at Graham 
Exhibit 4, which is a memorandum that was provided to us by 
counsel for Mrs. Studley. I'd like you to look at the 
document, tell me if you've ever seen it before, and if so, 
under what circumstances. 

[Witness reviews document.] 



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>07 CSotn NE 



THE WITNESS: Goodness. This is a weird one. No. 
I have not seen this. I don't know who — Koszuros, who's that? 
BY MR. KERR: 

Q That's the lawyer for Mrs. Studley. 

A That's the lawyer. Is there any indication who the 
author is? 

Q Mrs. Studley, I believe, wrote that document. 

A Koszuros is the author of the cover memo, but — I 
see. Oh, you think Barbara wrote that? 

Q Yea . 

A Well, that sounds like Barbara. She's a little 
"wild" sometimes, I must say. 

Q The memo you've never seen? 

A I've never seen it. 

Q And you don't know the circumstances under which it 
was written? 

A No. 

Q Let me close with two newspaper stories that I need 
to take a look at. 

A All right. 

Q The first is a "Los Angeles Times" article of June 
13, 1987 which talks about work that we are doing with regard 



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iCUSSIFlEO 



155 



to Cyrus Hashimi and in a note, on the last page, it mentions 
Houshang Lavi. I'd like you to read it enough to tell me if 
it gives you any further recollection of knowledge that you 
would have of why Studley was passing on to you information 
on Houshang Lavi. Any connection it might have with the 
untimely demise of Cyrus Hashimi? 

A When did he get knocked off? 

Q He died before we had a chance to talk to him, 
unfortunately, back in '86. 
A Oh. 

Q It's long before-- 
A '86. Oh, not when this — 
Q Long before this blew up. 

[Witness reviews document.] 

THE WITNESS! Wild. I don't remember anything more 
about that. I honestly didn't pay much attention to that. I 
see. So he was a, presumably was a good guy. 

MR. KERRi At least he was a snitch that started 
the Customs Service's case. He was a little nervous about his 
current well-being. 

THE WITNESS : Maybe that ' s ifwy Barbara wanted to 
give it to the Customs Service. It surprised me that she gave 



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muni mrcmma CO.. mc 
M7 CS<nn. NE 
VMkamaa. DC. 20002 
( 1021 M«.«M< 




156 



it to me. 

MR. KERR: You know, anything you can tell me about 
what she told you when she passed the packet onto you. 

THE WITNESS: Well, she didn't pass it. She sent 
it over-- 

MR. KERR: By way of Marx. 

THE WITNESS: She probably called me. She sent it 
by her son. 

BY MR. KERR: 
Q And he didn't tell you anything more about the 
Lavis? 

A No, no. I don't think he knew anything more about 
them, and I kept asking, why does anybody want to do this?, 
and they said, well, this guy in Belgium is probably the one 
who has some axes to grind, you know, but he's a "good guy" 
and it ought to be available to people, and which is an 
argument I tend to make on almost anything. But I don't know 
any of that detail. 

Q And that doesn't give you any further recall? 
A Doesn't refresh my memory on it, no. 
Q All right. There is an investigation going on 
relating to Mrs . Studley and her activities with regard to a 



tuaiey ana ner activities 

lifmSlflEO 



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«>? C Sutn N £ 
Vuhtofton. O C 
(rail ^46-t«*4 



'IICIASSIFIED 



157 



couple of Florida banks. I'd like you to take a look at a 
June 11th article from the Miami "Herald" which outlines what 
the Miami "Herald" knows about those investigations, to see 
if they stir any recollection of knowledge that you would 
have about knowledge of Mrs. Studley's activities relating to 
these banks, and her use of these banks to finance activities 
relating to the contras . 

[Witness reviews document.) 

THE WITNESS: You know, this is the sort of stuff 
that makes my eyes glaze over. My observation is these 
businessmen cheat each other all the time. I've become so 
disillusioned. 

MR. KERR: It's what keeps us lawyers busy; God 
bless them. 

THE WITNESS: It keeps you guys in funds. That's 
right. I can't make anything much out of it, to tell you the 
truth. 

MR. KERR: All right. Well, let me ask you a 
specific question. 

THE WITNESS: Is there some special angle on it? 

MR. KERR: Yes. 



BY MR. KERR: 



UNCLASSIFIED 



816 



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pomwaco.. M 

»' C Sotft N E 

'Mil ' 



Q Do you know Louia F. Petrillo, the former president 
of the Bayshore Bank? 

A No. I don't know him. I never heard his name. 

Q Have you ever had any business transactions 
yourself with the Bayshore Bank? 

A Absolutely not. No. 

Q Do you have any knowledge- - 

A Bayshore is Florida, isn't it? 

Q Yes, sir. 

A Not in Long Island. 

Q That's true. 

A Okay . No . 

Q Do you have any knowledge of a loan that GMT 
obtained in the amount of $500,000 from Florida National Bank 
to further its relationship with Israel in 1985? 

A I didn't know that, although Barbara throws the 
nasMS — the name Israel around, and says she's got a lot of 
banking connections, but I didn't know about this one. 

Q Do you have any knowledge of a $1.5 million letter 
of credit issued by Florida National Bank ostensibly to aid 
Mrs. Studley in raising money to purchase weapons for the 



contras in 1985? 



UNCLASSIFIED 



817 



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■UjBI II U K H I J CO.. MC. 
W C S<n«I N t 
TTiillllllnl C 10002 
(XI) VUMM 



UNCmSSIFIED 



159 



A No. No. This is all prior stuff. 

Q Do you have any knowledge of a $1.5 million loan 
from Bayshora Bank, utilized to pay off the defaulted letter 
of credit of Florida National Bank when it came due in the 
summer of 1986? 

A No. I get the impression Barbara has financial 
troubles, but that's all I can say. 

Q In terms of her Florida banking difficulties — 

A I don't know anything about it. 

Q — you know not, is that right? 

A I know not. Absolutely. 

MR. KERR: Well, Doctor, many thanks. I think we 
have succeeded in covering my outline. I appreciate it. 

[Whereupon, at 2:15 p.m., the deposition was 
concluded. ] 



t^un ti 



;t 




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MXBI K PU W H i a CO , MC 
)07 C iatn N 6 
WMhuflsn O C 2000] 



UNCLASSIFIED 



160 



I 

I 



I have read the foregoing pages, which contain 
a correct transcript of the answers made by me to the 
questions therein recorded. 



RAY STEINER CLINE 



Subscribed and worn to before me this 
of , 1987. 



My commission expires; 



mu^m. 



day 



Notary public in and for: 



819 



ONCUSSIFIED 

CERTIFICATE OF NOTARY REPORTER 



161 



I, Terry BarhanC the officer before whom the 
foregoing deposition was taken, do hereby certify that the 
witness whose testimony appears in the foregoing transcript 
was duly sworn by me; that the testimony of said witness was 
taken by me and thereaftrer reduced to typewriting by me or 
under my supervision; that said deposition transcript is a 
true record of the testimony given by said witness; that I am 
neither counsel for, related to, nor employed by any of the 
parties to the action in which this deposition was taken; 
and, further, that I am not a relative or employee of any 
attorney or counsel employed by the parties hereto, nor 
financially or otherwise interested in the outcome of the 
action. 




Terry fearham.^-^' 
and for th6 Dis 




otary Public in 
trict of Columbia 



My coainission expires Hay 15, 1989- 



I. HL 
. DC 



yilASSIFIED 



820 



^q />^^fiS7 



UNCUSSiRED 



ffarch 9, 198 7 

Dr. Ray S. Cline 
1800 K Street, N.W. 

Suite 1102 

Washington D.C. 20006 

Dear Ray, 

This letter is to acknowledge our conversation during 
Tuesday, March 3, 1987, 



lunch on 



I appreciate your willingness to proceed on behalf of GMT and to 
conduct the ongoing negotiations thru your corporation, "Cllnexpo". 

As you are aware, I have worke^^ove^^twp years in the effort of 
obtaining the essential torpedoes ^|^^^^H|| Prior to 1984, I spent 
considerable time during the three years on ny radio show informing my 
listen^j:^ on the necessity of supporting our proven friend and ally. 



Due to the importance of this transaction, any media attention from 
GMT's earlier efforts to help Maj. General John K. Singlaub must be 
eliminated. Therefore, your corporation, and your personal attention 
in handling this negotiation would be in the best interest of all 
concerned. 

The banking arrangenents have been established thru an exceptional 
attorney, Mr. Lauren t Lew. 23 Quai De e Bergues . 1211 Geneva, 
Switzerland, Telephone: 

Mr. Levy is French, aarried to an American and highly respected by the 
Swiss banking coanunlty. 



The JB^mattorney would work closely with Mr. Levy, Mr 

would instruct the Swiss bank to begin this process 

provide a letter to you clearly stating their desire to pure 
the exact number of torpedoes desired. 



purchas^ 



turn 

must 

and 



unotf otuv.s^ns 01 E 12356 



UHCUSStFIED 



sisS- 



QeoMlirikch ConsuKints Corporation 

t91« Pw»i»irNw««Av».NW. Suit* 300 W»a^,'QC. 20006 U.&A.T(ttwhoo« (202)887-0616/1ite:904a78QMT.W*tfi .OC. 



821 



March 9, 1981 
Pag* Two 



l/NCUSSiFe 



The additional 30 million dollars will provide the necessary funds for 
the 3rd country, the four brokers involved, (each country has an 
agent) , and the attorney in Switzerland. 

After you receive the letter of intent ,J|^^|^^^^il 1 provide a 
contract clearly outlining the cos^^of the torpedoes, and all 
additional items. At that time,H|H|||||||wi 1 1 approve the contract, 
^j^^^con^ac^s must be approvedT^^On^^f rom the 3rd cc 

J^mi^m^l^ and a contract between the 3rd country and] 

Tnes^^^Tg^^^details will be carefully concluded between the attorneys 
of all parties. Said meeting will take place in Geneva. 

apon the final approval of the contract, |HHHwou Id be required to 
establish an irrevocable Letter of Credit for the full amount of the 
purchase, therefore assuring the 3rd country that the funds are 
available, on dema nd, at the tine that the torpedoes are ready to be 
shipped FOB I 




rely. 



--:iAL^/<u 



ra p. stud ley / 



President 

GeoMiliTecK Consultants Corporation 



:/ 



BPScb 




im 



822 




SIFT inc 

iStr^tegic Intelligence Future Trends) 



November 24, igg^ 



i.e. Ccn. Robert L. Schweitzer, USA (Ret.) 

C.MT 

1919 Ponnsvlvania Avenue, Suite 300 

Washi-iit.-in, .). C. :0006 

^ear r>'D: 

For Che record olease treat this letter as an invoice 
:j C>!T for - .v processional services in the] 
[Droject . 

The trip ue made toU^^^Hcalled for a flat 
SIO.OOO fee plus expenses which I understand you have 
already paid or will reimburse separately. 

In addition my pre-trip preparations Involved 
numerous briefings, readings, telephone calls, and 
meetings with principals involved. At a very minimal 
hourlv billing account ray calculation Indicates the 
equivalent of two full work days expended for CMT, 
for which I request payment at SI. 000 per day or a 
total of S2,000. 



'»'ith -luch appreciation. 



Cordially, 



Ray S. CliiSr 



Pirtuity Oedassified/Reieasea nn ffcuFS 

unfler orovisions ol E 12356 

Dy K Jonnson. NUkkuI Sicunly Council 



KNWSIfe 



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STEIN 
QUINTERO 

II 
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'WW 



\^^>T.i-Z^\^l- 



c/Nct 



DEPOSITION OrJ 



Wednesday, April 22, 1987 



y3V\0 



^' 



^ 



House of Representatives, 

Select Conunittee to Investigate Covert Arms 

Transactions with Iran, 
Washington, D.C. 



The select cominittee met, pursuant to call, at 
10:00 a.m., in Room EF-100, The Capitol, W. Neil Eggleston 
(Deputy Chief Counsel for the Committee) presiding. 
Present: Senator Heflin; Charles Kerr, Counsel, Senate 
Select Committee t-o-^ wvast iQa ta C o v a rt A c4t>3 Ti Jiii>ai-tiono 
with Iran; Diane Dornan, A-a a imTnt Staff, House Select Committei 
to Investigate Covert Arras Transactions with Iran; David 
Pearline, Legislative Liaison, CIA; E. Page Mcffett, Office 
of General Counsel, CIA. Pwmy owi^tsiiwRtniswi on "^J^ I^SR 

unOet BTOvisions ol E 12356 
\I1 K JoAnson Ninonji S«cuity Couicil 



punoo «iiin3»S i«>«>l'N uotuiior K «q 
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Whereupon, ^^^^^^^^^^^ after having been 
first duly sworn, was called as a witness and testified 
as follows: 

EXAMINATION 

BY MR. EGGLESTON: 
Q ^^^^^^^^^^1 just so the record is am 

Neil Eggleston, Deputy Chief Counsel for the Select Comnittee 
to Investigate Covert Arms Transactions with Iran. Represent- 
ing the Senate is Chuck Kerr, who is an attorney with the 
Senate Select Committee as well. 

This deposition is being conducted pursuant to, at 
least on the House side, H. Res. 12, which establishes the 
Select Committee to Investigate various incidents, including 
the activities of the U.S. Government and others involved in 
the Iran affair, as well as the jurisdiction of the committee 
extends to the Contra investigation as well. 

So this deposition is being conducted on the House 
side pursuant to that resolution and there is a 
substantially similar Senate resolution. 

MR. PEARLINE: Before we begin, I would like 
to point for the record that^^^^^^^^^^^^f is CIA 
employee^^^^^^^^H and that his name has heretofore not 
been revealed publicly with respect to his involvement in 
the CIA support to the NSC initiative. 




\Cw#mih?T 



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\mBm 




not be publicly associated with the CIA and we trust 
that individuals at this deposition and those who read 
this deposition will honor this request. 
MR. EGGLESTON: All right. 
BY MR. EGGLESTON: 
Q ^^^^HIB let me begin just by asking you 
lid to give for us in a brief fashion your professional 



vou couJ 



) 



and educational background up 
1985. 



until, say, the summer of 




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land then became the Deputy Chief of 
NE Division until May -- April, I guess it was, April of 1986. 
And have been Chief of NE Division since then. 

Q And your current position then is Chief of the 
NE Division? 

A That is correct. 

Q NE stands for Near East? 

A That is correct, in the DDO. 




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Q I would have thought it would be. And so then 
from July of 1985 until April of 1986, you were involved 
as Deputy Chief of the North East Division and then until 
present, Chief of the North East Division? 

A Yes. 

Q could you explain your duties first as deputy 

f^t^^^m^m^^^^^^ and then your duties as Chief 
c h 1 e t^^^^^^^^^^^^^^^^^^^^^ 

)f the North East Division? 




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Q So that I understand, so one of the things that 
you did during the period of time that you were deFjty is that 
you read most of the cable traffic involved in the NE Division 

A I would say almost all of the — the purpose 
was to read all of the important operational cables. 



A Did anybody screen it for you? 

IlilDLACPJnFn.- 



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there was a sort of 20, 30 percent 
of the traffic that I wouldn't have seen. 




Q Let me sort of get to that. I just have a few 
more questions about this administrative type duties before 
getting to specific facts. I take it that there were 
also regular meetings of the senior staff of the CIA, that 



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IRftlOTfiF 



there must have been regular meetings with the director and 
the senior staff, is that correct? 

A Yes. 

Q Do they happen on a regular basis? 

A I am not sure I am the right person to ask that. 

Q Let me ask you, how often as chief of the 
NE Division would you or did you meet with the director? 

A Only when called to meet him or there was a 
problem that we would take up to the DDO that he would want 
taken on up to the director. 

He then might or might not take me along. 

Q so you were not part of a regular staff meeting 
that would have been conducted? 

A NO, the only regular staff meeting I attend at 
a higher level as the chief of the division would be a weekly 
staff meeting with the DDO, and as the deputy I would 

flHI^^^^^^^^^^^^^^^^I were 
attend that only vhen^^^^^g^^^^^^"'-'' 

Q Let me get — I guess I will ask the 

question in this fashion -- is there any record kept of 

staff meetings or is there a note taker of minutes with 

the DDO that you just described? 

A No. 

Q Did you indicate when the staff meetings took 

place? 

A Once a week . 



iiiiri Aooinrn 



82-696 0-88-28 



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mmm 



And is it a regular time? 

Well, it changes from time to time 



10 



( 




Q Let me start when maybe most people start at least, 
I would like to start in or about the summer of 1985. During 
the summer of 1985, and I have gotten this from a numb«;r of 
witnesses so I don't want a lot of detail from you, but could 
you generally describe to me your own personal knowledge of 
Mr .Ghorbanifar , his relationship with the agency and his 
then status with the agency. 

Was he someone who was known to you by name at 
that tine? 

A I am not sure that he was at that tme, although the 
agency and NE Division had had a fair 2UDOunt of experience 
with him. I would have known of him because of the 1984 
experience with him in which he provided allegedly sensational 
information that there was a terrorist team out to assassi- 
nate ranking officials of the U.S. Government, and I was in 

NE Division during that time and recall that we did do a 

JecepV.otsJ 
polygraph of him and found that he was showing iji ir^ipt t rn on 

all principal questions. So he was well and unfavorably 



JJhICI iCCJCirn 



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11 



known to us by the summer of 1985. 

Q So by the summer of 1985 you were aware of him 

A We had a pretty sensitive file on him by that 
time, which you have at your disposal. 

Q As I refer you to documents so the record is 
clear, I will refer to the CIIN number which is at the bottom 
of the documents. This is CIIN -- this is No. 511. 
Let me show you that and ask you, is that document familiar 
to you? 

A . This is the 1984 fabricator notice which was 
disseminated to several other government agencies after 
we and the Secret Service had gone through this -- that 
episode with Ghorbanifar. This was originally written 
in NE Division. 

Q Do you know who was the officer, official 
responsible for the decision to issue a fabricator notice 
on Mr. C^prbanifar? 

A That would have been taken principally in NE 
Division, that decision, possibly consulting with the DDO. 
There was a great deal of consternation about that case 
because It did involve an awful lot of time by us and the 
Secret Service in tracking down whether or not that could 
be true in part, if not in whole. 

We have to take all such. things very carefully and 



IUICli<L<UEl£L. 



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seriously. So there was a -- there woUld not have been, 

having had the polygraph come out as badly as it did, there 

would not have been much argument that such a fabricator 
notice should be issued. 

I 

Q Let rae ask you so that I am clear, do you recall 
whether you were personally involved in the decision to 
issue the fabricator notice to make the determination that 
Mr. Gorbanifar should have a fabricator notice issued on him? 

A I do not recall that. 

Q. Is that something that you as deputy chief would 
probably have been involved in? 

A It should have corae across ray desk, should have 

been something that I read and signed off on. It would have 

* 
been approved by the chief of the division, and all paper 

coming to the chief of the d«viaion has to come through 

me first. 

Q Let me ask you as well — there must have 
been a lot of people who provide information to the agency 
whose information turns out to be Incorrect, and as to most — - 

A There certainly are] 

Q That is what I assumed. 

Could you just describe for me what it takes before 
the agency makes a decision that whatever the person has 
done is sufficiently serious that a fabricator notice should 




IIMPI Accinrn. 



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be sent out on that person, and that question is a little 
out of order — how many of those are sent out on various 
people during the course of, say, a year? Is this a fairly 
routine document; is this the only one in the 1980s that 
was ever sent out by the agency? 

I would estimate that NE Division sends out 




And in our 
experience, people like this would have elaborate stories, 
some of which is based on some true facts which are checkable 
but may not have anything to do with terrorism, it takes 
an awful lot of time to check these out. 




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B(IR)K8WI«ET 



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Q So what I get from what you are saying is that 
the decision to issue one of these is not a routine matter, 
there are certain sort of factors or qualifications that 
must be present before a decision would be made to issue 
this kind of a document? 

A The most important factor is v /h « wt er somebody 




[then we issue a faWicator notice. 
Q Let me ask you about some events which took place 
in the fall of 1985, just to obtain your level of knowledge 
of things that were happening. I understand you were not 
principally involved until 1986, but on or about September -- 
let me ask this first -- on or about August 30th, and then 
again on September 12, 1985, there were shipments of TOW 



iiiWLioxiinrn« 



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\mwim 



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^ missiles from Israel to Iran, 500 in late August and an 

2 additional 500 ^pc^eptember 12th, I don't remember the 

2 exact date. Were you aware at the time that they were 

^ taking place of those shipments? I don't mean aware through 

c official sources. What I really mean is were you aware 

g through intelligence or any other kind of information that 

y they were taking place? 

If that was too complicated a question, I will 
break it out. 

A That is all right. I am looking dumb because 
you are .giving me some figures that I have never heard before. 
I know a lot more about this now than I did then. The 

September flight is the one 

Q . I am sorry, I gave the wrong figures actually. 
There were 100 in August and 408 in September. I gave 
you the wrong figures. No wonder you are looking at me 
stranAy. 

Were you aware of those two flights delivering 
those? 

A I am still not aware of the August flight. 
I did't realize that that was a split shipment. I thought 
that all took place in the September flight. We heard whiffs 
of the September flight from overt press reports that were 
coming out o^^^^^^^^H and we have provided you with 
some cables on what we did know in the succeeding weeks and 



two months. 

^4 



mmm 



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And there was one hint that maybe there was 
something involving the NSC, a cable coming outi 

The only other thing I can tell you 
about that period was that it wasn't the first time that we 
had had a sense that the Israelis might be involved in 
providing arms to Ira 




there had been a pat 
the Israelis were maybe doing something. 

Q This was a pattern though that resulted in release 
of a hostage? 

A The September one, yes. 

Q Did your intelligence information connect the 
events of the release of the hostage with the delivery of the 
weapons? 

A It didn't in NE Division. I have recently seen 
[which make it very clear to me that that 
was known in the building. But NE Division did not 
see 




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imssieii^T 




Icontemporaneous with the events, is that correct? 
A That is correct. 




Q Do you know the reason that you did not see 

in September of 1985? 
A Well, as I have said before, there are a lot of 
things that I eun a lot smarter on now than I was then. I 

am ^h3^^H^^H^^H^^^4H^^|^HH^^| ^° 

Allera^|H^H^^^^| and that shared them 
with the director. 



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Now the question I cannot answer, your next 
question is, I don't know who else the director might 
have shared^^^^^^ith. 

Q You are exactly right, that was going to be my 
next question, who else had seen them. 

Was unusual W^^^^^^^^^^^^^^^K not shown 
to the NE Division? ' 

A Yes, that is highly unusual. It is not unheard of 
in the agency for something to be very highly compartmented, 
even though it might involve the area division. Even 
though it might be taXing place in an area that an area 
division was responsible for. And I would say that had been 
particularly true if it was essentially a White House 
operation. 

Q Were you aware that Colonel North had asked 
Allen f|^Hmmm^^m^^^^H|H in 
mid September of 1985, were you aware of that at or 
about the time it took place? 

A No. 

Q Had you met Colonel North as of September 1985? 

A Yes. I had probably seen him at two or maybe 
three meetings by that i time. 



iMinssm 



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Did any of those involve -- any of those meetings 
involve efforts to get the hostages released? 

A Probably, because we did by that time have 
American hostages. Colonel North was involved in hostages -- 




844 



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unsH^ssieT 



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Q Let me ask you about the way your filing system is 
maintained. Is it fair to say or would I be accurate in sayin< 
that there is a general computer capability at the agency 
that maintains various name indices, an ability by the agency 
to check individuals by name? Is that a fair statement? 

A Yes, 




846 



P^.aa 



^^J/SD 



J 



/:) >'(T 



T^U 



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mm^ 



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BY MR. EGGLESTON: 
Q DO you know whether Mr . Ghorbanifar is in the DI 

system? 

A NO, I do not. I would be a little surprised if 

he were, but -- I could find that out for you. 

A Actually I guess that would be hopeful. I guess 
I would be surprised if he were, too. 

could Mr. Allen in October of 1985, could he 
have the ojf system searched to determine whether or not an 
individual is reflected? 

A It would be difficult for him to do without it 
:oming to any division attention. 




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Q Do you know whether Mr. Ghorbanifar' s alias of 
Nicholas Kralis, do you know whether that is in the computer? 

A No. 

Q How about his name Ashgari, do you know whether 
he is in the computer under the name Ashgari? 

A I can check that if you like. Both of those 
names should be in. 

Q Was -- you would suspect that they would have 
been in as of October of 1985? 

A Well, if you tell me Kralis was in the 1984 burn 
notice, then that should have been. The burn notice is the 
sarie as a fabricator notice. 

Q Was the name^^^^^^^B familiar to you? Did you 
know^^l^HH as of October of 1985? 

I know these are hard questions to ask what you 
know at a time a year ago? 

A Yes, I sometimes have to sort out what I knew 
then and what I know now. I don't believe -- yes, the first 
time I heard that name as I recall, was wheni 




I took those over to Colonel North. 

And Colonel North told me the true last names 
of the two people Kralis and Ashgari, I think it was, meaning 



iiiiPl KCQIHFn 



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Ghorbanifarand^^^^^^B That, as I recall, was the first 
time I had heard ^^^^^^^H name , and I am sure of that 
because I had a name trace done when I came back to the 
building. 




850 



Ri<^(£s 26 "^ 28 



^JfAj/BD J^ 



/o 



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UH<lkl£^HkE' 



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Q Did you have any conversations with Colonel North 
at the time as oppxased to conversations that might have 
taken place with Mr. George earlier, that you may or may 
not have been aware of, did you have conversations with 
Colonel North at the time about the reason that he was 
interested in these individuals? 

A No. My instinct on something like this would 
be to respect his corapartmentation, and I would 
ask him — I would ask him no questions other than what 
else he — what other support he might need, but I would 
let him volunteer what he wished to volunteer. 

Q you had indicated then that after this conversation 
with Colonel North you returned to the building and ran a 

nane check? 

A That is my recollection. 

Q Did the name Ghorbanifar , as of the time that 
colonel North mentioned it to you ^MHit meeting with him. 



h\m 







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Ghorbani&r, did you talk to Colonel North about Ghorbanif ai-? 
Did you alert him of the prior experience that the agency 
had had with that name? 

A I don't remember having done so. 

Q 




rwere there any discussions with anyone at the 
agency about the reason Colonel North might have been involved 
with Ghorbanif; 




A Not that I remember. And I am fuzzy on that. 
It is possible, but I don't remember. 

Q Let me show you what has been ma^ed as CIIN 1034, 

if you could read that and tell me if you have seen this 
before: 

Had you seen this prior to now, if you recall? 

A I have read his 201 file. And I suspect that 
this is out of his 201 file. I don't remember it, but I 
would imagine I have read it before — I am sure I have 
read it before. And it says that this approach in July of 
198 5 was connectlngH^^^^Hwho was described as the 

I-- so contrary to what I have 
said in the last five minutes, we should have had hit that 



IINP.I ftWIFIFn 



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he was at least described by — presuinably by Ghorbanifar 
as that. That, in fact, is not his real title, but is a 
typical Ghorbanifar exaggeration. 

Q This, and there are three of these total — let 
me show you this one as well, 1033 

A All right. 

Q First who is it to, and who is it from? 

A I don't know. 

Q Do you know who Arnie is; or Peter? 

A No , I don ' t . 

Q This would appear to relate — I think that is 
dated the 12th of February? 

A Is this a CIA document? 

Q Yes, I presume it is. At least we got it from 
them. I think they are all out of th« 201 file. Here is 
the third of the series, which you had not seen, 1032, for 

the record. 

A I can't put a name to either Arnie or Peter in 

NE Division. 

Q Let me start with number 1034. Who is this cable 

to and who is it from, if you can t«ll me? 

I i> *'°^HI^^^Ih ''"^ 

\£\ from NE Division. 

Q Why don't you go to 1032, which is the other 
cable? Do you know who that is to and who that is from? 



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UNffiemftET 



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A Well, that references the cable which we are callinc 
1034, so this is the reply to the first cable. It is a 
reply f rom^^^^H to headquarters. So it would have 
come to NE Division. 

Q You have no recollection of seeing these cables 

in the summer of 1985? 

A No, but I am sure I did at the time, unless I 
was out at that moment, you know, on a trip or something. 
I should have seen these. 

Q It strikes me at least that these would have been 
the kinds of cables that would ring bells everywhere. 

A These would come to front office attention. 
The outgoing is authenticated, means signed off on by somebody 
in the front office. 

Q Just so that I am clear, who do you mean by someone 
in the front office? 

A Either^^^^^^^Hor myself. And usually, but 
not always, both of us. 

Q These cables together with, I guess it is 1033 

A Yes. 

Q Seem to indicate that as of the summer of 1985, 
the agency was pretty aware that there had been a contact 
involving Mr. Ghorbanifar , who I thinX is identified a few 
places here — I think they have got his moniker? 
25 A There is no question you can tell from the cables 



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that we figured out that the Manachihr had to be, even though 
he is describing himself as ranking Iranian intelligence 
officer, had to be an arms merchant, drug dealer] 
Ghorbanifar. 

Q Do you have any recollection that there was any 
follow up to any of these? These are the only cables at 
least that I have seen on this sort of around this time, and 
then thereafter NE Division appears to have not have been 
involved. 

Do you recall whether there was any follow up 
to these activities? 

A Well, 1033 helps me a little more than the other 
two cables do on it, because that refers to me by, or 
^^^^^^^H and gives more hint of where this is coming from. 

It starts off with update on Hashemi's escapade, and I 

e 
don't have the full meincry on that, but Hashemi — there 

was a Hashini something that came to us through the 

director as I recall. 

And it involved a previous contact, I think, with 

And what we — and I am baaing this, not on memory, 

but on the three documents in front of me — what we would 

have seen here was yet another attempt by Ghorbanifer to foist 

one of his complicated fabricator operations on us. And our 

bias againstMr. Ghorbanifarlis such that the reason you 

won't see a follow up is that we would have done our best 



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% 



_? 



to not have anything to do with this, 

MR. KERR: Let me ask a couple of questions. I 
am referring to a document that has not been produced to us 
by the CIA, but was produced to the Tower Commission. 
It is a memorandum from Director Casey to the Chief NE, 
dated, June 17, 1985, reporting that onf June 17 Mr. Casey 
heard from John Shaheen, who was at that point dying of 
cancer. T'hat a Dr. cyrus Hashemi is under indictment for 
attempting to Iran, claimed to have discussed with the Iranian 
Foreign Minister an exchange of hostages for the release of 
the Da-Wa prisioners in Kuwait, TOW missiles, and the nolle 

prosequi for Hashemi. 

13 T'^'^"' 

when I pi»iCfe together what happened here, we have 



that document, these three documents, and my hunch would be 
there have to be a few more. You have no recall of any 
directions from the director to look into this matter? 
THE WITNESS: Yes, I do. Let me see that — 



18 Q- 

once you say Cyrus Hashami and the nolle prosequi is what 



would drive that, because Hashemi through his lawyers was 
indeed trying to figure out a way to involve us with him 
in a deal that would get him — would enable him to come 

22 back to the U.S. Government. He would do something for 

23 the U.S. Government which would provide him with nolle 



prosequi. And that should be in a Cyrus Hashemi file, Which 



25 I would think you might h 



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MR. EGGLESTON: I don't think we have it yet. 
MR. PEARLINE: I thought it was sent to the 
Senate Select Committee earlier, the Intelligence Oversight 



Committee in December? 

THE WITNESS: I do not recall, that that had to 
do with Ghorbanifar , but clearly it did, and we got this 
Ghorbanifar opportunity, if you want to call it that, 
through Cyrus Hashemi. I can tell you that — and we should 
make sure that you have that file, because it is obviously 
pertinent -- if you don't have it, we will provide it to 
you. I can tell you that we decided, and I was personally 
involved with Mr, Casey on this one — we decided that we 
would do nothing to work with Cyrus Hashemi that would enable 



him to get a nolle prosequi under CIA 

MR. KERR: Thatiis fine, but apparently you also 
were being told at that time of a pfotential opportunity to 
free the American hostages through Ghorbanifar and^^^^^^^^^H 
and that apparently came by way of the HashXmi contact. 

Who in the Near East Division had responsibility 
for dealing with this matter, what human being that we can talk 
to? 

THE WITNESS: Well, I think you need to talk to 
both me and ^°|^|H^^B ^"<^ ^ think I would imagine that 
we were the two people who were involved. And our interest 

liMrill5ilElfD_ 



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Mfmi^ 



36 



was in deciding essentially risks versus gains. Here 

you have a fabricator once again coming up, this time he is 



3 £ 

coming through Cyrus Hashemi, with whom we have also had 



bad experiences. 

Mr. Shaheen, the late Mr. Shaheea, was urging the 
director on, saying this was a good opportunity through 
Hashtmi, and I think you will find from the Hashfcni file that 
NE Division was stiff-arming this. 

MR. KERR: Let me throw out some things that 
cause me to think there has to be more in the file than what 
we have heard. 

We know in June or July Mr. McFarlane met with 
Mr. Kimche about Mr. Ghorbanifar. We know during this period 



8 

9 
10 
11 
12 
13 
14 

^^ Roy Furmark is HashSini's partner, in June or July of 1985. 

ItLs conceivable you don't have anything in your files revealii^g 



of time that Mr. Shaheen's good friend and an acquaJAtance 



a state of knowledge that the NE Division has, but it is hard 
for me to think that you got this kind of a call from Casey 
and told him you were going to close the door on him. 

Casey doesn't strike me • Casey would be that easily 
put off, so what did you know in June or July of 198 5 about 

22 these characters who have come back to haunt us for the next 

23 two years? 

24 THE WITNESS: I think what you have done and you 

25 really should read the file — there is a file — 



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MR. KERR: I hope I will get a file not blacked 
out so I can't read it. 

THE WITNESS: We drew through that, and I think 
that will spell it out for you pretty clearly. We did 
indeed talk Mr. Casey into not following up on this 
possibility for legal reasons of Mr. Hashlmi's problems with 
the U.S. Government. 

MR. KERR: It is your testimony that in June or 
July you had no knowledge that the same sorts of contacts by 
Mr . Ghorbanifai^^^^^^^H and all, were being made at the 
White House? 

THE WITNESS: No, I didn't. 

KERK: The^^^^^^l^^^H is 




MR. KERR: Did you know at the time of contact 
with^^^^^^^^Hin thes« characters and what they had in 
mind in June or July of 1985? 

THE WITNESS: We did not. I think what you got is 
doing ai usual, you see, you have got what is 
typical for a man of hi« background — you have him going to 



um AQQinrn 



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gURHSIi^r 



38 



several different people saying I can do something. 

One of those he is going to is Cyrus Hashtmi, 
who has got himself a big legal problem with the U.S. Governmeii 
so he says, here is a ball I can run with for my own purposes 
At the same time, unknown to me at the time, he is using -- 
did you say 

MR. KERR: Ledeen, McFarlane and others 



THE WITNESS: Ledeen to McFarlane, 



approach^ the 



Hashi'mi 



^ 



one 



one, you would find was stiff-armed 



by CIA, and the other one was not stiff-armed by McFarlane. 

MR. KERR: You did tell Mr. Casey what you knew 
about Mr. Ghorbanifarind the Near East Division's desire not 
to be involved with Ihorbanifar in June and July of 1985, I 
take it, is that correct? 

THE WITNESS: My recollection is the principal 
consideration of that was don't get involved again with 
Cyrus Hashifmi and his legal problem with the Department of 
Justice. The second part of that certainly would have been 
it appears that this all has to do with Cyrus and something 
that Ghorbanifajr is recommending, and if that is true, 
and we would be attempting to verify that by asking the cable 
directly ^^^^^^H and them go ^^^^^^^^^^^^^^B that 
that is all the more reason Mr. Casey, not to touch this one. 




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MR. KERR: ^^^^^^^^^^^^^^^^HS November, 
you talJc to Colonel North, you identify one asl 
and the other as Ghorbanifar, and you didn't pursue in the 
agency what these folks were doing with Colonel North at 
that point? 

THE WITNESS: We pursue what Colonel North i« 
doing? 

MR. KERR: Yes, to find out what Ghorbanifar 
was doing? 

THE WITNESS: I am sorry, but you are asking me 
why I am not investigating Colonel North. 

MR. KZRR: I think that probably is a fair 
charactarlzation, yes, sir. 

THE WITNESS: And I will tell you that that is 
not my job to Investigate Colonel North. 

MR. KERR: I am sorry. 



UNCLASSIREO 



862 



• 2 

enun-l 



BNttlWffiBT 



40 



1 BY MR. EGGLESTON: 

2 Q Before I get off this topic, let me ask it in 

3 a slightly different way. The question is not whether or 

4 not you were investigating Colonel North; the question is 

5 whether or not, seeing that Colonel North was involved 

6 with these same two people, whether that led you to inquire 

7 into whether or not Colonel North had pursued the initia- 

8 tive that you had re]ected in the summer of 1985? Did 

9 this lead you to go back to Casey and say, Did this go 

10 on through another channel, because you knew Ghorbanifar 

11 was the kind of guy that would go to different sources, 

12 different ways to get the information. 

13 That is the question Mr. Kerr is asking, not 

14 did you conduct an investigation of Colonel North. Did 

15 that cause you to go to Casey saying. Are these guys 

15 duping Colonel North and NSC. I think that is the question 

17 he is asking. 

18 Do you recall doing anything after finding out 

19 that now you have ^^^^^^^^^H requested by North of the 

20 seune two guys that you had this run-around with in the 

21 summer of 1985? 

22 A I think in retrospect, it is pretty easy to 

23 put these pieces together. You take this piece here and 

24 that piece there and obviously you see the whole thing. 

25 I can tell you that the September flight, and 






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41 

you have got some cables on that, which involved the 
Israelis, and the Ghorbanifar's something, something offered 
up -- we didn't put together until December. Although if 
we tried and we had taken all these pieces and put them 

together, it was there. 

was very clear that 
Ghorbanifar is running this thing and that he is the 
mechanism that the NSC is using, and even obviously the 
Israelis are playing a role, because there is a plane 
that went that has something to do with Israel when it 
comes back. 

It again has to do, I think, with our attitude 
toward compartraentation, that we will not -- we operations 
officers will not investigate an NSC sensitive operation. 
Whatever wish that we had that there might be one, we 
are not going to actively go out and snoop on them. We 
have got a lot of other things to do. 
BY MR. KERR: 

Q What py^vents you from asking Colonel North, 
Did you know the«« folks in June or July went through the 
same drill with us. Why didn't you just ask him? That 
is not in the protocol? 

A When I had my discussion with him, he gave me 
that name and as I have said, I didn't respond to him. 
The name did not -- Ghorbanifar did not mean anything 



v\m fcCQicicn 



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to me . 

Q Had you received any instruction at this point 
from Mr. Casey not to look into these matters? 

A No , I did not. 

BY MR. EGGLESTON: 




A Well, I guess you would have to ask Charlie 



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Allan that since he was directing that program. Ard , as 
yoy know from other testimony, he was being directed by 
Colonel North not to discuss this with anybody in the 
DDO , and he did not, to my Knowledge 




I think that was in January, after the DDO became involved 
with the NSC. 

Q You do not think that you were awai 




A I could tell you that if I saw them. I have 
no recollection of them and strongly suspect in the 
context, since the DDO was not to be involved in this, 
that I did not see them. 

Q I have not read them myself, but I have talked 
to people that read them, 




land that is something 
that would have stuck in your head. Is that -- 

A I would think so. 

Q Were you -- when is the first time that you 
were actually consulted about Mr. Ghorbanifar in the 



MAini looinrn 



82-696 0-88-29 



866 



ufseiBffi^ 



44 




1 fall of 1985? 

2 There comes a time in December of 1985 when you 

3 are asked to do something with regard to him; is that 

4 right: 

5 MR. KERR: 

6 BY MR. EGGLESTON: 
^^^^^^^^^^^^^^^^^^^^1 I there 

8 ca;ne a time in early December when the division was asked 

9 to do a name check or run a tracer on him. Is that 

10 right? 

11 A I think you are right. My scenario says that 

12 on 3 December, Michael Ledeen informed Charlie Allen 

13 that the true name of Ledeen 's Iranian contact was 

14 Ghorbanifar. 

15 Q That was not a conversation in which you 
^g participated, I take it. 

^7 A No. On 7 December, NE Division provided to 

15 Mr. McMahon, the DDCI , full traces on Ghorbanifar, 

^9 pointing out that he was unfavorably known to the DDO and 

20 had been a subject of a fabricator notice in August, 

21 1984. 

22 Q Were you personally involved in that? 

23 A No . 

24 Q Did you know that that was taking place? 

25 A I have a dim recollection of it, yes. 



867 



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Do you know if you knew the reason that the -- 

that Mr. McMahon had asked for a trace on Mr. Ghorbanifar? 

A No, I don't remember. 

There was a -- you know -- there was a flight 

which took place in November of 1985. -^ were you aware 

S' ^ 

that that flight was taking place as of the time that it 
was taking place? 

A No. 

Q There was then, as you now are aware of, a 
flurry of activity in the Agency after the flight took 
place involving Ed Juchniewicz, Mr. McMahon^ I think the 
Office of General Counsel became heavily involved. 

Were you aware that any of that was taking 
place? 

A I was aware within a few days after that flight 
that Mr. McMahon had hit the overhead and was angry about 
our involvement in the flight, and was insisting that a 
new Finding be made. 

Q Did you know that the flight that you are talking 
about involved a flight into Iran? 

A Yes, I think that word did come toj 
and then to me. 

Q Did you know at that time that it involved 



Mr. Ghorbanifar? 



A No. 



Wm hmm 



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Obviously not the flight, but that the initiative 
involved Mr. Ghorbanifar? 

A Well, there comes a point and I don't know when 
that IS, when we had to have put that together. The 
extent to which it was a Ghorbanifar operation became 
very clear to us when he explained to^^^^^^^^^H later 
on in December , and that sort of spelled it out for us 
in a lot more detail, for the first time to NE Division. 
We had not been receiving that from the NSC. 

Q What was your understanding of the reason that 
McMahon had hit the overhead? What was your understanding 
at the time? 

A My understanding is that -- that is an expres- 
sion meaning that McMahon was exceedingly upset, and he 
was obviously upset about the Agency's involvement in 
that flight. 

I don't recall how much more detail NE Division 
got about that flight, and when we got it, because we 
weren't in at all on the question of should the flight 
go or where should it go. And so — you know, there 
would have been discussion of it upstairs probably with 
but I don't remember how much detail he got. 

Q Do you recall a particular meeting that he 



attended? 



No, I don't. 



wiASSife 



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\m^^^ 



47 



Q Did he -- I take it you didn't attend any 
meetings — 
A 
Q 



I did not. 

-- with senior members of the Agency about this 



issue . 



Do you recall talking about the issue with 
about what had happened and what the problem 



was? 



It seems to me that you are now in a position 
where someone has made a flight to a country that you' 
consider generally within your area. Not only has that 
occurred, but it has also caused the DDCI to hit the over- 
head and if I were in your position, I think you would 
find out what had gone on. Why did someone in my area 
screw up; what is someone doing messing around in my 
country without me knowing about it? 

Did you conduct -- when I say an investigation, 
I don't mean in a technical sense, but did you do anything 
to determine what had gone on? 

A Well, obviously that flight request came from 
Colonel North, and we must have learned that pretty 
quickly. But the -- and then, you see, we are into what 
he had just done a few weeks previously. I had been, 
talking to him about Ghorbanifar. There has to come a 
point fairly early after that flight when that plus name 



lixjLAi Aoo inrn 



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trace, plus flight puts this all together in our minds, 
but I don't know what that was. And then, you see, once 
the Finding starts getting talked about, it becomes a 
Finding for the Agency to support the NSC operation. 

So by early December, we are beginning to look 
at a possibility that somebody m the Agency, probably 
NE Division, would be supporting the NSC in some way in 
whatever this thing was that they were doing. 

I recall no preliminary discussions about what 
form that would take, and I was not involved in the 
question, nor, to my knowledge, was^^^^f^^H involved 
m the question of what form should that Finding take. 
This was something *is going on up there on the 7th floor, 
it is obviously political and legal, and to some 
extent operational, and they are working something with 
the NSC, and when they get that put together, they will 
let us know. 

Q But you don't have any recollection <3^^HH 
l^^l attending a meeting related to this general issue 
in early Oecenber? 

A I don't. 

Q It is from the cable traffic that we have 
read that involves this particular time period, late 
November through early December it is apparent that there 
IS at least a contemplation for four or five additional 



•moj AOOICICn 



871 



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flights into Iran, each carrying a planeload of Hawk 
missiles . 

Did you know that there was planning under 
way on behalf of the Agency to provide additional flights 
of weapons into Iran? By that time, I think they know 
pretty definitely -- 

A Could I see those cables? 

Q I have some of them. I am not even sure I 
have some of them. 

A Well, the reason I ask is that if those are 
NE Division cables -- 

Q They are generally cables sent and received 
not by the NE Division but by Dewey Clarridge. 

A No, we didn't see the Dewey Clarridge cables. 

Q There is a -- 

A I just need one that is a director cable. If 
you look down at the bottom of the director cable, you 
will see that the originator, authenticator and relea^r 
is Dewey Clarridge. 

That means Dewey Clarridge did no coordination 
whatsoever . 

Q So if there were plans for additional flights 
going in, you were not aware of them? 

A I was not aware of Dewey Clarridge "s series 



of messages. 



iiNP.iA<s<;inFn 



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Q Dewey Clarridge at that time was chief of the 
European Division? 

A That is correct. 

Q Did you ever see the mini-Finding, the draft 
form? 

A I saw a Finding, the Finding signed by the 
President on 18 January. I did not see any prior drafts 
or any Findings -- in fact, we didn't know that there were 
a series of drafts until well into these investigations. 

Q Let me take you -- let me tell you what my 
plan would be, to take you fairly quickly through what 
you probably thought was the beginning of your involve- 
ment in this, take a break for lunch and come back and 
finish up in the afternoon, if that is okay. So I will 
take us probably up through the Finding and the signing 
of the Finding, but pick up with your meeting on the 
18th after we get back from lunch, if that is all right. 

A Okay . 

Q Do you have any further involvement with the 
Ghorbanifar issue or this general issue between the time 
that you respond to this request for information about 
Ghorbanifar around December 7th and December 20th when 
the NE Division receives the instruction to conduct an 
interview of Ghorbanifar — did you have any involvement 
in this between those two times? 



iiUMACfilCliU, 



873 



12 



mmm 



51 



1 A No. 

2 Q Did you have any knowledge about -- let me ask 

3 this. Did you know that the reason that you were being 
^ asked to provide information about Ghorbanifar is that 

5 there was an upcoming meeting at which Ghorbanifar would 

6 be discussed, a fairly high-level meeting involving senior 

7 United States Government officials? 

8 A I think we did know that McMahon was going to 

9 take that information over to the White House, as I 

10 recall. 

11 Q Did you know he was going to meet with the 

12 President? 

13 A No. 

14 Q Was Casey out of town? Is that your recollec- 

15 tion? Why is it McMahon and not Casey? 

16 A Well, they often went together, and thi« may 

17 have been an occasion when they went together. I don't 

18 know. Certainly Mr. McMahon would. 

19 Q Did anyone tell you the restuls of that 

20 meeting — when I say "that meeting," you had indicated 

21 that you knew he was taking it to a meeting at the White 

22 House. Did anyone tell you the result of that meeting? 

23 A It is possible they did. I don't recall it. 

24 It is fairly shortly after that — the problem I am 

25 having is the name traces asked for on the 7th, I don't 



.■tiAi anoinrn 



874 



13 



imsa^BafcT 



52 



1 know when the meeting is that you are referring to. But 

2 by 20 or 22 December — 

3 Q You are back -- 

4 A We are being instructed to. That came down 

5 from the 7th floor from -- Casey was involved in that 

6 and that word that we were going to send somebody out 

7 to have a chat with Ledeen and Ghorbanifar was greeted 

8 by NE Division with more than a little consternation. 

9 Q Let me just -- I am going to get to that in 

10 one second. 

11 Actually, there was a meeting on the 7th that 

12 McMahon attended that was at the White House. The following 

13 day Mr. McFarlane, maybe it was that evening, Mr. McFarlane 

14 left to meet with Mr. Ghorbanifar in London. 

15 Were you aware of that? 

16 A No. 

17 Q When he returned, there was an additional 

18 meeting at which Casey was present, immediately after 

19 he returned, I think it was the 10th of December. 

20 Were you aware that Mr. Casey was then meeting 

21 at the White House in order to discuss this issue again? 

22 A I may have been at the time. I don't recall 

23 it. 

24 Q By 10 December, had anyone other than this 

25 name trace, had anyone consulted with you about your 



iiMoi Aooinrn 



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itttASSIPt^ 



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opinion of Mr. Ghorbanifar? 

When I say "anyone," I mean Mr. Casey or Mr. 
McMahon or Mr. George. 

A Well, the trace went up on the 7th of December 
and that would have given us occasion to give the NE s^ 
sizable bias on it. 

Q Do you know whether there was any wor^d briefing 
of McMahon about Ghorbanifar as opposed to merely providing 
you with documents? 

A I don't recall for sure, but I suspect, and 
this IS very fuzzy, I suspect both Clair G«orge andl 

I met with him on it. And little mor« than a guess, 
but I vaguely recall that. 

Q You don't have any doubt that if asked about 
Ghorbanifar, that ^^^^^^H and Clair George would have 
told Casey that he was not soneon* that the Agency should 
be dealing with? 

A A very firmly held view. Mow, you know there is 
a point there where despite knowing that, you also have 
the political problem of the President, possibly Bud 
McFarlane and the NSC wanting to do it despite that 
information, and there clearly was a bridge that was 
crossed on this, that we were going to do something, try 
this mechanism out despite DDO's i^straints. 

Q On the 20th, on or about the 20th, when the 



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assignment comes, or the direction comes to interview 
Mr. Ghorbanifar, I take it that comes tc^^^^f who then 
gives ^°^^^^^H 

A That IS my recollection. 

Q Were you consulted about who it was who should 
actually conduct the interview, or would that have been 
something you would be concerned about? 

^^^^^Bwas the ^^^^^^^^^^H chief 
point, and he would have been the logical person. 

Q Do you know who -- did you speak tol 
prior to the time that he went out to interview Mr. 
Ghorbanifar — I think that interview takes place in the 
evening of December 22nd. 

A ^^^^^^H would have handled that. 

Q You don't have any recollection of talking 
to him yourself? Well, when I say "talking to him," I 
mean talking to him about his interview. 

A I was present when this was discussed on a 
couple of occasions and I don't recall whether I was 
present with the instructions before he went to the 
meeting. I know I was present when he reported back. 

Q I am interested in knowing whati 
from your point of view, what his assignment was. What 
was the point of his interview? What was it that he was 



supposed to be doing: 



>« 



\\m AQCinrn 



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A I think you will get a good answer from 

I would say that the -- without the precision 
that he will be able to give you, that the tenor would 
have been to see what we could do to turn off an involve- 
ment by the DDO with Mr. Ghorbanifar. 

Q Let me ask it slightly differently. Apparently 
this request to interview Mr. Ghorbanifar came directly 
from Mr. Casey. Was it -- I am just wondering if you 
know why it IS that Mr. Casey wanted once more for there 
to be an interview with Mr. Ghorbanifar by the DDO. Wis 
he going to talk to him about terrorism information? Was 
^■||^^H|speci£ically briefed on the backgrounds of 
the Iran hostages-for-arms initiative -- 

A Ghorbanifar did have another one of his large 
involved stories about terrorism, which that is in his 
file, and it involved a conference of terrorists that had 
taken place in Teh'jjan . It involved a discussion of 
Libyan involvement, terrorist involvement with the 
Iranians as well as with Palestinians, so most of that 
polygraph exam, which is in your possession, does center 
around his terrorist information. 

Q On the 22nd,BHH|meet8 with 
Kr. Ledeen and immediately after that he meets with 
Mr. Ghorbanifar, has a substantial conversation, 
colonel North then shows up near the end of the interview. 



en tneii aiivjwia vjj^ .•■_ — .. -^- 



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When IS the first time that you speak toj 
[about the interview that he has conducted? 
A That meeting on 22 December was a very late- 
night meeting. I don't know what the date of the week 
was, but assuming that it is a workday, I would have 
heard f rom^^^^^H^m the following morning. If it was 
a Saturday night -- 

MR. KERR: It was a Sunday. 
THE WITNESS: Then I would have heard the 
first thing Monday morning. 
BY MR. EGGLESTON: 
Q The 22nd is a Sunday. 

A So we would have had a report from him first 
orally and then written the following morning. 

Q Do you recall whether there was a general 
meeting about^^^^^^^^^H interview of Ghorbanifar 
that was attended by senior members of the Agency? 
A Well, he would have come up and tolc 
land myself about it first, aid I believe that I have 
testified previously that I recall rather fuzzily that 
there was a meeting upstairs on the 7th floor probably 
in Mr. Casey's office after that first session. 

When I have asked you — I heard testimony 
from you about this once before. I seem to recall that 
you could not quite remember whether there was a meeting 



IIMOI loninrn 



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that you were thinking about took place after Mr. 
Ghorbanifar had failed the polygraph test. Maybe I am 
not remembering what you said, but do you think that there 
was a meeting after each of those events that took place 
in Mr. Casey's office? 

A I think your recollection is accurate, that 
I was -- when I talked to you about this before, I was 
fuzzy about which one of those, and it was particularly 
with regard to which one I might have attended. 

I do not personally recall having attended 
the meeting of ^^^^^Hreporting his first meeting. And 

was present then. He wasn't away on a trip -- 
so that should have been him attending that meeting. 

Q I take it from your discussions, though, with 
[after he returned from that interview, it is 
your recollection that he was not -- it was your recollec- 
tion that he was somewhat critical of Mr. Ghorbanifar 
and that his views of Mr. Ghorbanifar were consistent 
with the prior DO's views of Mr. Ghorbanifar? 

A That is correct. 

Q There is a memorandum prepared with the 
number 174. My version is not dated. It makes a reference 
to the days of the meetings but the memorandum itself 
doesn't seem to have a date on it. 

A Well, normal procedure would be for this to 



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:t 

be written up immediately after the meeting. So he would 
have worked on that the following day. 

I see no date either on this, but it would have 
been immediately after, and this was very high priority 
and it is a memorandum to the DCI. 

Did you see that at or about the time that it 
MBS prepared? 

A Yes. 

Q As well as reporting on some general terrorist 
activity, it had a discussion of Mr. Ledeen's pretty 
cBRiplete rundown of the initiative as it had taken place 
^ until that time. 

What reaction or what reaction did you have to 
learning that Mr. Ghorbanifar had been involved 

Vparently with th« United State* Governnent in this 

<V 
kitiative? 



in. 



I suppose the more relevant question is, did 
jpiu speak to anyone, Mr. George, Mr. Casey, anyone, 
■tout the wisdom of using Mr. Ghorbanifar in this kind of 
■ operation? 

A NE's attitude toward this at the time was that 



4o 



good would com* of it. I don't recall having spoken 
anyone outside of NE Division in those terms. 
Q Part of this memo, particularly a section 
ivolving a conversation with Mr. Ledeen, reports various 



iiMpi Accincn 



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sort of details about the operation, including actually 
two unusual details: first, that there had been a 
deliberate overcharge on the price of the items that 
generated approximately S200,000 for political contacts 

inside Iran. 

Do you recall discussing that with Mr. Ledeen? 
A No, I do not. 1 don't see that in here. 



UNCLASSlil[D 



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60 

Q It is the section on Mr. Ledeen . it is not 
in the section dealing with Mr. '"■horbanifar? 

A Yes, I see it. 

Q Had used around S200,000 of these funds to suoport, 
subsidize political contacts inside Iran, subject being 
Ghorbanifar . That would have been standard Middle East 
practice? 

There is also — if I could just take a look 
at it — there is also a reference in here to "subject stated 
that he was holding $40 million which the Iranians wanted 
returned" — in fact, it is right after the remark about the 
$200,000? 

A Ghorbanifar said he was holding $40 million? 

Q Yes. 

A You see, this is our problem. You know, when 
Ghorbanifar says he is holding $40 million, based on our 
experience we know that he is holding something. It may be an 
empty sack or it may be $4B million, or 14, but it certainly 
isn't 40, because Ghorbanifar is so well known to exaggerate 
almost everything he says. So we use a whole bag of salt 
when we are reading this stuff that he says. 

Now that becomes an operational problem, you see, 
because what you are seeing is we have a problem so big that 
we can't work with this guy. 

Q After this meeting between ^horbani£ir and^^^^^^^f 



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there is a decision made to conduct a polygraph of Mr. 
Ghorbanifar? Do you know who made that decision? 

A My impression at the time was that that was 
the price that was paid either by Mr. Casey or by the NSC in 
return for our agreement to talk to Ghorbanifar. That we 
insisted that if we were going to talk matters over, terrorism 
or whatever else, that we tfould do that if (Ghorbanifar 
agreed to a polygraph. 

Q You at least at NE though, I would assume, did 
not feel thatvou needed a polygraph to determine that he 
was not. someone that you wanted to be dealing with in any 
event? 

A Well, to the contrary — whatever your experience 
with a fabricator before, when you have this kind of interest 
in him and NSC feeling that here is a good guy, if you can 
provide some current truth or lack of truth judgments, 
technically provided, you give yourself a lot of ammunition 
with which you may be able to turn something off. 

So a polygraph was essential for our purpose. 

By essential, I guess what you mean is that you 
assumed that h* would fail the polygraph— - 

A Yes. 

Q And perhaps therefore you could shut the NSC off 
from dealing with this guy? 

A Probably. It was a little hard for us to judge 



iiAiAuifi$;ji4j;{u 



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that because we can't tell how far this has gone politically 
and we aren't being told all of that political data. 
But It is possible it seems to us that we might be able to 
make reason known. 

Q I just want to test how far your bias went. I 
take it that Mr . Ghorbanifar, although he was a fabricator, 
was someone that ycu thought had some access within Iran? 
Some -- let me phrase it this way. If he would just tell 
you the truth he was someone who might have valuable informa- 
tion to give. Is that a fair characterization of Mr. 
Ghorbanifar? 

A Mr. Ghorbanifar -- I am now stating it on what I 
know now -- Mr . Ghorbanifar had a very good business 
relationship with ^^^^^^^^^^H who worked in| 

is an intellectual superior of 
iHe had some intelligence from that connection 
as would anybody who was selling arms on that scale. The 
operation we are talking about, the TOWs, was only one 
operation that Ghorbanifar intended doing. They were running 
around Europe doing several others which they tried to keep 

corapartraented from uj 

now we ai 
back to the bias against -- the problem is when Ghorbanifar 
tells us about his intelligence derived fromi 





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whomever else, we can never -- and this is throucfh the 
history of the operation, from January to September of 1996 — 
we can never get enough meat on what he is saying to put out 
one single intelligence report. We can't separate out the 
wheat from the chaf. 

Q The impression I am getting fr-r^ you though is that 
NE would have been sorely disappointed if he had passed the 
polygraph? 

A Yes, I think that is accurate. 

Q Was the polygraph conducted in such a way to ensure 

that he would fail? 

Q No. We don't do polygraphs that way. 

Q It is my understanding Mr. Cave was brought to 
work on the polygraph, when I say work on it, I mean help 
design the questions. Was that your recommendation? 

A No, but George had had previous experience with 
Ghorbanifar, and so did know something about him. I think if 
you look at those questions you will see that they are the 
fair questions for the subject matter at hand. 

Q On December 23rd, Mr. Casey wrote to the President 
about various lines that were being taken to help getting 
the release of the hostages and one of those he mentioned 
was Mr. Ghorbanifar, there were letters reflecting CIIN No. 
447. Were you aware at that time that the director was 
writing the President about Mr. Ghorbanifar? 



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A I was shown that letter by the Tower Conunission. 

Q And you had not seen that prior to that? 

A I had not. 

Q I will show it to you. We have a lot of black 
marks. 

A I saw a better copy than you have. 

Q I think we now actually have a clean copy. 

Between — now I am moving into the early part of 
1986, between, say, January 21, 1986 and January 11, 1986 
when the polygraph was actually given. We now know that 
there was work being done and a number of different drafts 
being done of a second typing er a finding or whatever. Did 
you know that those drafts, that kind of work was being done 
in your legal counsel's office? 

A Yes, I knew that a draft was being written, and 
that is all I knew. 

I recall hearing that Mr. Sporkin was personally 
Involved. 

Q I take it by that you knew there was a draft 
related to Iran and this initiative? You knew a finding was 
involved? 

A It had — I assumed that it had to do with CIA 
support for ai< NSC operation. 

Q Were you concerned that regardless of how the poly- 
graph turned out that this initiative was going to go ahead 



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as a result of that? 

A Well, it is fuzzy in my mind at what point it is 

clear in my mind that finding is a part of this thing. 
I :ust don't remember that, how that worked or that I had a 
concern that Ghorbanifar, passing meant that we would be direc^i 



involved. I don't recall actively thinking about that. 

A. 

Q I just wondered by this time as'result of the 

l.-neeting you knew that Ghorbanifar had kind of been 
the principal engine in the fall of 1985? 

A Ye». 

Q And you were probably — at least you weren't 
aware that there was any other — I take it any other 
initiatives going forward that would be involving the 
hostages and be an agency support of an NSC mission? 

A No, once I^^^H writes his memo it is all laid out 
there. 

Q The polygraph takes place January 11. When did you 
first -- when were your suspicions first confirmed that he 
had failed? Was it that day or was it the following day? 

A Well, it would have been soon after -- my 
recollection is that that was done in the afternoon and we 
probably had the results the following day, at least orally. 
Typically it takes several days for the polygraph operator 
to write up hi.s report, and I recall that 
present and so we would have gotten his version immediately 



7 



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after he returned from the office. Whether that was that 
night or the next morning, I don't remember. 

So, by this tune you know that he has failed 
virtually all the questions? 

A That is correct. 

Q Is it around this time then that you had the 
meeting in Mr. Casey's office that you seem to recall you 
were present at? 

A Yes, that is the one that I recall. 

Q Could you just describe who was present and what 
was decided, or discussed at that meeting? 

A My recollection is that the DDO was present, 
and I was present. ^^^^^^^^|may have been present, I 
don't remember. And I think ^^^^^^^^H was not, as I recall. 
And the principal decision that came out of that was that 
Mr. Casey still was interested in Ghorbanif ar ' s information 
on terrorism despite the results of the polygraph, and felt 
that there might be something there that was in terms of 
information and terrorist names and international involvement, 
that there might still be something there that was worth 
following up. And as a result of that meeting, Charlie Allen 
was tasked with handling that contact with Ghorbanifar. As 
I recall — and this is a little fuzzy — Clair George said 
that he did not want DDO officers involved with that. 



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I am not sure how that was arrived at. I recall 
it as being fairly bluntly stated but I am a little fuzzy 
on that. 

Q Did you make your views of Mr. Ghorbanifar known 
at that time? 

A I do not recall speaking to it. I think Clair 
George did the talking. 

Q Despite, and I would assume that it has also been 
your position articulated to Casey, that even if there 
was something in what Mr. Ghorbanifar was saying, you are 
never going to know whether it was the truth? Did 
the operations director try to keep .Mr. Casey from even 
assigning Mr. Allen to talk to Ghorbanifar? 

A I doubt that we did that. Our views by this point 
are pretty thoroughly laid out, and there are some things 
that you can turn Mr. Casey off on and some that you can't, 
and it was pretty clear to us that he was not going to stop 
entirely on that one. 

Q It was apparent that he wanted to pursue this 
initiative? 

A Yes. Part of the — see, Ghorbanifar also 
throws out — there is another bone -- there is something 
else I have got for you guys that is really important, it is 
in my apartment back in Paris. There is something more 
just around the corner. That is a part of his modus 



. i 



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operandi . 

On this occasion, that was a series of 
intelligence reports and photographs that he had of 
terrorists. And that was -- you )cnow, it is just out 
there, just beyond our reach and he would provide it to 
us at the next meeting, so there is always one more 
temptation for a next meeting. 

So Allen was sent out to get that. He had a 
meeting with Ghorbanifar in Europe, as I recall, shortly 
after this. 

Q In fact, it might have been the very next 
day. 

Was there a discussion in this meeting on or 
about the 12th, whenever it was, in Mr. Casey's office 
with Mr. George and yourself? Was there discussion about 
using Ghorbanifar, continuing to use him in this arms- 
for-hostages initiative? 

A I don't remember that. I think it was entirely 
centered around the terrorist question. 

Q So your impression on the optimistic stance 
that Mr. Casey was taking about Ghorbanifar was not as 
a result of we just have to take a shot at the terrorists, 
on the hostages? 

A Well, Casey certainly knew that because he 
knows that a Finding was about to be signed. All I know 



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IS that there is a Finding in the works. 

Q Right. 

A There may have been discussion on the hostage 
and the NSC, something at that meeting too, but I don't 
recall it. 

I recall it all being centered around 
Ghorbanifar 's terrorist information and what would happen 
next time. 

Q On the 13th of January, Mr. Allen spent five 
hours with Mr. Ghorbanifar and he writes it up in a 
document that is number 526. I take it that that is 
something that you saw — I can't remember the date on 
the front of it. 

A The date i> 29 January. Yei. 

Q Let me show you No. 173, which came out of 
NE at least. 

A That is correct. 

X« that a response to the previous document 
I just showed you -- 

A That is not a response; it is a refutation of 
0526. 

Q It appeared to me that those two were related. 
But I wanted to make sure that I was talking about the 
same document. That is your response, a refutation of 
the information that is provided? 



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A That IS right. 

Q Between the 12th and the 18th of January, did 
you have any additional meetings or involvement in 
decisions relating to either the Finding or Mr. 
Ghorbanifar, any aspects of this initiative, do you 
recall, not including the 18th? 

A Not involving Mr. Ghorbanifar. There is in 
one of my testimonies, or not in my testimony, but 
somebody else's, the possibility of a meeting between me 
who was the chief of the 
[of the Agency, which was at that point called 
I, now called ^^^P and his recollection was that we 
had a meeting the week before the Finding was signed, 
which was a heads-up that some support for logistics 
purchase of weapons from the Pentagon, using his channel, 
might be necessary. 

I didn't recall such a meeting, but 
did, and it is on my calendar that I met with| 
that previous week, sometime the week of January 11th. 
So I am sure that meeting did take place. 
BY MR. KERR: 

Did your calendar show the exact date? 
Yes. 

Could you supply that to us? 
Sure. I think it is the Friday, which would 




Q 
A 
Q 
A 



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be January 17th. But I an not sure of that. I may have 
been — it may have even been the previous Friday, the 
11th. 

BY MR. EGGLESTON: 

Q I just happen to have Colonel North's 
calendar. The 17th was the day that the Finding was 
actually signed. So if it was the week — I am only 
suggesting if it was the wee)( prior to January 17th -- 

A Well, the 18th is a Saturday. The 17th was 
the Friday -- I think this was a Friday afternoon meeting 
and I think it was either the 17th or the 10th. It was 
a late afternoon meeting and it is on my calendar and, 
yes, we can provide that specific time. 

Q Colonel North's calendar reflects that you had 
a meeting with the Colonel on the afternoon of January 
16th. Do you recall such a meeting? Do you know whether 
the meeting actually took place? 

It is an entry on hia calendar. 

A I think I will have to check my calendar. 
I don't remember it. I do not recall any preliminary 
discussion of the Finding or of the activity. 

It is possible that I was talking to North 
about a terrorist matter unrelated to this. 

Q The calendar does not indicate the subject 



of the meeting. 



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1 A My calendar. 

2 Q Colonel North's calendar does not indicate 

3 the subject of the meeting. 

4 A But this would have been allegedly in his 

5 office if I showed up? 

6 Q It only indicates that a meeting was apparently 

7 scheduled. It does not indicate where it took place. 

8 A Well, I'll get you whatever my calendar says 

9 on it. 

10 Do you not have a copy of my calendar? 

11 Q I don't think we do. 

12 A You are welcome to it. 

13 And probably the last question before lunch, 

14 when do you then first learn that the Finding had been 

15 signed on the 17th of January? 

10 A I think that is on January 17th, when Clair 

17 George, and I don't remember whether this was a phone call 

13 or whether he had me come up and told me that he and I 

19 would be going down to the White House for a meeting 

20 with Poindexter the next day, and that the Finding had 

21 been signed. 

22 Q Okay. Thank you. 

23 I an prepared for a break here . 

24 (Whereupon, at 12:45 p.m., the taking of the 

25 deposition recessed, to reconvene at 1:50 p.m., this same 
day.) 



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MR. EGGLESTON: I note that Mr. Kerr is not here. 
The transcript will be available to him. I am willing to 
brief him on anything that happens. We are starting a few 
minutes late. 

EXAMINATION 
BY MR. EGGLESTON: 

Q ^^^^^^^^^^H immediately before lunch I had aslced 
you, and you had responded to the question when you had first 
learned about the finding signed on January 17, 1986. You 
indicated, I believe, that you had received a message either in 
person or over the telephone from Hr. George indicating to 
you that you would go down the next day to meet with 
Mr. Poindexter and I think you said it was your 
information at that time it had something to do with a 
finding. 

A That is correct. 

Q Did you know that it was a finding with regard to 

^* 

Iran? 

A Hell, I must have, because, as I indicated, there 
was apparently a meeting, a heads-up meeting that I didn't 
recall on the possibility of setting up a logistics chain. 
And since we had heard that a finding was in the works, the 
logic must have been pretty obvious. 

Q Let ae direct your attention to the meeting which 
you had on January 18th. Can you tell us who went from the 



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a9«iicy, wtMr* it was bald and who tb« other participants wara 
in th« aaating? 

A Fro* tha agancy, tha ganaral counsal, Mr. Sporkin, 
whoa wa knaw had authorad tha finding; Mr. Clair Gaorga, tha 
DDO, and aysalf. On tha NSC aida. Admiral Poindextar chairad 
tha aaating and Colonal North was thara. I don't ramambar 
anybody froM tha Whita Houaa lagal sida baing thara, but 
it is possibla thara was. 

I don't think so, though. 

Q Mas Paul Thompson thara? 

A Mall, I mat Paul Thompson and I had -- at a 
maating and if somebody wara thara, it would hava been him. 
If there was White House counsel present, and I just don't 
remember. 

Q Did it take place in Mr. Poindexter's office? 

A 
the secure room in the basement of the White House. 

Q Could you tell us the subject of that meeting? 

A Mr. Poindexter opened with a description of what 
it was we were going to attempt without going into any 
background of what had already been done. We were then given 
the signed finding and were permitted to read the signed 

9 



No, it took place in the situation room, which is 



finding. 



And both Mr. George and I individually read that 



signed finding at the 18 January meeting. 

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Was this the original, the blue ink version? 
A I think. It was. In fact, I think that was the 
only copy of it for some months. 

Q You did not, meaning the agency, did not at that 
meeting at least obtain a copy? 

A We were specifically told that we would not have a 
copy, that this copy would be in the office in the safe of 
Admiral Poindexter. Colonel North did not then have a 
copy either. 

I know that because about a month later I said that 
I would like to re-read the finding. I had read it fairly 
quickly on that occasion and so I wanted to go back and make 
sure that I knew exactly what it permitted us to do in order 
to avoid any pitfalls getting outside the finding and in 
order to do that I had to have a meeting with Paul Thompson 
and we got that finding out of Poindexter 'a office. 

Q How long did this meeting on the 18th with Admiral 
Poindexter and others last? 

A Well, it wasn't very long. I would say it was not 
in excess of 30 minutes. 

Q Did Admiral Poindexter describe the events of the 

fall of 1985? 

A No, he did not. He did not go into anything that wa 

prior to the signing of the finding. 

Q Was there any discussion by anybody about the 



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CAS-4 1 events of the fall of 1985? 

2 A There was not. 

3 Q Was General Secord at the meeting? 
'' A No. 

5 1 take it that one of the purposes of the meeting -- 

6 let me ask you one other question -- was there any discussion 

7 at this meeting of the status of the November draft finding? 

8 A No . I had not heard of the — any previous 

9 specific drafts. I am not sure it was November -- I thought 

10 there was something that was signed -- I believe it is -clear ir 

11 the Tower Commission Report. I think there was something that 

12 was signed but it was mid-December, as I recall. 

13 Mr. Kerr. The history is that there is a 

14 November 26th draft finding. There, then, is a series of 

15 drafts starting January 2nd. There is a draft apparently 

16 signed by the President on January 6th or thereabouts and 

17 there is a finding like that you saw. 

18 THE WITNESS: What I am saying is we didn't have any 

19 which was a drafts. ^^^^^^^^^^^^^H all we 

20 knew was there was a finding in the works. 

21 MR. KERR: When did you know that there was a 

22 finding in the works? 

23 THE WITNESS: Well, we had discussed that -- as I 

24 said this morning, we knew very soon after McMahon lost his 

25 temper at the end of November that the finding was in the workd 



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77 



And that is -- 

MR. KERR: As to the progress on that finding you 

3. 

were not kept apprised; is that correct? 
THE WITNESS: That is correct. 
BY MR. EGGLESTON: 

I take It that one of the purposes of the meeting 
on the 18th was in order to set the planning in motion 
in order to effectuate the purposes of the finding, to get 
people together? 

A The principal purpose was to start CIA support 
for the NSC operation. So the main focus was here we have 
this iinding and this is what we are going to have to do. We 
are going to have to buy some weapons from the Pentagon, 
and we can do that through the CIA. We want, 
to handle that. In fact, I thinJc Mr. George sa 
will handle all the finance and all of the logistics. 
And Poindexter said I want only^^^^^^^^^H to handle that 
part of this, setting up the channels and the mechanisms 
will be my responsibility. 

Was it also going to be one of your responsibilities 
to set up the method by which the CIA would obtain payment 
for the missiles and thereafter make payment to the Departmenr 
of Defense? 

A That is correct. 

Q Was there any discussion at this meeting about how 




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CAS-6 1 that was to take place? 

2 A No. It was my duty to find out how to do that and 

3 then to report that, how we would proceed back to the NSC 

4 and upwards to Clair George. 

5 Q Was there any discussion at this meeting about the 

6 kinds of weapons that you would be obtaining from the 

7 Department of Defense? 

8 A Yes. It was to be TOW missiles, and I think — I 

9 think the total number was laid out at that meeting and was 

10 4,508 TOW missiles. It may have initially been stated at that 

11 meeting as 4,500, because there was a discrepancy in numbers 

12 during the first week. It pounced around, first was 4 500, 

13 then it was 4504 and it eventually ended up at 4508. It 

14 didn't become clear until later why that odd number was. 

15 Q Was there discussion at the meeting about the 

16 reason it was not 4500, why it was 4508? 

17 A I can't be sure that the eight or four was mentioned 

18 at this meeting. It was clear to me at the second meeting 

19 in Frankfurt, which was 25, 24 February, that the 508 was a 

20 payback to Israel for a previous delivery. I think that 

21 eight — eight is kind of a strange number, and I think we 

22 might have asked a question about it — I think that did not 

23 come up at this meeting. 

24 Q Was there any discussion at this meeting about the 

25 Hawks that remained at that time in Iran? A procedure 



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for the return of the Hawks or to pick the Ha^s back up, was 
there any discussion at this meeting about that? 

A No, that came later, too. 

Q Do you recall anything else that was discussed 

during the course of this meeting? 

A No. It was primarily focused on the finance 
and logistic task that CIA was to undertake, and I don't 
believe anything else was covered. 

Q When did you first learn that General Secord was 
involved in the logistics of this operation? 

A ■ I am sorry. I was ]ust trying to think whether 
Ghorbanifar was discussed at that meeting. 

Q That was going to be my next question. I was 
going to ask you ]ust about when you first learned specificall 
that various other participants were going to be directly 
involved. I had started with Secord and was then going to 
ask about Ghorbanifar. 

A Secord' s name was mentioned within a week when we 
started talking about the logistics chain, because the chain 
was going to be we would arrange delivery of the missiles from 
the Army despot Alabama to our ^^^^^^^^^^^^| and 
then Secord would arrange to have them picked up by Southern 
Air Transport, SAT Airlines, our ^^^^^^^^^^^^B And we 
started planning that within the week of -- after that week 



of 20 January 



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CAS-8 1 Before I get into the actual — 

2 A He did not come up at all at this meeting because 

3 I recall being surprised on the phone by mention of his 

4 n ame . 

5 Q Before I get into asking you about how you made those 

6 arrangements or to satisfy the logistical requirements, did 

7 Mr. Ghorbanifar ' s name come up during the course of this 

8 meeting? 

9 A I would think so, but I don't recall it, and at that 

10 point it must have been pretty much a fait accomplis. It was 

11 clear we were going ahead whatever our strong objections and 

12 the DDO had been. So there may have not been that much to 

13 talk about. 

14 Q So it wasn't that the agency complained directly to 

15 Admiral Poindexter about the involvement of Mr. Ghorbanifar? 

16 A Not at that meeting certainly. I would have recalled 

17 that. What the agency had said previously to the NSC at 

18 these high-level meetings that you mentioned in December, 

19 I think the agency's position, John McMahon had pretty 

20 strong views, too, although he wasn't in the DDO — he 

21 strongly adopted our position on the non^worth of 

22 Mr. Ghorbanifar. So I think our views were pretty well known 

23 on that. 

24 Q As of the time of this meeting on the 18th, had you 

25 had any professional contact with Colonel North? 



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A Yes. I dealt on terrorism and hostage matters, 
so had had a few contacts at meetings with Colonel North. 




Q But by this time youroperational^ type contact with 
him had been fairly limited? 

A Yes. I thin)t that meeting! 

[probably the first week in November was the first time 
I had been in his office. 

Q After this meeting is over, did you have a conversa- 
tion with Mr. George or anyone about CIA's involvement in this 
operation? 

A I recall talking in the car going back with him on 
setting up the finance and logistics channels^ and I simply 
told him how I would proceed in doing that/ and that I would 
call the chief of finance to tell him what the problem was 
and that I would get back to him but I didn't think it would 
be a problem. It seemed to be pretty thoroughly covered 
by the finding. There was possibly some discussion about -- 
in fact, I recall a remark that the finding was broad 
enough you could drive a truck through it so there was a 
little discussion about it. 

Q Do you recall that in reading the finding that the 
introductory language provided that the Director of the 



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CAS-10 1 CIA not notify the Congress about the fact of the finding? 

2 A Yes. 

3 Q During the course of that meeting was there any 

4 discussion about that provision of the finding? 

5 A I think Admiral Poindexter did say that the -- that 

6 this was a very sensitive undertaking and that the absolute 

7 minimum number of people would be in the loop, in the 

8 circle of those who would be made aware of the compartment 

9 and that the President felt strongly that the Congress would 

10 not be notified until a later date. I took that later date to 

11 mean after the hostages were released, because at this point 

12 it was our — there were a couple of scenarios already floatinc 

13 around -- well, I think that may have been discussed for the 

14 first time at that meeting — that that -- that after 

15 delivery of the first shipment of TOWs the hostages would be 

16 released, meaning all of the American hostages in Lebanon. 

17 So we were looking at this, looked at it initially as 

18 probably going to be a fairly short-term thing. 

19 Q Who did you understand was going to have the 

20 responsibility for deciding when Congress should be notified? 

21 Was that a responsibility that would be on the agency, on the 

22 NSC, on the President? 

23 A That would be a presidential decision, I am sure. 

24 Q Since he is busy, someone has to advise him now the 

25 time has come, Mr. President, to advise Congress 



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CAS-11 1 A Yes. 

2 Q Just generally the way these things work, is that a 

3 responsibility that would fall on the agency or on the NSC or 

4 did you have any understanding of whose responsibility that 

5 would be? 

6 A In my understanding of the de facto way that that 

7 system works, I think either Mr. Casey or Mr. Poindexter, 

8 Admiral Poindexter, could initiate that discussion about now 

9 is the time, but it would be a White House decision. 

10 Q Did you discuss with Mr. George or with Mr. Ca'sey 

11 the wisdom of delaying notification of Congress -- wisdom 

12 is a bad word -- the decision to delay notification of 

13 Congress? 

14 A The answer is no, I did not. 

15 Q Could you describe for us after this meeting what 

16 steps then you took in, say, the next week in order to get 

17 the logistics chain in motion? 

18 A Yes. This was on a Saturday so the following 

19 Monday, 20 January, I made two telephone calls, one to the 

20 Director of Finance to tell him that we had a finding and that 

"^ 

21 X would need a Swiss bank account, and that a fairly 

r 

22 sizeable amount of money, something around S30 million 

23 on the first deposit, would come into that account. And he 

24 gave me the name of somebody in his office to welcr with who 

25 would be the only person in the Office of Finance who would 






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be in the compartment. 

The second telephone call was ^o^^^^^^^B the Chiet 
the^^^^^^^^^^H section, division, to that 

I would need the services ^ ^^^^^^^^^^^H ^° work with the 
Pentagon on transfers of arms to the agency ^^^^^^^^| had don« 
this -- he was a former Arr./ logistics officer before and so 
knew how that whole mechanism worked 




The third thing that had to be done was make the 
connection with the Pentagon, and I had a conversation with 
North -- it must have been that Monday or Tuesday, 20 or 21 
January -- in ^hich he told me that he would call the -- 
either call himself or have somebody else call, which I 
understood being Admiral Poindexter, call the military 
aid to CapMMk Weinberger, whose name was General Colin 
Powell, and Colin Powell would be told to arrange this in the 
Pentagon, let whomever the proper channel was know that 
I was going to be making the call and that they were to 
provide whatever I asked for, and the agency would pay DOD 
for the missiles. 

Then I would have waited a day or possibly two — 
I don't recall a telephone call back from North saying go 
ahead now. I did call Colin Powell, he was expecting my 
call, knew who I was and told me that the person I should 



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work out the details with was General Russo, and Powell 
warned me that he knew what the purpose of this was, knew 
where the weapons would be going, knew that it was in 
support of a sensitive, covert finding, but that General 
Russo did not. General Russo would only know that he was 
supporting a CIA covert arms acquisition. 

Q Let me just ask you a couple of questions about 
finance. You indicated that when you called the Finance 
Office that you thought that you needed an account that was 
going to have an initial deposit of around S30 million. • 
How is it that you had arrived at that figure? 

A Well, I don't recall — there were then a series of 
calls, I think probably two a day over the next four or 
five days, and I can't tell you exactly at what point we arrive 
at all these details. But the $30 million would have come 
later after it was -- after we had a first price from 
Army logistics that a TOW missile was probably going to run 
in the general neighborhood of $6,000 each. And that was 
simply a matter of multiplying 6,000 times 4S00 missiles, and 
that comes out, I think, to something around $27 million. 
We added sufficient cushion for the logistics, airplane rentals, 
the Army told us that they were going to have to charge some 
guard duty and other miscellaneous expenses so that they 
weren't out of pocket, and the principal concern of mine 
was that the agency did not end up with $31 million of 



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CAS-14 ^ expenses when we only had 530 million through the channel to 

2 pay for it. 

3 The reason that would have been a problem was that 
^ we might not then have anyplace else to take it except out o( 

5 our own budget, which would then have required us to disclose 

6 the activity to both the 0MB and to the Congress and I 

7 couldn't tell when that might be. So my principal concern 

8 in this was to make sure that I had enough money for the 

9 NSC channel to cover my agency costs. 

10 Q Did you believe that you would have had a -- if you 

11 would have had to use agency funds, you would have had to 

12 report to 0MB and to Congress even though there had been a 

13 finding? 

14 A Yes. 

15 Q There is a separate provision that would have 

16 required that kind of notification? 

17 A That was my understanding at the time. 

18 Q Did you — you told us that Mr. Powell had told you 

19 to get in touch with Russo. Did you get in touch with 

20 Russo? 

21 A Yes. Probably immediately, so we are 

22 talking somewhere around 22, 23 January. And I explained to 

23 him the number of TOW missiles that we would require, told 

24 him that there might be other things later, but I couldn't 

25 tell that, and that the — at some point fairly early on -- 



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it might have not been the first conversation, I told him that 
the first traunch, the first batch would be a thousand 
missiles, that we would need a thousand pretty quickly. 
Colonel North is a man who is always in a hurry, so he 
sort of was saying we are going to need this yesterday. It 
was a question of Russo, how fast can you set this up, how 
fast can you pin down a price, how fast can we get this whole 
thing nailed down. 

Q Did you have any understanding about how soon the 
missiles would actually be shipped as of this period of time, 
January 22, 23? Was there a tentative date in your head? 

A No. But by the following week. Colonel North brought 
over a scenario which was a pretty detailed thing. It had 20 
to 30 steps to it, the last step of which was -- and you have 
a copy of this -- was ludicrous to us, that on April 11th or 
some other specific date around there that 



si would 
step down from power. That was just Ghorbanifar nonsense. 

Q Let me show you CIIN n,uinber 131, which is a cable 
and ask if you would tell us whether you had seen that cable 
at or about the time it was sent. 

A That is a good cable. 

Q I take it from that this is the first time you have 
seen it? 

A No, I have seen this once before. 

Q Just so the record is clear, this is a cable dated 



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25 January where the agency is registering its objection to 
providing intelligence information to Iran on the Iran/Iraq 
war. Is that a fair summary? 

MR. KERR: It is not the agency, it is Mr. McMahon 
to Mr. Casey, isn't it? 

THE WITNESS: Mr. McMahon ' s cable to Mr. Casey. 

MR. KERR: There was another element in the agency 
that disagreed with that cable coming back the other way, 
Mr. Casey. 

THE WITNESS: Well, there is a sentence here that 
I am not sure whether he is objecting just to the intelligence 
or perhaps more accurately to the whole operation. The first 
sentence of the third paragraph, the Ssam^^r says everyone 
here at headquarters advising against this operation not only 
because we feel the principle involved is a liar -- that is 
referring to Ghorbanifar — and has a record of deceipt, 
but secondly, we would be aiding and abetting the wrong people, 
meaning I guess the Iranians. 

MR. KERR: That cable is addressed to Mr. Casey? 

THE WITNESS: Yes. The heading on it says please 
pass to OCX from DDCI, eyes only. 

BY MR. EGGLESTON: 
Q This was during a period of time when, as I recall 
Director Casey was On a trip^^^^^^^^H or that part of the 



world? 



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A That IS correct. 

Q He was out of the country? 

A Yes. 

Q Did you have any role in preparing this cable? 

A No, I did not. 

Did you know that this cable was being sent? 

A I think I did. I had forgotten it, but I am 
pretty sure I knew about that. 

Q Mr. Kerr has referred to a cable which I don't have 
with me, which is a response to this cable. Have you seen that 
cable? 

A I may have, but I don't remember it. If you have 
got it, I would like to see it. 

Q You were, though, aware that part of the plan was 
to provide intelligence information and you were generally 
opposed to that plan? 

A Yes. We were still fussing about that when Casey 
came back to town. 

Q Do you recall when Casey came back? 

A No, but it was before I went off — before I went 
off to the fir«t meeting in Germany on 18 February. 

Q There are various reports that you went to a meeting 
in Germany the 5th of February. I take it that is not true, 
you did not go? 

A That is not true. 



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Q There was a ma^or -- there was a meeting with regard 
to the logistical operation which appears to have taken place 
around 29 January. Do you recall that meeting? 

A Well, there should have been more than one, so I 
guess I am not sure where you are headed. 

Q I ]ust recall a meeting ^ii( other things that I have 
seen that involved Mr. Secord as well as yourself. Colonel 
North and -- 

A I know what you are talking about then. 

Q Is that the first time that you had had a mee.ting 
with General Secord? 

A That is correct, the first time I met him. That 
was held in the Executive Office Building in the evening, 
six or 7:00 p.m. 

Q You knew, though, prior to this time that Mr. Secord 
was to have some role in the logistical aspects of this 
operation; is that correct? 

A If I didn't know before then, I certainly did at that 
meeting and I think I had a little bit of data before. But 
it waspretty well laid out at that meeting. 

Q Could you tell us who else attended that meeting? 

A Charlie Allen was there. It was chaired by Colonel 
North. And that, frankly, was the first time I realized 
that Charlie Allen had a role in this. I was a little puzzled 
by it because I thought I was the only channel. I didn't quit^ 



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figure out where he fit in. And then Noel Koch was there 
from DOD. So that is a total of five people. 

Q Was -- did you say it was held in Colonel North's 
office? 

A No, It wasn't, it was held down the hall in a 
conference room. 

Q As best you recall, what was discussed at that 
meeting? 

A We discussed a^ot of detail at that meeting 
about the logistics, and exactly what we needed to do. I am 
not an air operations mem. I don't have a lot of background 
in that. But Secord certainly is, and he laid out a series 
of requirements on things called hot spot parking, which 
means a place where you load ammunitions, that he would need 

and I told him we would be responsible for 
the loading and we would be responsible for things like the 
pallets on which you load the missiles. There was a certain 
question about how many -- what the cube was and what the 
weight was and how many you could put into a 707 and whether 
it would take two or three airplanes, and so I had to get sort 
of a whole page of detail of loading and numbers of planes 
and weights, that I had to go back to Russo and to find out 
how these things were packaged. 

We\also had to discuss the question of sterility, 
whether these things would still have the U.S. markings, and 



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there was some discussion about the path that we would be 
taking. And it was described to me, I think, for the 
first time at that meeting that Secord would take them, and 
there was a customs question, too, with Secord, from] 
|either on a northerly route 

eventually ending up in Israel or he 
would take a southerly route which would take him throug 

the Mediterranean to Israel. It wasn't clear 
at that point. 

He had work to put that together. He did not .request 
any assistance from us on the overflight rights or landing or 
re-\fueling or anything like that. 

It was also clear at that point that the -- once 
they arrived in Israel that those missiles would be off- 
loaded at an Israeli base and then would be on-f loaded to an 
Israeli airplane and flown back by Secord' s crew, not an 
Israeli ere 
into Bandar Abas, a southern port in Iran. 

Q What did you understand that General Secord 's 
position with relation to the NSC to be? Did you think he 
was a consultant? 

How did you think he had gotten involved? 
A Well, I found out within the month. I don't think 
I knew then except I knew he wasn't awNSC member. I didn't 
understand him to be an employee or on contract to the NSC, 



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but anyone other than he was clearly handling this logistics 
for North. I didn't really know more than that. 

Now, on one of those February flights coming back 
from Europe, I asked North that question, and North sai^ 
I am getting a little ahead of the story, but both Secord and 
Hakim turned up at the second meeting and Hakim came to that 
meeting it was a fait accompli^ just out of the cold. There 
had been no discussion of a translator, no discussion of the 
need for a translator, and when we arrived there Ollie North 
says Hakim here is going to do the translating because we don't 
trust Ghorbanifar -- see, he is catching on, too — and so on 
the flight back from that meeting, which is the end of 
February, I said to North, you know, I don't think it is very 
smart to have these outsiders, they are retired or not U.S. 
Government, and we have this sensitive U.S. Government activity 
and we are trying to hold this very tightly -- I don't think 
they ought to be involved. 

If we need translators for meetings, I can provide a 
translator and give you somebody who knows something about 
Iran. His answer to that was, well, Secord and Hakim know 
each other, they knew each other a long time ago in Iran and 
they both served or have lived in Iran^ Hakim, of course, 
was an Iranian citizen at one point before the fall of the 
Shah -- and he said I trust them and I rely on their 
expertise, and besides. North -- Secord is handling things 



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CAS-22 ' for me in Central America. He is in charge. And Hakim is 
in charge of that activity -- I am not sure whether he 
Slid that activity or that effort -- in Europe. And I 
ijaid, well, if that is the case, all the more reason why you 

)n't want to do that, because if you are trying to do a 
compartment, I don't think we ought to mess this Iranian thing 
up with whatever else you are doing. 

In dealing with North -- and I was dealing with him 
mostly on the telephone -- through that month of February, 
which is the busiest time for me — it was -- I would say he 
was clearly the most hectically pressed member of the U.S. 
Government I had ever met. He was working very long days on 
this. He would disappear for a day or two and I would be told 
he IS down south. 

It was clear that he was down in Central America. 
I think that is perhaps as early as March. 

SENATOR HEFLIN: What was North's reply to your 
statement that you ought not to mix up things? 

THE WITNESS: There was no reply to my recollection, 
Senator. What I did when I got back to the agency was 
run a name trace on Hakim, and find out how much we really did 
know about him. He is a U.S. citizen by now, but we don't hav« 
very many files on U.S. citizens, but we did on Hakim because 



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SENATOR HEFLIN: When you said to him you don't 



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think you ought to mix up the Iranian situation with the 
Central American contra situation, he made no reply whatsoever? 

THE WITNESS: Well, not that I recall. If he made a 
reply it was sort of to slough it off. He did not in my view 
take It very seriously. 

SENATOR HEFLIN: Did you press him? 

THE WITNESS: I am not one who presses frontally 
very often. What I did was gather up my facts when I 
got back to the agency, and we took that up to 
Clair George, and he recommended to Mr. Casey that we get 
Hakim out of this and that we substitute George Cave, 
ont of our retirees, but a real expert on Iran, who speaks 
excellent Farsi, and we did that successfully. We removed 
aakf^ and Secord from direct participation in these meetings. 

SENATOR HEFLIN: Why did you ask hiro the question of 
safing they ought not mix up the two? 

THE WITNESS: That is a cardinal rule in my business 
I l»ve been an operations officer in the CIA sinceJ 
And we never mix the mechani.^m for two separate operations if 
we can possibly get away from it. 

SENATOR HEFLIN: Did you tell North that or did you 
3v»t make the question you didn't think that they should mix 
ttB two? 

THE WITNESS: As I said, Senator, I did tell him that 
I thought we should not mix the two. Was that your question? 



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CAS-24 ' SENATOR HEFLIN: I was trying to really -- you are 

not dealing with the CIA, you are dealing with North. Did you 
tell him that it has been the policy of CIA not to mix the 
two? 

THE WITNESS: Any two — no, I don't think I would 
have said that. It is his operation and I am charged with 
supporting him. We have already been over on whether we are 
going to be involved in it. So I have got to be a little 
careful about how I rearrange his support mechanism. And so 
I went back and got my facts. 

There was a little odor to both Secord and Hakim, 
and I think you have a lot of that data. There was a legal 
question at one point of whether Secord had been involved with 
the Wilson and Terpil connection with Libya, and I had heard 
a little something about that^and it wasn't clear in my mind 
whether he was out of that woods or whether he had been 
indicted at one point for it or cleared and I just didn't 
know. 

The same was true of Hakim. That was a name that 
for me smelled a little funny, because we had had — I don't 
think I knew at that point how closely associated he was with 
Secord, but I did know that there was a — there are a couple 
of questions in his background. 

As soon as I did that name trace when I got back, 
I knew that there were some allegations that Hakim had been 



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involved in some illegal arms sales or illegal technology 
sales, something in U.S. to Iran. 




[that It would cause us a lot of pause before 

we used him. 

Now, North, on the other hand, assures me at every 
moment that Secord and Hakim are great Americans, a phrase he 
used a lot, and that these two gentlemen were doing their 
patriotic best to assist the U.S. in a very sensitive 
operation, and whatever Hakim's concerns had been, whatfever 
Hakim's problems were before. North was going to help him 
clear those. 

There was a problem because Hakim couldn't get into 
the Executive Office Building. When North tried to clear 
him into the building there was derogatory block so he 
couldn't come in the building, and that related to not 
agency, but FBI information on Hakim, which I didn't have 
access to. 

I had a good reason to try and get him out of that 
operation. 

MR. KERR: Just a couple questions. You are saying 
that North told you that Secord was handling things in 
Central America on the flight. What kinds of things was 
Secord handling for North in America at that time, if you 



know? 



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THE WITNESS: Well, I think that conversation moved 
over pretty quickly to the point that was on my mind that 
I wantedhim moved away. 

MR. KERR: What did you understand him to be 
conveying to you? 

THE WITNESS: I don't think there was any question ir 
my mind that he was talking about his involvement in 
supporting para-military operations in Central America. 
I don't think I asked him any questions about it because I am 
pretty sure I knew without him telling me. 

MR. KERR: On Hakim, you said that he told you Hakim 
was handling the European aspect of what North was doing. 
What did you take that to mean? 

THE WITNESS: That was linked to the first phrase of 
the sentence. 

MR. KERR: There isn't^war Ollie North was fighting 
in Europe so you thought he was doing something to help out the 
Central American convention in Europe? 

THE WITNESS: I thought he was talking about support 
mechanisms. 

MR. KERR: You had heard about Secord's bank 
account in Switzerland at the January 29th meeting? 

MR. EGGLESTON: I have not asked him any questions 
about the bank account. 

MR. KERR: You knew that the money — 



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THE WITNESS: You are right. I think it was before 
29 January, in fact. If it wasn't, it was 29 January — 
I think I got that from North on the phone before that so, 
yes, I knew Secord was involved in the money trail. 

MR. KERR: I believe that is when the item was 
discussed at the meeting 29 January which was the flow of 
money that would ultimately result in the delivery of weapons 
and one of the things mentioned at the January 29 meeting was 
that the money would come in from Iran through a couple of 
gates, ultimately end up in Secord 's bank account in Switzerlarjc 

is that right? 

THE WITNESS: I don't remember whether it was at the 

January 29 meeting or on the telephone, but I do, and I 
have telephoned any number of times on this, there was a very 
clear statement by North to me that was memorable in which he 
said the money would come from the Iranians to the Israelis, 
meaning Mr. Nir or some account controlled by him, and then to 
Ghorbanifar and from Ghorbanifar into Secord 's controlled 
account in Switzerland and then Secord would effect the 
transfer into our account. 

MR. KERR : Neil is going to go into more detail. 
I am pursuing it now because of your discussion of Hakim on 
the airplane. When you used the reference Hakim was handling 
the European side of things, it was your understanding on the 
airplane that Hakim was handling the financial mechanisms for 



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1 4||r Secord's Central American operation, isn't that right? 

2 THE WITNESS: I don't think I would limit that to 

3 financial. It would have been arrangements with arms merchants 

4 or with medical suppliers or with food or with boots or 

5 whatever needed to be done in Europe, it was my impression 

6 Hakim was in charge of that. 

7 MR. KERR: And one of those things would be 

8 financing mechanisms? 

9 THE WITNESS: Possibly, not necessarily, but 

10 possibly. 

11 MR. KERR: At the time that you were told Secord 

12 handles things for North ai**^ Central America, Hakim handles 

13 things for North*|i£/Europe, you drew the connection, did you 

14 not, that the account that was going to be used by Secord 

15 would be handled by Hakim and would be the same account 

16 that had been used for the Central American venture with 

17 General Secord, isn't that right? 

18 THE WITNESS: No, I did not make that connection. 

19 I still wouldn't. It doesn't have to be the seune at all. 

20 Either one of the gentlemen could handle any number of accounts 

21 BY MR. EGGLESTON: 

22 Q When you indicated that you thought that General 

23 Secord was handling a paraVmilitary operation in Central 

24 Americair for Colonel North, where did you obtain that 

25 information? Where did you derive that understanding? 



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A Well, I think it is derived from even at this 
early date -- see, I had been working with North roughly a 
month by that time -- I think it is derived not from any 
explanation, but rather from the vibes, if you will, of calling 
his office almost every day with an additional question or an 
additional logistics detail and there being nobody else there 
to discuss, It was all the North account, there would be 
days when I couldn't deal with him. He just was -- and 
as you know, and I think we have talked about this once 
before, there are two sides to North. 

One is sort of secret and compartmented , and another 
one IS sort of boyish and boastful, and it would be in 
character for him to say I won't be here tomorrow, I 
will be down south, and then for him to say, yes, it was a 
quick trip and I flew all night and I came back and I 
haven't slept for 48 hours, always complaining about how busy 
he was and how terribly over+worked. 

It is from that kind of what the Germans call 
f ingerspitzen gefuhl -- just from the smell of iCjthat I had a 
pretty good idea that North was spending a lot of his time on 
Central American things. 

Q Let me get back to the meeting of the 29th. As I 
recall, there was some discussion at that meeting about the 
price of the TOWs , that as of that date you had already obtained 
a price of $6,000 per TOW, and probably gave that price to 



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CAS- 30 1 Colonel North. Do you recall any discussion about the 

2 price of the TOWs at that meeting? That the price was too 

3 high? 

4 A There is an awfully lot of discussion about price 

5 in the Army I.G. report, which you may wish to look at, 

6 because the Army I.G. would have to go into this in great 

7 detail. 

8 General Russo's problem, a little like mine, was that 

9 he was given two or three days to come up with a price. And 

10 he did the best he could in two or three days, but the 

11 price he ceune up with the Army I.G. has now found is not the 

12 correct price. The Army I.G. took 90 days to figure that out. 

13 The GAO has also done an investigation and they have 

14 determined that the Army I.G. price wasn't right either. I 

15 am saying that because that has a lot to do with the confusion 

16 on the prices. 

17 The Initial price was precisely — it was Russo 

18 telling me it was going to be something around «, 000 per. 

19 And I recall telling North that and he recalled — it 

20 doesn't make any difference to me whether they charge three 

21 or six or nine — I recall North saying, well, that is too 

22 high, they must be giving you a brand new missile replacement 

23 cost figure, and they should be charging for the oldest model 

24 of TOW in stock. 

25 We don't care whether these things in fact work real 



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well. Tell the Army that we want the oldest thing they can 
find in the warehouse. So I went back to Russo and said, 
let me make clear we don't need the very best, latest thing 
right off the factory line. 

It probably shouldn't be replacement cost for a new 
TOW. And so he said, okay, we will do that. Then at that poirJt 
it moved into -- there is a guy in Russo 's shop named Simpson, 
and he worked directly with ^^^^^^^1 and these two 
logistics fellows came back with a price -- 

Q Of around $3400? 

A I aun not sure. But it was around $3400. 

Q Just under 35. 

A Yes. 

Q Colonel North's statement, I don't really care 
if they work very well, strikes me as a little surprising 
in the context of the initiative. At least at some level 
it was supposed to have a strategic dimension to it. Was 
that just a flip remark by him? 

A I thought it was. I didn't think he really 
meant that. 

Q Who was the CIA selling these TOWs to? 

A The CIA -- well, we were buying them from DOO. 
What I needed to do was provide to the NSC, to Colonel North, 
exactly the amount of money that was needed from the NSC to 
cover our costs to OOD plus whatever other logistics costs 



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we had. 

I think the U.S. Government was arranging to sell 
them through the mechanism to the Iranians, is that what you 
were driving at? 

Q Yes, that is. Did you ask Colonel North what it 
was that General Secord was doing in the logistics operation 
that the CIA could not do? 

The CIA has proprietaries and methods of transportin 
weapons else ^^^^^^^^^^^^^^^^^^^^^^^^| 

Did you discuss with him what it was that Secord was doing 
that the CIA hadn't done on the institutional basis most 
times before? 

A I had to probe with Secord being in the 
finance chain because it provided a cut out between the 

Government and the CIA funds, ^^^^^^^^^^^^^| and 
I wasn't particularly anxious for an Israeli Government 
entity to know what my account was. 

So that was perfectly all right with me. The 
logistics chain again was one of those fait accompli| which 
wasn't any real discussion — it was laid out for me that that 
was the way it would be arranged. And I was happy enough — 
again, you have to put this in the context of the moment 
that we had early, the second half of January, early 
February, we were in a little pain for having had 
Ghorbanifar shoved down our throats on this, and I wasn't 



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CAS-33 1 in a very strong position to argue with North. The best I 

2 could do was try and influence him and I felt pretty 

3 good about my ability to have -- by the end of February -- 

4 to have gotten Secord and Hakim out of the meetings, although 

5 It was North's clear intention that he wanted them kept in 

6 there. 

7 I did not get them out of the logistics and 

8 finance mechanism, which would have been my preference, 

9 too, but I didn't even try. 

10 Q You had mentioned last time we spoke that you' were 

11 not unhappy to have Secord in the finance chain because it 

12 put a break between the agency and the Israeli account. I 

13 didn't quite understand it then and I don't quite 

14 understand it now. 

15 The agency must have all sorts of accounts that it 

16 opens for a particular purpose^^^^^^^^^^^^Hand 

17 then closes dovm, and I am certain they are not opened under 

18 the name of CIA, so it doesn't really, I would think, reveal 

19 too much to the Israeli Government anything about the 

20 agency, the fact that you give them an account number and 

21 they deposit in an account and as soon as the operation is 

22 over I take it the account will be closed anyway. 

23 I understand as to this particular account and the 

24 purpose, although before too many months had gone by it 

25 was closed out or the Iranian aspect was transferred. What 



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was Secord doing for you that you must not do all the time 
With various different other governments, unsavory 
individuals you must have to deal with in financial 
arrangements -- I am not sure I quite understand that 
explanation. 

A I can understand why you wouldn't to< that is a 
peculiar part of our business, I think, and it is one of those 
things that sort of comes nat^/Jally or second-hand to me for 
having thought that way for 2 5 years. 

I end up as having trouble understanding why * 
you don't understand. 

The problem with the Israeli part of it in the 
Middle East is that we work pretty hard at hi 




our biggest problem in doing that 
successfully is being pictured as too close to the Israelis 
strategically, the whole U.S. Government or CIA in 
peculiar operations. 

One of my concerns in this operation from the 
beginning, and shared by those of us who had some doubts about 
It, was that the blow-back potential for having been a part of 
selling American weapons that had been refused to Arab govern- 
ments to Iran, which was deeply involved in a war with Iraq, 
could cause pretty sizeable problems. 

The decision had been made in the White House, but 



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But It was clear that they were not a part of this 
operation. We were told that they were not to be included in 
any way or made known that it was even happening. 

And that made me very nervous, because there is 
some possible internal blow-backl 

as opposed to this one guy who is a 
little strange, Mr. Nir, working out of the Prime .Minister's 




Colonel North, is collecting 
intelligence directly from the Prime Minister's office] 




itrol North's intelligence activities, and we in 
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BY MR. EGGLESTON: 

Q Let me move you to your first trip to Frankfurt, 
which I think took place around the 19th and 20th of 
February. 

As I recall from other reading, you went on 
two occasions fairly close together, is that correct? 

A That is correct. 

Q Your second trip, just so we are in the ball 
park, IS -- 

A Twenty-four, 25. 

Q ■ According to the documents that I have seen as 
of the 13th or so of February, the Agency notifies Ma^or 
Simpson, I think, that approximately S3. 5 million is now 
available, and the processes of transporting the TOWs and 
getting them moving has started. 

Let me ask you, as of the date that you first 
go to Frankfurt, have any TOWs been delivered to Iran? 

A No. Well, I am sorry — yes, back in September. 

Q I'm sorry, I asked that imprecisely. 

Had any of the February TOWs arrived -- 

A No. 

Q What was the -- and yet the money had been 
deposited so the process had really begun? 

A That was at my insistance. We -- and again, 
this relates to ensuring that the Agency was not out of 
pocket -- the Agency insisted that we had to have money 



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in our account before w« would order, put in a firm order 
to DoO. 

Q What was the purpoie of the 19th, 20th of 
February trip? 

The purpose with^^^^^^^^^H who 

was coming out from Iran. 

Q And I take it he was not out? 

A He didn't come. 

Q Was it your understanding -- let me ask it this 
way. What was your understanding of the arrangements with 
regard to the delivery of the TOWs and the release of the 
■hostages as of the time of that meeting? Did you think 
that the hostages were ed>out to come out? How many did 
you think were coming out? 

A We had in our hand by that time the scenario 
that I described to you that is also in your hands, and 
that was my understanding. 

The essence of that was first delivery of 1000 
TOWs, all hostages are released, and then a series of 
additional steps leading to a strategic meeting somewhere, 
maybe in Europe or maybe on an island off Iran, and then 
additional weapons being delivered. 

Q I take it by additional weapons you mean the 
remaining, I guess, to Iran, it would be the remaining 



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A That !■ right. 

Q What was the purposa, than, of meeting with 

Was that a meeting that had to take place 
before any TOWa were going to bm delivered? Why is it 
that your — 

A The money having been deposited was their first 
step to show that they were serious. The next step was 
this meeting to lay out an agreement on what the following 
steps would be. 

The scenario that you have seen and I have seen 
was one that was worked up by North as a result of communi- 
cations coming to hin from Ghorbanifar that what we needed 
now was to actually sit down with an Iran^nd verify that 
his understanding was the same as ours. 

Q How did Mr. Ghorbanifar explain the absence of 



A H« said ha would b« coming the next day, 
probably the day after that, but certainly coming at 
any moment . 

I take it from your ton* of voice, which is 
not reflected on the transcript, that you didn't necessarily 
believe this assertion? 

A Wall, neither did Colonel North. In fact. 
Colonel North was very angry about it. And we simply 
turned right around and Colonel North said, after a 



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