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

Y l.l/2:Serial 13752 

United States Congressional... 



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Documents 



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



Senate Report 

No. 216 




IRAN-CONTRA INVESTIGATION 

APPENDIX B, VOLUME 11 
DEPOSITIONS 



United States Congressional Serial Set 

Serial Number 13752 



United States Government Printing OfFice 
Washington : 1989 



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



Report of the Congressional Committees Investigating the 

Iran-Contra Affair 

Appendix B: Volume 11 
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 



Bnited States 3tnatt 

SELECT COMMITTEE ON SECRET MILITARY 

ASSISTANCE TO IRAN AND THE NICARAGUAN OPPOSITION 

WASHINGTON, DC 20510-6480 



March 1, 1988 

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

Dear Mr. President: 

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



Sincerely, 




Warren B. Rudman 
Vice Chairman 




III 



U.S. HOUSE OF REPRESENTATIVES 

SELECT COMMITTEE TO INVESTIGATE 

COVERT ARMS TRANSACTIONS WITH IRAN 

UNITED STATES CAPITOL 

WASHINGTON, DC 20SI5 

(202) 22S-7902 

March 1, 1988 



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

Dear Mr . Speaker : 

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

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




Lee H. Hamilton 
Chairman 



United States Senate 

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

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

George J. Mitchell, Maine 

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

James A. McClure, Idaho 

Orrin G. Hatch, Utah 

William S. Cohen, Maine 

Paul S. Trible, Jr., Virginia 



Arthur L. Liman 
Chief Counsel 

Mark A. Belnick Paul Barbadoro 

Executive Assistant Deputy Chief Counsel 

To the Chief Counsel 

Mary Jane Checchi 
Executive Director 

Lance I. Morgan 
Press Officer 



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 Courter, New Jersey 

Bill McCollum, Florida 

Michael DeWine, Ohio 



John W. Nields, Jr. 
Chief Counsel 

W. Neil Eggleston 
Deputy Chief Counsel 

Kevin C. Miller 
Staff Director 



Thomas R. Smeeton 
Minority Staff Director 

George W. Van Cleve 
Chief Minority Counsel 

Richard J. Leon 
Deputy Chief Minority Counsel 



VII 



United States Senate 



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



Arthur L. Liman 
Chief Counsel 
Mark A. Belnick Paul Barbadoro 

Executive Assistant Deputy Chief Counsel 

to the Chief Counsel 

Mary Jane Checchi 
Executive Director 

Lance I. Morgan 
Press Officer 

Associate Counsels 



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



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



Committee Staff 



Assistant Counsels 



Legal Counsel 
Intelligence /Foreign 

Policy Analysts 
Investigators 



Press Assistant 
General Accounting 
Office Detailees 



Security Officer 
Security Assistants 



Chief Clerk 
Deputy Chief Clerk 



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

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

Marshall 
Georgiana 

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



Staff Assistants 



Administrative Staff 



Secretaries 



Receptionist 
Computer Center 
Detailee 



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

Manwarring 
Stephen G. Miller 
Jennie L. Pickford* 
Michael A. Ray nor 
Joseph D. 

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



VIII 



Committee Members' Designated Liaison 



Senator Inouye 
Senator Rudman 

Senator Mitchell 

Senator Nunn 

Senator Sarbanes 
Senator Heflin 



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



Senator Boren 

Senator McClure 
Senator Hatch 

Senator Cohen 

Senator Trible 



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



Part Time* 



Assistant Counsel 
Hearings Coordinator 
Staff Assistants 



Interns 



Peter V. Letsou 
Joan M. Ansheles 
Edward P. 

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

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



Document Analyst 

Historian 

Volunteers 



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



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



IX 



United States House of Representatives 



Select Committee to Investigate 
Covert Arms Transactions with Iran 



Majority Staff 



Special Deputy 

Chief Counsel 
Staff Counsels 



Press Liaison 
Chief Clerk 
Assistant Clerk 
Research Director 
Research Assistants 



John W. Nields, Jr. 
Chief Counsel 

W. Neil Eggleston 
Deputy Chief Counsel 

Kevin C. Miller 
Staff Director 



Charles Tiefer 

Kenneth M. Ballen 
Patrick J. Carome 
V. Thomas 

Fryman, Jr. 
Pamela J. 

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

Birmann 
Julius M. 

Genachowski 
Ruth D. Harvey 
James E. Rosenthal 



Systems 

Administrator 
Systetns 

Programmer/ 

Analysts 
Executive Assistant 
Staff Assistants 



Catherine L. 

Zimmer 
Charles G. Ratcliff 
Stephen M. 

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



Minority Staff 



Associate Minority 

Counsel 
Assistant Minority 

Counsel 
Minority Research 

Director 



Thomas R. Smeeton 
Minority Staff Director 

George W. Van Cleve 
Chief Minority Counsel 

Richard J. Leon 
Deputy Chief Minority Counsel 



Robert W. 
Genzman 
Kenneth R. Buck 

Bruce E. Fein 



Minority Staff 
Editor/Writer 

Minority Executive 
Assistant 

Minority Staff 
Assistant 



Michael J. Malbin 

Molly W. Tully 

Margaret A. 
Dillenburg 



Committee Staff 



Investigators 



Director of Security 



Robert A. 

Bermingham 
James J. Black 
Thomas N. 

Ciehanski 
William A. Davis, 

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



Security Officers 



Editor 

Deputy Editor 
Associate Editor 
Production Editor 
Hearing Editors 

Printing Clerk 



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



Associate Staff 



Representative 
Hamilton 

Representative 
Fascell 

Representative 

Foley 
Representative 

Rodino 

Representative 

Brooks 
Representative 

Stokes 
Representative 

Aspin 



Michael H. 

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

Schweitzer 
William M. Jones 

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



Representative 

Boland 
Representative 

Jenkins 
Representative 

Broomfield 
Representative 

Hyde 
Representative 

Courter 
Representative 

McCollum 
Representative 

DeWine 
General Counsel to 

the Clerk 



Michael W. Sheehy 

Robert H. Brink 

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

Dennis E. Teti 

Tina L. Westby 

Nicholas P. Wise 

Steven R. Ross 



XI 



Contents 

Volume 11 



Preface XXI 

Furmark, Roy 1 

Gadd, Richard 193 

Gaffney, Henry 241 

Gaffney, Henry (With Glenn A. Rudd) 410 

Galvin, Gen. John R 454 

Gantt, Florence 634 

Garwood, Ellen Clayton 742 

Gast, Lt. Gen. Philip C 844 

Gates, Robert M 960 

Glanz, Anne 1063 



xm 



Depositions 



Volume 1 



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



Volume 2 



Volume 3 



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



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



Volume 4 

Channell, Cari 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. 

Galvin, Gen. John R. 

Gantt, Florence. 

Garwood, Ellen Clayton. 

Gast, Lt. Gen. Philip C. 

Gates, Robert M. 

Glanz, Anne. 



Rudd). 



Volume 12 



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



Hakim, Albert. 



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



Volume 13 



Volume 14 



XVII 



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



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



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



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



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



Volume 15 



Volume 16 



Volume 17 



Volume 18 



XVIII 



Miller, Richard R. 



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



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



Volume 19 



Volume 20 



Volume 21 



Volume 22 



Raymond, Walter, Jr. 

Regan, Donald T. 

Reich, Otto J. 

Revell, Oliver B. 

Reyer, Billy Ray (See John Chapman). 

Reynolds, William B. 



Volume 23 



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



XIX 



Rosenblatt, William. 

Royer, Larry. 

Rudd, Glenn A. 

Rudd, Glenn A. (See Henry Gaffney). 



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



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



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



Volume 24 



Volume 25 



Volume 26 



Volume 27 



Thurman, Gen. Maxwell. 

Trott, Stephen S. 

Tull, James L. 

Vessey, John. 

Walker, William G. 

Watson, Samuel J., IIL 

Weinberger, Caspar. 

Weld, William. 

Wickham, John. 

Zink, Gregory (See Alfred Clark). 



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 reftising 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 Conmiittee staff corrected obvious 
typographical errors by hand and deleted personal and proprietary information 
not considered germane to the investigation. 

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



XXI 



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

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



XXII 



Publications of the Senate and House 
Select Committees 



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

Appendix A: Source Documents, 2 volumes, 1988. 
Appendix B: Depositions, 27 volumes, 1988. 
Appendix C: Chronology of Events, 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 



1 




UNITED STATES SENATE 

SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 

DEPOSITION OF ROY FURMARK 

Washington, D. C. 
Wednesday, July 22, 1987 

Deposition of ROY FURMARK, called for examination at 

the offices of the Senate Select Committee, Suite 901, the 

Hart Senate Office Building, at 10:00 a.m. before KATHIE S. 

WELLER, a Notary Public within and for the District of 

Columbia, when were present on behalf of the respective 

parties: 

CHARLES ;CERR, ESQ. 
Associate Counsel 
RICHARD PARRY, ESQ. 
Associate Counsel 
United States Senate 

Select Committee on 

Secret Military Assistance 

to Iran and the Nicaraguan 

Opposition. 



ROBERT W. GENZMAN, ESQ. 
Associate Minority Counsel 
United States House of 
Representatives Select 

artUyyiJeciasu.ic^/l J -"--<^ ^^/f/ 7 Committee to Investigate 

fH^f pwwWww of F " '' Covert Arms Transactions 
4^l|.flrti0kNMl0Mal Security :j-with Iran. 




DIANE DORNAN, Professional Staff 

U.S. House of Representatives 

Permanent. SslepU,CoflWJilWe on Intelligence. 



iiiMf^rarn^ 



82-708 0-88-2 



wmm 



1 

2 
3 
4 
5 

6 
7 
8 
9 
10 
1] 
12 
13 
14 
15 
16 
17 
13 
19 
20 
21 
22 



CONTENTS 



WITNESS 

Roy Furpiark 
by Mr. Kerr 



NUMBER 
Exhibit I 
Exhibit 2 
Exhibit 3 
Exhibit 4 
Exhibit 5 
Exhibit 6 



EXAMINATION 



E X H I BITS 




OIHL^^ 



IDENTIFIED 
30 
32 
68 
94 
107 
128 



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1 
2 
3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



UNCIASHD 



PROCEEDINGS 
Whereupon , 

ROY FURMARK 
was called as a witness and, having first been duly sworn, 
was examined and testified as follows: 
EXAMINATION 
BY MR. KERR: 

Q State your name for the record, please. 

A Roy M. Furmark. 

Q Where do you live? 

A 200 Hicks Street Brooklyn, New York 11201. 

Q I will start with some background information. 
Could you describe your educational background? 

A Graduate of the New York City public schools. 
Graduated Pace University in June of '57. 

Q And what degree did you take at Pace? 

A A bachelor of business administration with an 
accountancy practice. 

Q Do you have any higher education past the 
bachelor's degree? 

A No, other than I passed the New York state 
certified public accountant's certification and am a CPA in 



^C </ --/!/7: 



provWons of E.0. 12356 



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1 

2 

• 3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



\|HtUS«B 



the state of New York. 

Q Are you certified in any other state? 

A No. 

Q When did you become a CPA in New York? 

A I think 1964. I'm not sure. Around that, around 



'64. 

Q 
A 
Q 
A 

Q 
recollect 
A 
Q 
A 
Q 



And you still are a CPA in good standing? 

Yes, I am. 

By whom are you employed at the present time? 

I'm basically in my own business. 

You tend to operate in a corporate mode, as- I 



Yes. 



What's the name of your corporation? 
The Furmark Corporation, 274 Madison Avenue. 
And what positions do you hold with the Furmark 
Corporation? 

A I'm president. 

Q And the sole stockholder; is that correct? 
A No. Furmark Corporation is a wholly owned 
subsidiary of Perikari, P-e-r-i-k-a-r-i, Corporation. 
Q And who are the stockholders of Perikari? 




sb^rit^i 



31795.0 
ksw 



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A I own 80 percent of it and Mr. Adnan Khashoggi 
owns 20 percent of it. 

Q The holding company, is it simply a holding 
company or is it a business as well? 

A It is basically a holding company. 

Q The business of Furmark Corporation is what? 

A Well, it is basically involved in the energy 
field. Over the years we've had consulting agreements with 
— to run a bankrupt refinery in Texas for two years doing 
refining. I worked with Roger Tamraz for three years trying 
to buy Commonwealth Oil & Refining in Puerto Rico, which was 
in bankruptcy and which was a public company. 

The Furmark Corporation had a contract to act as a 
developer for two other companies. Alternative Power 
Corporation and Pittsburgh Alternative Power, which are 
companies trying to develop cogeneration power plants using 
waste coal, just trying to get involved in financing, working 
now on a financing of a hotel in St. Kitts. Try to do crude 
oil deals. 

Q How many employees does the corporation have at 
present? 

A Don•t^il^^i(^,ar_^ ^ ^ 




silt . There are two 



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1 individuals in that office with me and we work together. 

2 Q But they are not employees? 

3 A No. 

4 Q Let's take a break for a moment. 

5 (Discussion off the record.) 

6 BY MR. KERR: 

7 Q You have a number of other business affiliations. 

8 I would like to go through the list of active corporate 

9 entities in which you are involved. Can you give me a. 

10 description of those? 

11 A Sure. APC, Alternative Power Corporation, which 

12 is a company which I control; the other shareholders are -- 

13 Mr. Khashoggi has a few percent. Saarberg-Interplan, a 

14 German coal company; third largest coal company in Germany, 

15 which is owned by the German government, is a major 

16 shareholder with me and we're trying to develop power plants 

17 utilizing their new technology. Another company is Broad 

18 Street Resources, which is in the oil field service company. 

19 It has a wholly-owned subsidiary called Genergy, which had 10 

20 workover rigs and now has five, and Genergy is in Chapter 11. 

21 Q In Broad Street, who are the shareholders in Broad 

22 Street? 





A I own about 10 percent or maybe up to 30 percent 
and the balance is owned by, I think. Triad Holding or one of 
Mr. Khashoggi's companies. 

Q And Genergy was a wholly-owned sub of Broad 
Street? 

A It is. 

Q And it is Genergy that's in Chapter 11, not Broad 
Street? 

A 

Q 
present? 
. A 

Q Any other corporate affiliations that you have at 
the present time? 

A Well, we have a company called Loki Petroleum, 
which is an inactive company, however we just transferred the 
rigs, the five rigs to Loki Petroleum. 

Q Loki Petroleum is owned by whom? 
It is owned by me. 
Wholly owned by you? 
Yes. 



Correct. 

Are there any other subs of Broad Street at 



No. 



Any other active corporate enterprises' 




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A I'm just trying to think. No, that's it. 

Q How about partnerships, joint ventures? 

A No . I have just formed a partnership called 
Furmark and Partners . 

Q What kind of partnership is that? 

A It is a Delaware partnership. The purpose of 
it — 

Q Limited partnership or -- 

A It is a limited partnership. The purpose o-f that 
is to use that for a potential acquisition of a company, and 
we're still working on it. 

Q Who are your partners in that enterprise? 

A Well, I'm the general partner and the limited 
partner is William Seizer, who works in my office, and until 
we get the transaction completed, he is the limited partner 
and he will then resign and other limited partners will put 
their money in. 

Q I'm with you. Okay. You are in as a general 
partner in your own right or do you use one of your corporate 
entities? 

A In my own right. I expect also to be a limited 
partner . 



i 



liHCUSSifB 




Q Any'^rher limited partnerships? 
A No. Well, way back when there was a partnership 
Beta involved with a four- or five-well drilling frame in 
Oklahoma . 

Q Wh^t is the status of that partnership? 
A It is a total' loss. 

Q That's what happened to my oil partnership. 
A There's another partner called -- partnership 
called maybe Alpha, which is a disaster too, in Oklahortia. 
Q Oil, natural gas? 
A Oil. 

Q Does that exhaust the current corporate 
partnership affiliations? 
A Yes. 

Q I want to review with you some of your 
relationships with people who are of some interest to our 
investigation. Let me start with John Shaheen. You were 
employed by the late Mr. Shaheen? 

A I was employed by Mr. Shaheen through his 
companies. Shaheen Natural Resources was his umbrella 
holding company and also by MacMillan Ring-free Oil, which is 
a company he controlled, and also Founders Corporation which 



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he controlled-. 

Q Can you give me the time period when you were 
employed by one or more Shaheen entities? 

A I went to work for him in 1966 and I left him in 
1976. 

Q And if you can, give me a synopsis of the types of 
things that you did for him during that 10-year period that 
would be helpful. 

A With Shaheen Natural Resources I was the ch-ief 
financial officer, and one of the wholly-owned subsidiaries 
was called Newfoundland Refining Company. We built a • 
refinery in Newfoundland, raised $150 million which was my 
job. It was built in the name of Provincial Refining, which 
was a crown corporation of the province of Newfoundland and 
in 197 6 that corporation went bankrupt. My job included 
being head of the marketing committee overseeing the sale of 
the products . I was involved with all the financing and 
negotiations for ship charters as well as for crude oil 
contracts. 

Q In terms of John Shaheen 's business endeavors, can 
you give me a summary of the types of things that he was 
engaged in during that 10-year period? 



liHOLASSIFIFB 



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A Well, Founders Corporation is a small public 
company with very few shareholders. It was not enough to 
file the normal filings that you would have. It owned two or 
three radio stations. It owned a station in Syracuse, a 
station in Honolulu and it owned half of a station in New 
Orleans, and it owned an interest in a television station in 
Syracuse. I was president of that company for a number of 
years and it also owned a block of shares of MacMillan 
Ring-free oil company. 

He then tried to develop in Newfoundland a 
newsprint mill for about 10 years. I tried to develop it 
with him for about five or six years, trying to get newspaper 
publishers as customers as well as shareholders. He 
attempted to build an oil refinery in Nova Scotia. He 
attempted to build a second oil refinery in Newfoundland. He 
was working in Ireland on building an oil refinery in Bantry 
Bay in Ireland. He worked on three or four years to publish 
a New York City newspaper, and he just never got it 
finished. He spent about $16 million on it and never got it 
done, never printed its first copy. 

He was involved years ago, before my time, in 
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1 over by Ultramar, which is an English company. He became the 

2 largest individual shareholder of Ultramar and sold out those 

3 shares before my time or early in my relationship with him. 

4 Q Let's shift gears a little bit. In terms of 

5 Mr. Shaheen's relationship with William Casey, there was a 

6 relationship? 

7 A Yes. 

8 Q Can you describe what that relationship was? 

9 A They were extremely close personal friends.- They 

10 were both very much involved in Republican politics. They 

11 were very much involved in the William J. Donovan Foundation 

12 or the OSS, the Office of Strategic Services, which is an 

13 all members who were in that service, and they would meet and 
I 

14 have dinners and present awards out. They presented awards 

15 to Thatcher, Willy Mountbatton, the three astronauts that 

16 landed on the moon. They presented awards to President 

17 Reagan, and so that was a focal point for them to get 

18 together, I think, and in addition, they were involved with, 

19 you know, doing legal work. He was in his own firm and then 

20 he became a counsel to Rogers & Wells, and Jack Wells and 

21 John, I think, were great pals as well as Casey, you know, 

22 was involved in it, in New York City. 



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Q Was Casey counsel to Shaheen during the time you 
were employed by Shaheen? 

A He did special things like when the company got 
into financial trouble, Newfoundland Refining Company, Casey 
and Shaheen and I went to Kuwait for about a week or 10 days 
trying to interest KNPC, Kuwait National Petroleum Company, 
owned by the government, to become a partner in Newfoundland 
Refinery, to invest funds to revamp the refinery so that we 
could use 100 percent Kuwaiti crude. It is very high - 
sulphur, and you need lots of conversion equipment in the 
refinery, and we didn't have enough conversion equipment to 
use all Kuwaiti crude. 

He was an advisor when Shaheen had problems, and 
you know, but that was my longest involvement with Casey on 
that trip. 

Q Place that time for me, will you please? 

A 1975 or 1976, let's say. 

Q So this would be just before the time that you 



left? 



Yes. 



A 

Q Coming back, Shaheen had been in OSS at the same 
time Casey was in OSS and that's how they got to know one 



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1 another? 

2 A Yes . 

3 Q Casey thereafter acted as legal counsel for 

4 special projects for Shaheen; is that correct? 

5 A Basically, yes. 

6 Q Did Casey and Shaheen have business relationships 

7 together to your knowledge? 

8 A To my knowledge, I have never heard of any 

9 business relationship. 

10 Q So you don't know of any partnerships, joint 

11 ventures, joint projects? 

12 A No . I don't believe so. Shaheen just never did 

13 things like that. 

14 Q Shaheen, I believe, from a conversation you and I 

15 had sometime ago, you characterized him as being a man who 

16 didn't work well with partners? 

17 A He wanted to do everything himself, you know, and 

18 like, we got shares in the Newfoundland Refining Company, but 

19 we had to sign an agreement that he could buy it back at any 

20 time, so he wanted to be the -- he didn't want any, like you 

21 say, he didn't want somebody to die and have the wife get a 

22 lawyer and start poking around in his company. He didn't 



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1 mind the employees making lots of money, you know, as long as 

2 he could control it. 

3 Q With regard to the relationship between Shaheen 

4 and Casey after you left, you were aware that they continued 

5 to maintain a friendship? 

6 A Oh, yes. 

7 Q You were aware of that because of, among other 

8 things, you saw them at the OSS dinners each year; correct? 

9 A Sure. 

10 Q The reason you were going to the dinners was not 

11 because you were a member of the OSS -- 

12 A No, I was invited to fill out the table, and it 

13 was an a honor, really. I met lots of people because if it 

14 was in New York, Shaheen would have a party back at his 

15 apartment. I met the astronauts, lots of important people at 

16 the apartment, so it was — 

17 Q You were aware, though, that the relationship 

18 between Casey and Shaheen continued, that they continued to 

19 be friends? 

20 A Yes. 

21 Q Let's move on now to your relationship with 

22 Casey. You got to know Casey best, I guess, on the trip to 



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Kuwait; is that correct? 

A Well, I knew him all these years through Shaheen, 
you know, and you got to know more and more, and of course I J 
was- Shaheen 's heir apparent, okay, and so I would see Casey a 
lot and lots of times I wouldn't see him, you know. 

Q Let me move you into the period 1984, 1985. To ^ 
what extent were you in contact with Casey in '84-85? 

A I saw Casey at Shaheen 's funeral, which was in 
November of '85, and I may have saw him. at a dinner in- '84 or; 
at Shaheen 's Christmas party in '84. 

Q But you didn't have occasion to meet socially with 
Casey, talk to him on the phone -- 

A No, I didn't call him until I made that call. 

Q In October of '86? 

A Ves . 

Q All right. Let's move on to a couple of other 
people. Let's take you to Adnan Khashoggi . You mentioned 
Mr. Khashoggi as being a business associate of yours with 
respect to some of the companies you have gone through . 
Let ' s backtrack and start out with how you came to know 
Mr. Khashoggi. 

A I met him I think in 1966, when I was working for 



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John Shaheen. We met in the summer, I think, of '66, or 
could have been '67, and we met almost every day in the 
Waldorf Astoria. Shaheen was attempting to do creative 
things involving Saudi Arabia, involving oil, and he and 
Khashoggi were ahead of their times. Their first idea they 
had was normally that Saudi Arabia was paid a royalty for 
their oil which is 12-1/2 percent. In their royalty 
contract, they had a right to take it in kind but normally, 
the Iranian would send them a check. 

So they ciune up with the idea that the Saudi 
government should elect to take the oil in kind and sell it 
to Shaheen, and when word got out that was contemplated, the 
Aramco partnerships were all excited at the thought of 
Shaheen would have control of this oil, and then we were 
going to buy — Shaheen and Khashoggi proposed to buy an 
interest in the oil which the Saudi government had, again 
ahead of its time, that somebody would think of buying the 

oil when in reality Aramco partners owned the oil and they 

just got a royalty. So Shaheen and Khashoggi were always a 

little ahead of their time. 

Then I developed a relationship with Khashoggi and 

I would see him and he would use me as a sounding board from 



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time to time. What would I do, you know; his business people 
said he should do this or that and he would ask me what I 
thought about it. I would see him in London or New York and 
have dinner with him and he would use me as a sounding board 
for various ideas which his staff was contemplating such as 
they wanted him to go public. I told him it was a crazy idea 
because all his income was offshore, so why bring offshore 
income onto the U.S. jurisdiction and pay taxes on it? 

Q When did you and Khashoggi start actually doing 
business together? 

A I left Shaheen in early '77 and at that time, 
Mr. Khashoggi purchased 20 percent of my company, Perkari, 
and retained me as a consultant to one of his companies. 

Q You were a consultant to which of his enterprises? 

A I think it was Triad Holding. 

Q Triad? 

A Yes. I forget. I advised him on basically oil. 

Q And your relationship with Khashoggi has continued 
up through the present time? 

A Yes. 

Q Let me ask you about Cyrus Hashemi. You knew the 
late Mr. Hashemi; is that correct? 




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ONCLASSIHED 



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A Yes. 

Q When did you first meet Mr. Hashemi? 
A I met him in 1983; I'm not sure of the exact 
date. Roger Tamraz asked me to go with him dovm to the 
Bahamas to have a meeting with the prime minister and the 
cabinet. There's a big oil refinery located in the Bahamas 
called BORCO, which was owned by New England Petroleum, Ed 
Carey's company, and it was in financial trouble with Libya 
and Iran, and Tamraz invited Hashemi to come down as a. 
representative of the Iranian government. 

BORCO owed Iran like $300 million or something 
like that and the idea was Tamraz tried to get the Bahamian 
government to work with him to acquire the company, and maybe 
within a week or two after our meeting, charter/acquirec^^the V 
company from New England Petroleum. 

Q So your first occasion to meet Hashemi would be on 
the Bahamas trip? 

A Correct. 

Q Thereafter, you had contact with Hashemi? 

A Yes. I had a number of oil transactions I tried 
to get him to work with me on, as well as other financings. 

Q In what capacity were you dealing with Hashemi; 



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1 was it as banker, Hashemi as coventurer? 

2 A He was as banker. 

3 Q Okay. What bank? 

4 A He had a bank called Gulf Trust, I think, First 

5 Gulf Trust or something like that, which was located in New 

6 York at, I think, 9 West 57th Street then, and so I went 

7 there to see him on a number of transactions that I was 

8 trying to do because he indicated he had access to lots of 

9 money. 

10 Q So you went to him as a potential lender for those 

11 ventures? 

12 A Yes. 

13 Q And you would have gone on a number of occasions 

14 from '83 forward? 

15 A Yes. 

16 Q Was there ever an occasion up through the end of 

17 1984 when you actually entered into a business relationship 

18 with Hashemi or any of his entities? 

19 A In '84, that's when my activity with him got a 

20 little more frequent. In November -- let's say October, I 

21 went to him -- 

22 Q October of '84? 



llHCUSSinf!! 



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UNCLASSIFIED 



21 



A Yes. He was in London. We were trying to acquire 
a controlling share of a company called Gulf Resources which 
was on the New York Stock Exchange, and it was owned by 
Clore, and we went to him with a proposal that he would 
participate in the financing with us. We got to the stage of 
drafting agreements and et cetera with him, and the 
transaction never went forward. While there, he than had a 
potential Iraqi crude oil deal and he asked me to work with 
him on it, which never went forward. 

It was at that time in December I approached him 
about the possibility of his ability to assist Caterpillar 
Corporation, who was on the blacklist in Iran, who prior to 
the revolution had an enormous agency in Iran, and this was 
in December of '84. And he indicated that he could assist in 
having Caterpillar's blacklist removed and Caterpillar 
becoming, you know, back in Iran, whereas now it was working 
through maybe the Spanish agency selling spare parts from 
time to time, but no new equipment. 

And the Japanese company Komatsu, I think, was 
selling lots and lots and lots of equipment, so this was in 
December of '84. And then in January, first few days of 
January, I set up a meeting in London with Paul Kollao, 



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K-o-l-l-a-o, who was from Geneva in charge of sales in the 
Middle East -- I'm not sure of his exact title -- and we had 
a meeting. 

Q You had a meeting with yourself, Kollao, Hashemi; 
anybody else? 

A No, I think that was it. 

Q And the purpose of the meeting was to discuss 
reopening Iran to Caterpillar? 

A Correct. 

Q What came of that meeting? 

A It went on and on and on, and eventually 
Caterpillar came back and said that they wanted to have a 
large partner with Hashemi. They didn't think he was strong 
enough or big enough but they thought maybe he might be able 
to do something in Iran, and that is how world trade got put 
together with Khashoggi. 

Q And world trade becomes a prospect at what point 
in time? 

A Well, let me just maybe go on to the next -- to 
fill you in. 

I then went to Hamburg, like -- I can give you the 
exact dates. I have them, on a crude oil contract, on the 




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5th of January, and that contract -- those discussions led to 
the signing of a letter of intent, which I gave you a copy 
of. 

Q Let me stop you for a second. At the Hamburg 
meeting, that was a meeting with the Iranians? 

A Correct. That was signed in April, but that 
meeting was -- 

Q Let's back up, though. At the meeting in Hamburg, 
one of the Iranians present was Manucher Ghorbanifar? - 

A Correct. 

Q This was the first occasion you had to meet' 
Mr. Ghorbanifar? 

A Yes, sir. 

Q Did you know of Ghorbanifar before this meeting?- 

A Never heard of him. 

Q Apart from the Iranians, who else was at that 
meeting? 

A There was an oil consultant from Hamburg named 
Shubert, I think. 

Q Anyone else? 

A That was the only Iranians . 

Q You were at this meeting in your own right; were 



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you also there on behalf of Khashoggi? 

A No, I was there on behalf — in my own right and 
on behalf of Tampimex and Hashemi. 

Q You were there for Hashemi? 

A And a company called Tampimex. 

Q What business are they in? 

A An oil trading company owned by Fritz Ingram. I 
go back to the Iraqi crude oil transaction. I brought in 
Tampimex as a potehtial buyer of the Iraqi crude if there was 
a contract, and there ended up being no contract but that was 
the initial introduction of Tampimex and Ingram to Hashemi. 



Moving on, had Hashemi set up a meeting with t.he 



Iranians? 
A 
Q 
A 
Q 
A 
Q 



Yes. 

Did Hashemi know Ghorbanifar to your knowledge? 

No. 

He did not? 

No. 

You have a meeting on or about January 5, and is 
that, at that point, that the counter at any rate proposal is 
broached? 

A No. We are negotiating a crude oil contract, 



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100,000 barrel a year contract, per year, and I then had 
lunch. Included in that meeting was a Dr. Espabardi who 
headed up the Iranian buying office in Hamburg, so seeing him 
for lunch, meeting with him for dinner, I was interested in 
what he was doing. And so then I said, why don't you give 
barter contracts, because he had barter contracts with other 
companies . 

Q When you use the term "barter contracts," is that 
where oil would be traded for goods? 

A Yes, let's say with Kerr Steel Company, specific 
contract, and I suggested why don't you give us a contract, 
trade contract, where we will sell your oil, put the money i.i 
escrow and then buy your goods and pay for the goods out of 
the escrow amount. So that was the beginning of that 
concept, and then it evolved into my going back in April to 
negotiate. It was initially 500 million, but in Hamburg, in 
April, we got it up to a billion dollar contract. 

Q With regard to Hashemi, let's stop there for a 
moment. Do you recall when the indictment of Mr. Hashemi 
came down? Was it in early 1985? 

A The first one? 



Yes. 



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A I'm not sure when. 

Q Is it your recollection that you were dealing wit^. 
Hashemi outside of the United States in 1985? 

A Yes, because I was going to London. 

Q The reason he was in London was because there was 
a warrant outstanding for his arrest in the United States; 
correct? 

A I think it happened later. I'm not sure when it 
happened. 

Q Okay. 

A I'm not sure of the date because I remember- he was 
traveling, from what I read in the paper. 

Q Were you ever present at meetings where both 
Ghorbanifar and Hashemi were present together? 

A No . I shouldn't say -- in June of '85, in 
Hamburg . 

Q 

A 

Q 



They were together at that time? 

Yes. 

All right, let's pursue the chronology, then, in 



terms of the world trade development. You have meetings in 
January? 

A On Caterpillar. 



DNCLilSSIFlEO 



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Q Yes. Take me chronologically. What happens 
next? Where next do you go? 

A The Caterpillar thing was on and off, on and off 
while Caterpillar U.S. did lots of checking on Hashemi, and 
they came up with a lot of black marks about him, gambling 
problems and other things, but they thought maybe he had 
contact in the country. But they suggested that I needed a 
big partner, and that is when I recommended Khashoggi . 

Q Place that in time, when that recommendation 
occurred; is that February? 

A No, no. You know, probably in March, and I- then 
arranged a meeting for Hashemi and Khashoggi, but that 
meeting was set up on a different matter, okay? Khashoggi 
was in Brazil and was negotiating a deal with Petrobras 
involving his Sudan oil concessions. He owned half of a 
company called, I guess. National Company of Sudan or 
whatever the name of it was , and he was going to have 
Petrobras, which is the national company of Brazil, join him 
in the effort in developing the oil in Sudan. 

So I'm in New York in my office, and I get a call 
from Hashemi, and he tells me that Khashoggi 's proposal in 
Brazil has fallen apart is going to be turned down, so I 




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called Mr. Khashoggi in Brazil and I tell him that this guy 
Hashemi that I'm working with who is on Iranian things and on 
the Caterpillar transaction -- let me go back. 

One of Khashoggi 's guys asked if I could help 
Caterpillar, so I talked to Adnan, Cyrus, and Cyrus tells me 
these things about Brazil and I tell Khashoggi all these 
things, and Khashoggi is amazed how much information this guy 
has about Brazil and Petrobras . So I think it was in March, 
a meeting was set up between -- because he said he knew how 
to solve Khashoggi 's problems in Brazil and how to present it 
in a different fashion so it could get approved. So a^ 
meeting was set up and that's how they met, okay? In that 
meeting. Caterpillar transaction came up and also the 
potential contract for the $500 million counter trade 
contract came up. It was at that meeting where the world 
trade concept came up, that and an agreement was worked up. 

Q Where was the meeting and when was it? 

A It was in London in March, I guess, because I see 
I was at Claridge's in London for about a week, like March 5 
through 12th, so I thiiik it was in that period of time. 

Q And the people — 

A What's the date of this; this shareholders' 



IJMP 



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agreement? This is March 29, okay? So — 

Q People attending that meeting were yourself, 
Khashoggi, Hashemi? 

A Lots of those people. 

Q Ghorbanifar was not at this one? 

A No. 

Q Okay. And the upshot of that meeting is what; 
what was concluded? 

A That a company would be formed which would have 
two purposes, two subsidiary companies. One was to deal with 
the Caterpillar transaction and the other to deal with- the 
countertrade transaction. 

Q All right, and the participants in the company 
were to be whom at the outset? 

A Khashoggi, Hashemi, each with 45 percent, and I 
had 10 percent. 

Q All right. That results in a shareholders' 
agreement? 

A Correct . 

Q Of March 29? 

A Correct . 

Q Let's take a look at that. We have a copy of it 



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1 which will be marked as Exhibit 1. Is that the shareholders 

2 agreement that was one of the formative documents on the 

3 venture? 

4 A Yes . 

5 MR. KERR: Let's mark it. 

6 (Exhibit 1 identified.) 

7 BY MR. KERR: 

8 Q As of the time of this document, March 29, 1985, 

9 had you introduced Khashoggi to Ghorbanifar? 

10 A No . 

11 Q Had you talked to Khashoggi about Ghorbanifar? 

12 A No . 

13 Q To what extent had you had contact with 

14 Ghorbanifar between the first time you met him in early 

15 January 1985 and the end of March? Had you had further 

16 contacts with Ghorbanifar? 

17 A I don't think so. 

18 Q You got the shareholders' agreement of March 29. 

19 What happens next? 

20 A We then — I was proceeding to try to get 

21 Caterpillar to agree to giving us an agency agreement. 

22 MS. DORNAN: Could you tell me what the original 



(INCUSSIflfO 



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problem with Iran and Caterpillar was? 

THE WITNESS: Well, my understanding is that when 
they had the revolution, Caterpillar was loyal to whoever 
they were, working with in Iran, and didn't change, you know, 
shift over to a new agent or new group or something, and they 
got put on a blacklist. 

MS. DORNAN: Caterpillar was in any case having 
trouble competing with Komatsu worldwide? 

THE WITNESS: Up to that time I didn't know much 
about Caterpillar other than it was — you know, you see the 
big tractors . 

BY MR. KERR:' 
Q Let's move forwatd from March 29. What was the 
next event? 

A I then — we were working with Caterpillar, 
numerous meetings trying to get them to give us the agency. 
Caterpillar U.S.A. then decided that they wanted to bring us 
a partner, which was Finnings, which is a Canadian company 
with a big English operation, which handles like Poland and 
some of these other countries for repairs as well as new 
equipment as well as supplies . 

So we were negotiating with Finnings to be our 



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partner for Iran because they had a big operation in U.K. and 
they had expertise, in addition to Poland, I think another 
couple of countries where they handled the whole thing. And 
we left world trade in, I think, July, and so I don't know 
what happened. I know they never concluded anything. 

Q Let me keep you in April. There is a letter of 
intent that gets executed April 23 in Hamburg, Germany, 
apparently. Let's mark that as Exhibit Number 2. 
(Exhibit 2 identified.) 
BY MR. KERR: 

Q First, if you can identify that document. 

A Yes, this is the letter of intent that I 
negotiated. 

Q Tell me what this document is intended to do and 
how you got to that point from where you were on March 29 . 

A Well, I went to Hamburg on the 21st of April. I 
was there for the 22nd and 23rd negotiating with a team of 
people from Iran at the offices of Iranian Commercial 
Industrial Services, ICI, concerning this agreement. And 
what this does is, okay, we would sign, "we" being World 
Trade Group, would sign a crude oil contract with NIOC for a 
billion dollars. We would then pay, let's assume we could do 



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it in one shot, we sell a billion dollars today, we put 500 
million into an escrow account which we would use to pay for 
goods and services which we would buy for Iran, and we would 
pay 500 million to IROC in cash. 

So this was a letter of intent. We would have to 
then negotiate a crude oil contract with NIOC. We would have 
to negotiate a credit agreement with the central bank of 
Iran, and we would have to negotiate a goods purchase 
agreement with the ministry of industry, so this was the 
first step toward the negotiation of three contracts . 

Q Now, the Iranians you were dealing with for' the 
letter of intent, did they include Ghorbanifar? 

A He was not involved in the negotiations . 

Q Were you dealing with Ghorbanifar in this period 
of time, April of 1985? 

A I met him but I wasn't — he was not involved in 
any of the negotiations whatsoever. 

Q What were the circumstances under which you met 
him; was it social? 

A He was in Hamburg. 

Q He was in Hamburg? 

A 



I believe so 




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Q You met with him socially? 

A Yes. With — I think with his family, if I'm not 
mistaken. I think he was there. 

Q Do you recall discussing with him at that time any 
activities he was involved in? 

A None whatsoever. 

Q Was there any discussion at that time of his 
interest in seeing relationships between the U.S. and Iran 
improve, talking about arms for hostages, any of those- items 
that came up? 

A Let's go back to January of '85 when we had- -- 
when I was there on the oil contract. We had, I don't know, 
three, four, five lunches or dinners, and they were talking 
about, you know, the difficult problems in Iran and the 
various scenarios as to what could happen in the country. 
They could have another Lebanon, the Russians, total 
isolation, or there could be, you know, pro-Western people 
that take over. It was at dinner or at lunch in an Iranian 
restaurant, and those kind of conversations, discussion. 
Shubert, the German guy, was discussing lots of hard 
questions, and they were, you know, very open. 

Q And what, if any, direction did you sense 



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Ghorbanifar to be taking? 

A Well, I sensed that lots of people in Iran were 
unhappy with the situation, but they couldn't do anything 
about it. I mean, I think one of the Iranians said the only 
way they can protest is to slow down on the job. The only 
way they can do it. 

Q By April, you are meeting with Ghorbanifar again. 
At that point, does he talk any more about these kind of 
things? 

A No. 

Q With regard to the relationship developing from 
April forward, take me past the letter of intent. What 
happens next? 

A Well, we then began to try to get from Hamburg, 
you know, various potential orders; like one order they gave 
us was for paper boxes or something like that. Another order 
they gave us was for steel billets, and we could — we went 
out in the marketplace. We found that three other Iranian 
ministries had already also sent word out they wanted to buy 
it, so we were just, instead of thinking, we had some kind of 
exclusive relationship with Hamburg. We found out that, you 
know, 35 other people were trying to buy the same thing we 



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1 were trying to buy. 

2 So the supplies of stuff — thought there was a 

3 big demand and the price went up. This is the way they have 

4 always operated, I'm told. Nobody has any exclusive because 

5 each department, each industry, each ministry, each 

6 everything, they do what they want to do, and if they want to 

7 buy something rather than use Hamburg, which is supposed to 

8 be one of the buying offices or their only buying office, but 

9 it is not tha.t way. So every time we went out for something, 

10 you know, we were — with the fifth inquiry or the 10th 

11 inquiry that the company had gotten. We talked about Bowater 

12 Paper Company and they had a number of inquiries on the same 

13 purchase item. We then continued to worked with Finnings and 

14 Caterpillar trying to get that thing done. 

15 Q When did you introduce Khashoggi to Ghorbanifar? 

16 A We then went to Hamburg to have a meeting with 

17 Espabardi, the head of the office, to try to accelerate how 

18 we would get this done, the letter of intent done, and in 

19 Hamburg, I was there, Khashoggi came, Ghorbanifar was there, 

20 Hashemi was there. 

21 Q And when did this meeting take place? 

22 A I have — like the 12th of June. 







37 



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Q And what do you recall happening at this meeting? 

A Well, lots of things. Number one, when I was with 
Espabardi who is head of the office, he told me that 
Mannesmann, the big German company which had a barter 
contract with Iran was in trouble. So they asked me to go 
and I went to Dusseldorf to meet at Mannesmann. Khashoggi 
met Espabardi, Ghorbanifar; Hashemi was there, and the idea 
was how do we accelerate this and expand this . It was a 
billion dollar contract, and it seems like a lot of money, 
but we're talking about getting it enlarged and how do we get 
it done; how do we get to negotiations in Hamburg rather than 
in Tehran, and then Ghorbanifar and Khashoggi hit it off. 

Q Was it your impression this was the first time 
that Khashoggi and Ghorbanifar had met? 

A That was my impression. 

Q Has it come to your attention since that time that 
they had met or had done business before then? 

A No. 

Q So you have no reason to believe that they had 
known each other prior to the introduction in June of 1985? 

A Right. 

Q All right, they met, they hit it off. Hashemi was 



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also involved in these meetings? 

A He was there, yes, because it was world trade. 

Q And Hashemi and Ghorbanifar also appeared to get 
on with one another or did not? 

A No, it was very formal and -- 

Q All right. Hashemi was under indictment at that 
time. Do you recall any discussions that you would have been 
privy to with regard to what he was going to try to do to get 
that indictment taken care of? 

A Not at that meeting, but at one meeting he asked 
if I knew a good lawyer in London and I gave him the name of 
a lawyer here in New York or Washington and the lawyer went 
to see him, and he didn't retain him. 

Q He did retain Elliot Richardson? 

A Eventually, yes. 

Q Mr. Richardson apparently begins to represent 
Hashemi in late June, early July. In terms of placing your 
conversation with Hashemi — 

(Discussion off the record.) 
BY MR. KERR: 

Q Place for me, if you 'can, in relationship to this 
meeting on June 12 in Hamburg, when you would have talked to 



DNMSSiflFD 



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Hashemi about his legal difficulties. 

A He asked me in London. At some point in time he 
asked if I knew a good lawyer, and then I forget the name of 
the lawyer that I recommended. I called somebody who called 
somebody who said this may be a good guy and then I spoke 
with him and he spoke directly with Hashemi and then he went 
to London and he wasn't retained. 

Q Let me take you back into June then. In the June 
period of time, or any period of time up to June, were- you 
involved in any discussions with Hashemi in an effort he 
would make to suggest to U.S. officials that he could put 
together an arms-for-hostages arrangement involving 
Ghorbanifar if they would take care of his indictment? 

A No. 

Q Did you at any time have such a conversation with 
Hashemi? 

A No, but I overheard a conversation -- I think it 
was maybe talking to Shaheen, John Shaheen, in his office in 
London, where he was saying that he could get the hostages 
released and he wanted to have an agreement that his 
indictment would be withdrawn. 

Q Let me focus on that. First, can you place that 




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in time? When did that occur? Use whatever dates you have 
there. 

A It would have to be like June or July of '85. 

Q Right. But you can't narrow it down more than 



that? 



No. 



You were present when this conversation took 



place' 



I was in his office. 

In whose office? 

Hashemi's office. 

In London? 

In the world trade office. 

And John Shaheen was also present? 

No, he was on the telephone. I assumed he was 
talking to Shaheen. I don't know that he was, but I assumed 
that. 

Q Why did you assume that? 

A Because — go back to the Iraqi deal in '84. He 
was trying to do the same deal with Shaheen on the Iraqi deal 
and one of Shaheen' s guys was in Geneva, ready to go to Iraq, 
and when I knew there was no Iraqi deal I was going to call 



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Shaheen and say, listen, there's no Iraqi oil deal and he 
would have said, maybe, Roy is trying to put me off the deal 
so he can do the deal. So I never called Shaheen, and 
through mutual friends I heard and knew that Shaheen and 
Hashemi were involved in some financing deals and other 
potential deals. 

Q Let me come back. Let's set the context. Why was 
it that you were in Hashemi's office? 

A It was world trade. It was world trade. L 
happened to be talking to him and the phone call came in. 

Q And it was your perception the phone call was from 

John Shaheen? 

A Yes. It was -- either he had placed the call or 

John Shaheen had called. 

Q And in capsule form, tell me what you recall 
overhearing in that conversation. 

A That he, Hashemi, you know, could be instrumental 
in the release of the hostages and he would want to have an 
ironclad agreement that his indictment was, you know, thrown 

out or whatever. 

Q was Ghorbanifar's name mentioned during the course 

of that conversation? 

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A Never. 

Q Did there ever come a time when you were involved 
in a discussion with Hashemi when he discussed using 
Ghorbanifar as the vehicle to affect an arms-for-hostages 
deal? 

A Never. I never heard "arms for hostages." 

Q With regard to Hashemi, is this the only occasion 
when you heard such a conversation? 

A Yes . 

Q And it is the only knowledge you have about 
Hashemi's involvement in an effort to get the hostages- out ; 
is that correct? 

A Correct. Let's go back to October '85. October-. 
3, maybe. I had a drink with John Shaheen in New York, and 
he had just come back from Japan. He had been there for I 
guess four or five months, having treatment for liver cancer, 
and he told me that he had been dealing with Hashemi on at 
least getting the hostages released, but that on July 13, 
1985, he was cut off. 

Q Cut off by whom? 

A By Casey, because Shaheen was talking to Casey. 

Q Let's back up. What did he tell you about how he 



yNDLASSIflED 



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VjiHliU^'i"''-'* 



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was dealing with Hashemi and with Casey. Tell me what 
Shaheen told you in as much detail as you can recall. 

A Only that he had been working with Hashemi and 
Hashemi said he could get the hostages released. Casey -- he 
was relaying it to Casey, of course, and Shaheen said that, 
you know, we cut him off on July 13, 1985, because we felt 
that he could not deliver anything, and in fact, Shaheen said 
the only Iranian name he could — 

(Discussion off the record.) 

THE WITNESS: So Shaheen said the only Iranian 
that he mentioned was a guy named Ghorbanifar, and 
Ghorbanifar, you know, couldn't do the job or something, John 
said, and that was the end of the conversation. 

MR. KERR: Let's take a recess. 

(Recess. ) 

BY MR. KERR: 
Q With regard to what you knew about the Hashemi 
effort to involve the Central Intelligence Agency and getting 
back the hostages and getting his indictment quashed, I think 
if I understand what you are telling me, you did not have any 
contemporaneous knowledge that these initiatives were going 
on apart from the telephone conversation? 



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1 A Correct . 

2 Q But you did get kind of a recap from Shaheen when 

3 you had a drink with him in New York in October of 1985? 

4 A Right. Then he died about three weeks later. 

5 Q I understand. 

6 Did he tell you any more about who at the agency 

7 he had been dealing with? 

8 A No. 

9 Q You were left with the impression that Shaheen had 

10 been in touch with Casey? 

11 A Correct. 

12 Q But T/mm didn't give you the identity of any other 

13 CIA personnel he had dealt with? 

14 A No, he just mentioned Casey. 

15 Q In terms of Iranians, he had mentioned 

16 Ghorbanifar's name? 

17 A Correct. 

18 Q Did he mention the name of any other Iranians? 

19 A No, and I did not mention that I knew Ghorbanifar 

20 when I saw Hashemi. 

21 Q Okay. 

22 MS. DORNAN: Did you receive the impression that 



IINCUSSIFIEO 



45 



<'.r'\ 



Mm 




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Hashemi hoped to secure the hostages' release on this through 
his contacts in Iran, or did he also have contacts in Lebanon 
or elsewhere that he could use? 

THE WITNESS: No. I can now speak today. Hashemi 
led everybody to believe he knew everybody, and in the end he 
really knew nobody, and I went through so many transactions 
with him where it gets to the point and he wouldn't sign, 
couldn't deliver, wouldn't do anything. That's why, you 
know, we walked away from it and I stopped trying to dp 
anything with him. 

MS. DORNAN: So either in the telephone 
conversation you overheard or in your conversation with 
Shaheen, you didn't get any details on how you planned to go 
about it? 

THE WITNESS: You know this indictment was an 
obsession with him. He wanted to be — he would give his 
ascot party in June and invite the lords and ladies, and then 
in one of the London papers there would be a story 
occasionally about him and this indictment, and it was an 
obsession to get rid of it. 

MS. DORNAN: If he could get the U.S. government 
to get the hostages back, he would do anything. It was an 

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obsession to get rid of it. Occasionally the U.K. press 
would attack him and who he was . 

MS. DORNAN: In part because it was a social 
stigma as well? 

THE WITNESS: Sure. He was extremely wanting to 
climb the social ladder in London and all over the place. 
BY MR. KERR: 
Q Let me touch base on a couple of other things . 
There's a report that grew out of the indictment of Sam Evans 
that you introduced Evans to Hashemi in January of 1985. Is 
that correct? 

A That's not true. 

(Discussion off the record.) 
BY MR. KERR: 
Q Did. you introduce Evans to Hashemi? 
A Yes . 

Q When did you do that? 

A In October, maybe of '84, because I was using Sam 
Evans as my lawyer on the Gulf Resources deal, and then he 
became the lawyer when we were trying to do the Iraqi crude 
oil deal in November, December. 

Q So you would have introduced him to Hashemi, but 



yNCLASSlFIEll 



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UNCLASSIFIED 



47 



it was earlier than January or February? 

A I would say it is October. I look at the drafts 
of the Gulf Resources transaction. 

Q There is also an allegation that's been made in 
that lawsuit that at some point in January of 1985, you 
related a conversation perhaps to Evans that Casey had tola 
you that the United States had supplied and permitted others 
to supply arms to Iran as of January 1985. Was there ever 
such a conversation that you had? 

A Never . 

Q And I take it from what you have told me you 
weren't having many conversations with Casey as of January 
1985. 

A I saw him maybe at a Christmas party. Maybe. I'm 
not sure if he was even there or if I was there, but that 
would have been Shaheen has a Christmas party, his company, 
MacMillan would have a Christmas party at the Metropolitan 
Club. 

Q Let me phrase the question another way. As of 
late '84, early 1985, had you had any conversations with 
Casey about U.S. responses to folks who wanted to send arms 



to Iran? 



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A Never . 

Q That had not been something you discussed with 
him? 

A Never. Never. 

MS. DORNAN: When had been your last fairly 
extensive contact with Casey other than something casual? 

THE WITNESS: You know, in — let's say prior to 
'76. 

BY MR. KERR: 

Q As of June 1985, your meeting in Hamburg at that 
time, had you become aware of Michael Ledeen? Had you' come 
to know that name? 

A No. 

Q When did Ledeen first become a name that was 
familiar to you? 

A I met him for the first time in January 1986. 

Q January of '86? 

A Yes. 

Q Is it possible that you would have met Ledeen in 
October of 1985 when Ghorbanifar was in Washington, D.C.? 

A No. I met him at Scott's in Georgetown, the 
restaurant, for dinner that night with his wife and 



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Ghorbanifar and his lady friends and myself. First time. I 
never heard of him before. 

Q And that was the first time Ghorbanifar was to 
take the lie detector test? 

A He was here in Washington, yes. 

Q Ghorbanifar reacted fairly violently to that lie 
detector test? 

A He told me he took one. 

Q That was taken January 11 or thereabouts? 

A I was in Washington and I met on, I think a 
Saturday night, that's where I met Ledeen for the first time. 

Q Again, see if I can refresh your recollection, 
Ledeen when interviewed had some recollection of having had 
dinner with you on an earlier trip Ghorbanifar made to the 
U.S. Ghorbanifar came into the United States on October 7 
for a meeting that he had on the 7th and 8th with Ledeen and 
others at the Old Executive Office Building. I have a note 
from our interview that you may have had some recollection of 
being present for a dinner with Ledeen and Ghorbanifar at 
that time; but that's an error? 

A I had dinner in New York with Ghorbanifar, and I 
didn't meet Ledeen until January of '86 in Washington. 



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Q You had dinner with Ghorbanifar in New York when? 
October of 1985? 

A I think it was October. 

Q Let me give it one more shot. Ledeen was in Tel 
Aviv in late July, early August of 1985, we will come to it 
in the chronology in a moment; but you also were in Tel Aviv 
meeting with Ghorbanifar during that period of time. 

A That was June. 

Q June? 

A Yes. 

Q Okay — 

A Yes, June 20, we left on the 19th, I think, of 
June from Frankfurt to Tel Aviv, and we were at the Hilton 
Hotel and we left on the 22nd of June. 

Q Okay, that rearranges the dates by a month or so. 
So your recollection of the trip to Israel with Ghorbanifar 
is that it would have been the third week of June? 

A Right, 19th of June, I left Dusseldorf to go to 
Frankfurt and then Frankfurt to Tel Aviv. That was the day 
that the Frankfurt airport had a terrorist bomb blast, then 
we were at the Hilton Hotel for three nights, look like. We 
left on the 22nd, Tel Aviv to Paris. 




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Q Let's back up then. The meeting in Hamburg was 
when in June? June 12? 

A Yes. 

Q And you would have gone from the meeting in 
Hamburg to Tel Aviv; is that the way it worked? 

A Well, I went to Paris, and then I went to 
Dusseldorf to meet for two days with Mannesmann, and then I 
went from Dusseldorf to Frankfurt to go to Tel Aviv. 

Q And you left Frankfurt for Tel Aviv when? 

A On the 19th. 

Q June 19? All right. And you made that trip with 
Ghorbanif ar; correct? 

A Right. 

Q And you made it with the consent of Adnan 
Khashoggi? 

A Yes. 

Q Let me get it clear. Something has developed in 
the relationship between Ghorbanif ar, you and Khashoggi, 
obviously, by June 19. Describe for me what's happening. 
What's going on between you, Khashoggi and Ghorbanifar? 

A Well, I am -- you know, I eim working with Adnan 
for many years. I'm working with Ghorbanifar, trying to get 



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crude oil contracts, trying to get other business that we can 
get out of the country. Here's a guy that says he can 
deliver, and it is extremely hard to even, you know, spend 
time with the guy because the guy comes and goes, disappears, 
and so I think probably when I was in Paris on the 17th, he 
says I'm going to Israel, why don't you come along; and I 
called Khashoggi and he said go ahead. 

Q As of that point, what if anything did you know 
about Ghorbanifar' s interest in developing relations between 
Iran and the United States? 

A It goes back to — 

Q But tell me what your state of mind was, what you 
knew as of mid-June, 1985. 

A Khashoggi was trying to assist him. 

Q Assist Ghorbanifar? 

A Right . 

Q In what sense? 

A To develop a relation with the U.S. via Israel. 

Q So the prospect of using Israel as a way of 
improving Ghorbanifar ' s access to the United States had come 
up by that point; is that correct? 



Right. 



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Q Explain to me what Khashoggi was suggesting to 
Ghorbanifar vis-a-vis Israel. 

A Well, I think — I know — I don't know a lot of 
details, but I think Khashoggi ' s view was that he did not 
know how to check out Ghorbanifar and Ghorbanifar' s bona 
fides and his contacts in intelligence, but he thought the 
Israelis would know how to do it best of all, and if they 
could do it best of all and verify he was what he says he 
was, that could be the first step toward opening better 
relations . 

And all the time you must remember Khashoggi had 
just signed a billion dollar contract, trade contract, which. 
would be 10 billion or 20 billion, so in his mind is that if 
we could get Iran close to the West and Ghorbanifar was the 
person doing it, we could then go from a billion dollar 
counter trade contract to a 10 or 20 billion dollar contract, 
so that was ultimate in Khashoggi 's mind; because he thought 
once the war would be stopped, Iraq and Iran would probably 
spend 20, 30, 40, 50 billion a year to rebuild for the next 
10 years. The bloom was off the Middle East in making big 
money on big contracts, because they had already built 
everything they were going to build. 



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UNCIASSIHED 



Q Let's pursue it a step further. As of June 19S; 
what knowledge did you have of Ghorbanif ar ' s past 
relationship with the Central Intelligence Agency? 

A Zero. 

Q Ghorbanifar had not told you of his past dealings 
with the CIA? 

A Never. 

Q What knowledge did you have or did you acquire ir 
June of 1985 of efforts that Khashoggi was making usir 
:o learn more about Ghorbanifar? 

A I didn't know anything about it. 

Q Did not know anything about it? 

A No. 

Q You did know he was going to use Israeli 
intelligence to check on Ghorbanifar? 

A Right. 

Q Who were Khashoggi 's contacts in Israel at that 
time to your knowledge? 

A I guess he knew the prime minister. 

Q Peres? 

A Yes. I don't really know but -- 

Q What names was he running by you? Had he 



H^ 



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UNCIASSIHED 



55 



mentioned Nimrodi or Nir or Schwimmer? 

A Yes, Schwimmer. 

Q What did you know about Schwimmer? 

A Didn't know anything about him. 

Q Any other names being used at that time? 

A I heard the name Nimrodi, but that was it. Nir I 
never heard of until this whole thing was blown up. 

MS. DORNAN: Were you certain in your mind that 
Israel was raised by Khashoggi and not by Ghorbanifar,. that 
Ghorbanifar didn't suggest Israel as a way to check the bona 
fides or an interroediary? 

THE WITNESS: All I know is that Khashoggi was 
instrumental. That's my understanding, but I don't know. 
BY MR. KERR: 

Q Well, by June 19 or thereabouts, you are getting 
on an airplane to fly with Ghorbanifar to Israel; correct? 

A Right . 

Q What was your understanding as of that time of 
Ghorbanifar 's relationship with the Israelis? 

A I didn't know of any relationship. 

Q You knew that Ghorbanifar had traveled to Israel 
before? 



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A Did not. 

Q Did not? 

A No. 

Q You get on an airplane, it is a El Al airplane 
that you take? 

A Yes. 

Q Did you discuss with him on that airplane ride 
what his relationship was with the Israelis? 

A No. 

Q Did not? 

A No. 

Q What did you discuss on the airplane ride? 

A What? 

Q What did you talk about with him? 

A Lots of things . 

Q Such as? 

A Business, potential for getting, you know, oil 
field supply contract, how do we get this done quicker. 

Q This being the counter trade deal? 

A Yes. How do we get crude oil contracts, you know, 
in January of '84, I went to Singapore to try to sell the 
Iranian offshore oil company a drilling frame from Singapore 



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for S40 million, so I was trying to see how he could get 
things done for us in a commercial sense, because it is not 
easy. 

Q All right. The June trip to Israel, when you 
arrived at the airport, who met you? 

A Mr . Nimrodi . 

Q What did you know about Nimrodi at that point? 

A Nothing. 

Q You had not been told anything by either 
Ghorbanifar or Khashoggi about Nimrodi? 

A No. 

Q Did they introduce you to Nimrodi? Somebody .must 
have introduced you to Nimrodi? He stuck out his hand and 
said hi? What happened? 

A I had met Nimrodi I think once in London, in May 
or June or something. 

Q What had caused you to meet him in London? 

A He was meeting Khashoggi . 

Q He was meeting Khashoggi? 

A Yes . 

Q To discuss business? 

A I don't know. 




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Q You weren't present when they — 

A No. 

Q What was your understanding of what Nimrodi's role 
in life was? 

A I didn't know. I have learned, being around in 
the Middle East, you don't ask lots of questions, because if 
you do they will wonder why you- are asking questions . You 
may sit at a dinner table and learn lots of secrets, but you 
never ask anybody in the Middle East any questions about this 
or that unless you are working on a specific thing and you 
say, I need this or I need that; but it is a cardinal rule 
you don't ask any questions. 

Q What did you understand Nimrodi's relationship to 
Khashoggi to be? 

A I don ' t know . 

Q You didn ' t Icnow? 

A I didn't know of his relationship. 

Q As of today, do you have any knowledge of the 
relationship between Nimrodi and Khashoggi? 

A I don't know how deep it is . I know they know 
each other. 

Q what's the nature of the relationship? 



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A I think Mr. Khashoggi, you' know, believes that 
Israel, you know, can play an important role in peace, and 
Nimrodi is an important guy in the country. He apparently is 
involved with the Sharon faction, and Sharon is involved in 
another faction, so he has access to people. Since this I 
learned he was involved with the August transactions. 

MS. DORNAN: Did you have the impression that they 
had a longstanding relationship or was there anything to — 
THE WITNESS: No. 
BY MR. KERK: 

Q You arrive at the airport with Ghorbanifar. I 
take it your being with Ghorbanifar caused something of a 
stir; is that correct? 

A Oh, that's what Ghorbanifar said. 

Q What were you told in that regard? 

A Ghorbanifar told me they think you are a CIA 
agent . 

Q "They" being the Israelis? 

A Yes. 

Q And how was that manifested to you, if it was? 

A Well, I didn't see it, but Ghorbanifar said they 
are snapping pictures like crazy of you but you didn't see 




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It. 



Q "They" being the Israelis? 

A ' Yes. They told me they think you are a CIA 
agent. Are you an agent? 

Q You were in Israel for what period of time? 

A I think we were there three nights . We got there 
on I guess the 19th and we left on the morning of the 2 2nd. 

Q I want you to describe for me what you did and 
what you saw during that period of time in Israel. 

A Okay. We got to the hotel. Checked in. The 
rooms were already set up for us. Then Ghorbanifar went to a 
meeting, and I don't know what time he got back, three or 
four hours later, whatever. The next day, we went to 
Nimrodi's office. 

Q We being whom? 

A Ghorbanifar and I. Then we went to Nimrodi's home 
and sweun in the pool and did that for two days waiting for 
Schwimmer, who was in I think China, and then Schwimmer came 
back, landed at the airport, went to Nimrodi's house and then 
they called for somebody, I think Kimche. 

Q Kimche? 

A I think so. They came and there was a very short 



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meeting and that was it. 

Q You were at Nimrodi's office first? 
A Yes. 

Q Any conversation that you recall? 

A No. there were lots of other people there. 

Q At the office? 

A Yes. 

Q But you can't recall anything that was said or 
done at that — 

A No. Nothing to do with Iran or the U.S. It was 
just, you know, conversation and then we went to have lunch. 
I'm not sure where we had lunch, whether at his house or 
what, but we spent the next two days at the hotel walking 
around . 

Q When you say we, it was you and Ghorbanifar spent 
the next two days? 

A He had lots of meetings and then he would come 
back. 

Q Did he tell you what the meetings were about? 

A They were tirying to — ■ 

Q They being — 

A Israeli, intelligence.- 



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Q Right . 

A They were trying to check his bona fides and he 
was giving them I guess information which they could confirm 
or deny, and I think it went on and on, but that's 
basically — 

Q Your impression was that Ghorbanifar was being 
debriefed during this period of time by Israeli intelligence? 

A They were checking him out. 

Q He was providing them with information that. they 
would check out? 

A I think so. 

Q That's what he told you? 

A Correct. 

Q You were not present when he was being debriefed? 

A No. 

Q Do you know what Israeli intelligence he was 
giving this information to? 

A Do not. 

Q Were you yourself giving information to anyone? 

A No, nobody talked to me. 

Q All right. Again, do you have any recollection of 
knowing or learning during this period of time about 



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Ghorbanifar's previous relationship with Israeli 
intelligence? 

A None whatsoever. 

Q Ghorbanifar didn't enlighten you in that regard? 

A Did not, no. 

Q You spent time at Nirarodi's home? 

A Correct. 

Q Do you recall anything about conversations that 
took place when you were at Nimrodi's home? 

A No. There were no conversations. I mean there 
was talk about — 

Q You couldn't have been underwater at the pool the 
entire time. You must have been talking about something. 

A His daughter was getting married, you have to come 
to the wedding, have some great Israeli food and, you know, 
but it was no business. 

MS. DORNAN: You didn't discuss what sort of 
business he was in or anything? Did you learn about his 
background? 

THE WITNESS: He was — let me see. They were 
involved with desalination plants or something like that, I 
think he was telling me they have, you know, the finest 



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technology and, you know, you ought to sell some of our 
plants to the Arabs, you know. 
BY MR. KERR: 

Q Schwiiraner arrives on the scene toward the end. 
Were you present when he was with Ghorbanifar and Nimrodi? 

A Yes . 

Q What were they talking about in your presence? 

A They wanted to send spare parts to Iran. 

Q They being the Israelis? 

A Yes, but they couldn't do it without U.S. 
government approval. 

Q Spare parts for munitions? 

A Don't know. Spares. They had to get U.S. 
approval and they were going to try to do that . 

Q Did they say how they would try to get U.S. 
approval? 

A 

Q 
with? 

A 

Q Anything further that you recall about what was 
said in your presence during the course of these meetings in 



Go to Washington. 

Did they say who in Washington they were dealing 



No. 



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Israel? 
A 

of you? 



No. That's really it. 

MS. DORNAN: Were they reluctant to speak in front 



THE WITNESS: They were, yes. 

BY MR. KERR: 
Q Why? 
A I was an American. 

MS. DORNAN: Did you wander off sometimes and they 
conducted their business? 

THE WITNESS: No, the meeting was outside on the 
patio, and probably it lasted 20 minutes. It was -- 
Schwimmer was exhausted, had just flown back from China and 
he wanted to go home, and the meeting, I presume it was 
Kimche they waited for. They introduced him, but the name I 
never recalled, but it looks like when I look at the 
pictures, and the most — it was a short meeting. That's not 
to say they didn't have another meeting after that. I don't 
know, but it was an unbelievably short meeting. Schwimmer 
wanted to go home and that was it. Next morning we left for 
Paris, like 5:00 in the morning. 



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BY MR. KERR: 

Q You and Ghorbanifar on the same plane again? 

A Yes. 

Q What did you talk about on the ride back from 
Paris? 

A He was excited that maybe the U.S. would approve. 

Q Approve what? 

A The Israelis supplying spares. 

Q And why did he think that was going to happen? 

A Just the fact that they would go to Washington. 
He felt good about it. 

Q Do you have any recollection of Ledeen's name 
coming up at all, flying into or out of Tel Aviv? 

A Never . 

MS. DORNAN: During your time in Israel, did you 
get much time with Ghorbanifar to discuss the business deals 
you had gone there for? 

THE WITNESS: Yes, we had some time. We took long 
walks. We had I think dinner one night out at one of the 
restaurants overlooking the water. 

MS. DORNAN: By the end of this trip, what was 
your impression of Ghorbanifar? • 



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THE WITNESS: When we met in January of '85, it 
was a very good chemistry, you know, exceptionally good 
chemistry. He is a very, you know, considerate person, 
always asked about your family, the kids, I mean it is 
important to him, whereas lots of other people would never 
ask, you know, how is your wife? How are the kids doing? Ke 
was always very considerate, and we developed a relationship, 
and that's why I pursued it. 

MS. DORNAN: You felt by this time that he could 
deliver and he was somebody you could trust? 

THE WITNESS: No question. I believed if anybody 
could deliver he might be able to deliver. Get this contract 
done, get some business out of the country because you need 
to know somebody, you know, to get these things done in Ira.n, 
more so than any other place because it is a revolutionary 
government. It is impossible to do business. 

MS. DORNAN: Did you talk in any detail about his 
Iranian contacts? 

THE WITNESS: He talked about he had great friends 
in the prime minister's office. 

BY MR. KERR: 
Q Did he identify who his friemls might be? 



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A No. 

Q All right, you fly back into Paris when? 

A On the 22nd. 

Q All right, and do you and Ghorbanifar part ways at 
that point or what happens? 

A I then — yes, I go then on the 23rd to New York. 

Q When do you next have contact with Ghorbanifar? 

A I don't have it down, but I think it was in 
August. 

Q In August? Let me stop you then. You were aware 
that Khashoggi on July 1 sent a letter to Mr. McFarlane 
enclosing a rather lengthy paper; correct? 

A Way after the fact. I was not aware — I got it. I 
don't know when, but long after the fact. 

Q You were not aware at the time that this letter 
was being drafted for McFarlane? 

A That's correct. I didn't know anything about it. 
I was not involved whatsoever. 

Q Well, let's start by identifying the document. 
Let me ask to have marked as Exhibit 3 the Khashoggi letter 
of July 1 with its enclosure. 



( Exhibit>,l^d*^ici:a.W . ) 



69 



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BY MR. KERR: 

Q If you would look at Exhibit 3, you provided me 
with this document; correct? 

A Correct. 

Q When, did you come into possession of Exhibit 3? 

A Maybe the fall of '85. I don't remember, but long 
after. 

Q Was any explanation given to you of why you 
weren't being made aware of this document when it was being 
produced? 

A No. I have never been involved in anything- like 
this with him whatsoever. I mean, he does — he maybe sends 
lots of things out. I have never been involved in it. 

Q Do you know who drafted either the letter or the 
attached memorandum? 

A Don ' t know . 

Q You don't know who in Khashoggi's organization did 
this? 

A Do not know. 

MS. DORNAN: Who would normally do that sort of 
thing, do you know? 



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BY MR. KERR: 

Q Do you have any knowledge of the role Robert 
Shaheen may have played in preparing these documents? 

A I don't know. I don't think -- he may have been 
involved, but I don't think so. I really don't know. 

Q How did you come into possession of this document? 

A I don't know, Khashoggi may have said, you know, I 
sent this to McFarlane on how to solve the Middle East 
problem, and I said I have never seen it, so he gave it to 
me. It is not unusual, okay? 

(Discussion off the record.) 
BY MR. KERR: 

Q When the document came into your possession, you 
did review it, I take it; right? 

A I skimmed it, yes. 

Q The letter to McFarlane says that Khashoggi has 
had a number of approaches from Iranian officials. Do you 
know what he is referring to in that regard? 

A I can only think of Ghorbanifar. He may have met 
other people through Ghorbanifar which I don't know about. 

Q He says that I have managed to channel them, these 
approaches, through a single senior individual who is in 




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charge of Iranian intelligence in Western Europe. Do you 
know who he is referring to there? 

A I think he is referring to Ghorbanifar, but I'm 
not sure. 

Q Was it your understanding that Ghorbanifar was in 
charge of Iranian intelligence in Western Europe? 

A Well, way after the fact, I heard somebody, you 
know, mention that he may be, you know, involved with Iranian 
intelligence, but I don't know. 

MS. DORNAN: Ghorbanifar never made such claims? 
THE WITNESS: No. 
MS. DORNAN: Or hints? 

THE WITNESS: No, but I felt he was important. He 
was always on the go. Always meeting in Paris with mullahs 
and people from Iran. 

BY MR. KERR: 
Q All right, do you know how Khashoggi arranged for 
delivery of this material to McFarlane? 
A Do not know. 

Q All right, do you have any knowledge of the 
response McFarlane made to the material once he received it? 
A I think in the hearings I think he gave it to 

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somebody to read. That's the only thing I know about it. 

Q All right, as of 1985, did you have any knowledge 
of McFarlane's response to this material? 

A None whatsoever. 

Q I take it from what you have said you played no 
role in the drafting of this material yourself? 

A None whatsoever. 

Q As of the trip to and from Tel Aviv with 
Ghorbanifar, what discussions, if any, had you had with 
Ghorbanifar about the role he could play in trying to obtain 
the release of American hostages? 

A Never came up. 

Q As of the time of that trip, what discussions, if 
any, had you had with Ghorbanifar about munitions, U.S. 
munitions going to Iran? 

A Never mentioned . 

(Discussion off the record.) 

MR. KERR: We'll break now and get together at 
quarter of 1:00. 

(Whereupon, at 11:55 a.m., the deposition was 
recessed, to be reconvened at 1:00 p.m. this same day.) 



«msffiB 



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AFTERNOON SESSION (1:00 p.m.) 
Whereupon, 

ROY FURMARK 
resiimed the stand and, having been previously duly sworn, was 
examined and testified further as follows: 
EXAMINATION (Continued) 
BY MR. KERR: 

Q Let me pick up the events as you recall them. 
After your return to Paris from Tel Aviv, what is the next 
event that you recall with regard to the Iran arms 
initiative? 

A I remember being in Marbella on Khashoggi's yacht, 
and Ghorbanifar came aboard and was excited, but he said he 
needed $1 million to make a prepayment to get the transaction 
going. 

Q All right, now let's try to place that in time. 
When would that event have occurred? 

A The end of July, I think. 

Q And you base that thought on what? Your travel 
records? 

A Yes, because it was right after Khashoggi's 
birthday party, and I'm not sure^Mw many days after. 




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UNCUSSIFIED 



74 



Q And his birthday was when? 

A The 25th of July. 

Q And your travel records show you being in the 
right part of the world? 

A No, I missed the birthday party. 

Q But you were on his yacht? 

A Yes. 

Q When were you in that part of the world from your 
travel records? 

A I would say — it doesn't show here, but I would 
say it was more like the end of July because we had --I know 
I got there a few days after the party. 

Q And this would have been the first time you had 
seen or talked with Ghorbanifar since Tel Aviv? 

A I think so, yes. 

Q And you were there when Mr. Ghorbanifar appears at 
the yacht? 

A Yes. 

Q Tell me what happened. 

A He was excited that, you know, that the thing was 
going to go forward, but he couldn't go forward because he 
needed SI million to make a prepayment. 



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What thing is it that's going forward at this 



point? 



A The transaction. 

Q What did you understand that transaction to be? 

A Spare parts . 

Q Did you know anything more about them, what kind 
of spare parts? 

A No, I didn't. 

Q But it was your understanding it was spare parts 
as opposed to weapons? 

A Correct. 

Q Did Mr. Ghorbanifar ask Mr. Khashoggi to do 
anything? 

A They were chatting about the transaction, and he 
agreed to in effect make the bridge financing of $1 million. 

Q He being Khashoggi? 

A Khashoggi. 

Q The records that we have indicate that 
Mr. Khashoggi put up approximately $1 million on or about the 
7th of August, 1985. Were you present when Khashoggi 
actually posted the $1 million? 

A When you say "posted" -- 



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UNCLASSIFIED 



76 



Q Gave a check to Ghcrbanifar, anything of that 
kind? 

A I think it was a — he was going to instruct his 
bank to transfer the money, I think, to transfer the money to 
an account . 

Q You would have known that because he would have 
said that to Ghorbanifar in your presence? 

A I don't remember exactly how. That's my 
recollection. 

Q Do you have any further knowledge about this 
particular transaction, the $1 million transaction? \ 

A No, other than he got a check from Ghorbanifar. 

Q Were you present when that check was given? Did 
you see the check change hands? 

A I don't think I saw the check. I don't recall, 
you know. 

Q All right, again, the records that we have 
suggested that Khashoggi posted the million dollars on or 
about August 7 and got the million dollars back on or about 
August 29, 1985? 

A I knew the August 7 date, but I didn't know the 
date when he got it back. What was the date that he got it 



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Q According to our records, on or about August 29, 
1985. 

Did you acquire any additional knowledge about the 
transaction for which this million dollars went? 

A No. 

Q Did you have any additional meetings in August 
when this was discussed? 

A No. 

Q Where were you in August of '85? 

A I was in Marbella, Spain, shows August 1st through 
the 8th, then I went to New York. 

Q And you remained in New York until when? 

A September 1, I went back to London. London, 
Paris. Looks like I flew New York, London, and then I went 
to Paris, and I was in Paris September 2 and 3, then I went 
back to London on the 4th, then I went to Zurich on the 5th 
and was there through the 6th, then I went back to New York, 
I guess. New York, London, then back to New York. 

Q And you remained in New York for the remainder of 
September? 

A No, then I went back to London on the 9th, and I 



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was there through the 10th, 11th, 12th and 13th. I was in 
London on the 17th and 18th, looks like. 

Q All right, in terms of meetings or discussions 
relating to the Iran initiative, what meetings or discussions 
did you have in September? 

A None . 

Q Were you aware or were you not that Khashoggi was 
asked to cause another bridge financing arrangement to be 
entered into? 

A I did not know about it. 

Q When did that come to your attention? 

A Way after. Probably after all this thing broke, I 
learned sometime that he did two transactions, but I didn't 
know anything about it . 

Q So you were not aware in September — 

A Of the 54 million transaction. No. 

Q Let's stop on that transaction for a moment. At 
some point you did develop some familiarity with this 
transaction, correct, sometime last year that you learned 
about that transaction? 

A Sometime in '86, yes. 

Q From your prior testimony, you indicated that you 



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believe that the source of Khashoggi's funds was another 
company. You testified to the Senate Select Committee that 
you thought Khashoggi borrowed the $4 million from an English 
firm, Lonrho. What was the basis of your information? 

A Mr. Khashoggi. 

Q What did he tell you? 

A That's where he got the funds from. 

Q What is Lonrho? 

A Lonrho is a major English trading company with 
extensive holdings in Africa, major commodity trading house. 
Also owns all the hotels, the D.K. Levitt hotels they bought 
in Mexi-co and stuff. It is a big, big company, and that's 
the same company that tried to buy Herod's if you remember, 
and then lost out to the Egyptian. 

Q Do you know anything about the terms under which 
Khashoggi borrowed his money? 

A Do not, no. All I think is when they had all the 
trouble with Lonrho recently, I think it made me refer back 
to it, but I don't know. 

Q You mentioned a meeting with John Shaheen that 
occurred on or about October 3, I believe you said? 

A Yes, I think October 3. 





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Q In October, did you have contact with anyone else 
with regard to the Iran initiative? 

A No. 

Q You had no contact with Ghorbanifar in October? 

A Yes, we did. 

Q When in October did you meet with Ghorbanifar? 

A Well, I would say, you know, the tail end of 
October, because we were getting a crude oil contract, and we 
were putting together a company, Ghorbanifar, Khashoggi and 
Furmark, and I went to Hamburg in October to deal with a 
company called Mabanaft because they were going to be the 
contracting party and we would sell the oil to Shell. Iran 
would sell it to Mabanaft, Mabanaft would sell it to Shell. 
We had put together a draft agreement between us . 

Q Run through where you were in October for me, 
please . 

A All I have, okay, is October 20 to the 24th, New 
York, London, 20th, London, Hamburg the 21st, 22nd Hamburg, 
23rd Hamburg, 24th London, New York. 

Q Ghorbanifar was in the United States October 7, 8, 
perhaps October 9. Did you meet with him at all during that 
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1 A We had dinner one night, I think. 

2 Q And that would have been where? 

3 A In New York City. 

4 Q Is this you and Ghorbanifar? 

5 A We had dinner one night, and another time he was 

6 in New York we had dinner, he and I, and he had a lady friend 

7 with him. 

■ 8 Q Both dinners would have been in October of '85? 

9 A I'm not sure, I don't have it marked. 

10 Q Do you remember what you and he would have talked 

11 about? 

12 A Well, the night we had dinner alone, I'm not sure 

13 what month it was, but you know, it was basically pursuing 

14 all the business we were trying to do through him. 

15 Q Did you have any discussions about the Iran 

16 initiative? 

17 A No. I don't recall that, because I had not heard 

18 anything really since, you know, the August, and I didn't 

19 know about the September transaction. You must realize that 

20 these guys don't tell you anything. I think I told you that 

21 earlier. If you ask they get suspicious. That's a standard 

22 Middle East trait, okay? 



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Q Ghorbanifar was in Dubai in late October. He was 
in Dubai October 29, October 30, that period of time. Did 
you know he was going to Dubai? 

A No. 

Q As I mentioned earlier, Ghorbanifar was in contact 
with Ledeen in October of 1985, but if I understand your 
testimony, you didn't know Mr. Ledeen at that point? 

A No. 

Q Let me drop back to one other matter. The . 
relationship, the business relationship that had included 
Mr. Hashemi, you and Mr. Khashoggi sold out your interest in 
that venture to Hashemi sometime before October of '85; is 
that correct? 

A No, it was the end of July. 

Q Tell me what happened in that regard. 

A Well, first of all I think Mr. Khashoggi felt that 
Mr. Hashemi could not deliver. I think he believed that 
Mr. Ghorbanifar in the end could deliver oil contracts, 
counter trade contracts, and my experience, okay, with 
Hashemi was in July and June. I was negotiating a crude oil 
contract with Shell for European Mercantile, which is 
Hashemi's company. Prior to that, we were negotiating with 

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Tampimex the same contract, and in the Tampimex transaction, 
our profit was half of what the profit would have been with 
Shell. 

I used my relationship with Shell to get them to 
go along and we drafted lots of contracts, drafts ready for 
signature where we would have had about SI. 15 a barrel profit 
on a hundred thousand barrels a day, which is about $40 
million of profit, whereas with Tampimex the profit would 
have been about 60 percent of that. I just was flabbergasted 
that he wouldn't sign with Shell and they were ready to sign, 
having the credit of Shell and the profit that we would have 
with Shell; and when he didn't sign I knew there was no oil, 
and it had affected my relationship with Shell and I had told 
this to Khashoggi. Then little did we know was that Hashemi 
was warming up to Fritz Ingram of Tampimex, and in the end, 
there was a confrontation between Khashoggi and Hashemi as to 
you buy me out, I will buy you out, you know, I'm not going 
to do all this work and you make all this money, Khashoggi, 
I'm doing all the work, so Khashoggi agreed to return the 
shares and he got back his $500,000. I returned my shares 
and was supposed to get my expenses back, which I never got. 

We ■ found out later that simultaneously Hashemi 






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sells half the company to Fritz Ingram for a reported $2 
million, so that was like the end of August. I would say the 
end of August, first week of — end of July, rather, first 
week of August. 

Q Okay, in terms of events in the fall of 1985, when 
did you get clued in again on things around the Iran 
initiative? 

A I never knew about the November transaction. In 
fact, when Time magazine did a story and they showed the 
November transaction, I spoke to the reporter and I said, you 
know, it is wrong. I never heard of anything Khashoggi was 
involved in. I never knew about it. 

Q How frequently were you in touch with Khashoggi 
during this period? 

A Fairly frequently. 

Q But he never clued you in? 

A He never clues anybody in, unless if I was working 
with him on it I would know about it, but he is not one to — 
his conversation with me was, you know, how are we coming on 
the oil contract with Ghorbanifar? But I never knew about — 
just like I never knew about the February transaction. 

Q To what extent were you dealing with Ghorbanifar? 



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A When I could locate him or see him, I was pushing 
him on the things I wanted to do . I wanted a special 
contract with NIOC to handle one of their problems they had 
with an oil company. Trying to get an oil service company to 
buy to service Ghorbanifar, trying to get some, trying to get 
a contract out of Iran and through Ghorbanifar because there 
is that potential, but unfortunately, he didn't spend much 
time on the commercial side. 

Q He being Ghorbanifar? 

A Right. One of his Paris friends says, you know, 
politics pops up and he forgets about commercial business 
completely, but he was, you know, he said he was going to get 
it, he was going to get it, but he never got it. He never 
got any contracts. 

Q Were you aware that Ghorbanifar was dealing with 
representatives of the U.S. government in the fall of 1985? 

A In the fall of '85? 

Q Yes. 

A No. 

Q He didn't mention that to you? 

A No. 

Q Shifting gears a bit, with regard to Khashoggi, 



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1 were you aware that he was negotiating with Ernest Miller and 

2 Donald Fraser and various companies that they are related to 

3 such as Sarsvati International? 

4 A No. 

5 Q You were not familiar with those negotiations? 

6 A No. 

7 Q And the various loans that Khashoggi obtained 

8 through the Miller-Fraser connection in the fall of '85, you 

9 were not privy to? 

10 A Never knew about it. 

11 Q Turning to January 1986, you mentioned that' when 

12 Ghorbanifar was in the U.S. to take the lie detector test for 

13 the CIA, you met with him and Mr. Ledeen . 

14 A Yes. 

15 Q Take me through what happened there. 

16 A He called me — 

17 Q He meaning Ghorbanifar? 

18 A Yes. He said come on down to Washington and have 

19 dinner with me, so I went down on a Saturday I think it was. 

20 I think we stayed at the Four Seasons hotel, and we then went 

21 to Scott's, and there I met Mr. and Mrs. Ledeen. 

22 Q That's the first time you had met Ledeen? 



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Q What kind of introduction was made? What did 
Ghorbanifar say about his relationship with Ledeen? 

A He said he was a professor and he was an expert en 
terrorism, and the next morning on television he was on one 
of the programs, you know, which I turned on, and his wife 
was there, and they kept -- and of course Ghorbanifar said I 
was very close to Khashoggi, and so the conversation, you 
know, centered on Khashoggi and his life and having been on 
the yacht, having been on the plane, and there was a lady 
friend of Ghorbanifar ' s there, and so the conversation' was, 
you know, social, and a few dances, they have music there, 
good food, I don't know if you have been there, and that was . 
it. 

Q Was there any discussion with Ledeen about what he 
and Ghorbanifar had been doing together? 

A No. 

Q Was there any discussion about the status of the 
Iran initiative at that dinner? 

A No. 

Q Now, your meeting with Ghorbanifar was simply that 
dinner that evening? 







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A No, then I had brunch on Sunday before I went back 
to New York, and the three of us had brunch. 



Three being — 

The lady friend, walked up to someplace. 

What was the nature of the conversation at that 



Q 

A 

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brunch? 

A You know, he mentioned, I'm not sure when he 
mentioned it, but he said he was going to take a lie detector 
test, and he was going to Ledeen's house or somebody's house 
in the afternoon, Sunday afternoon, and he said we're making 
progress. 

Q Progress as to what? 

A I knew he was meeting with the U.S. government 
officials. Who I don't know, but Ledeen had arranged it. 
Maybe the name McFarlane came up, you know. With all this 
publicity and all the televised hearings, there are so many 
names that get thrown into the picture which it would not 
have been before, but that was all. 

Q All right, in terms of the state of play, he 
didn't describe any further what was going on? 

A No. 

Q Did you have any other contact with Ghorbanifar in 



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January of '86? 

A I think I went back on Monday to see him, because 
I went back to New York because my dad was in intensive care 
in the hospital, and then I think I went back to see him in 
the afternoon, Monday afternoon, maybe Tuesday afternoon, I'm 
not sure. 

Q Back to D.C.? 

A Yes. 

Q What happened then? 

A He wanted to, you know, asked me to come down and 
I was there and nothing happened. 

Q What would you talk about? 

A How everything was going . 

Q Did he say anything more about the lie detector 
test or the business he was trying to do with the U.S. 
government or anything like that? 

A He told me one thing, I'm not sure when he told 
me, but he told me that — maybe this was on Saturday -- that 
a ship was going to be boarded or something, an American 
freighter, and that was a signal to the people he was seeing 
as his bona fide. I'm not sure of the exact timing, but that 
I remember him telling me, that he I guess told them in 



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1 advance of the Iranian patrol boat going to board an American 

2 freighter; and that apparently then happened because I read 

3 it in the paper, and that was a signal as to his bona fides. 

4 Q Anything further said about the nature of the 

5 matters being negotiated with the U.S.? 

6 A No. 

7 Q All right. With regard to Khashoggi, what were 

8 you and he doing in January of '86? 

9 A I see myself going to London the end of January 

10 and then going to Zug, New York, London on the 27th. 28th, 

11 London to Zug and Switzerland, and back on the 30th to' London 

12 and the 31st, London to New York. 

13 Q Moving on to February of '86, at some point you 

14 learned that Khashoggi lent $10 million to Ghorbanifar in 

15 February of '86. Did you know that at the time? 

16 A No, no. No. Didn't know it whatsoever. 

17 Q When did you learn of it? 

18 A Months later. 

19 Q Can you place the context in which you learned of 

20 the $10 million transaction? 

21 A It could have been — I'm just guessing. May. I'm 

22 just guessing. 



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Q Let me -- 

A April, May. 

Q Let's see if we can't connect it up in other 
ways. You were paid $88,500 by Khashoggi on April 15, 1986; 
correct? 

A Yes. 

Q Why were you paid that sum by Khashoggi? 

A Well, Khashoggi has been, you know, sending me 
money for a number 9f years. I do lots of things for -him. I 
have been expecting $100,000 from him for a while. On the 
Hashemi thing, he got his $500,000 back, I didn't get any 
money back on my expenses, and I do lots of things for him. 
You know, when I need money I ask him for it. 

Q Was it your understanding that the $88,500 was 
related to an arms transaction or business transaction that 
Khashoggi entered into with Ghorbanifar in February? 

A I didn't know about the transaction in February. 

Q I'm trying to jog your recollection. Let me give 
you some facts. According to our record, Khashoggi was paid 
$12 million on April 11 as repayment for the loan that he had 
made back in February. Two days, four days later, April 15, 
you get paid $88,500. There's a coincidence in terms of the 



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money coming into Khashoggi's hands and a payment to you. Is 
there a relationship between the $88,500 and the February 
arms transaction? 

A In my opinion there's not. I think Khashoggi pays 
money out when he gets cash in. That's how he operates. He 
gets a chunk of money in, he pays money out. I have down 
that he got $3 million on February 26, 1986, and he got the 
balance on the 11th. This is what they told me. 

Q They being — 

A Khashoggi . 

Q Khashoggi's accountants? 

A Yes. No, wait, they got $6 million on the 2&th cf 
February. Is that what you have? 

Q No, I don't, but — 

A Then they got the balance on the 11th of April. 

Q The $88,500, that's not a round number. What does 
it correspond to? Why $88,500 as opposed to 90? 

A Lots of times he said he would send me money and I 
get smaller amounts. I have no idea how the $88,500 was 
determined. I then got, a month later I got another $88,500. 

Q Yes, I will come to that in a moment. The $88,500 
does not represent any agreed-upon sum? 



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A Not to my knowledge. 

Q Nor does it tie directly to the arms transaction? 

A As far as I'm concerned, no. 

Q Well, has Khashoggi told you anything to the 
contrary? 

A No. 

Q And as to why he sent you $88,500, what is the 
explanation? Why did he send you that 88,500? 

A I have been trying to have him send me money for a 
long time. I think as I said -- 

Q How much money and for what reason? 

A I'm just trying to recover the expenses I never 
got out of Hashemi, which is over $200,000. 

Q Have you ever invoiced Khashoggi, sent him a bill? 

A No. Occasionally, you know, if he asks for it. A 
lot of times I ask him and he sends me money because I'm 
doing lots of different things for him. 

MR. GENZMAN: How was that money paid to you? 
THE WITNESS: By bank wire. 

MR. GENZMAN: Was there any note that was sent 
along? 

MR. KERR: We have the wire here. 



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1 MR. GENZMAN: Is there any verifying documents 

2 that were sent along? 

3 THE WITNESS: No, no. 

4 BY MR. KERR: 

5 Q The way this transaction worked was that the money 

6 was simply wired into your account, you didn't receive any 

7 explanatory material on it? 

8 A No, I get money wired in on various occasions from 

9 him. 

10 Q Let me show you the Furmark Corporation checking 

11 account records for the period ended March 31, 19 86. The 

12 I reference to the Khashoggi wire is contained in the backup 

13 material for that statement. The statement will be Exhibit 

14 4. 

15 (Exhibit 4 identified.) 

16 BY MR. KERR: 

17 Q Exhibit 4 is a bank statement and some of the 

18 backup material for the March 31 period for the Furmark 

19 Corporation? 

20 A It is March 31, ending April 30 '86. 

21 Q And the wire transfer record is attached; correct? 



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Q And you have no other documentation on what this 
88,500 payment was for; is that correct? 

A It is money that he was sending me. 

Q Mr. Khashoggi does business differently than other 
folks, but even sugar daddies usually give you an explanation 
for what was going on. What was the reason for the $88,500 
coming your way? 

A Because I needed the money. I was in trouble 
financially. 

Q Was this tendered as a loan or what? 

A No, no. He has been sending me money for a' number 
of years. He asked me to go here, to go there. I'm no 
longer on retainer to him. 

Q How is it carried on the books? This is payable 
to the Furmark Corporation, I take it? 

A It is income. 

Q By Furmark? 

A Yes. 

MR. GENZMAN: Had you asked him for a payment 
around that time? 

THE WITNESS: I asked for $100,000 and he said he 
would send me $100,000 in March, beginning of April. It 




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1 didn't come. 

2 MR. GENZMAN: When you asked him for that amount 

3 at that time, what was the purpose? 

4 THE WITNESS: Because I needed it. The money came 

5 in and it was paid out to keep me going. 

6 MR. GENZMAN: Did you indicate why he should be 

7 paying you this amount from his end other than that you 
needed it? 

9 THE WITNESS: No: It is not unusual for him to do 

10 that. 

11 BY MR. KERR: 

12 j Q Was there any understanding between you and 

13 Mr. Khashoggi with regard to a percentage payment of any kind 

14 I that you would receive in connection with the Iranian arms 

15 transactions? 

16 A No . 

17 Q At any time? 

18 A I did not know about this transaction at all. 

19 Q Whether or not you knew about this transaction, 

20 did you ever have an agreement with Khashoggi that you would 

21 receive payment for any Iranian arms transactions with 

22 Ghorbanifar? 



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A I was getting my money on the oil deals. 10 
percent of the oil contract with this new company. 

Q Did you ever have any agreement with Khashoggi 
that you would be paid money in connection with the Iranian 
arms transactions? Yes or no? 

A Mr. Khashoggi and I did not have any arrangement 
that he was going to give me anything. 

Q All right, similarly with regard to 
Mr. Ghorbanifar, did you have any arrangement with 
Mr. Ghorbanifar relating to the Iranian arms transactions? 

A No. 

Q And with regard to the February $10 million lean 
by Khashoggi, you didn't learn about that until much later in 
1986? 

A That's correct. I never knew about it. 

Q In February/March of '86, take me through where 
you were during that period. 

A Well, in February I went to London on the 2nd, and 
then I went to Dubai on the 4th. I was in Dubai, I came back 
on the 11th to Paris. I was in Dubai from the 4th to the 
11th. 

Q Okay, then you came back to Paris. What happens 



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A I was in Paris for four days and I went to London, 
and then I went back to New York and then I came back to 
Paris on the 20th. I was there through the 28th. 

Q Where did you go there? 

A Then I went to Geneva. I was there until the ^ 
4th. Then — 

Q Were you meeting with Khashoggi in Geneva? 

A We had a meeting in Geneva with Khashoggi; J think 
that may have been the time when he brought his oil company ■ 
people from California, because we were going to get oil from 
Iran for a refinery in Hawaii. I think that may have been 
the time. 

Q You left Geneva when, the 4th? 

A Yes . 

Q Where did you go then? 

A Paris . 

Q You stayed in Paris -- 

A Until the 9th, and then I went to London for a 
couple of days. 

Q Take me through the rest of the month. Where were 
the rest of 'your travels in March? 



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A On the 19th I went to Paris, the 20th in Paris. 
The 21st I went to Monte Carlo. I was in Monte Carlo until 
the 2 3rd and then I went London, New York. 

Q Okay, let me just go through a couple of events. 
On the 4th and from the 4th through the 5th and 6th, 
Khashoggi picked up Manny Floor, and he and Floor and Robert 
Shaheen went down to the Cayman Islands to meet with Donald 
Fraser and Mr. Miller. Were you aware from your meeting with 
Khashoggi just before the 4th that he was going to Cayman 
Islands to discuss a series of loan transactions with Fraser 
and Miller? 

A Never knew about it . 

Q When you spoke with Khashoggi later on in March, 
he did not relate to you what had happened at his meetings in 
early March with Fraser and Miller; is that correct? 

A Never . 

Q Floor flew out to Geneva March 17 through 18 to do 
the paperwork on these loan transactions that had been 
negotiated in the Cayman Islands. Did you meet with Floor at 
all during that period of time? 

A No, sir. 

Q Again, you don't have any knowledge of the loan 



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transactions that Floor was working on? 

A None whatsoever. 

Q As a result of the Geneva meetings, the board of 
Triad America was reconstituted. Did you have any knowledge 
of those events at that time? 

A No, sir. 

Q In March of 1986 was your office broken into? 

A I don't know whether it was March or February. It 
was broken into over the weekend. 

Q Describe to me what happened in that break-in. 

A Well, Monday morning we got there, and the lock 
was off. It was obvious somebody had been through all the 
papers. They didn't take anything that I knew of. They 
didn't take any equipment or anything like that. We reported 
it to the building. The building came up and installed a new 
lock. 

Q Did you relate this break-in to Mr. Ghorbanifar? 

A I told Khashoggi and Ghorbanifar that somebody 
broke into my office. I had no idea who did it. 

Q Did you suggest to either of them that you thought 
the break-in had been done by U.S. officials, either CIA or 
someone else? 

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1 A I didn't know who did it. I had no idea. 

2 Q Did you suggest to either of them that that was 

3 the likely source of your difficulty? 

4 A I think, you know, Ghorbanifar, I think maybe he 

5 thought maybe it was the CIA that did it, but I didn't know, 

6 and I don't think I said who did it because I didn't know. 

7 Q Did you suggest to Ghorbanifar that he lodge a 

8 complaint with federal officials about this break-in? 

9 A No, sir. 

10 Q Were you aware that he had caused such a complaint 

11 to be made? 

12 A I think after the fact, yes. 

13 I Q How did you learn of it after the fact? 

14 A I think I may have read it in the report. 

15 Q Other than the report, do you recall discussing it 

16 with Ghorbanifar? 

17 A I think I remember him telling me that his lady 

18 friend in California was harassed or something like that, and 

19 he thought my office break-in was connected or something, but 

20 that was the extent of it. 

21 Q Did you ever discuss this break-in with Michael 

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A No. 

Q Other than that dinner that you described with 
Ledeen, have you had other occasions to meet with Ledeen, 
meet with or talk to? 

A I think I may have talked with him on the 
telephone, because I called him to invite him to a dinner in 
Washington when the OSS was presenting an award, and he 
couldn't go. He had another dinner. 

Q All right. We've discussed the payment that you 
received in April. You did or did not know in April that 
Khashoggi was being repaid for his February loan? 

A I did not know. 

Q All right -- 

A I did not know about the transaction. 

Q When next did you have conversations with 

Ghorbanifar or Khashoggi about the Iranian initiative? 

A I would have to say that it is in June. 

Q What causes you to say that? 

A Because Khashoggi, you know, told me that, you 
know -- 

Q Well, something is triggering a recollection. 
What's the event?^ What causes you to recollect something 



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happening in June? 

A Well, he was under pressure and the transaction 
wasn't completed and he hasn't gotten any money. 

Q And he tells you about that at that point? 

A And he asked me to stay in close touch with 
Ghorbanifar, find out what's happening. 

Q Let's back up. He made a loan of about $15 
million or a payment to Lake Resources on or about May 10, 
1986. Does that correspond to your recollection? 

A I was told May 15, but — 

Q Did you know he was doing that at the time he did 



it: 



A Did not. 

Q When did you first find out that he had made such 
a payment? 

A I would say in June, sometime in June I was over 
there and he was — he knew, you know, that the shipment had 
been made, but he had not been paid. 

Q Take me through your travels in June. Where were 
you? 

A I was in London, Paris, Paris for three days, went 
to Nice — 



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Q Give me the dates. You were in London, Paris, 
when? 

A June 1, New York, Paris, via London, and I was in 
Paris on the 2nd, 3rd and 4th and then I went to Nice, to 
Monte Carlo again, on the 5th, and I flew home to New York on 
the 6th from Nice to New York. 

Then on the 18th I went New York to Paris, and I 
stayed in Paris for a week, then I went on the 26th to Nice, 
then on the 27th I went to Marbella, Spain, to Adnan's_ 
house. On the 28th, I went to Nice on the 28th, and I was 
there on the 30th. I was there July through the 7th. .On 
July 8 I went Nice, Paris, London, Paris. I had a meeting at 
the airport in London, then I came back to Nice on the 9th. 
I was in Nice the 9th, 10th, 11th and 12th. I went to Geneva 
on the 13th, and I went on the 14th to Paris. I stayed in 
Paris through the 24th of June — July rather. 

Q Let's stop there for a minute. Nice is where 
Ghorbanifar has his home? 

A He lives in the next town. 

Q When you were in Nice, were you visiting with 
Ghorbanifar? 

A A couple of occasions he came to see me. 



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Q Why else would you have been in Nice? 

A No, I was just waiting, you know. I was the 
contact between he and Khashoggi. 

Q So the reason you were in Nice was to make contact 
with Ghorbanifar? 

A You know, and find out what was happening, because 
Khashoggi was very concerned. 

Q Using the schedule you have given me as a way of 
trying to place when you were brought into this matter. again 
by Khashoggi, give me your best estimate of when you were 
there. 

A I would say middle of June. 

Q Let's use another event. You were paid S8000 and 
change by Khashoggi on June 5 . 

A Right. 

Q What was that payment for? 

A Well, he asked me to go down to Dubai, and I went 
down in February. 

Q Again, how does that relate to the payment of 
$8000? 

A Well, I said I never got anything on the trip down 
to Dubai and I need some money, send me something, so he said 

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send me something and I sent him an invoice. 

Q Did you send an invoice for $8,038.51? 
A I sent it to his office. 

That represented your expenses to Dubai? 

Yes. 

What this is is a reimbursement of those expenses; 



Q 

A 

Q 
correct? 

A Right. 

Q In addition, you received a $60,000 payment- from 
Manucher Ghorbanifar on June 16; is that correct? 

A Correct;. 

Q What was that payment for? 

A That was either an investment on his part or a 
loan on his part. To me, there's a company called 
Alternative Power, APC, Alternative Power, which was in the 
development of a cogeneration power plant in Pennsylvania. 
At a shareholders' meeting, the chairman of the board wanted 
to in effect turn over the project to Bechtel Corporation. I 
did not want that to happen . 

I wanted to keep- the -- we have a license to use 
the Saarberg technology in Pennsylvania exclusively, and I 
told them I wouldn't permit it, so he said, well, then, why 



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don't you buy our shares back and it came to $60,000, and I 
tried to get the money from various people, and Ghorbanifar 
knew some of the things I was doing, and I chatted with him 
about it, and he then sent me the $60,000 -- came into my 
account -- and based upon a contract between the selling 
shareholders and myself, the money was paid to the selling 
shareholders' lawyers in escrow, and then they turned over 
the shares . Ghorbanifar was supposed to send additional 
money for the development of the project which he never did. 

Q Let me show you what will be Exhibit 5, which is 
the bank statement for Furmark Corporation of June 30,' 1986. 
It has attached to it an agreement of June 13, 1986 between 
yourself, Mr. Weisser, Roag AG and Vipema? 

A Vipema . 

Q And APC, which is the buyout agreement referred to 
earlier. 

(Exhibit 5 identified.) 
, BY MR. KERR: 

Q Going through the items, there is a credit slip 
showing a $60,000 credit wired into the Furmark Corporation 
account by Manucher Ghorbanifar on June 16 and that's the 
$60,000 amount that you utilized to effect the buyout of the 



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1 stock; correct? 

2 A Correct. 

3 Q There's also a credit confirmation showing 

4 $8,038.51 wired into this account by Mr. Khashoggi, and 

5 that's the amount that corresponds to the reimbursement of 

6 your Dubai expenses; correct? 

7 A Correct. 

8 Q Again, just so we're clear, the $60,000 amount 

9 Ghorbanif ar paid to Furmark Corporation on June 16 was. not 

10 related to the Iranian arms transaction; is that correct? 

11 A No way. 

12 Q Similarly, the $8000 amount that Khashoggi paid 

13 was not related to the Iranian arms transaction? 

14 A No . 

15 Q Now, when Khashoggi talked to you in June about 

16 the problems he was having, give me your fullest and most 

17 complete recollection of what it was that Khashoggi told you 

18 had happened and the nature of the problems he was having. 

19 A He told me that he had, you know, bridge financed 

20 $15 million and he had not been paid any money, and he was 

21 concerned. 

22 Q What did he ask you to do? 







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A He said just stay on top of Ghorbanifar, find out 
what's happening, keep me posted, push him. 

Q And you then went to meet with Ghorbanifar? 

A I would be, you know, wherever I was waiting for 
him to call me, or to see him. I mean, I sat in Nice maybe 
for a week and maybe I talked with him once. He came to see 
me once, you know. I just was sitting waiting. 

Q What did Ghorbanifar tell you when you saw him? 

A Said he was having problems. 

Q Did he describe the nature of the problems? 

A No. 

Q Can't give me any more information than that? 

A No, he didn't even tell me about the McFarlane 
trip. 

MR. GENZMAN: When did you first learn about the 
McFarlane trip? 

THE WITNESS: Sometime in July, middle of July. I 
learned that in Paris. 

MR. GENZMAN: Who told you at that time? 
THE WITNESS: It was either Ghorbanifar or one of 
his Iranians' in Paris. I think it was Ghorbanifar. He was 
upset, under great pressure. 



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BY MR. KERR: 

Q Let's try to come at this a couple of different J 

j4f 1 

ways ."n 8.1 million was paid to Khashoggi by Ghorbanifar 

apparently in two slices, a 3 million slice and a 5 million 
slice, and that payment was made on or about July 24, 1986? 

A Well, the first payment was the 3 million paid in 
July, and then the 5 million was paid in August, I think. 

Q Is that what your records show? 

A That's my understanding. 

Q Ours suggests that they both got paid on July 24, 
but it makes no never mind to me . 

A I know it was two separate payments. That's my 
understanding of it. 

Q No disagreement about that. The only disagreement 
was the dates? 

A The first payment was 3 million. 

Q Right. It was your understanding, was it not, 
that Ghorbanifar had given three checks in the amounts of 1 
million, 11 million and 6 million to Mr. Khashoggi? 

A Right. 

Q What was happening was that when money came into 
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checks; correct? 

A Right. 

Q And so apparently some European custom allows for 
partial paydown of checks? 

A Right. I never heard of it before. 

Q All right, but you were familiar with the fact, 
certainly by July, that Khashoggi had three checks totaling 
$18 million in his hands; correct? 

A I think so. • 

Q What was your understanding as to who the 
beneficiaries of the three checks were, and start with- the 
$1 million check. 

A I thought the $1 million check was Khashoggi. 

Q The $11 million check? 

A I thought it was the lenders of the 10. 

Q You thought that to be Canadians; correct? 

A Not at that time, but in September. 

Q Certainly by September when you talked to 
Khashoggi, he had attributed the $10 million to his Canadian 
lenders; correct? 

A Correct. 

Q And the $6 million was to the other lender; 



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correct? 

A Yes . 

Q Did you ever learn the identity of the other 
lender? 

A No. 

Q Was the nature of the other lender ever 
characterized to you by nationality, sex, business -- 

A I thought it was Arab, you know, whatever that 
means . 

Q But Khashoggi has never identified that lender to 



you: 



No. 



A 

Q Has he ever suggested to you as it was a member c: 
the Saudi royal family? 

A No . He has never said anything to me. You see, 
the way -- when the money came in, they paid off the $6 
million first, so that was, you know, never in the 
conversation. Pay off the 10 was always where the pressure 
was; to get the money to pay off the 10. 

Q Now, with regard to the events in July, take me 
through what happened in July. You had meetings with 
Khashoggi and others about this debt. Where were the 



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1 meetings, what took place, who was present? 

2 A Well, in July I was sitting in Nice, okay, from 

3 the 1st until the 12th, at a hotel called the Beach Regency, 

4 and I may have -- I may have seen Ghorbanifar maybe once or 

5 twice in that period of time. I don't know what day he may 

6 have come over for lunch. I was just waiting and Khashoggi 

7 would call, I would call him, I hadn't heard anything, I 

8 would call Ghorbanifar, don't know where he is, don't know 

9 what's happening. I was just sitting, waiting, the whole 

10 time. 

11 Then I was going to see Khashoggi in Geneva 'on the 

12 13th, and then I was told he wasn't coming so I went to 

13 Paris. Then Khashoggi did arrive in Geneva and called me up 

14 I and I said I don't know, I'm trying to find out where 

15 Ghorbanifar is. You only know when he calls you or you see 
15 him because you never know where he is. Then I was in Paris, 

17 you know, from the 15th to the 24th, and I believe I may have 

18 seen Ghorbanifar in Paris. 

19 I'm not sure that was the time his health was in 

20 bad shape, he was under unbelievable pressure because he knew 

21 that Khashoggi 's checks were worthless that he gave him 

22 unless he could get this back on the track. I believe that 



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it was during this period of time that he went -- I'm told he 
went to Tehran, then to Damascus, then to Beirut to 
accelerate or to assist in getting the release of Father 
Jenco because he knew unless a hostage was out, Khashoggi 
would get no more money, no more shipment and Khashoggi would 
be out his money. He was taking medication, high blood 
pressure, pains -- he was in terrible, terrible shape with 
the pressure because here, you know, Khashoggi, who he had 
developed a relationship with, was out $15 million. 

Q All right, did you and he discuss anything about 
the problem? Did he attribute the problem to anything' in 
particular? 

A Then they got — then he explained to me about the 
pricing problems . 

Q Did that occur in July? 

A I think maybe it was in July or August. It may 
have been after the first payment that they had a microfiche 
on pricing and they checked it out and there were anywhere 
from, you know, 300 percent to 600 percent inflation on the 
various items. That was part of the problem. 

Q Did he attribute the overpricing to any particular 



motive? 



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A He made the comment that, you know, some of t: 
funds may have gone to the Contras, 

Q Did he tell you what he based that on? 

A No. 

Q Did he tell you who he was dealing with in the 
U.S. government? 

A I heard the name North. 

Q What did he tell you about North? 

A He was, you know, he only had the highest 
compliments for him, you know, whenever he talked about h: 
but other than that, no details. 

Q Did he give you any further e.xplanation of why 
thought money might have been generated out of this 
transaction that was being used for the Contraa 



A No. 

MR. GENZMAJN: Who was giving you this 
information? 

THE WITNESS: Ghorbanifar. 
BY MR. KERR: 
Q Now, your role at this point was basically to keep 



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1 an eye on Ghorbanifar for Khashoggi; is that right? 

2 A That's right. 

3 Q Were you asked at this time to do anything 

4 vis-a-vis the U.S. government yourself? 

5 A No. 

6 Q Take me through events in which you participated 

7 in August relating to this matter. 

8 I A I was in New York until I guess the 11th, and then 

I 

9 I I went to Paris and I was there until the 18th, and then I 

10 j had to go to Oklahoma City. I was there for two days and I 

11 came back. Basically, I think Ghorbanifar was desperate 

12 I because Khashoggi no way is getting his money, and he was 

13 doing everything he could to try to get the contract 

14 completed. 

15 Q All right. Did you meet with Khashoggi and 

16 Ghorbanifar while you were in Paris? 

17 A I think so, yes. I don't have any dates, but it 

18 is my recollection. 

19 Q Can you describe for me what was discussed between 

20 you and Khashoggi and Ghorbanifar in August in Paris? 

21 A I think basically, you knbw, Ghorbanifar said the 

22 problems he has and until he gets it right, Khashoggi isn't 



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going to get his money. 

Q Any further discussions of diversion of funds cr 
overcharges? 

A Yes, I think, you know, it was mentioned that the 
inflated pricing -- but it was not, you know. The main thing 
was how could Khashoggi get his money back. How can he get 
it back on the track. 

MR. GENZMAN: Did Ghorbanifar specify exactly what: 
the problem was? Did he go into detail? 

THE WITNESS: Yes. Not at that point, okay? 

MR. GENZMAN: Not at that point? 

THE WITNESS: He told me, you know, I don't know, 
go ahead, but when I went to see Casey in the CIA he said, 
you know, that 5 3 parts that were delivered were either 
defective or next generation or old generation or whatever, 
and that had a value of $3 million, and that 299 parts were 
never delivered which had a value of 7 million one. 

And that's why Iran didn't pay Ghorbanifar and 
that's why the checks Khashoggi had deposited never got 
covered because they prepaid $15 million and let's say for 
800 items, whatever the number is, I don't know -- and some 
of the items delivered were defective or different generation 



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1 which didn't fit into their system, but 299 items were never 

2 delivered, which were paid for with the $15 million deposit. 

3 So that's when I went to see Casey -- was, you got 

4 to complete the contract so Ghorbanifar can be paid by Iran 

5 so Khashoggi can get his money, and that is the basis of 

6 going to see Casey. 

7 BY MR. KERR: 

8 Q All right, how frequently were you meeting with 

9 Ghorbanifar and Khashoggi in August of '86 regarding this 

10 matter? 

11 A In August? 

12 Q Yes. 

13 A Maybe once or twice. I mean, I don't have it 

14 down, but I'm just sitting and waiting and waiting and 

15 waiting. That's the Middle East game is sit and wait. I 

16 would go to have a meeting with somebody and it could be 

17 three days before they call you. 

18 Q All right, let's move into September. What 

19 happened in September? Why don't you run through where you 

20 were in September first? 

21 A On the 10th, New York, London; then London on the 

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back to New York. 

Q During that period, did you meet with Ghorbanifar 
and Khashoggi? 

A I presume so, but I don't have any record, but I 
presume that I may have saw -- I know Ghorbanifar went to the 
hospital. I'm not sure when, and it could have been maybe 
this time he was in the hospital in London, but it could have 
been another month. I don't know, and I presume I may have 
saw Khashoggi, but I don't have it down, unfortunately.. 

Q At some point it was suggested to you that you try 
to get in touch with Casey or you made that suggestion-. Tell 
me how that came about . 

A I didn't make the suggestion. They knew I knew 
Casey through Shaheen. 

Q "They" being both Ghorbanifar and Khashoggi? 

A Yes. And I think, you know, earlier, they were 
thinking about that they would need some help in Washington 
and they had mentioned to me — Ghorbanifar thought he would 
maybe get it resolved. And basically, the checks which 
Khashoggi had were worthless unless the contract was 
completed and Iran paid money into Ghorbanifar' s account so 
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the transaction. They were dealing with another individual. 

Q When did that come to your attention? 

A- Maybe it was September or October, you know. It 
was prior to the meetings, okay, with Casey. 

Q First meeting was October 7, so it was before 
that? 

A Because I was -- in October, I was in London on 
the 2nd, 3rd, 4th, 5th and the 6th I went to New York and I 
saw Casey on the 7th. 

Q Right. 

A And so the reason for me going was to alerf Casey 
and the government that the contract had not been completed. 

Q I understand that. Before we get to that, who 
suggested to you that you see Casey or did you suggest it and 
what instructions were you given? 

A Khashoggi asked me to go and see Casey. He told 
me to tell Casey the situation, which was what I just said, 
that Ghorbanifar is now cut out. The only way that Khashoggi 
can get paid is if Ghorbanifar is involved in the completion 
of the contract so he can get his money with the checks of 
Ghorbanifar which the bank is holding. 

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1 do under those circumstances? 

2 A Well, I think Khashoggi thought that once they had 

3 examined that, the contract was not completed, they would 
> 4 complete the contract. 

5 Q And why was it Khashoggi thought Casey had 

6 anything to do with this transaction? 

7 A Well, Khashoggi thought or knew it was an American 

8 transaction through his conversations with Nir as well as 

9 what Ghorbanifar was telling him. 

10 Q This was the first time Nir has come into the 

11 picture. What do you know about Khashoggi 's relationship 

12 with Nir? 
I 

13 I A I don't know anything. 

14 I Q Nir is in the U.S. in September of 19 86. Were you 

15 aware of that? 

16 A No, sir. 

17 Q And were you ever privy to any of the 

18 conversations that Khashoggi had with Nir? 

19 A Never . 

20 Q What did Khashoggi tell you about Nir or his 

21 relationship with Nir? 

22 A Nothing. 



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MR. KERR: Let's take a break for a minute. 
(Recess. ) 
BY MR. KERR: 

Q Let's move to October. At Khashoggi's request, 
you set up a meeting with Mr. Casey for October 7, 1986; is 
that right? 

A Yes. 

Q Did you actually talk to Casey on the phone before 
that meeting on October 7 or did you simply schedule it 
through his secretary or what happened? 

A Through his secretary. 

Q Through his secretary. So there was no 
conversation between you and Casey until the time of the 
meeting; is that correct? 

A That ' s correct . 

Q The meeting took place at the Old Executive Office 
Building? 

A Yes. 

Q Was anybody present besides yourself and 
Mr. Casey? 

A No. 

Q Can you describe for me in as much detail as you 



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recall what was said between you and Mr. Casey at the October 
7 meeting? 

A I said I was there at the request of Mr. Adnan 
Khashoggi and I said that he had been doing the bridge 
financing for Ghorbanifar in the transaction involving Iran, 
and that Mr. Ghorbanifar was now out of the picture. I 
explained to him the bridge financing mechanism and that 
Mr. Khashoggi can only be paid if the Americans deliver the 
rest of the goods, and then Iran will pay Mr. Ghorbanifar 
into his account and then Khashoggi will be paid. That's 
basically, you know, what I told him. 

Q How long did the meeting last? 

A Maybe half an hour. 

Q All right, did Casey affect any prior knowledge of 
this transaction; did he show that he knew about it? 

A No, he said to me — I had mentioned that the 
money was paid into Lake Resources , and he said he never 
heard of that account. He said I don't think it is one of 
our accounts. He said this is not my operation. Sounds like 
it is an Israeli operation. Then I told him that it was 
being handled by North, and he said, well, I will look into 
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Poindexter and have him come over and Poindexter was not 
there . 

He knew Ghorbanifar. He recognized Ghorbanifar 
right away. But as to the transaction, he said it sounds 
like an Israeli operation. As to Lake Resources, he didn't 
think it was one of his accounts and he said he would look 
into it. Then as I left, he said I would appreciate it if 
you would see one of my guys and give them all the details of 
everything that you know about it, which I said I %rould do. 

Q What did you tell Casey about the Canadians at 
that first meeting? 

A I told him that it was in Khashoggi ' s mind . 
Khashoggi had financed it through Canadians, which is what I 
was told, and I told him that Ghorbanifar was thinking about 
talking to some members of the intelligence committee. I 
mentioned two names . I mentioned Senator Moynihan and 
Senator Leahy. 

Q Now, the story of the Canadians; you were relating 
what had been told you by Khashoggi? 

A That's correct. 

Q What had Khashoggi told you as of that time about 
the Canadians? 



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A Khashoggi told me he was under great pressure. He 
borrowed the money from — he gave the names Miller and 
Fraser, and he was under lots of pressure. 

Q what kind of pressure? 

A Financial pressure. I learned after, you know, 
that he put up collateral. I didn't know it at that time and 
going to -- when I went to another hearing, he told me that 
in effect, the Canadians had only facilitated the borrowing 
for him. 

(Discussion off the record.) 
BY MR. KERR: 

Q Let me show you a memorandum that Director Casey 
prepared, apparently of your meeting. This has previously 
been marked as Allen Exhibit 74. I would like you to look at 
it and see if it gives you any further refreshed recollection 
of what happened at that first meeting you had with 
Mr. Casey. 

A Well, I don't think I ever mentioned the loan was 
repayable in 30 days. I said it was long overdue, and they 
were putting on lots of pressure on Khashoggi. I didn't say 
without any collateral. I didn't know, but Khashoggi had 
borrowed the money so we presumed it to be his signature. 



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The Lake Resources was in there. I didn't -- he believes the 
members of the group were talking to Leahy, Cranston and 
Moynihan. Ghorbanifar was talking about talking to these 
three. 6 3 pieces defective and 299 were missing. He has the 
same. 

Q Looking at that memorandum, do you have any 
further or fuller recollection of what was said between you 
and Casey? 

A Well, first, the Canadians put in $10 million, not 
$15 million. 

Q I know what reality is today. Do you think'you 
told him $10 million on October 7 and he just got it wrong? 

A I told him $10 million. That was what was 
missing. I mean, you know, the thing was that the final 
message was, the only way to handle this matter was to supply 
the rest of the equipment. We discussed how you go about it, 
you know, finalize the contract that's been prepaid for, or 
if you are not going to deliver, refund the money, and he 
said he would look into it and get back to me, and — 

Q All right, did he, in fact, get back to you? 

A Allen called me for a meeting and I came down, I 
think, on the 16th. 

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Q Before the meeting on the 16th did you hear 
anything from anybody else on this matter? 

A No. 

Q Are you familiar with a telephone number, area 
code ^^^^^^^^^^^^H 

A Right . 

Q Whose number is that? 

A Mine . 

Q Do you have a recollection of having a 
conversation with Lieutenant Colonel Oliver North on or about 
the 9th of October regarding this matter? 

A Never . 

Q So to the best of your recollection, you and North 
never talked; is that right? 

A That's right. In fact — on what day? 

Q The 9th of October? 

A I was in London, but I never talked to him. 

MR. KERR: Well, let me just mark for reference 
purposes Exhibit 6. It is an exhibit from the notebooks of 
Colonel North from October 9, 1986. It is a note that was 
taken at a luncheon that North had with Director Casey on the 



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(Exhibit 6 identified.) 
BY MR. KERR: 

Q As you note, there's a reference to you and your 
telephone number, but it is your recollection that you never 
spoke with Colonel North; is that correct? 

A I never spoke to him and I was in London on that 
9th. I never spoke to him. 

Q At any point in time? 

A At any point in time. 

Q All right, with regard to Allen, Allen called you, 
and what did he ask you to do when he called you? 

A To set up a date. 

Q To meet? 

A To meet. He asked me to come down on, I think it 
was the 16th, and I came down to Washington to meet in the 
executive office building. 

Q All right, and you met Allen and you also dealt 
with Casey that day; is that right? 

A Right. 

Q You met Allen at the Old Executive Office 
Building? 

A Correct. 



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Q And you met Allen without Casey being present? 

A Correct. 

Q Let's deal with Allen, then, first. What do you 
recall happened in the conversation between you and Allen? 

A I began, you know, going over in detail the bridge 
financing transaction. I told him that Khashoggi had done 
this on three previous occasions, and I told him that 
Ghorbanifar is no longer involved and Khashoggi can't get 
paid unless they complete the contract. We had a short 
meeting because Casey was flying up to New York to go to 
Governor Smith's dinner and asked me if I wanted a ride back 
and I said yes, so when he was ready to go, that was the end 
of the meeting. 

Then they took me to wherever Casey was going and 
we went to National Airport and his wife was there, and the 
three of us flew up to New York in a plane and then he went 
out to Long Island or wherever he was going and I went home. 
But the meeting with Allen was just beginning to go through 
the detail; he asked me questions, what I knew, but then the 
meeting was cut short and he said he would like to meet 
again. 

Q Let me review with you some things that Allen 



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relates as having been told to him by you on October 16. 
Let's see how it corresponds with your recollection. 

Allen said that at the meeting on the 16th, you 
said that the idea of providing Iran with military equipment 
in exchange for American hostages originated in the summer of 
1985, and that you, along with Ghorbanifar, traveled to Tel 
Aviv in August of 1985 where you met with a number of Israeli 
officials, including Mr. Nir, the Israeli special assistant 
prime minister for combatting terrorism. Do you recall 
relating that to Mr. Allen? 

A No, sir, because I went in June. 

Q Okay, so there's a transposition of dates, and the 
actual trip to Tel Aviv was in June of '85? 

A Right. 

Q Beyond that, did you meet with Nir? 

A No, never. No, I met him after the whole thing 
blew up and after the Tower Report was done. Only time. 



1985? 



right? 



But you did not meet with Nir in the summer of 

A I did not meet with Nir. 

Q And you did not tell Mr. Allen that; is that 



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A I did not. 

Q Then Allen goes on to say that you said that after 

a number of false starts in late '85 and early '86, Khashoggi 
agreed to finance another arms transaction in May of 1986, 
just prior to Bud McFarlane's secret visit to Tehran. He 
borrowed the money from a number of Canadian financeers. On 
the basis of a signature loan, he borrowed 15 million at 15 
percent, agreeing to pay principal and interest in 30 days. 
Do you recall telling Mr. Allen that? 

A No. I never said he borrowed it for 30 days and I 
never said he borrowed it for whatever that rate was . " And I 
don't know where he got the false starts. I had no idea of 
any false starts. I never knew about the November 
transaction. 

Q You were aware, were you not, that Allen was 
making notes while you were meeting with him? 

A He was making some notes, yes. 

Q His handwritten notes correspond to his written 
notes. For example, the Tel Aviv trip is down in his notes 
as August of '85. 

A To be fair to Allen, I have pinpointed the Tel 
Aviv trip now in June. I thought maybe it was in July, you 



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know, I didn't tell him exactly that it was August. I may 
have said the summer of '85 because I really had not gone 
into detail. I was trying to give him as much information as 
I could so they could have everything that I had. 

Q With regard to the Canadians, Allen says that you 
told him at the meeting on the 16th that the Canadian 
entrepreneurs have investments in oil, gold, mining and real 
estate; reportedly are aggressive, tough-minded individuals 
with influential contacts in Washington. They have told 
Khashoggi that unless some payment on the principal is 
forthcoming, they will begin to inform individuals like. 
Senators Leahy, Moynihan and Cranston around 15 October about 
this back channel deal with Iran and how they have been 
swindled. 

Furmark stated he was not authorized to state the 
names of the Canadian investors, asserted that we should not 
underestimate the determination of the Canadians . Claimed 
they have a reputation for dealing roughly with those who do 
not meet their obligations. Khashoggi allegedly is trying to 
get them to extend the 15 October deadline, was unsure 
whether he would be successful in this effort. Do you recall 
relating those things to Mr. Allen? 



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A I don't know that descriptive, but my 
understanding was that they were determined to, you know, get 
the money, and that Adnan was under extreme, extreme 
pressure, but it was not — it was Ghorbanifar who was 
talking about the three senators, not the Canadians, as them 
being, you know, rough or tough or whatever the language 
was. They were determined to get their $10 million back, was 
my understanding. They were putting tremendous pressure on 
Mr. Khashoggi . 

Q And you related that to Mr. Allen? 

A Yes . 

Q And basically what you were telling Mr. Allen was 
that unless the Canadians got satisfied by getting 
Mr. Khashoggi satisfied, the Canadians were going to bring 
this thing public? 

A They were going to sue Khashoggi and therefore 
Khashoggi would have to, in turn, bring the U.S. government 
involvement in. 

Q How were things left with Allen at the conclusion 
of this? 

A He was going to call me because he wanted more 
information, and Casey said, you know, we're leaving and they 
Hit 



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collected me and went up to another building where Casey was, 
and when he came out, went into a car to the airport. Then 
he called me for another date and he came up to New York. 

Q With regard to the meeting of October 16, our 
documentary references to the meeting are Allen Exhibit 78 
and Exhibit 80. 

With regard to Casey, you flew to New York with 
him; is that right? 

A Right. 

Q What did you and Casey talk about on that plane 
ride? 

A We talked about Ghorbanifar and we talked about 
comparing this to a commercial transaction. Somebody prepays 
the money for a thousand items, you only deliver 500; if you 
can't deliver the whole thing, deliver a partial delivery. 
And so I was suggesting to Bill Casey that, you know, try to 
send a small shipment so that Ghorbanifar may be able to take 
another 5 million to take the pressure off Khashoggi. 

And he, you know, indicated he would look into it, 
and he indicated just sit tight, and we talked about 
Ghorbanifar. He failed the lie detector test, and I said, 
that may be, but I said, he is the individual who did the 



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transactions, and he is the individual that got Weir and 
Jenco out; he set the McFarlane trip up. He's the guy that 
did these things, and now Khashoggi is in trouble because he 
can't pay him, and Mr. Casey — 

Q Give me some sense of the degree to which Casey 
was indicating to you that he was familiar with this 
transaction, that he thought the government had a 
responsibility for the transaction — 

A No, he did not indicate that the government had 
any responsibility for the transaction. He indicated that he 
was working on the problem, and he said, you know, $10' 
million is a lot of money, and he could understand why 
Khashoggi, as rich as he is, still $10 million is a lot of 
money. And we went back and forth, and he said, just give me 
some time. 

And his wife was there and we talked about, you 
know, Mrs. Shaheen and other people, how my family was, how 
my business was, what was happening, talking about 
alternative power, which he was very intrigued with because 
we discussed it at the first meeting and he thought maybe 
there was potential in Latin America for lots of cogeneration 
and he was going to help. So it was, you can only talk so 



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long about Ghorbanifar and about Khashoggl's money, and then 
his wife — it is a small little plane, you know, and he 
said, you know, just sit tight and — 

Q Did he give you any notion of how long he wanted 
you to sit tight or did you tell him how long you thought you 
could sit tight? 

A No, he kind of indicated toward the end of the 
month . 

Q You thought he thought he could do something for 
you by the end of the month? 

A I thought toward the end of the month, rnayb^. He 
said, I'm not involved in this but I will see what I can do. 

Q Did he give you any better notion of who was 
involved with this thing? 

A No, other than, you know, at the first meeting I 
mentioned North, and then he called Poindexter up to have him 
come over to discuss it. I did not say, well, what happened 
when you met with Poindexter. I was appreciative that he was 
seeing me and trying to help me and help Khashoggi out with 
his problem. He could have Just as well, you know, have not 
seen me or put me off. He's not that kind of a person. He 
asked how my family is, and it was, you know — how other 



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people were . 

Q After you got off the airplane on the 16th of 
October, I assume you called Khashoggi and reported in to 
him? 

A Probably. 

Q What did you tall Khashoggi at that point? 

A I told Khashoggi that it is being worked on and we 
just got to, you know, do nothing. Keep everybody quiet. 
Hopefully something can get done. 

Q At this point, does Khashoggi tell you anything 
more about the Canadians? 

A No. 

Q There's a subsequent meeting with you, Allen and 
George Cave, correct; that happens about the 22nd of October? 

A Correct . 

Q That was a meeting also arranged by Allen? 

A Yes . 

Q It happens in New York? 

A Yes. 

Q Where does it take place? 

A I meet them at, I think the Roosevelt Hotel where 
they are staying, and George Cave was introduced as like 



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and some other name, and then we go to Chrysalis, a 
restaurant on 46th Street not too far away. We have a nice 
meal, a few drinks and chat and talk, and during that time, 
in between eating, Charles Allen is taking some notes and it 
is during that meeting that Cave tells me that he was 
involved in the logistics, as he says, of the transaction ._ 
And it is at that meeting he tells me these are Hawk misses, 
which I never knew. We start again and we go through the 
thing, and basically, you know, the same story is told. 

We go into the bridge financing, how it is done, 
getting the post-dated checks, getting -- in the case o"f 
February, you get 20 percent to cover financing costs and 
other expenses, and in the May 15 transaction a total of 18 
million, which is 20 percent. And that mark-on was, 
according to Khashoggi, approved by Ghorbanifar and the 
Iranian government that they could add on that much to cover 
financing costs because it took in the first transaction, 
February 10 to April 11, you know, 60 days before that got 
concluded, and Khashoggi had to induce people to lend money 
to him, so I don't know what the profit arrangement was, so 
we went into, at that time, the inflated pricing and -- 

Q What were you told, if anything, by Allen and Cave 



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1 on the inflated pricing? 

2 A They had no comments . 

3 Q They are extracting information from you, but not 

4 returning any? 

5 A But, I mean, Allen thought, you know, Ghorbanifar 

6 did a good job. Cave, they were all complimentary, you know, 

7 about Ghorbanifar and what he has been able to do, et cetera, 

8 and they didn't go into any details, really, what happened in 

9 this, why it didn't get concluded. They knew that 

10 Ghorbanifar said so many pieces were not delivered, so 

11 therefore you can't get paid. They know all those details, 

12 okay. And they asked me what I thought of Ghorbanifar, what 

13 else I knew. I told them whatever I knew. I was trying to 

14 be helpful, to let them know everything I knew, however small 

15 it was. 

16 Q Did you get any sense from them as to how or when 

17 this problem was going to get resolved? 

18 A No. They said they were going to go tomorrow and 

19 brief the director, the next day they would brief the 

20 director on the meeting, and — 

21 Q Okay. 

22 A I kind of told the same story each time I met 



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them, so I'm not sure what more — they got more detail. 
They got the precise details of what I knew, okay? 

Q Do you recall discussing with Mr. Allen and 
Mr. Cave the Hashemi suggestion that he could deliver 
American hostages in exchange for his indictment being 
quashed? 

A I don't recall. I'm not saying — did they bring 
it up or — 

Q I'm looking at Allen's notes and he says you told 
him about Hashemi's promise to deliver the hostages if the 
indictment was lifted and that you told him about Khaslioggi 
and Hashemi parting ways in August of '85 — 

A Yes, I probably did, because he was asking me did 
I know whether Ghorbanif ar was involved with Hashemi . I 
think he asked me those questions and I said I really don't 
think so. Afl a matter of fact, I feel that Ghorbanif ar could 
not stand Hashemi. I had that feeling. 

Q All right, now the notes also indicate that you 
told Allen and Cave that Ghorbanif ar believed that the 15 
million, that $15 million had gone to Nicaragua. Was the 
meeting on the 22nd of October the first time when you had 
raised the diversion issue? 



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A Yes. When I saw Casey, it was just the general 
solve the problem because you must remember, in February, we 
learned later that there was unaccounted-for funds in the 
February transaction but Khashoggi got paid. And so I was 
just hoping that once they analyzed that, they had not 
delivered all the parts and they had defective parts, that 
somebody would say, yes, let's complete this so Khashoggi can 
get paid and then we won't have problems with Ghorbanifar. 
That's what I thought, you know, would have been the result, 
you know. That would be the perfect result that they would 
analyze and realize that they had this problem not completing 
the contract. If somebody else brings it up, maybe they will 
review it and do it. 

Q Circling back on Hashemi, apparently you were 
asked about the sting operation in April of 1986, and 
according to Allen's notes, you told Allen that Ghorbanifar 
was not involved in that operation. 

A To my knowledge. He asked me that question. 

Q And then there's a reference, something to the 
effect that you said Hashemi had set up the Israelis with Sam 
Evans? 

A What I said was that Hashemi would do anything to 



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1 get rid of the indictment that he had, and I don't know 

2 whether I used the word "set up," but I said that was his 

3 goal in life was to get his indictment, you know, withdrawn. 

4 Q Did you have knowledge about what Hashemi had 

5 actually done? 

6 A No, none whatsoever. 

7 Q The reference here that you told them that 

8 Ghorbanifar had spent one and a half million of his own money 

9 on this project. Did you make that representation? 

10 A I think Ghorbanifar said that he was going to have 

11 to spend, I'm not sure of the amount, additional monies on 

12 the project. 

13 Q What knowledge had you had about Ghorbanifar' s 

14 investment of his own funds? Had he invested funds, to your 

15 knowledge? 

16 A No, but all I know is he had no money. He was 

17 always broke. 

18 Q There's also a reference that you told him on the 

19 22nd that Mr. Khashoggi had had the Canadians fly out of 

20 Europe to meet with him in the last few days. Is that true? 

21 A I think that the Canadians were very close to 

22 Khashoggi during these crucial days. I don't know whether he 



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1 asked him to fly. That I don't recall. 

2 Q Did you participate in any meetings with the 

3 Canadians? 

4 A No. 

5 Q What was Khashoggi telling you about them other 

6 than the fact they wanted their money? 

7 A They were trying to foreclose, you know, on his 

8 collateral, which was worth $35 million or $25 million, he 

9 owed them 10. He would have not only lost the 10, but he 

10 would have lost the differential. In fact, I even questioned 

11 him how could you have such an agreement whereby they 

12 foreclose and take it all? 

13 He said, well, that happens a lot, but you know — 

14 nonnally they get the money and the differential goes back to 

15 the party who put the collateral up after it had been paid. 

16 So I think he was talking about losing not only 10 but the 

17 whole collateral, which was about 25 or 30 million. 

18 Q There's also a reference towards the conclusion of 

19 his notes that you say a leak will occur and that McFarlane, 

20 Poindexter and North know everything. Do you recall 

21 discussing those items with you? 

22 A A leak will occur? 






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1 Q Yes . 

2 A You know, I don't know whether I actually said a 

3 leak will occur because I did not know a leak would occur, 

4 and I may have said to him that Poindexter and North knew 

5 everything because that's what Ghorbanifar told me. Now I 

6 don't know how I could say McFarlane knew everything because, 

7 you know — 

8 Q There's another reference here that you said a 

9 leak would not be good, especially for things south of the 

10 border. Do you recall discussing the impact of a leak on 

11 Nicaragua or anything else south of the border? 

12 A I said "south of the border," I didn't say 

13 "Nicaragua"? 

14 Q South of the border is in quotes, yes. 

15 A You know, I don't recall. I may have said it. 

16 Q Okay. I will tell you what. Why don't you take a 

17 quick look through Allen's handwritten notes made on the 22nd 

18 and read through it, see if it gives you any further 

19 recollection of what you would have discussed with Allen and 

20 Cave at that meeting. 

21 A All right, now, there's no way I would have said 

22 "latest deal started April of '86." I didn't know. 



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1 Q He is not the only one that says that. Mr. Cave 

2 says the same thing as having been discussed by you at that 

3 meeting, so isn't it a fact that by this time, you had 

4 discussed with Khashoggi what had happened and you knew that 

5 this deal had been done in April of '86 7 

6 A No. I never knew that. He had an April meeting 

7 with Amir and Israelis. I never knew about any meeting on 

8 the 2nd. I never said anything about the 30-day loan. You 

9 get paid after the shipment is made and they inspect it and 

10 then they pay it. 

11 The first five million, I never knew that. "I knew 

12 it was one and four and that's what they got paid. I never 

13 knew of any markup of a million. 

14 Q So what you are saying is that these notes by 

15 Allen, which apparently he was taking contemporaneously while 

16 talking with you, don't reflect things that you were telling 

17 him? 

18 A I never knew there was a $6 million payment in 

19 August and September. All I know is a million and a four 

20 million, and Khashoggi got paid five million and put up five 

21 million. It may be that they knew about it because through 

22 their intelligence or what, but I never knew. 

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1 Q All I can ask you to do is tell me where these 

2 notes differ from your recollection of what you and Allen 

3 were talking about. 

4 A It says "stayed at Nimrodi ' s house." We stayed at 

5 the hotel. 

6 Q Cave makes the same reference that you stayed at 

7 Nimrodi 's house, but that's not what you recall having told 

8 them; correct? 

9 A I may have been visiting his house in the daytime, 

10 but they took us to the Hilton Hotel and we stayed there. 

11 Q Okay. 

12 A First flight to point Tango. 

13 Q That would be Tehran. 

14 A That may be their code name. It is hard to read 

15 everything that clearly. 

16 I told them all about Hashemi because they asked. 

17 This says "believed the 15 million went to Nicaragua." I 

18 think what I said was that Gorba thought a substantial part 

19 of that went. I never said 15 million. Then there would be 

20 no money for whatever the transaction was. Gorba would not 

21 return Hashemi's calls. I was told that. That would have 

22 nothing to do with — I mentioned, I think, Hashemi's brother 




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was in Danbury prison. I may have. I don't think I said 
Hashemi set up the Israelis. That could have been the case, 
because I don't know. 

I see Delta is Damascus, I guess, and point Bravo 



Q Beirut. Point Bravo? 

A Bravo? 

Yes, I don't know what this is, I guess "pressure 
on Gorba" -- I don't know what that last word is. I guess it 
means until he gets it done. 

Q I think it is supposed to be unbelievable. 

A Okay. They tried to get him out 

Okay, yes, somebody 
called the PM's office and said we're not delivering because 
the minimum hasn't been paid, and that hurt Ghorbanifar, 
according to him, with the HM when they had already paid in- 
advance. 

Q This would be the Iranian prime minister? 

A Yes. He was in the hospital, okay? 'when I saw 
Bill on the plane -- 

Q Mr. Casey? 

A Yes, Bill Casey. Ghorbanifar told me that the 



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1 Iranians were planning more kidnappings or they were planning 

2 some activity. I don't think I used the word "kidnappings," 

3 and some factions were going to do that. I told Bill on the 

4 plane, I'm just telling you what I heard. 

5 Khashoggi was saying, you can't do anything, 

6 kidnappings, you know. In fact, it says the condition that 

7 he is involved that they do nothing to anybody, not only 

8 Americans, but nobody. It says "Roy's concept," "G" is 

9 "agency." Ghorbanifar? CIA? 

10 Q I don't know. It doesn't correspond to your 

11 recollection. That's what I'm trying to find out. 

12 A I was saying, you know, he released the two 

13 hostages, he received Bud in his elevation. Had they picked 

14 up Reed in Cicippio? 

15 Q As of that date? I believe so. 

16 A I know Ghorbanifar said it is people who are in 

17 the business — it is not his people, just trying to get 

18 money. Some of this I don't understand, but basically, it is 

19 a lot of things that we discussed. Ghorbanifar used to call 

20 Nir Adams. Really it was Tel Aviv, Adams was calling Tel 

2 1 Aviv . 

22 Now, solution to the pricing problem, two 



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shipments of TOWs, 500 TOHs and Zebras. I never heard of 
it. What I may have said was that they had agreed that, yes, 
it was overpriced and so we'll send 500 TOWs, I think, to 
offset the pricing problem. And that was what I had been 
told, but I never heard of Zebras and two shipments and 500 
TOWs and stuff like that. 

Q Well, on that score. Cave indicates that your 
suggested solution to the problem was to let Ghorbanifar 
handle the shipment of the remainder of the Hawk spare parts, 
that the proceeds from that would allow him to take care of 
the Canadian pressure, and that there would then be a ~ 
shipment of 500 TOWs for one hostage and another shipment for 
the second hostage. Do you recall proposing that? 

A Never said it at all. Our solution was just to 
complete this contract and if you want to work with somebody 
else, Ghorbanifar is finished, but just complete the 
contract. The thought of my solution was that we'll give 
hostages for shipments, you know — 

Q You were not proposing that? 

A No. I wasn't proposing anything other than to 
make partial shipment or refund the money or whatever, but I 
was — in no way did I do what you said. They would make a 



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partial shipment, Gorba said he could get another 5 million 
out, then there would only be 5 million they had to collect 
and it would take a lot of pressure off. Canadians believe 
money has been stolen. That they have been -- I can't read 
the word . 

Q "Swindled"? Is that the word? 
A Maybe that's it. Now he has this thing under 
Ledeen. Roy met once or twice; leaks would not be good 
especially with anything south of the border. This thing 
with Ledeen I can't understand. 

Q You can't relate to that comment? 
A We've always said we wanted to make money after 
peace was in the area. That was the whole reason to show the 
support for Khashoggi supporting Ghorbanifar. 
Somebody' s| 
Q Look like 
that mean anything to you at all? 
A No. 

Okay. 

Who isl 
The^^^^^Bl know^^^^^^^^^^^^^^K but 
We covered lots of it, either at that meeting or 




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at the first meeting. 

Q Well, these notes were taken by Allen during the 
course of the meeting on the 22ncl of October. You have told 
me the things that don't square with your recollection. Does 
looking at these notes give you any further recollection of 
what you discussed with him at that meeting? 

A No, I think, you know, we were eating and talking 
and eating and drinking and talking, and they would ask me 
questions and I would give them, you know, whatever reaction 
I had or what I had heard or whatever to try to get them as 
much input into, you know, the situation. 

Q Our documentary references to the October 22 
meeting are Allen Exhibits 81 and 82. 

THE WITNESS: Can we take a break? 

MR. KERR: Sure. 

(Recess. ) 

THE WITNESS: I want to comment with reference to 
the notes that he may have just picked a few words out where 
I said this could be a possibility or this or that, you 
know. 

MR. KERR: Sure. I understand. 



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1 BY MR. KERR: 

2 Q Now, after the meeting on the 22nd, apparently you 

3 called Mr. Allen on the 5th of November and asked him for a 

4 meeting on an urgent basis. Do you recall doing that? 

5 A I said I want to talk with him on the phone . He 

6 said, don't talk on the phone. Come and see me. 

7 Q What prompted the call? Why were you calling? 

8 A I think Ghorbanifar told me that Secord is deeply 

9 involved in this thing. — I'm trying to think. I think 

10 that was — that Secord was involved; this was the 7th? 

11 Q The 6th, I think, is when the meeting actually 

12 took place. 

13 A I met him at a hotel. 

14 Q Right. 

15 A I had a sandwich. I think that's the first time I 

16 brought Secord 's name up because I didn't know about it until 

17 then. Let me just see. On the 7th — 

18 Q Let me run through what Allen says. He says you 

19 called him on the 5th to request an urgent meeting in 

20 Washington; that you then met with him on the afternoon of 

21 the 6th at the Key Bridge Marriott Hotel. Does that refresh 

22 your recollection? 




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A Yes. 

Q All right, in terms again, what caused you to make 
that call? What had happened? Had Khashoggi said you have 
to do something? Why was it urgent for you to meet with 
Allen? 

A I'm not sure. I'm just trying to think. Is that 
the day when I gave him the Ghorbanifar's bank account 
number? 

Q Ves. 

A He asked me to get the number, and I got the 
number from Ghorbanifar, and he said, don't talk on thd^ 
phone, come down. So that's when I gave him the number and 
that's when I told him that I learned from Ghorbanifar that 
Secord is deeply involved in this transaction. I think at 
that meeting, you know, I disclosed the names of Fraser and 
Miller to him. 

Q Right . 

A I don't think I called him that urgent. I think I 
told him I have the Ghorbanifar number and he said, let's 
don't talk on the phone, come down, and that's why I went 
down, and then we probably rehashed the whole thing again 
about the pressure that Khashoggi was under. Talking about 






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1 retaining lawyers, I think, getting a lawyer in Washington. 

2 Q His notes reflect the following? 

3 A I did not know the name of who Adnan was talking 

4 to as far as legal counsel. 

5 Q The first item mentioned in Allen's notes of the 

6 conversation with you, something to the effect that unless 

7 payment is made, Canadians retaining law firm that handled 

8 case involving President Nixon have given Roy until Monday or 

9 will file suit. Oo you recall making that representation to 

10 Mr. Allen? 

11 A Well, I don't think that is clear. I think Adnan 

12 said they were going to retain lawyers, and you know, 

13 proceed. He was under unbelievable pressure. 

14 Q Do you recall identifying the law firm? 

15 A I did not know the law firm. 

16 Q Do you recall telling him it was a law firm that 

17 had a connection with President Nixon? 

18 A Well, the only law firm that I know of with Nixon 

19 is Mudge, Rose in New York, you know, and that name -- 

20 Q With regard to other things that he — in the 

21 notes he said you said you weren't certain against whom the 

22 suit would be filed. 






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A It would be against Khashoggi and Khashoggi would 
have to in turn sue -- you know, bring somebody else into it, 
whether it was Lake Resources, the government, somebody who 
had the money, and there's a question of who, you know. 
First of all, you can't just sue the government. You have to 
get permission to sue the government, is my understanding. 

Q With regard to this lawsuit, who told you that the 
lawsuit was going to be filed? 

A Mr . Khashoggi . 

Q What did Khashoggi tell you in that regard? 

A He said that they were going to retain Washington 
counsel . 

Q You say "they. " Talking about Fraser and Miller? 

A The lenders . 

Q Well, you identified the lenders in this 
conversation as Fraser and Miller. 

A Right . 

Q Were you telling Allen that Fraser and Miller had 
retained counsel and were about to file suit? 

A Khashoggi said they were going to retain counsel 
in Washington to begin proceedings . 

Q All right. Now, Allen in his notes says that you 



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1 gave the following direction, and it appears that you were 

2 suggesting that the United States pay $10 million into 

3 Ghorbanif ar ' 3 account at Credit Swiss at account number 

4 ^l^m^^ main branch Geneva, care of the name of a 

5 banker. Do you recall giving that suggestion to Mr. Allen? 

6 A I gave him the number because he asked me to get 

7 the number and I got if from Ghorbanifar and gave it to him, 

8 but in my own mind, I never dreamed that they would ever 

9 refund any money. The way to do it is to complete the 

10 shipment. 

11 Q Do you recall making a demand or a suggestion to 

12 Allen that the United States put $10 million into this 

13 account? 

14 A I said if you are not going to do it, maybe you 

15 are going to refund the money, but he asked for the account 

16 number I got it for him; he said he needed it. I did not 

17 demand that he put the money in. I gave him the account 

18 number because he requested it. He didn't have it from his 

19 intelligence and if they were going to do anything for him, 

20 they needed an account number. 

21 Q There's a fairly elaborate description of how 

22 Ghorbanif ar' s account had been attached by the Canadians. Do 



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you recall going through that description? 

A That his account had been attached? 

Q Who gave you that information? 

A Mr. Ghorbanifar. 

Q He told you that the account had been attached by 
the Canadians? 

A Yes. 

Q And he is talking about the same Canadians, Fraser 
and Miller? 

A Yes . The Canadians , yes . 

Q So you had had a conversation with Ghorbanifar 
about the Canadians? 

A Yes . He told me that his account has been 
attached, I think, by whatever it was, the Canadians. 

Q All right, when you did have this conversation 
with Ghorbanifar? 

A Probably on the telephone. I may have been with 
him. I don't show going anyplace in November other than the 
16th I went to Aruba, down to the Caribbean, and last time I 
was in London looks like it was the 11th, according to this 
here, so maybe it was on the telephone or maybe he had told 
me — he said his account had been blocked or they have done 

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1 something, they have blocked his account, attached his 

2 I account. The exact language I'm not sure, but his account 

3 was frozen in effect. 

4 Q All right, apparently during the course of this 

5 conversation, you told Allen that you had been led to believe 

6 that Director Casey was going to clean this matter up by 

7 early November. Do you recall relating that to him? 

8 A I don't know whether it was in those exact terms, 

9 but Casey was trying to help us and he told us, you know, sit 

10 tight until the end of — until November. 

11 Q And this was now November and you wanted some 

12 action, I take it. 

13 A Well, we wanted to know what was happening, you 

14 know. 

15 Q Do you recall characterizing Mr. Miller to 

16 Mr. Allen as being real sleazy and corrupt? 

17 A No. I said that they are tough lenders and they 

18 want their money, but "sleazy" is not a word in my 

19 vocabulary. I don't use it, I don't think I use it because I 

20 had only met Miller once, and that was in the lobby of a 

21 hotel. 

22 Q Do you recall discussing the swami, the California 



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swami, with Mr. Allen? 

A Yes . 

Q What do you recall in that regard? 

A I wa? asked the question about the swami and I 
told him that I think that Miller was an adherent to the 
swami 's religion. 

Q Let me show you Mr. Allen's handwritten notes of 
the meeting on the 6th of November. Let's go off the record 
to give you a chance to review them and we'll see if they 
give you any further recollection of your conversation with 
Mr. Allen. 

(Discussion off the record.) 
BY MR. KERR: 

Q You've had a chance to review Mr. Allen's notes of 
the meeting on November 6 . During the course of that review 
two items came up. There's a reference to the Bank of 
Montreal being the bank of the two Canadians, and the bank 
which had attached in some fashion or another 
Mr. Ghorbanifar's account in Switzerland. From your 
comments, I take it that you do not have any recollection of 
having mentioned the Bank of Montreal to Mr. Allen? 

A I don't recall the Bank of Montreal. I don't 



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1 think any bank was ever mentioned. 

2 Q The other item that you raised was the item 

3 related to General Secord. Mr. Allen's notes make reference 

4 to Mr. Secord as being involved in the financing of these 

5 transactions with North and you said that would not have been 

6 a comment that you made; is that correct? 

7 A I was told Secord was deeply involved. I didn't 

8 know that he was involved in the financing. I didn't know 

9 what his real role was. I knew he was involved. 

10 Q Who had told you that Secord was involved? 

11 A Mr. Ghorbanifar. 

12 Q Do you remember what more he told you in that 

13 regard? 

14 A No, I think that's all he said because I think he 

15 knew that by mentioning the name, it was enough for the 

16 people involved. 

17 Q Coming back to the $10 million, there's a 

18 reference to pay $10 million in these notes, and Mr. Allen's 

19 typewritten summary of the notes says that you said that 

20 somehow $10 million should be paid into Ghorbanifar 's account 

21 at Credit Swiss and gives the account number. So we're 

22 clear, were you or were you not telling Mr. Allen that to 



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avoid publicity resulting from a suit to be filed by the 
Canadians, arrangements should be made to pay $10 million 
into Ghorbanif ar ' s account? 

A No, I never said that. The reason we have the 
account number is because Mr. Allen asked if I could get it. 

Q Why would Mr. Allen want the account number? 

A He just wanted to know Ghorbanifar's account and I 
spoke to Ghorbanif ar and he gave me the account number. 

Q You don't recall Allen telling you any other 
reason why he wanted that account number? 

A He just felt he needed it for his intelligence. 
He asked for it. I said, sure, I will try to get it for 
you. I called and Ghorbanif ar gave it to me. 

Q You do not have a recollection of telling Allen on 
the 6th of November that in essence, time had run out, the 
case would be going public by the next week or so when the 
Canadians were going to file suit and the only way to avoid 
this operation being exposed to the public was a payment into 
Ghorbanifar's account of $10 million? 

A No. If anything, I told him, you know, the way to 
do it is to make a partial shipment, you know, deliver on the 
contract. I never told him to pay money. He asked for the 



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1 account. It is not for me to tell Allen or anybody what to 

2 do. I can only make suggestions. The alternative that they 

3 have is to complete the contract or make another partial 

4 shipment and make a settlement, you know, but — 

5 Q All right, are there any other items in those 

6 notes which are at odds with your recollection of what you 

7 would have told Allen? 

8 A Well, he has a few words, okay, and I don't 

9 understand a lot of his handwriting, and I don't know, you 

10 know, I can go through it -- 

11 Q I'm really looking for those things of 

12 significance that strike your eye. If there's anything there 

13 that you can say, I didn't say that or, you know, I don't 

14 recall saying that. That's what I'm looking for. I'm trying 

15 to find out if this memorandum ia basically an accurate 

16 reflection of what you and he discussed at that meeting? 

17 A I don't know what the L.A. Times thing says. Knew 

18 three or four weeks. I don't know what that is? 

19 A You don't remember anything about a story in the 

20 Los Angeles Times or conversations that you were having with 

21 the L.A. Times at this point? 
22 



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Q November 6, 1986. 

A This is three or four weeks ago. 

Q That would have been early October 1986? 

A And in reference to what? 

Q I don't know. I wasn't at the meeting. 

A Certainly nothing to do with this. This was still 
very private. How did the L.A. Times know? 

Q I don't know. Did you have any knowledge of the 
L.A. Times being onto this story as of October of 1986? 

A I think the L.A. Times may have been onto a story 
regarding Hashemi and they may have come to me and asked me 
some questions about it. That may have been it, but as far 
as them knowing about this, I don't think anybody — that 
would be October 7 . 

Q Mid-October. 

A I think at this meeting, you know, he was asking 
who would be sued. I said I don't know, the lawyers will 
determine that, but if Khashoggi gets sued he would have to 
bring in Lakeside and whoever else, whether it be the U.S. 
government or somebody, you know. His view was that Nir 
always paid into this account; it is a U.S. government 
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Q What Nir said was what Khashoggi told you he said? 

A In here, when you say "Canadians," this is 
conversations with Khashoggi because I did not talk to the 
Canadians, so he, rather than -- he is using Canadians where 
I may have said Khashoggi said this, that the Canadians would 
do this, so he has eliminated and put a few words in it. 

Q I have no problem with that. These are his notes 
for purposes of writing a memorandum. I'm putting them in 
front of you to see if I can either refresh your recollection 
or find out where your recollection differs from his notes. 

A It says "G told Canadians this last week." I 
don't know, I just don't know what it means. It says 
"Nice." Maybe Nice was in Ghorbanifar when he spoke to me. 

Q Ghorbanifar was in Nice? 

A Maybe. I don't know. Well, it was always the 
Canadians were going to sue Mr. Khashoggi. Mr. Khashoggi, 
then, to defend himself, would have to bring in Lake 
Resources and the appropriate parties, and that would be 
determined by lawyers. I don't know what --^^^^^^^Hissue, 
I just don't know. 

Q You don't recall talking to him about the fact 



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that once Secord's name came up it would expose the 
Nicaraguan efforts of the administration at the same time the 
Iran initiative is exposed? 

A I really don't recall because I didn't know much 
about Secord at all until I saw the hearings, and his role 
was not given to me until Ghorbanifar told me just before 
going down. 

Q All right, let's not spend any more time on this 
unless there's something that either refreshes your 
recollection or is other than your recollection. 

To make sure we have it covered in the recofd, the 
documents we have of the meeting on November 6 are Allen 
Exhibit 83 and Exhibit 84. 

As of November 6, 1986, had you had any 
conversations regarding the Khashoggl money problem with 
Michael Ledeen? 

A I think I chatted with him once when I was in 
London and he was in Paris for a minute on the phone. He was 
at somebody's house. 

Q This would be in October — 

A I don't recall. 

Q Do you recall the nature of the conversation? 



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A No. It was just I was talking with somebody else 
and he got on the phone for, you know, 30 seconds. 

Q Do you have a recollection of Ledeen talking to 
you in this period of time and suggesting to you that these 
problems were going to be worked out and you and 
Mr. Khashoggi ought to sit tight for a while? 

A No. I don't think anything like that. It was, 
you know, 10 seconds. It was a very quick conversation, and 
he said, Mr. Ledeen wants to say hello to you when I called 
and that was it. I don't recall what he said. 

Q As of this period of time, had you had occasion to 
be with Ledeen again? Had you had dinner with him or done 
business with him? 

A No. 

Q After the meeting with Allen on the 6th of 
November, what was the next involvement that you had relating 
to this matter? 

A Well, I think — on, like, November 22 or 23 — 

Q How about the 24th? 

A Or 21st, okay, there was in the newspaper an 
announcement by the CIA that they had been paid $12.2 million 
in the Iran transaction. So on Monday morning, I called 



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Mr. Cassy up, MIT TaTcy up, and I said, Bill, your numbers 
are all wrong. You were paid a lot more than that and he was 
all shook up. What do you mean, he said, can I please come 
and see hin and bring the information that I have. So he 
said, come down late in the afternoon; so I went down, went 
to Langley. I don't know, I got there maybe 5:00. 

Q This would be on the 24th? 

A 24th of November. 

Q Right. 

A And we then went through the dates Khashoggi put 
his money in and the dates he got paid. 

Q "He" being the CIA? 

A Yes, and like on February 10, Khashoggi paid $10 
million and he then was paid on the 11th $3,250,000 or 
whatever it was and on May 15 Khashoggi put $15 million in, 
and on May 16 he got paid $6,250,000, and there was 
unaccounted a difference of $15 million, and it was at that 
point for the first time I knew there was an unaccounted 
difference, and as of that point I said Ghorbanifar thinks 
some of this unaccounted-for difference has gone to the 
Contras . 

Q You had already told Allen and Cave that? 



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A But in the first meeting with Casey, it was just a 
general — what the problem is and hope I can help Khashoggi 
to get it resolved, but it was on the 24th is when after 
calling and saying listen, your numbers are all wrong, you 
were paid a hell of a lot more than that; and he said what do 
you mean, are you sure, and I said yes, so I said can I 
please come down with the information I have? 

We went through the dates of Khashoggi 's payment 
and the dates he got his money, and Khashoggi paid $25 
million, and he got $10 million, so there was a difference of 
$15 million, and he said he doesn't know what the money is 
whatsoever or anything like that. It was at that point in 
time and he got his papers, to double-check everything, and 
to see the press release or whatever they sent out, and it 
was at that point in time he tried to call Don Regan; and Don 
Regan wasn't there, and then he called North on the phone and 
said, there's a guy here says you owe him $10 million, and 
North said tell the man that the Iranians or the Israelis owe 
them the money. Then he called somebody at CIA archives or 
something, to find out what he has on Lake Resources, the 
account, and the response was to me that it came into our 
system from Furmark. We got the name in the system, and then 



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he talked for a while to Cooper at Justice. 

Q What did he talk to Cooper about? 

A About Lake Resources, and then when it was over he 
said, would you like to talk to Meese about the money? I 
said Bill, you are the government. Here's the problem. 
Khashoggi is owed the money and I'm dealing with you. You 
are the government, and someone has to resolve the problem 
for Khashoggi. He believes that the government was involved 
in the transaction. He was led to believe that, and the 
meeting was over basically. 

Q What did Casey say he was going to do about it, 
though? 

A He didn't say anything. I said, you know, you 
have the problem. You know the problem. So then of course 
he got money, 2.2 like the end of October or November for the 
second channel's business, so the 10 of the 12 he announced 
was from Khashoggi and the 2 was from the second guy, so he 
could see where Khashoggi paid 15 and 10 or 25, he got 10, 
left 15 unaccounted, and we did say maybe there's some 
transportation costs, but not 15 million, he agreed; but he 
said, Roy, I don't know where the money is. I don't know 
what's happened to it. That was it. Then of course I went 



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1 home and next morning I saw it on television that the 

2 president and Meese had made an announcement. 

3 Q About the diversion? 

4 A About the diversion, yes. 

5 Q You had a series of telephone conversations with 

6 Casey after the 24th, did you not? 

7 A I had one where he told me there was only $30,000 

8 in the account. 

9 Q When was that? 

10 A I don't recall. 

11 Q Couple of days after the 24th? 

12 A It was a couple days after that. 

13 Q He called you or you called him or what happened? 

14 A I think I had called him, because I had been 

15 subpoenaed, and I said I have been subpoenaed, so he said you 

16 just follow us, you know, in this thing and then by the way, 

17 there's only $30,000 in the account. I'm not sure it was 

18 that conversation, but — 

19 Q Did he say how he learned about the $30,000 in the 

20 account? 

21 A No, I didn't ask him. He just said there's only 

22 $30,000 in the accouniL, * r\. r^ X~' ' r," ,\ 



171 



UNCLASSIFIED 



171 



Q How many other conversations did you have with 
Casey after the 24th? 

A He called me once to get the name of -- called me 
at home to get the name of the German company which has its 
technology for cogeneration for atmospheric fluidized 
combustion burning, and he may have called me one time to -- 
or maybe it was the same conversation, the president was 
making a statement. 

Q Anything further said in those conversations about 
the money problem? 

A No. It was just, you know, very short. 

Q Did you have any other occasions to meet with or 
talk to Mr. Casey before his death? 

A No, I don't think so. The last time I saw him was 
on the 24th. Other than these telephone conversations, I did 
not go and see him. 

Q Did you have any further conversations or meetings 
with anybody else from the CIA? 

A Allen called me. I think it was in '86. 

Q '86 or '87? 

A '87, I'm sorry, and I was up in Nova Scotia, in 
Nova Scotia seeing some people, and I returned the call and 






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1 he said one of the CIA overseers or whatever the boarders 

2 that oversees it wanted to talk to me, so he wanted to let me 

3 know that he was going to call me; and I said I would be 

4 happy to talk with them. He said they want to know about 

5 your dealings with the CIA. But I never got a call from that 

6 person . 

7 Q You never got a call from that person or entity? 

8 A No. When talking with Allen, I commented on the 

9 Senate intelligence report, which quotes me as saying that 

notes 

10 the l iwB^ m went to Nir, you know, and he said he wondered 

11 where that came from. He said he gave the notes to Cave 

12 because he to go on a trip and Cave did the report, but he 

13 said he doesn't remember that, you know, in the meeting on 

14 the 22nd, and that was all. I think someone has been in the 

15 hospital or something, and that was the end of the 

16 conversation and I haven't heard from him since, and I 

17 haven't called him and no one from the overseer board 

18 contacted me. 

19 Q Any other contacts with CIA personnel? 

20 A No. 

21 Q Now, in December 1986, you met with Khashoggi to 

22 review the financial transactions in order to help you 



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1 prepare for your testimony before the House Intelligence 

2 Committee. Do you recall that meeting? 

3 A Yes. 

4 Q What did you review with Khashoggi at that time? 

5 A Well, I had been to the Senate beforehand. 

6 Q Right . 

7 A The Canadian ambassador wanted to see me, and I 

8 was going down to see the House Intelligence Committee, and 

9 so I said, I told him I said I will come and see you when I 

10 am finished, so I told Khashoggi I'm going down to see the 

11 Canadian ambassador. Tou have to tell me about the role of 

12 the Canadians, exactly what it is, and he then told me that 

13 whereas with the Senate intelligence, we talked about the 

14 Canadian investors, when I went to the House intelligence, I 

15 stated what Khashoggi had just told me the day before or two 

16 days before or whatever, that the Canadians had facilitated 

17 the loan for him through a Cayman Island financial 

18 institution without giving me the name of the institution, 

19 and that Miller and Fraser were working with him, they had 

20 facilitated the loan, which he had put up collateral of a 

21 company which had shares in Barrick and Burke, and the 

22 collateral was worth 25 million when it was put up and now it 




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1 was worth about 35 million. That's what I told the House and 

2 the Canadian ambassador. 

3 Q When you used the word "facilitate," what did you 

4 understand that to mean? 

5 A Help arrange, you know, arrange for the loan, do 

6 the paperwork, whatever. Facilitate. Get the loan for him. 

7 That's the word he used, facilitate. 

8 Q It was or was not your understanding that they had 

9 utilized monies under their control to make this loan? 

10 A He just said that they facilitated the loan. Then 

11 later, okay, he said that they were handling money for a 

12 Saudi group, which that money was used for this loan. 

13 Q Later being when? 

14 A In '87. 

15 Q When in '87? 

16 A You know, about the time of the article in the New 

17 York Times. 

18 Q That would be February of '87? 

19 A Is that the date? Yes. 

20 Q And give me a little more detail, what did he tell 

21 you at that point about the Canadian — Fraser and Miller 

22 were doing what? 



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A They were working for or they controlled money or 
did something for a Saudi group of friends of his . It was 
that money which was the money that was used. 

Q That money being the $10 million? 

A Right. 

Q All right. Did he give you any indication of what 
entity had actually put up the money? 

A No. 

Q And you continued to understand that the 
collateral for the loan was the Barrick equity? 

A It was Barrick, but through another company.. I 
forget the name of the company. 

Q I understand. 

You met Mr. Fraser for the first time in March of 
1987? 

A In Paris, yea. 

Q What were the circiimstances that caused you to 
meet Fraser? 

A I was at Khashoggi's apartment, and he was there 
having a meeting, and I was introduced to him and I said two 
words to him. 

Q You didn't have a chance to chat with him? 




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1 A No. 

2 Q How about Mr. Miller? 

3 A I met him a few times at Khashoggi's apartment. 

4 Q Have you had any discussions with him about his I 

5 role in these transactions? 

6 A No. 

7 Q None? 

8 A No. 

9 Q Did anyone — 

10 A He has always asked me, okay, where did I get his 

11 name from, and I said, Mr. Khashoggi. Who authorized, 'you 

12 know, for me to use Miller and Fraser's name, and I told 

13 him. He has asked me that a few times. 

14 Q All right, I think we're almost done. Let me pick 

15 up a couple other things. 

16 A The collateral he put up was in another company 

17 that owned shares of Barrick. 

18 (Discussion off the record.) 

19 BY MR. KERR: 

20 Q An article appeared March 10, 1987, out of Paris 

21 by the New York Times of an interview that you and 

22 Mr. Khashoggi gave to a New York Times reporter. Do you 



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recall that interview? 

A I didn't give an interview. 

Q Were you present when the interview was given? 

A Yes. 

Q And you did make comment from time to time to the 



reporter? 
A 
Q 
A 



No. 



You just sat there? 

It was not for me to make any comments to what 
Mr. Khashoggi was saying. 

(Discussion off the record.) 

BY MR. KERR: 
Q Let me ask you some things that supposedly 
happened during the course of that interview. The article 
says Mr. Khashoggi said at the interview that he masterminded 
a deliberate deception of Mr. Casey last fall when Mr. Casey 
was still head of the CIA, by inventing a group of angry 
Canadian investors who were supposedly threatening to 
disclose the administration's secret arms sales to Iran 
unless they were immediately reimbursed for a $10 million 
contribution to a $15 million arms sale to Iran last May. 
Did Mr. Khashoggi make that statenie.nt at the interview? 



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at statemen 



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IS 

16 

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21 

22 



A I think Mr. Khashoggl said that the Canadians were 
not the investors but that a Saudi friend, it was his money 
that was used through the Canadians . 

Q Did Khashoggi tell the reporter that Mr. Casey had 
been deliberately misled? 

A I don't recall those %ford8. 

Q Did Mr. Khashoggi tell the reporter that there 
were in fact no Canadian investors? 

A I think he said it was — that they were not 
investors, it was his Saudi friend trtiose money was used, but 
they were used through the Canadians. 

Q All right, so your understanding of trtiat was being 
told to the reporter is the Canadians were in fact involved? 

A Right. 

Q But in the capacity of being — 

A Facilitators. 

Q Facilitators and managers of the money of this 
Saudi investor. Who was the Saudi investor? 

A I don't know. 

Tou have never been told? 
Never been told. 



Mow the interview, according to the newspaper, was 



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set up by you . 

A Well, Safire, who I know from, you know, John 
Shaheen days and Bill Casey days, had called and wanted to 
have an interview with Khashoggi, and Khashoggi said sure, 
have him come over, and he arrived and Adnan met him. 

Q You were there? 

A Yes. 

Q The thrust of the story is that Khashoggi had 
engaged in a scam, a deception, crudely put, a blackmail 
attempt using you on Casey. Has that the story that 
Khashoggi was trying to put out at that time? 

A I don't believe that when I went to see Casey that 
what he was telling me was nothing but the truth, because he 
was under unbelievable pressure. The Canadians, you know, 
had the collateral and they were, you know, trying to get 
paid; whether they were acting on behalf of somebody, I only 
learned that when I went to visit the Canadian eunbassador. 
Now I have learned that it was a Saudi, the source was from a 
Saudi friend of his through the Canadians . 

Q Is it your understanding today that Mr. Khashoggi 
had indeed been threatened with a lawsuit by these Canadian 
investors in October, November of 1986? 




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1 A I believe that. I believe that he was under great 

2 pressure. 

3 Q' No, I'm not talking pressure. Had a lawsuit been 

4 threatened? 

5 A He told me. 

6 Q Does that continue to be his story? 

7 A He has — his position today is that with all of 

8 the hearings going on, that the truth will come out and that 

9 he will get his money back. 

10 Q Okay — 

11 A And he has I think since refinanced the $10' 

12 million loan. I'm not sure if he has done it completely or 

13 partially or what, but the pressure is off. 

14 Q We have deposed Mr. Fraser. He denies any 

15 involvement whatsoever with a loan related to the Iran arms 

16 transaction. The only basis you have for believing 

17 Mr. Fraser to be involved, I take it, is what Mr. Khashoggi 

18 has told you; is that correct? 

19 A Tes. 

20 Q Tou have no independent knowledge of that? 

21 A No independent knowledge. Other than I think 

22 Ghorbanifar knew about their involvement. 



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UNCUSSIFIEO 



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Q And related their involvement to you? 

A Yes I think so, yes. I mean — 

Q Ghorbanifar's knowledge in all likelihood is based 
on what Khashoggi told him; right? 

A Somebody froze the account. 

Q He told you that somebody froze his account; is 
that right? 

A Yes. 

Q He told you the Canadians had done it? 

A That's right. 

Q You yourself don't know whether his account was 
ever frozen; is that correct? 

A Whatever I have been told —I'm trying to give 
you everything I know, same thing I did with the CIA when I 
visited with them, everything I know. I was, as somebody 
said, a messenger. I was trying to, you know, assist my 
government in everything I knew that could help them in this 
transaction. 

Q All right, when was the last time you spoke with 

Mr. Khashoggi? 

A I spoke with him today. 

Q Did you speak with him regarding matters you and I 



ONCUSSinEi] 



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1 have discussed today? 

2 A No, I told him I'm going down and I told him that 

3 I don't have a lawyer, and he said, well, you know, you've 

4 got nothing to worry about. Just tell them everything you 

5 know. You don't need a lawyer. 

6 Q Did you and he discuss anything about the 

7 substance of your testimony? 

8 A No, definitely not. Definitely not. 

9 Q In preparation for today's testimony, did you 

10 discuss the Canadians with Mr. Khashoggi? 

11 A No. 

12 Q Have you had occasion to be interviewed by the 

13 independent counsel or appear before the grand jury that the 

14 ^-MMOTCcounsel is utilizing? 

15 A No, I spoke with somebody at independent counsel 

16 and they said they just wanted to have the bank statements, 

17 show what happened to the money that I got from 

18 Mr. Khashoggi. They didn't know about the money from 

19 I Ghorbanifar. 

20 Q Okay, with regard to the independent counsel then, 

21 the only conversations you have had with him relate to these 

22 bank statements; is that right? 



IINCLA^^^R'^Q 



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1 A That's all. 

2 Q Have you been interviewed by the FBI on these 

3 matters? 

4 A No. 

5 Q Now, apart from the $60,000 payment from 

6 Ghorbanifar that we have looked at earlier today, have you 

7 ever received any other monies from Ghorbanifar? 

8 A No. 

9 Q And apart from the $80,000 plus payment and the 

10 $8000 expense reimbursement from Khashoggi, are there any 

11 other monies you received from Khashoggi in 1986-87? 

12 A I don't believe so, but I will double check it. 

13 But I don't believe so. 

14 Q How about this year? 

15 A No, I don't believe so. Off the record. 

16 (Discussion off the record. ) 

17 BY MR. KERR: 

18 Q I understand. To make things as clear as I can, 

19 you do not attribute any money you received from either 

20 Ghorbanifar or Khashoggi at any time to the Iran arms 

21 transactions; is that correct? 

22 A Ghorbanifar, you saw where I got the money from. 



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UNCUSSiriFl! 



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1 Khashoggi sent me the money. The fact that it may have come 

2 from the transaction, I don't know where he got the money 

3 from. 

4 Q But there is no relationship between any payments 

5 that you have received from Ghorbanifar and Khashoggi and 

6 your involvement in the arms transaction? 

7 A Definitely not. 

8 Q Do you have Icnowledge of the Canadians Fraser and 

9 Miller making any effort to get Khashoggi to change, modify 

10 or otherwise vary his story about the pressure that they 

11 brought to bear on him? 

12 A I don't know. 

13 Q Khashoggi has never discussed that with you? 

14 A No. 

15 Q You are aware, are you not, of an interview that 

16 Manny Floor gave a series of Midwestern newspapers about a 

17 trip to the Cayman Islands in March of 1986? 

18 A I never knew he went to the Caymans. 

19 Q Did either Mr. Shaheen, Robert Shaheen, or 

20 Mr. Khashoggi ever talk to you about their reaction to 

21 Floor's statements in the newspaper? 

22 A Never. 



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Q You are not familiar with expressions of dismay or 
disappointment that Mr. Shaheen made to Mr. Floor after that 
story was published? 

A No, no, but off the record, he is always attacking 
anybody , you know . 

Q Robert Shaheen is? 

A But 1 don't know about what was in the press, and 
I have never seen, never heard anything about it. 

Q The reason I raise it is that story said quite 
bluntly — and we've since deposed Mr. Floor — that Fraser 
and Miller were in the Cayman Islands, that the 10 million 
was loaned at that time, specifically for the Iran arms 
transaction, and Mr. Shaheen apparently reacted unhappily to 
that story once it came out, but that has not been discussed 
with you? 

A I have never heard it before this time. 

Q 7ou were interviewed by the Royal Canadian Mounted 
Police? 

A When I met with the Czmadian ambassador, they came 
in and asked me lots of questions . 

Q Do you recall telling them anything different from 
what you have told me today? 



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BNCIASSIRED 



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A None whatsoever. 

Q Old they ask you anything different from what I 
have asked you today? 

A They had a list of names and companies which they 
asked what I knew about, and most of them Z never heard of. 

Q All right. Have you had any connection with 
Vertex? 

A 

Q 

A 

Q 



I 



No. 

Tou have not? 
None. 

Have you had any connection with any entities 
o%med by Miller or Fraser? 
A None . 

Q Has Khashoggi offered you any monetary reward if 
your efforts to obtain repayment of this money came to 
fruition? 

A Nell, he once said trtien Z get the money, I'm going 
to give you a nice bonus. 

Q Did he put a percentage or price tag on the bonus? 
A No, he said at least count on a htuidred thousand, 
but I hope he gets the money back. 

Q And as to the accosmiodation that he has reached 



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with the Canadians or whomever, you don't know the details of 
that accommodation? 

A No. 

Q Give roe one minute and I think we can get you get 
out of here. 

(Discussion off the record.) 
BY MR. KERR: 

Q Have you had any dealings with Euro-Commercial? 

A No. 

Q You have not? 

A No . 

Q Are you familiar with the company? 

A I have just read in the press. 

Q Apart from Casey and the other CIA folks that you 
had discussions with, did you discuss these matters with any 
other U.S. government official? 

A No. 

Q No? 

A NO. 

Q Now, we asked you to produce certain documents to 
us . Am I correct that you have produced all documents that 
were responsive to the subpoena? 






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1 A Tes . 

2 MR. KERR: Okay. I think we're done. 

3 (Whereupon, at 4:35 p.m., the deposition was 

4 concluded.) 
5 
6 
7 
8 
9 

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NOTARY PUBLIC 6 



CERTIPVA^T'or NOTARY POBLIC t REPORTER 18 9 

I, KATHIE S. WELLER the officer before whom 
the foregoing deposition was taken, do hereby certify 
that the witness whose testimony appears in the 
foregoing deposition was duly sworn by me; that 
the testimony 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 counsel 
employed by the parties hereto, nor financially 
or otherwise interested in the outcome of this action. 



Notary Public in and for the 
District of Columbia 



My Commission Expires NOVEMBER 14, 1989 



W 



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I 

i 






July 1. 1985 



Dear Mr. McFarlane: 

Since the early part of this year, I have had a number of approaches 
from Iranian officials who, although they do not admit to being disloyal 
to their government, believe that It is being forced Into policies Mrhlch 
are taking their country into even deeper chaos than it is already in. 
For reasons which will be clear to you once you find time to read the 
attached paper, I have not gone as far as I could have gone in the 
development of these contacts, but I have managed to channel them 
through a single senior individual who is in charge of Iranian intell- 
igence in Western Europe. 

The remarks of this individual begin on page 33, following an e.xplana- 
tory note by myself on page 32. They consist of a translation (from 
French into English) of a report he gav« mc explaining his conv^tion 
that the USG is 'profiting' from the present situation in Iran, and the 
Iraq Iran war; a report (translated from Farsi into English) outlining 
the current political divisions in Iran; an abbreviated transcription of 
^ taped conversation he had with me on the subject of how he and his 
colleagues are now in desperate need of 'outside help* which must 
come from one such as myself rather than from the CIA or some other 
Western intelligence agency. These papers I would treat as "Confiden- 
tial* according to your government's system of security classification. 
The others in my possession, which I will convey to you in the event 
you find interest in the ones I now enclose, should be regarded as 
TOP SECRET, and shown to others in your government on a strict 
"Need to Know" basis. 

As for blue bound booklet as a whole, I have put it together, with the 
Iranian materials (Part III) as part of it, because 1 would not want 
you have you read these materials except in a conte.xt wherein I have 
an opportunity to explain the premises which underlie m^ present 
tUaking. There is a question here of perspectives, and you will 
^fi^eciate that mv own, rather than those of the Iranians, .ire the 
^Bl which determine what "I will and wilt'liol be willing lo do in 
PP^ing the role which they envisage for me. 

While I am at it, let me say that I have followed from afar your own 
role .in your government's current crisis. As you will sjee from the 
attached paper. I am not entirely in agreement with it. but I do ad- 
mire the competence you are showing as you apply it. 



With mv verv best wishes, I am 



UNCLniiW 



Sincerely yours. 





Adnan M. Khashoggi 



191 



"90^ 



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UNCLASSIFIED 



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'iS^u — J^_ 



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;-*>— V-Ai».->»*— ^ *»>vi«i?>< .^•-'^ -■■--»■ -^ ■'^'' 








%*<^ 















UNCUSSIFIEO 



PanialW Oeciasylied/F.eleasea on IftfCJ W5 
under pfcvi5io'iS oi E 'JjtS 
by K jotinson National Seuu^ Council 



5^5® 



192 



yNCUSSiFlES 

ROY M. FURMARK 
200 HICKS STREET 
BROOKLYN, NY 11201 



February 18, 1987 



Senator David L. Boren 

Chairman 

Senate Select Committee on Intelligence 

Washington, D.C. 20510 



Dear Senator Boren: 



The following sentence which appeared in the Senate Select Committee on 
Intelligence - Report on Preliminary Inquiry - "According to the memorandum, 
Furmark also presumed that $2 million of the $8 million fjaid by the Iranians to 
Chorbanifar went to Nir, as agreed to at a meeting among the financiers, Chorbanifar, 
and Nir in May." is not true and was never said by me. I know of no meetings 
between Financiers (Khashoggi), Chorbanifar, and Nir in May or at any time in 
1986 and was never told by anyone of any such meeting(s). 

I have always stated that Mr. Khashoggi was paid eight million dollars by 
Mr. Chorbanifar after he received the funds from the Iranian Covernment in the 
summer of 1986 and that Mr. Khashoggi is still owed 10 million dollars. This was 
stated by me in my meetings with Mr. William Casey, Mr. Charles Allen and Mr. Ceorge 
Cave. Furthermore I testified to these facts before the Senate and House Intelligence 
Committees. 

I was never asked in the Senate or House Committee hearings about the above 
quoted sentence. Had I been asked by the Senate Committee I would have flatly 
denied ever making such a statement which to the best of my knowledge is not true. 
Furthermore, Nir was never mentioned in the October 22, 1986 meeting. 

I am surprised that I was not, contacted about this sentence prior to publication 
in view of my testimony to your ,comrqittee. 

I would greatly appreciate it if the Committee would review this matter and make 
the appropriate revision to the report. 



Very truly yours. 



f Released nnJltl^J^S 
iv K jotifison Nalionji SccM, Council 



Roy M. Furmark 

UNCUSSIFltu a^ 




193 



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4 

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\>ia^' 



mi: 



DEPOSITION 
RICHARD B. GADD 

Friday, May 1, 1987 



Select Committee to Investigate 
Covert Arms Transactions with Iran, 
U.S. House of Representatives, 
Washington, D.C. 



The deposition convened at 2:45 p.m. 
Rayburn House Office Building. 



in Room 2226, 



Present: Kenneth A. Lazarus and Daniel Q. Grief, 
counsel to Mr. Gadd; David Faulkner, Investigator, 
Senate Select Committee; Kenneth R. Buck, Assistant 
Minority Counsel, House Select Committee; Ken Ballen, 
Associate Counsel, House Select Committee; and 
Donald Remstein, Investigator. 



\^C 



CjDopy no <?<_ 



-^F- 



:3 



DPIEs) 



TOR^^HRET 



82-708 0-88-8 



194 



TOP 



S^P^T 



1 Whereupon, 

2 RICHARD B. GADD 

3 having been first duly sworn, was called as a witness herein, 

4 and was examined and testified as follows: 

5 MR. BALLEN: THe witness has been worn. Go ahead. 

6 MR. LAZARUS: For the record, I would like to, 

7 number one, indicate that Mr. Gadd ' s testimony here today, 

8 as well as previous interviews conducted by the staff 

9 beginning on the day when he was first granted immunity, have 

10 been compelled within the meaning of the First Amendment, 

11 and that I have been advised, which I would appreciate your 

12 corroborating, that he has been under subpoena since well 

13 before that time, and since the date of the original 

14 subpoena has been complying with that compulsory process, 

15 and if we could introduce the subpoena into the record. 
15 MR. BALLEN: I don't have the subpoena with me. 
17 MR. LAZARUS: If you would merely corroborate 
■\Q my statement. 

19 MR. BALLEN: Right. What I would like to say is 

20 that this has been done pursuant to an order signed by 

21 United States Chief District Judge Aubrey Robinson compelling 

22 Mr. Gadd testify under Section 6005(b) of Title 18, United 

23 States Code, and will make the order or a copy thereof 

24 exhibit number one. 



TORx^RET 



195 



TOf^^igiRET 



(Whereupon, the document referred 
to was marked for identification 
as Gadd Deposition Exhibit 1.) 

MR. LAZARUS: The second point I would like to 
make for the record is that although this is not a judicial 
proceeding, and I am not aware of your procedures, I would 
like agreement that we will conduct the deposition in terms 
of future use of the deposition as if it were being 
conducted under the Federal Rules of Civil Procedure, so 
that save for questions which might involve some 
privilege, attorney/client privilege, I will not interpose 
any objections, but that for future purposes I would reserve 
whatever rights as to the form of the question or as to 
whether or not the relevance of the question or other objection 
that might be lodged. 

MR. BALLEN: That would be fine. Let's proceed. 

The rules of the committee provide in terms of 
any future use of the subpoena that any objections as to 
questions posed today you can raise with me, and if they can't 
be resolved, they have to be referred to the Chair ultimately. 

MR. LAZARUS: Would you explain that to me again? 

MR. BALLEN: Since the procedure of the committee, 
if there is an objection to a particular question — why 
don't we proceed today. If you object to a question, we will 
not ask it today. You will raise your objections. 



T^f&CBEJ: 



196 



TOP ^gj^ , 

1 MR. LAZARUS: For purposes of future proceedings, 

2 I don't want to interpose at this point in time, I don't 

3 think it would be fruitful to interpose objections that go 

4 to the form of the question. Indeed, I don't know whether 

5 or not I have a right to interpose such objections here. 

6 I would just like to make that point on the record 

7 for purposes of any future proceeding. My point with 

8 respect to Mr. Gadd's answers before this committee that I do 

9 not want to instruct him to answer in any way that is 

10 confining, in the sense of providing adequate information 

11 to you. 

12 Normally, questions might be posed that would 

13 require a yes, no or I don't know answer. I don't want to 

14 stifle the proceeding and allow you to have a free discourse 

15 with Mr. Gadd, and I just want to make that a matter of 

16 record. 

17 The third point that I would make is I am advised 

18 by the reporter that you are not authorized to provide me 

19 with a copy of this record, but that Mr. Ballen has 

20 indicated that I will be provided by him a copy of the record. 

21 MR. BALLEN: Yes. 

22 MR. LAZARUS: That is all I have. 

23 MR. BALLEN: With that, let's proceed. 



24 
25 



TOR^CRET 



197 



T0P^\6ECRET 



EXAMINATION 
BY MR. BALLEN: 

Q Do you want to give your full name for the record? 

A I am Richard B. Gadd, g-a-d-d. 

Q Mr. Gadd, how long did you serve in the Armed 
Forces of the United States? 

A Slightly over 20 years. 

Q And during your service in the Armed Forces, did 
there come a time when you specialized in covert operations? 

A Yes. 

Q And did there come a time during your service 
with covert operations that you met General Secord? 

A Yes. 

Q And how did that come about? 

A The first meeting with General Secord was in 
connection with the Iran hostage rescue attempt. 

Q And when would that be? 

A I believe it was in the spring of 1980, but I am 
not certain. 

Q And during your time after first meeting him, 
did you work with him closely while you were in the service? 

A Yes. 

Q In covert operations? 

A Not in covert operations. I worked with him 
closely on the Iran rescue attempt. 



Td^^t^RE 



198 



T0&^SE€5RE?r 



1 Q Which branch of the service were you in? 

2 A United States Air Force. 

3 Q And when did you retire from the United States 

4 Air Force? 

5 A I believe it was September the first, 1982. 
B Q After you retired from the United States Air 

7 Force, did you continue to work as a private citizen assisting 

8 U.S. Armed Forces in covert operations? 

9 A Subsequently, I assisted the United States 

10 Government in those types of operations, not necessarily 

11 covert. 

12 Q Classified operations? 

13 A Classified operationsl^ 

14 Q And did you form your own companies shortly 

15 thereafter? 

16 A Yes. 

17 Q What were they? 

18 A The first company was a subsidiary of Vinnell 

19 Corporation, known as Sumarico. That company was eventually 

20 subsumed by the parent corporation which we formed known 

21 as American National Management Corporation. 

22 Q And did American Management have subsidiary 

23 corporations? 

24 A Yes, Sumarico was subsumed as a subsidiary and 

25 two other subsidiaries were subsequently formed known as 



Td^^es^T 



199 



TOPSESSCTco 



Eagle Aviation Services and Technology, Inc. The other 
is Air Mach. 

Q Sir, were you the sole stockholder of these 
companies? 

A I eventually became the sole stockholder. 

Q When did General Secord retire from the service, 
to the best of your knowledge? 

A To the best of my knowledge, it occurred in 
1983. 

Q And from 1983 until approximately September 1985 
what relationship, business relationship, did you have with 
General Secord? 

A General Secord leased from me office space in our 
office complex. We also provided staff assistance to his 
business. 

Q During that period of time, namely, from 1983 
until September 1985, did General Secord tell you he was 
working for the United States Governmennin any capacity? 

A General Secord mentioned on several occassions 
that he was a consultant to the National Seucrity Council 
or the White House, and also a consultant to the Department 
of Defense. 

Q And did he at any time possess any special 
knowledge which allowed you to corroborate his statements? 

A Would you repeat that question? 

UNCI 



■*i>ai?^gECRET 



200 



..T9?.JJiPRET 



1 Q Let me ask it a different way. Did he indicate to 

2 you at any time knowledge of your classified activities with 

3 the United States Government. 

4 A Yes. 

5 Q And from that did that corroborate the fact to you 

6 that he was, in fact, an adviser to the Government in some 

7 capacity? 

8 A Yes. 

9 Q Sir, beginning in or about January of 1985, did 

10 General Secord ask you to arrange for the charter of 

11 aircraft to deliver munitions from Lisbon, Portugal to 

12 Guatamala, Central America? 

13 A Yes. 

14 Q And how did Secord describe the purpose of these 

15 charters to you? 

16 A They were to be the. the carrying — or the 

17 munitions were to be provided in support of the Contadora 

18 in Honduras. 

19 Q And when you say the Contadora, you mean the anti- 

20 Sandinista forces fighting against the Sandinista regime in 

21 Nicaragua? 

22 A Yes. 

23 Q Did he describe this operation to you as 

24 clandestine, covert or anything to that effect? 

25 A He indicated to me that this type of activity 

UN( 



'^¥^'^CRET 



201 

TOP SECRET 



should be conducted very discr^^ly. 

Q And did you subsequently charter the aircraft? 

A I arranged for the charter. I did not charter 
it. 

Q And who did you arrange to charter the aircraft 
with? 

A Southern Air Transport. 

Q Sir, in or about March of 1985, did you arrange 
for another charter from Lisbon to Guatamala? 

A I am uncertain as of the date. I would place that 
as approximately correct. 

Q And you did arrange for another charter? 

A That is correct. 

Q In 1985? 

A Yes. 

Q In 1986, did you continue to charter aircraft 
for General Secord, again, to haul munitions from Portugal 
to Central America, arrange for the charter? 

A Yes. 

Q And how many charters did you arrange for in 1986, 
to the best of your recollection? 

A I think it was five additional charters in 1986. 

Q Let me just ask a clarifying question. Was the 
five charters overall, two in 1985, three in 1986, or 
five additional to the two in 1986? 



TOP SECRET 



202 

TOP^SECKET 



10 



1 A I would place it at five to six total between 

2 1985 and 1986. 

3 Q For the charters both in 1985 and 1986, what kind 

4 of munitions did they contain? 

5 A I believe it consisted of aminunition, 7.62, 

6 explosives, 40 milimeter shells, and weapons. 

7 Q Do you recall what any of the weapons were? 

8 A No. 

9 Q And who informed you as to the type of munition 

10 that was aboard these charters? 

11 A General Secord. 

12 Q Were these articles of East European or Soviet- 

13 type manufacture, to the best of your knowledge? 

14 A I believe some were East European manufacture. 

15 Q Sir, what was the weight carried on the planes, 

15 of the munitions in the charters? 

000 

17 A Approximately 8^, to 95,000 pounds per charter. 

18 Q On at least one of the shipments, did you know 

19 who supplied the arms? 

20 A By individual or company. 

21 Q Company, or individual, if you know. 

22 A There was one company in Canada, I believe it 

23 was connected with supplying the munitions. 

24 Q Do you recall the name of the company? 

25 A Something to the effect of Transamerica Arms, or 



UVCL^^I 



^W^ECRET 



203 



TOd^g^ 



11 



related to that name, from Canada. 

Q Did you call them in reference to an end user 
certificate? 

A I had a discussion with the President, who I 
believe to be the President of the company, and I do not 
remember the specific circumstances, whether it would 
involve end user certificate or other documentation. 

Q And who had asked you to call him? 

A General Secord. 

Q And what was the result of the conversation? 

A For him to deliver to us documents to pass on to 
the air carrier. 

Q Did Secord pay you a commission for arrangement 
for the charters that you have described? 

A Secord did not. 

Q Who did? 

A Southern Air Transport. 

Q And to your knowledge, who paid Southern Air 
Transport? 

A I directed — correction on that. I informed 
General Secord of the price of the charter, and passed on 
to him bank transfer information for transfer of funds. 

Q To Southern Air Transport? 

A To Southern Air Transport. 

Q And on the first two charters in 1985, do you know 



UNfOpi^CRET 



204 



TOPOSEGi^'E, 



12 



1 if Southern Air subcontracted those. 

2 A Yes, they did. 

3 Q To who? 

4 A Arrow Air. 

5 Q Sir, in or about September 1985, did General 

6 Secord contact you in reference to setting up an air 

7 re-supply operation? 

8 A Yes. 

9 Q What did he say in reference to that? 

10 A First, verbally to describe how that could be 

•J-J done. Subsequently he asked me to develop a plan. 

12 Q Did he specify to you that it was a plan to drop 

13 weapons and other supplies in the area of Central America? 

14 A Yes. 

15 Q Did you draw up such a plan? 

16 A Yes. 

17 Q And who did you give it to? 

18 A General Secord. 

19 Q Did General Secord tell you to whom he was 

20 taking the plan for approval? 

21 A General Secord said he was taking it to the White 

22 House. 

23 Q As a result of the plan, did you investigate and 

24 subsequently discuss with General Secord the various types 

25 of aircraft necessary to conduct this operation? 



'^'i^SKBRET 



205 



TOPSgJi^g^, 



■|ED 

A Yes. 

Q And which planes did you discuss with him? 

A C-7 Caribou, C-123, Cara-212, and I believe, 
I think C-47. 

Q And did you settle on any particular plane as a 
result of your discussions with General Secord? 

A Yes. 

Q Which plane was that? 

A Originally the C-123. 

Q What about the Caribou? 

A When we were unable to arrange for the purchase 
of C-123S, we changed to C-7 Caribou. 

Q Do you know whether Secord presented this option 
of the planes to anyone at the White House? 

A He indicated to me that the White House approved 
that choice of aircraft. 

Q Did Secord tell you that there would be an 
opportunity for you to profit from your involvement in this 
re-supply operation? 

A Ultimately, yes. 

Q And how did he tell you that? 

A That we would be given the opportunity to set up 
the air operation in Central America, and to charge an over- 
head plus fee. 

Q Did he discuss with you the fact that you could 



u»1ftJl^ffic.RET 



206 



TOP SE<2gET, 



14 



1 eventually buy a share in the ownership of the aircraft? 

2 A Yes, as part of that building. 

3 Q What, if anything, did General Secord tell you 

4 about the covert nature of the operation? 

5 A Covert is not the correct word. 

6 Q Okay. Why don't you tell me what would be. 

7 A I would say more accurately confidential air 

8 activity to support or provide air support to the contras. 

9 Q Did he tell you why it had to be confidential? 

10 A It was implied that this kind of operation 

11 should be kept very low key and not be known to the general 

12 public. 

13 Q Specifically, did he tell you it should be kept 

14 secret to protect the sponsorship of the United States 

15 Government in this operation? 

16 A I was told to protect both his name and the 

17 White House. That was the implication. 

18 Q And sir, did you subsequently hire Edward DeGaray 

19 in this operation? 

20 A I did. 

21 Q And did you explain to General Secord that DeGaray 

22 would be useful as a cut-off? 

23 A Yes. 

24 Q To protect the identity of the Government and 

25 General Secord? 



UN(T0PF|ffi:CRET 



207 



wT^sBECRET 



A Correct. 

Q When I say the identity of the Government, the 
sponsorship of the United States Government. 

A Ray was hired to conduct the operation, and by 
using Garay, Garay would not know that General Secord 
or the United States, or the White House was involved. 

Q Sir, did you contact Southern Air Transport to 
purchase and help maintain the aircraft? 

A Yes. 

Q And did you ask them to acquire a shell company 
in Paneuna to hold title to the aircraft? 

A Yes. 

Q Did they agree to do so? 

A Yes. 

Q And what was the name of the company they 
acquired? 

A I think the name was Amalgamated Consolidated 
Enterprise, also known as ACE. 

Q And was there a plan between you and Southern 
Air Transport? 

A Yes. 

Q To share ownership of Ace? 

A That is correct. 

Q What would be the ownership percentage? 

A Fifty percent for Southern Air Transport, and 

UNOj^'gECRET 



208 ' 



TOPi^GSaSB) 

1 50 percent for my companies. 

2 Q And in addition to that, was there any plan to use 

3 the aircraft for commercial purposes, for additional revenue 

4 and as a cover for the operations? 

5 A Yes. That is correct. 

6 Q And that is what you discussed with Southern 

7 Air Transport? 

8 A Yes. 

9 Q Sir, in or about November 1985, did you identify 

10 four CH23 aircraft for purchase, possible purchase, I should 

11 say? 

12 A I believe the number was three aircraft. 

13 Q And where were these aircraft located? 

14 A Venezuela. 

15 Q The funds for the aircraft that you were to 

16 purchase, who was to furnish those to you? 

17 A General Secord informed me that those funds would 

18 be provided by private — correction, donation. 

19 Q And that you would inform him of your need for a 

20 fund, for money before receiving the money; is that correct? 

21 A I would inform him of the cost of the purchase. 

22 Q And he would effectuate the transfer of the 

23 funds to you? 

24 A Yes. No. Not to me. 
Q To whom? 



25 



UNO 



^'^^^ECRET 



209 



To^'^SBsaijgjr 



17 



1 



2 



A To the seller. 



Q And who would the title to the aircraft revert? 



3 

to ACE 



A Initially the title to the aircraft would revert 
4 



Q And the plan was that you were to share an ownership 



6 



7 



8 



interest in ACE? 



A That is correct. 



Q So that eventually the title to those aircraft 



9 when this operation would be complete, what was the plan 



10 



11 



12 



with respect to that? 

A The original concept was the aircraft would be 
titled to ACE, and that ACE would buy out equity in the 



13 aircraft. 

"1^ Q You stated the aircraft were located in Venezuela. 

15 Who owned the aircraft? 

16 Q Venezuele«»aBI Air Force. 

17 Q Had you at this time met Oliver North, 

18 Lieutenant Colonel Oliver North of the NSC staff? 

19 A Not in this time frame. 

20 Q Did there come a time when you did meet him? 

21 A Yes. 

22 Q And he provided assistance with respect to the 

23 Venezuelan aircraft? 

24 A Yes. 

25 Q And what assistance did he provide? 



UiTSPSBECRET 



210 



TQRdsesa^ 



18 



A I was told that he had sent either a letter, a 
message or had made a telephone call to the embassy, the 
American embassy in Caracus, Venezuela. 

Q And what was the effect of that phone call? 

A To work, to attempt to work with the Venezuelan 
Air Force in effecting the sale of those aircraft. 

Q Did he read or tell you that? "He" being Oliver 
North. 

Let me just ask it this way. Did Oliver North 
show you a cable that he had sent to Venezuela? 

A I think he read it to me over the telephone. 

Q And when you say he read it to you, did he say 
"This is a cable I am reading"? What did he say to you when 
he read it to you? 

A I believe he described what he was reading as 
the message that he had sent to the American embassy. 

Q Had you met him personally by the time — 

A I can't recall. 

Q Let me mark something as Committee Exhibit number 
two. I show this to you. 

(Whereupon, the document referred to 
was marked for identification as 
Gadd's Deposition Exhibit 2.) 
BY MR. BALLEN: 

Q Do you recognize that document? 



TSSBUSBISKSF 



211 



Top'^^&tmb 



19 



A Yes, I do. 

Q How do you recognize it? 

A That document was constricted in Venezuela by 
myself and Mr. William Langton, President of Southern Air 
Transport. 

Q What does it purport to be, or what is it? 

A A proffer for the procurement of the C-123 aircraft, 
owned by the Venezuelan Air Force. 

Q At the time you drew up that letter, had Oliver 
North intervened to assist you in obtaining these 
aircraft? 

A His assistance occurred after this letter was 
drafted, I think, shortly after. 

(Discussion off the record .J 
BY MR. BALLEN: 

Q Had you met Oliver North at the time he offered 
his assistance on the Venezuelan aircraft? 

A I believe so. 

Q In or about October 1985 did you attend a meeting 
with Oliver North, where North asked you to conduct a study 
to build an air strip in Costa Rica? 

A Yes. 

Q And did North have with him a map of Central 
America? 

A Yes. There was a map. I eim not sure who actually 

UNCI 



le§f%ECRET 



212 



'rOB^JSSm^ 



20 



' had it in their possession. 

2 Q Did North point out to you where in Central America 

3 the air strip was located? 

^ A Yes, to be located. 

5 Q And who else was present at this meeting? 

6 A General Secord, an associate of Colonel North, 

7 whose name I believe is Olmstead — 

8 Q Did Colonel North introduce you to Olmstead? 

9 A Yes. 

10 Q And? 

11 A And I believe Albert Hakim was also at the meeting. 

12 Q Where in Costa Rica did Colonel North point out 

13 that the airstrip was to be located? 

14 A I would say it was approximately 20 nautical miles 

15 south of the southern Nicaraguan border, on the Pacific 

16 Coast. 

17 Q Did North say anything with reference to Olmstead 

18 and this airstrip? 

19 A Yes. 

20 Q What did he say? 

21 A He informed me that Olmstead had been at the 

22 location and had surveyed it, taken pictures, and dealtjr 

23 with the locals in the area. 

24 Q And was it indicated at the meeting by Oliver North 

25 or anyone else that the permission of the Costa Rican 



^*f&P^SBCBET 



213 



20 
21 
22 
23 
24 
25 



TORj|5©SiWi5 



21 



^ Government had been obtained? 

2 A Yes. 

3 Q And what is your best recollection of who said 
^ what on that? 

5 A That they were working with the Costa Rican 

^ Government to get final approval to build the air strip. 

T' Q Did Oliver North say that? 

8 A I don't recall who said it. 

9 Q Could it have been Olmstead, North or Secord? 

10 A It could have been either one of the three. 

11 Q Were you subsequently hired or did you generally 
''2 agree to conduct the study? 

13 A Yes. 

14 Q And did you hire personnel to draw up a plan tO' 

15 build the airstrip? 

16 A Yes. 

17 Q And who was to pay you for the airstrip, and your 

18 work? 

19 A General Secord stated that he would arrange for that 



payment. 

Q And did you subsequently construct the airstrip 
through one of your subsidiaries, EAST? 

A We supervised the construction of the airstrip. 

Q And who did you invoice for these? Let me show 
you Exhibit 3, which would be a series of documents. On the 



UN^^IggCj^T 



214 



WBcSBSfl^T 



1 first page of the documents are what looks like wire transfers, 

2 on the second page, an invoice from East, Inc. to Lake 

3 Resources, Inc., and these, invoices begin on January 23, 

^ 1986, and run approximately to the end of the year, the last 

5 one being December 5th, 1986. Mr. Gadd, looking at those 

6 documents, do at least some of those documents represent 

7 invoivces? 

8 (Whereupon, the documents referred 

9 to were marked for identification 

10 as Gadd Deposition Exhibit 3.) 

11 THE WITNESS: Yes, some of these documents 

12 relate to the invoices submitted to Lake Resources, Inc. 

13 for construction of that airfield. 

14 BY MR. BALLEN: 

15 Q And to whom did you give the invoices for 

16 payment? 

17 A General Secord. 

18 Q Did you send them down to the P. L. box in 

19 Panama or did you personally deliver them, either yourself 

20 or one of your employees, to General Secord. 

Tii«t 

21 A W9k is correct. On some occasions I personally 

/\. 

22 handed them to him. In other cases, the employees of my 

23 company handed him those invoices . 

24 Q But they were not sent to Lake Resources in Panama. 

25 A They were not sent to Panama. 



■WflWaSISRET 



215 



23 



Q Sir, could you estimate to the best of your 
ability what profit you obtained from working on this 
project? 

A Yes. 

Q And could you estimate how much profit you had 
obtained from this activity? 

A The construction of the air strip? 

Q Yes, sir. 

A In terms of dollar amount? 

Q Yes. 

A I cannot estimate that. What do you mean by profit? 

Q Well, you said you were making a profit on it. 

A Correct. 

Q ia» were you making a profit? 

A Income exceeded expense. 

Q That is my question. How much did the income 
exceed the expense by? 

(Discussion off the record.) 
(Whereupon, the reporter read the record as directed.) 
THE WITNESS: I do not know. However, gross 
receivables exceeded $100,000 for construction of that air- 
field. 

BY MR. BALLEN: 

Q And that was money paid to you through General 
Secord? 



..Hd^^Sm^iET 



216 



0?Qa^gRET 



1 A That was money paid to the company through General 

2 Secord. 

3 Q Now, sir, did General Secord and Oliver North 
^ also call you in late 1985 in reference to Rob Owen? 

5 A Yes. 

6 Q And did they both tell you -- both being Secord 

7 and North -- to speak to Owen about an additional business 

8 opportunity in Central America? 

9 A I do not recall which one informed me. However, 

10 I was instructed to me^with Rob Owen about additional 

11 business opportunities in Central America. 

12 Q And did you meet with Rob Owen? 

13 A I did. 

14 Q And what occurred as a result of your meeting with 

15 Rob Owen? 

16 A Rob Owen suggested I contact a Mr. Mario Calero in 

17 New Orleans, who was ostensibly in charge of FDN logistics in 

18 the United States. 

19 Q And after your contacts with Mario Calero, did 

20 eventually you enter into a contract with the United 

21 States State Department? 

22 A Yes. 

23 Q And what did that contract involve? 

24 A Air movement of humanitarian supplies from the 

25 United States to Central America. 



■ra^fliKlE' 



217 



T08^^a»l^ 



25 



Q And what Government official headed that program? 

A The highest official I am aware of was an 
ambassador, Robert Duemling. 

Q Did you ever meet with Ambassador Duemling? 

A Yes. 

Q And did Oliver North ever accompany you to a meeting 
with Ambassador Duemling? 

A Yes. 

Q Could you explain the circumstances of that? 

A Oliver North asked me to meet with Ambassador 
Duemling and his staff at the Nicaraguan Humanitarian 
Assistance Office, in Rosslyn, to describe our capabilities, 
to provide this air trainsportation service. 

Q And did you do so? 

A And we did so. 

Q And do you recall when that meeting occurred? 

A I would say that meeting occurred in December 
of 1985 or January 1986. 

Q And did you subsequently pursuant to that contract 
with the Department of State — did you get the contract 
after the meeting, letter of commitment? 

A I believe so. 

Q Now, sir, did you subsequently perform services 
under that contract with the Nicaraguan Humanitarian 
Assistance Office? 



TQRgse^T 



218 



19 
20 
21 
22 
23 



25 



TOFUfiGJ^giig 



26 



1 A We did. 

2 Q Through which of your companies did you do that? 

3 A Air Mach. 

4 Q Now, sir, in January 1986 did Southern Air Transport 

5 finally purchase an aircraft, for your resupply operation? 

6 A Yes. 

7 Q What aircraft did they purchase? 
g A A C-7 Caribou. 

g Q And what was the purpose of purchasing this 

■JO aircraft? 

1^ A To deploy the aircraft to Central America, to 

12 provide air cargo movement. 

•J3 Q How was this distinct from the Nicaraguan 

14 Humanitarian Assistance Office contract? 

^^ A The NHAO contract was to provide air transportation 

'Ig of goods from the United States to Central America. The 

■^j C-7 Caribou was to move those goods and oteHrs within the 

1g Central American region. 



Q And those goods and others, were the others goods 
that were intended to be moved munitions and other arms for 
the contra forces? 

A Yes. 

Q Now, sir, from whom was the C-7 Caribou aircraft 



24 purchased? 

A I think the name of the company was Prop Air of 



TO^SBCRET 



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27 



Rouyn, Canada. 

Q And how much was it purchased for? 

A The first aircraft cost approximately $500,000, 
with initial spares. 

Q Now, sir, was this aircraft going to be titled 
to ACE according to your original understanding with General 
Secord? 

A The original plan was to title the aircraft to 
ACE. 

Q Did there come a point in time when the original 
plan changed? 

A Yes. 

Q And how did that plan change? 

A Can we stop for a second? 

(Discussion off the record.) 

THE WITNESS: There was a meeting that occurred 
in either January or early February, in which General 
Secord, Colonel North, Mr. Tom Clines and m^Welf met 
in a restaurant in McLean, Virginia. At that meeting I was 
instructed that the title of those aircraft would revert 
to Udall Corporation. 

Q And who was Udall Corporation? 

A It is a company that I believe General Secord was 
associated with. 

Q And what was your response when they told you that 



T!uP^^^S0SE^ 



220 



TOBJimms 



1 the plan had changed? That ACE would no longer hold title? 

2 A I made the statement that this was not my 

3 original understanding, but relented and agreed. 

^ Q And, sir, to the best of your recollection, do you 

5 recall whether or not this meeting occurred after the first 

6 aircraft was purchased or before? 

7 A I do not recall. 

8 Q Now, in February 1986, did you help move the 

9 aircraft down to El Salvador? 

10 A I assisted with the movement of that aircraft to 

11 El Salvador. 

12 (Discussion off the record.) 

13 BY MR. BALLEN: 

14 Q Sir, in December 1985, did you receive an advance 

15 for your operating expense for the air resupply operation? 

16 A Yes. 

17 Q And did Oliver North in your presence direct 

18 General Secord to furnish you with an advance? 

19 A Yes. 

20 Q And how much did he direct General Secord to 

21 furnish you? 

22 A $150,000. 

23 Q How much did you subsequently receive? 

24 A I believe the figure was $100,000. 

25 Q How did General Secord respond when Oliver North 



'l'6'f^9B(!5RET 



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29 



■'OSSIFIED 

directed him to? 

A He acknowledged that he would do that. 

Q And this was an advance in order to let you start 
up with the air resupply and the construction of the air- 
strip? 

A Correct. 

Q Both activities? 

A Both activities. 

Q And the air re-supply operation comprehended the 
movement of munitions as well as other goods? 

A In Central America. 

Q Now, sir, directing your attention to the winter. 
After February 1986, did North — what did North and Secord 
tell you concerning the necessity of moving arms into the 
contras at that time? 

You had one aircraft down there, correct? 

A I was informed that the contras resistance was 
going very poorly, and that they were in urgent need of 
resupply. 

Q And who told you that, sir? 

A Both General Secord and Colonel North. 

Q And what did they want you to do? 

A They wanted us to develop and sustain an air 
re-supply capability as fast as possible. 

Q And where were you to move arms from and where 



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were you to move them to in Central America? 

A Initially to move supplies and munitions within 
Honduras, and between Honduras and El Salvador. 



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Q Sir, did there come a time when Colonel North 

called you at home and said that Captain Lopez of the FDN 

needed an immediate shipment of ammunition to him in 
Aquacate? 

A Can you be more precise with that question? I 
don't recall this conversation. 

Q Did Colonel North ever call you at home? 

A Yes. 

Q Did he ever call you at home in reference to 
the needs of the Contras? 

A Yes. 

Q What, did he tell you? 

A On one occasion, I recall^ we should get an L-lOO 
aircraft to El Salvador as soon as possible to effect a 
resupply? 

Q What did he want you to resupply and to whom? 

A I don't recall what the load would have been. We 
did, however, deploy the aircraft. 

MR. BALLEN: Can we stop for a second? 

(Discussion off the record.) 
BY MR. BALLEN: 

Q On one of the flights 

MR. LAZARUS: Excuse me. 

Are you now beginning a new line of inquiry, 
or starting on a completely different line of inquiry? 



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MR. BALLEN: Same line of inquiry. Colonel North 
calling. 

BY MR. BALLEN: 

Q Did Colonel North call you one time in reference 
to NHAO flight? 

A Yes. He advised me they had an urgent requirement 
to move supplies from New Orleans to El Salvador. This would 
be Nicaraguan Humanitarian Assistance Office supplies. 

Q Did you do so? 

A Yes. 

Q What happened when the crew had that plane down 
in Central America? 

A After they arrived, and off-loaded, or attempted 
to off-load, they were advised by the FDN representative 
down there to continue to take that load to Aquacate 
air field. 

Q Did they do so? 

A They did so. 

Q Did there come a time when Captain Lopez asked 
them to move ammunition on that plane? 

A That is my understanding. 

Q Did you subsequently have discussions with the 
representatives of the Nicaraguan H umanitarian Assistance 
Office regarding payment for the movement? 



Yes. 



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Q And the substance was they refused to pay? 

A That is correct. 

Q Beginning in March of 1986, did flights to trans- 

port arms to the Contras inside Central America begin to 
occur? 

A Yes. 

Q And who — what — where were these flights being 
conducted? 

A There were two types of flights. First was 
the transfer of munitions and supplies from El Salvador to 
Aquacate air fieldA 

In addition, operating — while operating out of 
Aquacate air field, the crews provided — performed air 
drop of supplies to FDN forces within Honduras and also 
provided training to FDN pilots. 

Q Did North or Secord, at that time, mention to you 
the needs of the southern front? 

A Yes. 

Q What did each of them tell you? 

A I do not recall which informed me that the forces 
in the southern front of Nicaragua were in urgent need of 
resupply, of munitions and goods. 

Q Did both of them inform you, or one of them inform 
you? 

A I do not recall. 



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Q What occurred as a result of them informing 
you of that, of the urgent need of the southern forces for 
supplies and munitions? 

A We considered the C-7 Caribou inappropriate to 
resupply that type of load and the C-123 in that area, at 
that time. And I was asked to arrange for Southern Air 
Transport L-lOO to effect that resupply. 

O Did Secord ask you to do that? 

A Yes. 

Q How did he phrase his request to you? 

A 'That we must — I must arrange for an L-lOO 
to provide an air drop of those items to FDN forces in the 
southern front. It was of the highest urgency. 

Q Why was it of the highest urgency? Did he 
specify? 

A I believe he stated that they were almost completel) 
out of munitions and other supplies that were critically 
needed. 

Q Did he say how he knew that? 

Let me ask you the question: Did he say Colonel 
North was begging for it to be done? 

A I think he mentioned Colonel North informed him 

of that. 

Q What can you do in reference to that, sir? In 



obtaining the L-lOO? 



\to 



TOF^CRET 



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TOP ^eBET 



35 



A I coordinated with Southern Air Transport to carry 
out that mission. 

Q 0o you recall how much they were going to charge 
for the services? 

A It was one air drop, the plan was one air drop and 
the cost would have been approximately $25,000. 

Q Did that mission occur? 

A That mission occurred, 

Q What happened on the mission? 

A It was unsuccessful. They were unable to air 
drop their ■ supolies. 



them? 



Did they make a subsequent attempt to air drop 

A Yes. 

Q What happened then? 

A They were successful on the second attempt. 

Q When was this, sir? When did these missions 
occur? 

A The night of, I believe, April 9th, and April 
11th, 1986. 

Q Do you recall, did they go — where did they make 
the drops of supplies and munitions? 

A I do not know the precise location. The crews 
were informed of that in El Salvador. I would place it 
some 20 to 30 kilometers north of the southern Nicaraguan 
border in the southeast portion of that country. 



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Q Sir, directing your attention to later in April, 
did you fly with Colonel North and General Secord to El 
Salvador? 

A Yes. 

Q What was the purpose of the trip. 

A I was informed that Colonel North and General 
Secord were to meet with FDN and UNO heads. 

Q Who informed you of this? 

A General Secord 

Q I am sorry, I interrupted. 

A To meet with FDN and UNO officials to suggest -the 
logistics support of the FDN effort. 

Q Did you travel with them? 

A Yes. 

Q How long did you spend — where did you travel to 
in Central America? 

A Ilopango air field. El Salvador. 

Q How long did you spend with them at Ilopango? 

A We were on the ground approximately four to five 
hours. 

Q Did you accompany Colonel North and General 
Secord when you arrived to their meeting? 

A No. They went into a closed-door session in the 
office of General Bastillo, Commander of the El Salvadorean 
Air Force. 



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37 



Q Did they return with you on the Jet Star? 

A Yes. 

Q What if anything, did they say in reference to 
their discussion with General Bastillo? 

A The discussion — General Bastillo was in attend- 
ance at the discussion, but the discussions were directed 
at the FDN principal, 

Q Did they tell you which of the FDN principals 
were at the meeting? 

A Yes. 

Q Who did they say? 

A Enrique Bermudez, his chief of staff, I believe 
was his title; General Bastillo; I believe Colonel Steele was 
in the meeting from the military adviser group. El Salvador. 

Q This is what North and Secord related to you 
afterwards? 

A This is what was related to me afterwards. 

Q By whom? 

A I overheard a conversation between General Secord 

and Colonel North while on the airplane, and participated 

in that conversations. 
I—' 

Q During that conversation, did they say that 
Bastillo and others from the FDN indicated the planes belonged 
to the FDN, that they viewed the planes as belonging to the 
FDN? 



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A Yes. 

Q Did North and Secord report that they explained 
that their opinion was the planes belonged to a private 
group? 

A Correct. A contractor. 

Q Do you know whether or not — what else did they 
say on that subject? 

A Basically the FDN principals explained about the 
type of support they were receiving. 

Q What did they say? 

A Essentially that they were the wrong type of air- 
craft and that they wanted C-130 equivalent — C-130 
or equivalent aircraft as a better choice. 

Q How did General SEcord and Oliver North explain 
their response to that? 

A General Secord stated in this conversation that 
he tried to explain to Enrique Bermudez and the others in 
the group that a C-130 or equivalent aircraft was out of the 
question, that those aircraft were, in fact, most suitable 
for this type of air support activity, and that they would 
work extremely hard in improving the type of air support 
they would be receiving. 

Q Do you know whether General Secord and Colonel 
North were able to resolve the issue of who owned these 
aircraft with the — with Bastillo and the Contra leaders? 



*r(9^5SBCRET 



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TOP SEG^^^siFIED 



39 



A No. 

Q Let me just ask one other question on that trip. 
Why were you traveling with Colonel North and General Secord 
to El Salvador. 

A I had asked to go along to see the air base, to 
see the living quarters of the air crews and to discuss 
with them their situation. The general discussion. 

O At that time, by the end of April, how many 
aircraft had been purchased to operate the air resupply 
operation? 

A I believe three. 

Q Now you mentioned the first purchase of the 
Caribou in January. What were the other aircraft purchased 
by that time, late April? 

A And the second C-7 Caribou and a C-123. 

Q During this time of late April 1986, and later, 
did General Secord ever tell you what he planned to do with 
those aircraft if and when Congress authorized funds for -- 
U.S. Government funds for the Contra s? 

A At some point in the late spring and early summer 
of 1986, I was informed that they intended to sell those 
aircraft to the Central Intelligence Agency. 

Q Who informed you of that? 

A General Secord. 

Q And in what context did he tell you that; do 



you recall? 



....^PRuiSECRET 



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A That eventually the Central Intelligence Agency 
might be able to provide the — general support to the Contra 
effort, that they would be running the -- or responsible 
for air operations, and that these aircraft and associated 
support equipment would be an ideal capability for them 
to continue on with. 

Q Did he specifically mention for them to purchase? 

A His plan was for the Central Intelligence Agency 
to buy those aircraft and that equipment. 

Q Sir, did he ever tell you of meeting with Director 
Casey of the CIA? 

A Yes. 

Q In that regard? 

A That is correct. 

Let me — correction. He informed me of a 
meeting with Director Casey. 

Q And what did he tell you about that meeting? 
MR. LAZARUS: Excuse me. 

THE WITNESS : General Secord informed me that he 
had had a meeting with the director in his office. 
BY MR. B ALLEN: 

Q When would this be, approximately, sir? 

A In the late spring of 1986. He informed me that 
the substance of his conversation was to explain the 
capability of the aircraft that were currently supporting — ~ 



TOP'slCRET 



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TOP SBGfiiSeiFiED 



41 



these aircraft that were currently supporting the FDN; that 
they were most suitable aircraft; that the capability would 
get better; and that they needed the support of the Central 
Intelligence Agency. 

Q Now did there come a time in May of 1986 or in 
the late spring of 1986 that Secord told you that he — we 
have to get the operation going so — keep it flying so that 
the CIA would pick it up? 

A General Secord continually stressed the fact 
that the aircraft were not operating at their maximum 
efficiency 'and that we should strive or they should strive 
harder to fly more and provide more air support in order to 
improve the image of that capability. 

Q And was one of the reasons he expressed to you 
improve the image of the capability to impress the CIA? 

A Yes. 

Q And subsequently, sir, in the summer of 1986, did 
Secord tell you that the CIA did not want to purchase the 
ATWs because they were tainted? 

A That is the wordl he used. 

Q How about the rest of my question? 

A That is an accurate reflection. 

Q What did he say he was going to do as a result 
of the CIA's view on the tainted aspect of these assets? 

A That they would try to reverse that opinion by 



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the Central Intelligence Agency while at the same time 
improving the air operations support. 

Q Did Secord tell you what would be done with the 
proceeds of the sale? 

A No. 

Q Sir, backing up chronologically in time, in or 
about January of 1986, when you were planning initially to 
set up the air resupply operations, were you present when 
Colonel North directed General Secord to generate a list 
of codes? 

A Ye s . 

Q What did North say? 

A Yes. 

Q What did North say? 

A Ask General Secord to develop a list of code words 
to refer to individuals and certain actions. 

Q What was this code word list in reference to? 

A Air operational support in Central America. 

Q Did General Secord subsequently show you a list 
of codes? 

A General Secord provided me a list of those codes. 

Q Did he say who had prepared them? 

A I think he stated he had prepared those codes. 

Q I will show you what — what will be Committee 
Exhibit No. 4. 

. Let me ask you if you recognize the document? 



235 



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A I recognize this document. 

Q How did you recognize it? 

A This is the list of codes General Secord provided 
to me. 

Q And, in fact, sir, did you not retain a copy of 
this list of codes and provided it to us pursuant to 
subpoena? 

A Correct. 

Q In February, directing your attention to February 
1986, did there come a time when General Secord called you 
in reference to cash for the fuel account for aircraft in 
Central America? 

A Repeat the date, please. 

Q Approximately in February 1986? 

A I believe that is correct. The answer to your 
question is correct. 

Q What did General Secord tell you in regards to 
that? 

A He stated that Colonel North had informed him 
they had an urgent requirement to provide cash, U.S. currency 
to the El Salvadorean Air Force to replenish their fuel 
account? 

Q What was the fuel account? 

A It was an account that had been set up to — in 
which the C-7, C-123 air crews could purchase fuel from 
El Salvadorean Air Force. 



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Q That was the air crews in the air resupply 

operation? 

A Yes. 

Q Did you subsequently follow General Secord's 
request in that regard? 

A I did. 

Q Sir, back to the Jet Star trip in late April, 
apart from yourself and Colonel North and General Secord, 
who else was on board that flight that you recall, and 
apart from the Captain and flight crew? 

A On the flight to El Salvador, was also Rafael 
Quinteros. 

Q On the flight returning home? 

A And one or two crews members. 

Q Of course. 

A On the flight returning, the same individuals 
plus approximately three of the crew members returning 
from El Salvador to the United States — crew members and 
maintenance personnel. 

Q Were any crew members present who had 
participated in the April mission inside Nicaragua? 

A The air drop? 

Q Yes, sir. 



Yes. 

Who was that? 



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A His name was Mr. Ian Crawford. 

Q Did there come a time when Mr. Crawford spoke 
to either you, Mr. North, or General Secord? 

A Yes. 

Q What occurred with that? 

A I asked Mr. Crawford to brief Colonel North on 
the genetics with regard to that air drop. 

Q Did he specify the lethal nature of the cargo on 
the air drop? 

A I don't recall. 

Q 'Did he brief Colonel North? 

A Yes. 

Q Colonel North had known of the flight prior to 
that briefing, had he not? 

A Yes. 

Q In fact, he had helped to ask for the flight 
to occur; is that not correct? 

A That is correct. AsJ|[me why I know that; please. 

Q How do you know that? 

A General Secord had been coraraunicating to me — 
coraraunicating with me on details regarding that air drop 
and had — during the course of those communications, had 
made frequent reference to Colonel North. 

Q Referring back to Committee Exhibit No. 3, 
which are your East receipts, are there charges in those 



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East proceeds for the transportation of lethal equipment 
to Central America, as well as the construction of the air 
field? 

A Do you have a specific invoice in mind? 
Q Let me refer you to — there is a charge for 
Hughs, Crawford, and others — if you look at some of the 
other invoices, other pilot expenses — unconnected, I believe 
with the construction of the air strip. Why don't you tell 
me? 

MR. BALLEN: Let's go off the record. 
(Discussion off the record.) 
(Reporter read the record as requested.) 

THE WITNESS: There are charges in this invoice 
for incentive fees for the air crews who fly on that mission 
the 9th and the 11th of April. 

MR. BALLEN: I have no further questions. 

Thank you, Mr. Gadd. 

MR, LAZARUS: May I put a question on the 
record? 

MR. BALLEN: Sure. 

BY MR. LAZARUS: 
Q Mr. Gadd, whenever you talked about matters of 
record from your company, is it accurate to say that during 
the course of your billing practices, that they were done 
in accord with customary billing practices? 



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Yes. That is correct. 



Q And that you have satisfied the committee's 
inquiry with respect to the production of all those? 
A Yes. 

MR. LAZARUS: If I may on the record ask whether - 
ask counsel whether or not — what the availability is of 
this deposition in the future? Members of the committee or 
otherwise? 

MR. BALLEN: My understanding is this deposition 
would be made available to members of the House Committee, 
members of the Senate Committee, and their staff on an as 
needed basis. 

MR. LAZARUS: Is it available to anyone else? 

MR. BALLEN: It would not be available to members 
of the news media, or anyone else other than a copy being 
provided to you. 

MR. LAZARUS: It would be available, though, 
to compulsory process? 

MR. BALLEN: No, 

MR. LAZARUS: It is sealed then, so to soeak? 

MR. BALLEN: Yes, sir. 

THE WITNESS: Can we go off the record for a 
minute? 

(Discussion off the record.) 
(Whereupon, at 4:30 p.m., the deposition was adjourned.) 



aiQB^SKDRET 



240 



8TBN0GRAPHIC MINCm 
UanrtMd and UMdIM 
Not for r 



C^uO^S^^ 



-h^ 



ONClASSIHEe 



'Wt I ■ 11 iff 



UNCLASSIFIED 




Committee Hearinga 

idth» 
VA HOUSE OF REPRESENTATIVES 



Pirtltlly DedMrilM/Ralimd on /- /<- ^^ 

under previsions of LO. 12356 

by N. Menan, National Security Counc9 



^ UNClASSinED 



OFFICB OP THK CLCBK 
OfflM of Official B«pp(t«* 



241 



NAHE: HIR167000 



RPTS SUniKL 
DCMK SUMIZL 



UNCLASSinED 



DEPOSITION or HEKRY M6H»n» '"HAHK" GAFFNZY ^ 

V 

Tuesday. Jun« 16, 1/87 

U.S. Housft oi Repzassntativas. 

Salact Connittea to Invastlgata Covatt 

Arms Tzansactions with Iran, 
Uashington. D. C. 



Tha Comnittaa mat, puisuant to call, at 9=05 a.m.. In Room 
2203, Raybuzn Housa Oiflca Building, with Josaph Saba, 
presiding . 

On bahali of tha Housa Salact Comnittaa' Josaph Saba, 
Staif Counsel; Robert H. Ganzman, Associate Minority 
Counsel; Roger Kreuzer, Investigator. 

On behalf of the Senate Select Committee = John Saxon, 
Associate Counsel. 

On behalf of the Witness: Jerome H . Silber, General 
Counsel, Defense Security Assistance Agency, Department of 
Defense. 



P.rti8lly Declassified/Released on 

under provisions of t.O. lZ3bb 
by N. Meiun, National Security Council 



UNCIASSIHED 



242 



mtmm 



NAMK: HIR167000 
23 

Hharcupon, 

HENRY GAFFNEY 
having been iiist duly sworn, was called as a witness 
herein, and was examined and testified as follows: 



i 



EXAMIKATION ON BEHALF OF THE HOUSE AND SENATE SELECT 
COnniTTEES 

BY nn. SABA: 

fi Or. Gaffney, will you please state your full nane /J 
and your current duties for the record? ^ 

A Henry l l^a aid Gaffney, Jr., Director of Plans, 
Defense Security Assistance Agency. 

fi Can you please give us a brief resume on career 
with the Department of Defense? 

A I entered the Office of the Secretary of Defense in 
February 1962 as a management intern and have been in 
various positions in the Office of Secretary of Defense 
since that time. 

8 And what is your current position? 

A My current position is Director of Plans in DSAA, a 
position I've held since about the 1st of August of 1981. 

fi Can you please describe for us the organization of 
the Defense Security Assistance Agency? 



UNCIASSIFIED 



243 



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55 
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HIR167000 



UNCLASSIFIED 



PAGE 



A Hall, DSAA has a Dlrttctoz who is a thraa-staz 
■llltazy ofiiear. a Daputy Dizactoz who is a civilian, thraa 
najor diractoratas--tha Plans Ditactotata. tha Opazations 
Oizactozata, and tha Conptzollaz — and two spacial oificas. a 
Congzassional Ralations Oiiica and a Ganazal Counsal. 
2 Can you plaasa axplain youz dutias? 
A It's not always aasy. 

Tha Plans Dizactozata is sozt of tha junk shop of 
DSAA. It has a vaziaty of functions. Ouz pzinazy zole is 
to pazticlpata with tha Stata Oapaztaant in putting togathaz 
tha sacuzity assistanca budgat to ba zaquastad fzom Congzass 
and to pazticipata in tha allocation of thosa funds whan 
thay aza appzopziatad by Congzass, and this zaquizas that wa 
pzapaza all of tha tastimony of tha Saczatazy and tha 
Dizactoz, DSAA, and tha associatad tasks with that, and also 
any othaz pzesantations . 

[ Kz . Silbaz confazzlng with tha witnass. ] 

THE WITNESS: And than I havap-*ta hn/7j othaz 
functions: a Waapons Systans Division, an Ozganization and 
nanpowaz Division, Spacial Dafansa Acquisitions and a 
Suppozt Division. 

I think what Jazzy was just pointing to was tha 
fact that fzoB tima to tima both tha Dizactoz and the Deputy 
Dizactoz hava baan out of tha countzy at tha sama tine, oz 
out of tha city at tha sana tima. I've baan sitting in as 



UNCLASSIFIED 



244 



KANE: 
73 
7t( 
75 
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BNCUSSm 



X 



HIR167000 VI f lILm^*^'^'"'" Tt^Gi 
Acting Diractor oi DSAA. 
BY MR. SABA: 

2 You mantioned a Haapons Division. Could you 
axplain, is this a division which ansuats to you or on which 
you would nornally call? How 'do you relata to that 
division? 

A Thay ara undaz my suparvision. 

Q And what doas that division do? 

A Its majot task is to suparvisa major aircraft sale 
whara thara is compatition batwaanf H).3 ^ y two U.S. 
manuiacturazs . Fox instanca. thay hava rasponsibillty now 
for making sura that tha Mavy and Air Forca and associated 
contractor presentations to tha Koreans. Japanese, United 
Arab Emirates, tha Swiss, ara comparable. 

Q Does that include the Israelis? ^!liv^ 

A rj la 'te i»>* aw-H^hey have not had any involvement with y 
the Israelis because jb hm t ' a l i tau a j >H.aijlii4L J those have been 
straight sales. I mean like the F-16 was sold before. 
There's no-- 

8 How doas your office relate to the Office of 
Ganaral Counsel? 

A There is a General Counsel, DSAA, which is a Lyjt 
parallel office which we|<wy|UU Hiiowi^ interact with on a ''V 
daily basis. Tha General Counsel, in turn, as you know, ivML 
part of the--what do we call it, Jerry? The Legal Services l> 



UNCLASSIRED 



245 



KXnZ- HIR167000 



98 
99 

100 
101 
102 
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lOlt 
105 
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108 
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IIU 
115 
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122 



Agancy . 



UNCUkssra 



But w« don't dttal withthsB. H« daal thzough hlaOi 
to any iuzthar Ganazal Counsalj^ Oe^-30o0^ Vi ^X 



e HlB balng Hz. Silbaz — 

A Mr. Sll>Mz, right. ^\ Xl 

e --tha Ganaral Counsal ioz OSAA? 



^1 



A That's right. 

e You rafaranea that ona oi your dutias is to pzapara 
tastinony for tha Sacratazy. 

A U rn h M w . Va-S 

fi Ooas this also ineluda aXarting tha OSS whan a 
fuastion oi congzassional notification aay arisa? 

A That is not ay particular rasponsibility . That is 
alsawhara within DSAA . 

fi Hho would hava that rasponsibility? 

A Basically, I think tha rasponsibility is largely in 
Stata baoausa it's tha Anbassador who sands in a aassaga to 
tha whola conaunity announcing that a country proposas a 
sala which would naat tha thresholds of tha lagislation, and 
than avarybody bacomas sansitizad to it. 

THE HITKESS: Is thara a particular dafinad 
rasponsibility for that in DSAA, Jarry? 
MR. SXLBER= For notification? 
THE WITNESS: For datacting which casas ara 
notifiable . 



ONCUSSIflED 



246 



123 
12U 
125 
126 
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138 
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mo 

lUI 

m2 

143 

1145 

146 

1147 



HIR16700 



UNCLASSIRED 



PAGE 



HR. SILBER: U«ll, th« Comptrollec ' s Offica is 
z*sponsibla for th« notifications. 

THE WITNESS: Y«s . Out Conptroller Office is 
rasponsibla for sending the notifications to the Hill when 
directed to by the State Department '!t«<c^ the Director of 
DSAA . 

MR. SILBER: But they have a responsibility of , , t 
identifying if there is a particular letter p m law f at — ft^Tl sV 
acceptance that is being proposed and it is over the 
thresholds for notification, they are the ones who say: 
Wait. Ha can't issue than. Wa have to notify than. 

THE WITNESS: Yes, the FHS Progran Control Division 
within our Conptroller Branch. 

BY MR. SABA: 
Q All right, let ne nove on to the issue of Fns and 
HAP. Exactly what is your role and faniliarity with the FMS 
progran? P^Jn- 

A Wall, it's sort of a^>^general overview of all ' ^X 
sales. We keep track of--well, actually our Comptroller 
keeps track of all tha numbers and we basically perform an 
analytical function or absorb what we need to, to present in 
testinony . 

fi Whan you say nunbars, what do you mean? 
A The Comptroller, as a result of much of the ceiling 
legislation that was passed in the Arms Export Control Act, 



i 



\k. 




247 



MAKE: 

1148 
1X9 
150 
151 
152 
153 
15(4 
155 
156 
157 
158 
159 
160 
161 
162 
163 
16U 
165 
166 
167 
168 
169 
170 
171 
172 



HIR167000 



UNClASSinED 



PAGE 



had a responsibility for keeping track oi all foreign 
military salas--Fns. 

S Uhen you say the ceiling, you refer to a numerical 
qualitative or quantitative or a dollar? 

A It uas a dollar ceiling. It uas around 1977 
thereabouts. It uas around 8 billion at that time. There 
was a sentiment, and I guess it was unenforceable in the 
law, that the amount of sales should go down each year ^n 
•nr i "'T It- had to keep track of the overall sales to make (^^iL 
sure that the ceiling uas oy8>(/TH)lO*C^O<XS€*^^«*» X 

2 Would it be your duties to keep track of those 
sales? 

A No, it is not my duty. 

2 Would you be normally familiar ulth the numbers of 
weapons that ue have provided to the various countries? 

A It's not my responsibility but I can find out at 
any time. 

8 Would it be your responsibility to maintain 
knouledge of the dollar value in any given fiscal year of 
the weapons being transferred to another country? 

A As a responsibility, no, I don't have that 
responsibility. As a general analytical function, ue do 
keep track of those things . 

fi Would It be your responsibility to monitor 
transfers by transferring countries of weapons provided 



ONcussra 



248 



MAKE: 
173 
174 
17S 
176 
177 
178 
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182 
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18<4 
185 
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194 
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196 
197 



HIR167000 



ONCUSSIFIED 



PAGE 8 



under the FMS/MAP program? 

A No, it is not our responsibility. It is not ray 
responsibility and it is not the Plans Directorate 
responsibility. 

2 Whose responsibility would that be? 

A That's very unclear. That question has corae up a 
number oi times. I mean, I'm not sure you could point to 
any place in the law which says that so-and-so shall monitor 
all intelligence and all embassy reporting to assure that 
there is no third country transfers. I think the, as I 
remember the law^Hyut I iiniild hana %» J*j»ia that sun n( k]km 
" IwjI^^ fcifcM section 3(d) oi the Arms Export Control Act requires 
notifications and-- 

S Who makes that notification? Is that the 
responsibility of the President or the State Department? 

A The responsibility for notification lies in the 
State Department. 

2 Maybe we can make the situation clear by running 
through a hypothetical example. What I'd like to run 
through would be a hypothetical example on a transfer of 
Hawk missiles by the United States to Israel. 

A Um-hu^. 

2 And I'm making reference in the abstract, not to 
any of the events with which we are immediately concerned. 

A Um-hii^. Um-hir». 



BTOSWB 



249 



NAME 
198 
199 
200 
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20X 
205 
206 
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2 10 
21 1 
212 
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21'< 
215 
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222 



HIR167000 



ONCUSSIHED 



PAGE 



8 I would like for the sake of the record and our 
naiibers to get a clear picture of hou this is done. If you 
would run through with us how Hawk missiles might be 
transferred to Israel with a view to the period that we're 
concerned with. 

HR. SILBER: This is to Israel, by Israel? 
THE WITNESS: Transferred to Israel is what you 
said, right? 

BY HR. SABA: 
fi Transferred from the United States to Israel. 
A Yes. Okay. 

Well, there was a real case. They requested the 
sale of 100 Hawk missiles back in 1982. This request comes 
through-- 

8 Excuse me . That example would be a good one . 

A Yes . 

8 If you would explain to us how that is dealt with. 

A This request comes through official channels to the 

State Department, let's say, in this case. Assuming that 

d 
the Israelis haX^ not gone through the preliminary stages of 

asking for price and availability data before they made [It 

their request, [Vi UJua be ^Lhe State Department has to-- ^\ y<. 

2 Excuse me. If I can, I want to take this very 
slowly and very precisely-- 

A Um-hu^. 



4-. 



> 



"NCUSWll 



250 



NAHE 
223 
22M 
225 
226 
227 
228 
229 
230 
231 
232 
233 
2314 
235 
236 
237 
238 
239 
2140 
24 1 
2142 
243 
24 4 
245 
246 
247 



HIR167000 



PAGE 



Kussra 

2 --going stap by step. 

There comes a time in Israel-- 
A Ura-h»l». 

2 --where somebody, and I'd like to identify who, 
decides they want Hawks, and that someone writes a piece of 



paper and gives it to somebody. 
Um-hUta. 



A 

2 I'd like to walk that piece of paper all the way 
through until one day Israel has a Hawk in its inventory. 

A Okay. First of all — 

2 And where you can — 

A Yes. 

2 --in this period and using that example, if you 
would not only name the title of the person, but if you 
recall the name of the person who would also be involved it 
would be useful. 

A Yes. That's hard for me to say because, remember,-; 
the Hawk system as such was sold^to the Israelis , [^haj] wa; 
available to them in the 1973 war, so it was sold to ther 
probably sometime between '67 and '73. 

HR. SILBER: This is your basic. 
THE WITHESS: This is the basic Hawk sysl 
it's radars, it's launchers, it's control vans, and things 
like that. 

BY MR. SABA: 



t ^^V 
>tem, ■iiha'T I \ 



Mussm 



251 



Mfmim 



; HauK missiles 
uhat ue sold thenV ) 



\' 



«i»,.7o.. uilbLflOOiriLU "" " 

fi That was sold--the basic Hawk was sold when? 

A Prasumably, I think, someuheze between '67 and '73, 
but Z don't know to be precise. 

fi Do we keep track of how nany basic Hawk missiles 
Israel maintains in its inventories? 

A Ko . [5i»» w»ae w b Tje keep track of 
ihat we produced in this country and then sold them, but ue 
don't have access to their warehouses to find how many they 
have expended. 

2 And do they report as to how many they have 
expended and what remains in their inventories? 

A Ho. Ho. There's no responsibility under the law 
for them to do so whatsoever. 

e After '73 did there come a time when the basic Hawk 
was modified into something else? 

A 

Xmprovea nawA, x~nawn «5 x^ 9 njivHji,ykM 

first place, I have no idea, or whether it became Improved 
Hawk later on. Most of those modifications, as I take it, 
take place in the control vans and the radars and all. And 
you would probably find — you could probably go to our 
computer and check out all the cases having to do with Hawk 
for Israel since the initial purchase and you would probably 
find several cases each year for various modifications, for 
spare parts, for other supplies associated with the system. 



I Hell, the Hawk, yes. I don't know whether it was A^t— 
/ed Hawk, I-Hawk as it's known, ^u^s sold to them in the ■ ' 



smsim 



252 



HAHE: 
273 
274 
275 
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278 
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28U 
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29i« 
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HIR167000 



UNCLASSIFIED 



PAGE 12 



In other words, when a system enters the Israeli 
system, we support it, we say. They enter support 
agreements with us to get a continual flow oi the spare 
parts they need . 

Now the missiles, themselves, are a different 
matter. Most of those missiles, as I understand it, without 
being an expert on the system, are what people call wooden 
rounds. They've been adaptable to most of the various 
launcher improvements in the system and they can be stored 
for a long time until they're needed for use. 

How, for whatever reason, Israel decided that it 
needed to buy 100 more Hawk missiles in the early '80s. 

2 Let me go back. I'm trying to decide, trying to 
determine the difference between what we call basic Hawk and 
I-Hawk. 

You would have to get the Army experts over here, 
and by the time they finished you would be thoroughly 
confused . 

2 Are you saying that-- 

Especially when you get into PIPS I, II and III. 

Q Focusing on the missile itself, as opposed to the 
support system — the vans and the radars for the missiles-- 

A Yes. 

C Focusing on the missiles themselves, is there a 
dif f erenee--is there a substantial difference between what is 




253 



UNClASSra 



HknZ- HIR167000 UllllknVwII ■•■■' PAGE 13 



298 
299 
300 

301 
302 
303 
30M 
305 
306 
307 
308 
309 
310 
311 
312 
313 
31l| 
315 
316 
317 
318 
319 
320 
321 
322 



calJ.ad tha basic Hawk missila and thtt I-Hauk-- 

A I don't know. 

2 --missila? 

A I just haard through the grapavine that the missila 
hadn't changed much through all the years. 

Q And you mentioned that basic Hawks ware brought 
into Israel periodically or at some point between 1967 and 
'73. 

A Well, I assumed they made some large purchase of, I 
think it's roughly 22 batteries. Haybe it's 11. You know, 
some number like that. 

Q And between 1973 and 1982, do you recall what the 
Israelis obtained? 

A Mo. 

e Do you recall, in the period between from 1967 
until 1980, what the Iranians obtained? (TPj 

A Yes. as a matter of fact. (I uutinii T ninn ■■innafT" 
•-4«**^>^iNaM»*^-9««*«^^^ I had occasion to check out that 
fact and I have a tiny note here which said that we had 
delivered, presuaably across the life of the program, 1>4^^ 
Hawk missiles and 360 of them — 360 additional Hawk missiles 
had been bought by Iran, but when the Shah collapsed those 
ware diverted to other customers . 

HR. SILBER: Tell them what you're reading from. 
BY HR. SABA: 



CNfUSSW 



254 



NAME 
323 
324 
325 
? '5 
327 
328 
329 
330 
33 1 
332 
333 
3314 
335 
336 
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338 
339 
340 
341 
342 
343 
344 
345 
346 
347 



HIR167000 



UHCUSSIHED 



PAGE 14 



2 Yes. Could you tell us what you are reading from? 

A Just from my own handnotes dating back to November 
'85. 

8 These are notes which you prepared for this 
deposition? 

A No. These are notebooks that I keep sort of as I 
go along in ny work. 

2 So these are notes kept in the normal course-- 

A Yes . 

2 --of your work? 

A Yes . 

2 Were these notes made contemporaneous with the 
transfers of weapons? 

A This was the note that cane up in this particular 
case having to do with the transfer of Hawk missile--pos5ible 
transfer of Hawk missiles to Iran in connection with the 
hostages . 

2 All right. He'll cone to that-- 

A Yes. 

2 --but at the moment I want to remain focused a bit 
on the pre-1980 period. 

A Um-hJ^. ' y 

2 Obviously, what I'm trying to determine is the 
compatibility of the Israeli system and missiles with those 
in the possession of the Iranians through the late 1970's. 



ONCUXSIflEB 



255 



NAHE 
3U8 
3U9 
350 
351 
352 
353 
35tt 
355 
356 
357 
358 
359 
360 
361 
362 
363 
36i| 
365 
366 
367 
368 
369 
370 
371 
372 



ONCLASSIFIEO 



HIR167000 lllllll MalalM ITII PAGE 15 

A I uould hav« no idaa. It's not within my 
fsponsibilit y f i ■ ""^ Bind I'm not privy to that information. Vy \>^ 

2 All right. In terms of tha 360 additional Hawks 
which war* ordared and paid for by the Iranians but not 
dalivazad by tha United States — 

A Um-huV. 

Q Do you recall what type of Hawks they were? 

A Ko. 

fi Could they be described as I-HauKs, or is it that 
you don't know? 

A These were just missiles. As a matter of fact/ I ^ 
had gotten a printout at the time of all this business ^*Mi*Qjn^\| 
r'ij) 'f the Hawk missiles, per se, not batteries, not other I 
associated equipment that we had sold. 

e Ware these missiles distinguished as-- 

A Hot that I could tell. 

S — basic or X-Hawks? 

A Not that I could tell from the printout. Kaver 
identified it one way or another. Which leads one to 
believe that possibly there's no great distinction. 

fi All right. There came a time, then, in 1982, when 
the Israelis made a request for additional Hawk missiles. 

A Um-h\n^ 

fi Could you please tell us in as much specificity and 
detail as you can what that process was commencing with tha 



(iNfussffe 



256 



NAME: 

373 
3714 
375 
376 
377 
378 
379 
380 
381 
382 
383 
3814 
385 
386 
387 
388 
389 
390 
391 
392 
393 
394 
395 
396 
397 



UNCLASSIFIED 



PAGE 16 
Who mada it? And to whom uas it 



HIR167000 
initial Israali laquest 
mada? 

A I don't know any of tha datails. I can only 
hypothetically construct it according to tha way people 
usually maka these requests. 

2 That ' s iina . 

A Tha Israelis, and it would H w i a ^ Ul CllM 11 luuu^ 
presumably be tha Ministry of Defense or their agents--could 




be 



e their purchasing office in New York, it could be their r-\JL) 

ission inA or ir could be their Ministry of Defense in Tel */^ 

Aviv--uould maka a request to an official representative of 

the U.S. Government. 

Q And what agency would that be? 

A It should be tha State Department. And tha State 

Depar tment--let us say that the message originated from Tel 

Aviv, from the embassy there, which said the Israelis are 

making a request for 100 Hawk missiles; and the State 

Department has a regular format that they follow when a 

country makes a request like this which covers most of the 

categories that are required by an eventual 36(b) notice. 

In other wotds-- 

HR. KREUZER: Excuse ma. 1 

THE HITKESS: — it's key. to the section 36(b) of the 
A 



BY MR. KREUZER: 



UNCIASSIFIED 



257 



JO 



NAME 
398 
399 

MOO 
40 1 
402 
403 
404 
405 
406 
407 
408 
409 
410 
411 
412 
413 
414 
415 
416 
417 
418 
419 
420 
421 
422 



HIR167000 




SIRED . 



AGE 17 



8 The messaga would go iron Tel Aviv to the State 
Dapaztnent? Is that what you'ze saying? 
A From the embassy. Our embassy. 
2 From the U.S. embassy? 

A U.S. embassy. The U.S. Ambassador, who, of course, 
is the only-- 

HR. SAXOH: If it had been sent to the U.S. 
Ambassador-- 

THE HITHESS: Yes. 

MR. SAXON: --by the Israeli government, it wouldn't 
have to go that route. 

THE WITNESS: One way we see requests from the 
Israelis come to us is they may send us a letter. 

HR. SILBER: From New York. 

THE WITNESS: From New York. From the purchasing 
office in New York. 

HR. GENZHAN: Who is ' • US ' ' ? 

THE WITNESS: To DSAA . ^ta^The ones I see mos 
now on an incidental basis are those requesting the 
application of credit funds to commercial contracts that 
they are concluding. 

BY HR. SABA: 
C If the request for Hawks was originated by the 
Israeli purchasing office in New York, to whom or to which 
office would that letter go? 



tiy y 



WUSSIfifB 



82-708 O-88-10 



258 



NAHZ 

«23 

I42i( 

i«25 

U26 

•427 

■428 

>429 

<430 

1431 

•432 

■433 

143(4 

1435 

(436 

(437 

•438 

439 

14140 

14U1 
14142 

14143 
141414 
14(45 
14U6 
14 147 



HIR167000 



,«sro 



PAGE 18 
I don't know. Thay could tak* it diract to th« 



Stat. Departmant or thay could taka it diract to DSAA. In 
any casa, then DSAA would pass it to Stata, and Stata would 
pass it to DSAA. 

2 What would Stata do with tha taquast? 

A It would probably pass it to DSAA for action. 

B All right. But lat's go slowar. 

Presumably Stata is mora than a mailbox and someone 
with responsibility at least reads it and determines to take 
some kind of action, other than merely forwarding it, unless 
I'm wrong. 

A Ho. that's right. Host of these kind of things /V 
would come to us from the Office of Political fW Military VjJ^ 
Affairs in tha Stata Department. It may be that tha Bureau 
or HEA would send it over to us, but generally I think they 
probably would sand it over to^iiil WjQ, which would, in 7 
turn, forward it to the Defense Department in some way, ^ 
although I cannot ever remember seeing a particular piece of 
correspondence which said, now, here's a request. 

2 Do you know what substantive action, if any. the 
State Department takes on receiving a request? r{\ 

A (T^*liliili bin J ^I don't know what process they have tof ' 
go through a scrutiny of each individual request. 

2 Do they make a recommendation on sending the 
document to DSAA? 




259 



NAni 

14M8 
t4U9 
1450 
M51 
U52 
14S3 
(45M 
455 
>456 
US7 
t«58 
1459 
U60 
U6 1 
(462 
U63 
U6t4 
1465 
1466 
467 
468 
1469 
(470 

147 1 

1472 



.....uNoussra „ 



>AGr 19 
A Not that Ir-I'v« just not s««n any coriaspondencc 
that ralatas to that. 

HR. SILBER: Thaxe's a scteaning pzocass involved. 
If thay ask for sonathing which is walJl beyond their 
sophistication or thair technology or what not, or something 
that's nuclear capable or something like that, they probably 
would not forward it. 

THE WITNESS^ Yes. I mean. State can squelch any 
request it wants. In fact, there are various requests that 
come in--let me^ see if I can think of a case. Wall, sinc^^J^ 
the issue is pretty well over now, there was questiorfl of \ P^ 




Usually, they are not immediately asking for a letter of 
offering; they are probing the United States with various 
diplomatic messages to find out whether we have a 
disposition to sell. 

And then the Office of Political Military Affairs 
wouldfii— *iW*lJ! ] lliaT) 9^ ^P ^^* chain to the Under Secretary 
for Security Assistance, Science and Technology, and they V^ 
might send a decision paper as to how do ""^-i^*^"^""' hnv n 
^^ enter this process? Should we convene an interagency 
group to discuss it? Should we send a reply now saying it's 
out of the question? Or should we ask DOD merely to process 




ifLhooniiU 



260 



KAHE 

H73 

H7H 

•♦75 

•476 

•♦77 

•♦78 

•♦79 

•♦80 

481 

482 

•♦83 

•♦8i4 

•♦85 

•♦86 

•♦87 

•♦88 

489 

•♦90 

•♦91 

•492 

•♦93 

U914 

•♦95 

•♦96 

U97 



UNCLASSIFIED 



HIR167000 UI«UI_nil|J|| ■■ ■■ pjiQE jq 

th« tcquAst and provida us, or pzapaxa a 'l*44*c zaquast? 

A 

BY nX. SABA: 



S Focusing on a Hawk zaquast-- 

A Yas. 

fi --from Israal. assuming that tha raquast cana in in' 
1982 and tha Stata Dapartmant would than forward £^ that 
raquast iron tha Israalisw to OSAA. 

A UB-h\Jli.. 

S Would tha Stata Oapartaant normally maka an . 
affirmatiwa racommandation or is tha forwarding of that 
raquast to you, in affaot, a racommandation to mova forward? 

a Ho. I havan't baan in on any spacific casas, but whara 
a country has tha axisting systam and alzaady has an 
Invantoty of such missilas it is traatad in an absolutely 
routina fashion, aKcapt as it triggars a notification 
raquiramant to Congrass. If Dafansa takas a look at it and 
if Stata has not otharwisa noticad-- 

a Excusa ma. Lat ma go backwards slowly. 

A Yas. 

e stata has tha piaca of papar. Hhat is your 
understanding as to what Stata would do if Stata nada a 
^•tarmination that notification wara raquirad? Stata has 
tha papar first. 

A Yas. 

2 Is it your understanding Stata has — you indicated 



\ 



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PAGE 21 



\ 



eatliar that you thought Stat« had th« initial 
lAsponsibility for making a datatmination as to 
congressional notification? 

A Um-hih^. Un-hv 

fi Is that your undarstanding ? 

A Yes. ^|«*«n ll'j^Vhat would be i«y understanding. 
I mean, assuming they had a rough idea of the cost, and 100 
Hawk missiles is very likely to be in that category. 

2 Do you recall roughly in 19--the period '82 to '85, 
what a Hawk missile cost in rough terms? 

A Yes. About 300,000 a copy. 

2 Each? 

A Yes. 

2 So assuming there was a request for 100 Hawk 
missiles that would come into the State Department, is it 
your understanding that that would trigger a notification 
requirement? 

2 And are you familiar with the basis for that 
notification requirement? 

A You mean the-- 

2 The legal basis. 

A A legal basis. Yes, as contained in section 36(b). 

2 What is your understanding of 36(b)? 

A It says if it's *1U million or more of significant 



% 



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KAHE: 
523 
52>4 
525 
526 
527 
528 
529 
530 
531 
532 
533 
53M 
535 
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538 
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540 
SU1 
5(42 
5143 
5<«>t 
51(5 

sue 

5U7 



HIR167000 



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PAGE 22 



military equipnent or SO million or mora o£ any kind of 
military goods and services and— what was it?--»200 million 
worth of construction services would require that before a^-> 
letter of offer can be issued to the country that various <J^^^ 
officers of the Congress must be notified and it must '»^ up ^ 
there for 30 days. 

fi All right. Turning to our example, the case of a 
1982 Israeli request for Hawks, presumably that request went 
through the State Department, there was a notification 
requirement triggered by the value — 
A Um-hxiW'. 

e --and then that determination is made by State and 
they forward the request to DSAA. 
A Um-hiJb. 

a Mould the State Department in forwarding that 
request indicate what determination, normally indicate what 
determination it had made in respect to congressional 
notification; and would it recommend as to who would make 
that notification? 

A Well, since DSAA routinely prepares and sends up 
those notifications, then they would say to DSAA 
prepare the notification. 

S So it would be your office, DSAA — 

h 

A Um-h\iW. 

2 — which would prepare the notification? 





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Q Who in DSAA would do that? 

A Within the Comptroller, the FHS Control Division 

2 The rns Control Division? 

A Yes . 

2 In 1985, who would that have been? 

A CS ^ 'think it was Kon Kalachowski at that time . 

2 Ron? 

A Spelled ' ' Hal-a-chow-ski . ' ' 

MR. SILBER: n-a-1-a-c-h-o-w-s-k-i. 

BY MR. SAXOK: 

2 Dr. Gaifney, let me clarify one point about section 

36(b) . 

U 

A Um-h\ft|. 

2 You said a moment ago that various Members of 
Congress have to be notified and then there is a 30-day 
period it has to wait. 
A 

2 That 30 days can be waived; is that correct? 
A In an emergency that can be waived, but the 
Congress has to be notified of the waiver. 

MR. SILBER: The waiver has to be done by the 
President, of course. 

THE WITNESS: Yes. 
BY HR. SAXON: 



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24 



C Okay. But the requirement of notification itself 
cannot be waived; is that correct? 

A That's right. 

Vn 
MR. SAXOH: Tank you. 

BY HR. SABA: 

2 DSAA, then, would prepare the notification, and uhol 
would actually deliver that to Congress? 

A Daisy Walker. 

2 And what is her title? 

A She's Administrative Assistant in our Congressional] 
Relations Office. 

2 So this would be a piece of paper — 



A Yes. It's a series of letters signed by the 
Director, DSAA. to Speaker of the House, et cetera. 



4. 



2 And presumably, in the case of the '82 request from 
Israel, these procedures were probably carried out? 

A Yes. 

2 Has there any particularly unusual about that 1982 
request from Israel? 

A I would suspect not. I remember it appearing on 
lists of the things that the Israelis were buying about that 
time and it seemed perfectly logical. 

2 And in respect of that 1982 request by Israel, what 
happened after it was received by DSAA? Notification is 
sent to the Congress and then what? 



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PAGE 25 



> 



A It presumably passad the 20-day miormal and a 30 
day iornal notiiication period without any inquiry by 
Congress. And then the LOX ^t^aii^^ttmttm'H^f^m^uhich had been ^ 
prepared before would have been issued to them> probably 
delivered by DSAA to a representative of their Kew York 
purchasing ofiice. 

2 And then what happens? 

A They go over the terns of the LOA. If they're 
happy with it, they sign it--pardon? 

MR. SILBER: They, the purchaser. 

THE WITNESS: The purchaser, yes. fflu Tiiailj^ 

1i '-t' t^r "I" ■■■ h a m fci i- |_ t he U.S. nilitary service 

with the systen, in this case the Army, would prepare that 
LOA for us. DSAA must countersign it. We check over the 
terms and ue countersign it, and then we issue it to the 
country's representative. 

The country then examines it; if they agree with 
the terms they, in turn, sign it. That represents a 
contract between the country and the U.S. Government which 
permits the U.S. Government to go out and contract for the 
missiles on behalf of the country. 

BY HR. SABA: 

fi All right. In th« cas« of Israel, would this 
normally be the Israeli purchasing office in New York City? 
A I don't know. I don't know who is entitled to sign 



'ttflUJi'//) 



m 



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MANE: 
623 
6214 
625 
626 
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629 
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631 
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633 
63(4 
635 
636 
637 
638 
639 
6(40 
6U1 
6(t2 
6U3 
6(4(4 
6(45 
6146 

6^7 



UNCLASSIFIEO 



HIR167000 imicl M.I. Ill ■■ 11 PAGE 26 
off on these LOA's. It could very well be the Hew York 
purchasing office. 

S All right. So the LOA prepared by the Army, 
countersigned by DSAA, goes to the authority of the Israeli 
government authorized to accept the LOA? 

A Yes. 

q And is it your understanding that upon the signature 
of the authorized Israeli person this becomes a binding 
contract between the United States and Israel as to those 
weapons ? 

A Yes. Not in all of its details. I mean, it is not 
a contract/ because we have to turn around and, in turn, 
make a contract with the manufacturer. It is a binding 
agreement-- 

fi ' understand. Let's continue. 

And you, in turn, turnaround and make an agreement 
with the contractor? 

A Yes. 

2 And the United States Government obtains the Hawks? 

A That is correct. 

e Could it be that these Hawks would be in the 
inventory of the United States? 

A Ue could sell them from stock, yes. 

Q So the choice then is either go to the 
manufacturer-- 



iiftimm 



i 



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NAHE: 
BIS 
6U9 
650 
651 
652 
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65U 
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66U 
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671 
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HIR167000 



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PAGE 27 



2 --in th* case of weapons that you don't dcau iiom 
stock-- 

A Yes. 

2 --or you could go directly to stock? 

A That's right. 

2 And at what point do we have a binding contract 
with the Israelis with all the terns and conditions iix^d X^'^-^ ^ 

A gti aT iuMfri — mrij if we are getting it from y 

production, we have a binding contract between the producer 
or manufacturer and the U.S. Government as soon as they sign 
the contract for production-- 

2 My concern is between the .'nited States Governmen'; 
and the government of Israel. I'm looking for a bindang 
contract . 

A The LOA is a binding contract, except we get to 
change the terms all around if we please. I mean, the costs 
in there have to be rough. You cannot commit yourself that 
this is exactly the cost that the manufacturer is going to 
come up with when they sit down to negotiate a contract. 

2 I understand. But what you're saying is I have a 
contract-- 

A All other terms in there are we promise to deliver 
these things and to--to buy then and to deliver them and to 
assure their quali.ty, and that kind of stuff. 



icussra 



268 



KANE 

673 

67U 

675 

676 

677 

678 

679 

680 

681 

682 

683 

68i« 

685 

686 

687 

688 

689 

690 

691 

692 

693 

69(< 

695 

696 

697 



HIR167000 



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PAGE 28 



S L«t na say I want to get a clear record on this 
point. it the point at which the Israeli-designated 
representative signs the LOA I have a binding agreement 
between the United States and the government of Israel for 
the provision of certain weapons by the United States to 
Israel . 

A Right. 

8 This document contains essentially all the terms 
and conditions subject to certain conditions subsequent 
usually having to do with matters of price. 

A Yes. 

e Mould that-- 

HR. SILBER: And delivery time. 
KR. SABA: He says correct. 
BY HR. SABA: 

2 And delivery time, is this correct? 

A Yes . 

e Mould that document signed — the LOA signed by the 
United States and by the designated Israeli person contain a 
condition regarding the transfer of those weapons by the 
Israelis to any third party? 

A Yes. That's standard to the LOA. 

2 And what is that provision? 

A I'm not familiar with it. I mean, Jerry would know 



better since he- 



UNClASSm 



269 



NAME 
698 
699 
700 
701 
702 
703 
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71 1 
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7 114 
715 
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HIR167000 



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PAGE 29 



But you would describe this as a tetn which is 



printed on the form oi the contract? 

A As far as I know, yes. 

2 And IS that generally subject to change after the 
LOA has been signed? 

A No . 

2 All right. 

A I can't imagine why anybody would change it. 

S Uhat do you recall--other than the specific language 
of that provision, do you recall the general thrust or the 
substance of that provision? 

A The general thrust is that the country needs the 
approval of the United States Government before it can 
transfer this to any third party. 

2 So that in the case of-- 

A And generally--! don't know whether it's in the LOA 
or the way we do it is that the country in selling it to 
that third party in turn presents a further restriction on 
third-party or fourth-party sales by that recipient country. 

S So your understanding is that there is a standard 
provision in the agreement between the United States--and 
w«'ll stay with our Israeli example--and Israel that upon 
receiving the weapons Israel agrees, as a condition of 
receiving these weapons, that it will not transfer these 
weapons to any third part.y without the advance-- 



liNcussm 



270 



A Exptass approval. I 

2 — axpress advanca approval of th« Unitad Statas; is 

that corract. 

* That's how I undarstand it. I think that's tha 

thrust of it. 

e A« I corract whan I say tha word ''advanca" 
approval? 

A This I don't know. 

a All right. 

A But I would assuaa it. 

a All right. Ha can chack tha contract doouaants . 

A Yas. 

a Is it your undarstanding ganarally that furthat to 
that condition is a raquiramant that conditions of transfer 
ba imposad by Israal on tha third-party transfaraa — 

A Yas. 

a — according to that agraanant? 

A I know that's a standard practica. Whathar it's 
also raflaotad in tha LOA, I don't know. 
BY HI. SAXON< 

a Lat sa follow up. Ona aora question. Dr. Gaffnay. 
Is it your undarstanding that that approval by tha 
Unltad Statas has to ba givan in writing? An I corract in 
stating that tha contract axprassly includes that language? 

A I don't know. 



NAHE: HIR167000 

723 

72M 

725 

726 

727 

728 

729 

730 

731 
732 
733 
73«» 
735 
736 
737 
738 
739 
7M0 
7m 
7U2 
7M3 
7U«I 
7«»S 
7(46 
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UNCLASSIHED 



HIR167000 IliVI.I UAAirini PAGE 31 

2 One additional point. LOA stands ior what? 

A L«ttar oi oif«r and accaptanc* . 

2 In assencs, though, it is an oiiac by the United 
States Goveznment to sell to the recipient country? 

A Yes. 

BY HR. SABA: 

Q I want to continue essentially the same line, 
though. 

Are you familiar with the circumstances, in the 
abstract, by which consent for a transfer can be given? 
What is the procedure, assuming Israel took those Hawks 
shortly thereafter and then desired to transfer them to a 
third country? Are you familiar with the procedure? 

A Yes. Uhat I've seen in the message traffic is like 
^^^^^fsold ^^^^^^^^^^^^H to ^^^^^^^^^^Ha few months 
Ue send out to the ^^^^^^^^H|«' sample letter saying here is 
the letter we request you the ^^^^^^^^^^^^|to 
when they receive 

Q Can I interrupt a moment, because the record would 
seem to indicate that they sold it first and then we did 
something? I want to-- 

A No. There was agreement to sell. That they came 
to us . 

S Okay. 

A They found a customer and they came to us and said: 



iifimim 



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NAME: 
773 
77t4 
775 
776 
111 
778 
779 
780 
781 
782 
783 
784 
785 
786 
787 
7 88 
789 
790 
791 
792 
793 
79t4 
795 
796 
797 



HIR167000 



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PAGE 32 



Hay we go through with this third-patty transfer? 

S So before any transfer the government of ^^^^^B 
can* to the Government of the United States? 
A That's right. 

2 And correct me if I'm wrong. And the government of 
[said to the United States: Ue have received 

[pursuant to an ruS/HAP program and we now wish to 
transfer some quantity of these weapons to a third party. 




h 



A Um-hiJW. 

2 So they requested, pursuant to that agreement with 
us, consent. 

A Um-hU^. Um-hOm. 

2 What happens when^^^^H requested consent? How 
does the United States respond to that? 

A What I have seen is in the cable traffic. Ue send 
out a message saying yes, ue consent to this transfer and-- 

2 Hho is ' ' we ' ' ? 

A Ue , the United States Government. 

2 How does the United States Government express 
itself? Is this the Department of State? Is this yourself? 

A Uell it's a cable out from the Department of State. 
He don't send it ourselves. 

fi All right. Again, I'm trying to get it very 
precise . 

A It's State cable, signed by the Secretary of State. 



)^ 



wussife 



273 



KAnE = 
798 
799 
800 
801 
802 
803 
SOU 
805 
806 
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809 
810 
811 
812 
813 
81(4 
815 
816 
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820 
821 
822 



HIR167000 



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fi So the request froml 



PAGE 33 



goes to the State 



Department? 

A Yes, I guess it does. 

S And the State Department is the agency authorized 
by the Arms Export Control Act--correct me if I'm wrong. 
A As far as I know. 

HR. SILBER: No. It's executive order. 
BY MR. SABA: 
S All right. By an executive order to grant that 
consent ^o^^^^^H^<> transfer the missiles, is your office 
involved m that procedure? 

A I assume so, but I don't know because I'm not 
personally in that loop. 

HR. SAXOK: Let me see if I can clarify this point 
for the record, and ask Jerry Silber to respond. Jerry, am 
I correct in saying that the Arms Export Control Act gives 
the President the authority to approve a third-party 
transfer? 

HR. SILBER: Yes. 

HR. SAXON: And that the President, by executive 
order, has delegated that authority to the Secretary of 
State? 

HR. SILBER: Yes. 

HR. SAXON: Thank you. 

BY KR. SABA: 



UNCUSSIFIED 



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NAME: 
823 
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PAGE 3U 



& All right. In granting that consent, ar« there any 
restrictions that you are aware of that are imposed on the 
President and, through the President., the Secretary oi State 
in granting consent to^^^B^? Is it entirely discretionary 
with the President? 

A I don't know. I nean, all I've seen is extracting^,7^ 
^^^•4^] the third-party nontransier agreement from the s 
recipient country. 

2 Suppose the intended recipient country was one of 
those countries on a list oi countries which is a considered 
to be a country aiding and supporting terrorism? 

A For which there is, in other words, a current law 
or determination which prohibits sales to that country, or a 
policy ; yes . 

MR. SABA' For the sake of clarity, and although 
Mr. Silber has not been sworn as a witness, he is present; 
and presuming he consents to answer a few questions as to 
legal points, I'd like to get his statement on the record. 
MR. SILBER: Of course. 
MR. SABA: And we do appreciate it. 

Jerry, obviously, this is an important point to us. 
And using the example that we're now looking at in which 
^^^^H sold ^^^^^^^H^ft I we have a now 

in which ^^^^^|has requested the United States to permit a 
transfer of^^^^^^^^vo ^^^^^^^^H has 



UNCLASSIFIED 



275 



^SUSSIFIED 



KAHE: HI11167000 \J ) Y 'J ^.f iW VII "^^ PAGE 35 

8U8 gon*. pt«suiiably. to tha State D«partment. The Seccetary oi 

8M9 Stat* is eiipoueiad by an eKecutive oidar oi tha President, 

850 pursuant to the President's authority under the Arns Export 

851 Control Act, to consent to that transfer. 

852 MR. SILBER: Correct. 

853 HR. SABA: Changing the facts slightly, and let us 
85<4 presume that the intended transferee uas Iran. 

855 HR. SILBER: You make it easier. 

856 HR. SABA: i nake it easier. 

857 HR. SILBER: He have certain policies on 

858 restrictions of transfers to ^^H^^^H' ^V policy, right 

859 now. 

860 MR. SABA: i suspected as much, and therefore I 

86 1 don't want to learn ^bout^^mmi I, obviously, want 

862 to learn about Iran. 

863 Could you explain to us--and we night as well focus 
86U the tine period. 

865 HR. SILBER: All right. 

866 MR. SABA: And we will focus it on the fall of 

867 1985. 

868 HR. SILBER: Right. 

869 HR. SABA: jn a case where a nation wished to 

870 transfer sonething like a Haverick or a Hawk to Iran, in 

87 1 1985, what were the legal procedures pertaining to such a 
872 transfer? 



tvi! 



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89 1 
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895 
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897 



HIR167000 



UNIHSSIFIED 



PAGE 36 



HR. SILBER: Ual]. the law says that the President 
may not consent to a transfer to a third party — whether it be 
a third country or a private individual, it is third party 
transier--if the United States, itself, would not have 
transferred those weapons systems directly. 

HR. SABA: Is the law you're referring to your Arms 
Export Control Act? 

MR. SILBER: I'm sorry? 

MR. SABA: The law to which you refer-- 

MR. SILBER: Yes. 

HR. SABA: --is the Arms Export Control Act? 

HR. SILBER: Section 3(a), last paragraph, of the 
Arms Export Control Act. So that if we had either a law or 
a public policy, announced policy, whereby we would not 
ourselves transfer to Iran a particular weapons system, then 
the President is by law prohibited from granting his consent 
to another country who has received or purchased those 
weapons systems originally to transfer to Iran. 

In addition, the law says even if we, ourselves, would 
transfer it. the law says that before the consent is given 
the transferee country must give written assurances to the 
United States Government--the recipient being the State 
Department, in fact--that it will not further transfer to a 
third country. 

MR. SABA: These are written assurances in advance 



l/NCUJSIflED 



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KAHE 
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900 

90 1 
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91S 
916 
917 
918 
919 
920 
921 
922 



HIR167000 



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PAGE 37 



of th« transfax? 

HR. SILBER: I balieva in advanca . And tha 
assurancas do not go to tha tzansiazor countzy but rathar 
dizactly to us. So that in tha casa oi Izan, if wa had no 
public policy oz lau against tzansiarzing pazticulaz weapons 
systams to Izan in tha fall of '8S-- 

HR. SABA: If Izan waza, lat's say, a ''vanilla'* 
countzy. 

MR. SILBER: A ''vanilla'' countzy is adaquata . 
All zight. Wa would still hava to go to tha govaznnant of 
Izan and ask foz assuzancas that if wa had consantad to, in 
this casa, say, Iszaal tzansfazzing thosa systans to Izan 
that Izan will not tzansfaz to any othaz thizd pazty without 
ouz pzioz wzittan appzoval unlass it was first 
danilitazizad . 

MR. SABA: And I taka it that in tha fall of 1985 
thaza waza zastzictions as to what tha Unitad Statas would 
dizactly, oz could dizactly tzansfaz to Izan. 

MR. SILBER: Tha zastzictions aza not as claaz as 
paopla would noznally assuaa. Thaza waza pzohibitions on 
Baking salas to countzias that hazboz tazzozists, and I 
baliava thaza is a sazious quastion as to whathaz Izan fit 
in that catagory. It is not that thay — tha law, as I 
undazstand it, doas not pzohibit Izanian, oz pzohibit salas 
to a countzy that instigatas tazzozism outsida its bozdazs. 



UNCLASSIFIE 



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NAHE: 
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HIR167000 



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PAGE 38 



which appeals to be cleaxly the case in the case of Iran and 
Lebanon, ior example, but rather, x£ international 
terrorists are granted sanctuary from prosecution in Iranian 
territory, and that is something which is not clear to me as 
I'm not privy to intelligence reports. But at least it's a 
working assumption that there was a problem with legally 
transferring weapons systems to Iran. 

HR. SABA: In regards to the terrorist restriction, 
do you recall the statute? 

HR. SILBER: At the time I think it was section 
3(f) of the Arms Export Control Act. 

MR. SABA: Xs there any list of countries 
supporting terrorism-- 

MR. SILBER: Yes. 

nR. SABA: --by which a determination at that tj.me 
might be made? 

MR. SILBER: Yes. Under the Export Administration 
Act of 1979 there is a list of countries supporting 
terrorism that that law requires be supplied, I believe, by 
the State Department, and I think it's published in the 
Federal Register and notified to the Congress; and I believe 
Iran was on that. 

The effect of that is not clear to ma because the 

Export Administration Act of 1979 does not deal with weapons 

or military use only. However, there was a clear policy. LJ- 
A L 



*MSflfe 



279 



HX.,e7ooo UHulHOblntU „,, 3, Q^ 

^'I'Mll' R' ' " no question in ray nind about that. The ^^ 

President and the Secretary of State and the Secretary of 
Defense had announced well before 1985 that ue uere not 
selling arras to Iran. He publicly encouraged third 
countries not to sell arms to Iran. 

KR. SABA: Has this called Operation Staunch? 

MR. SILBER: There was something in the executive 
branch, at least, called Operation Staunch, which was a 
campaign to lirait the flow of arras I think to Iran and Iraq. 
But our policies, which section 3(a), last paragraph, also 
invoke as well as laws against selling to Iran--our policies, 
indeed, are frora two factors^ One, the aftermath of the 
hostage release in 1981, with various executive orders **• ^\^ 
Trading With The Enemy Act and the International Emergency 
Economic Powers Act; and, also, the announced neutrality 
between Iran and Iraq that the United States has assumed 
since its outbreak in--before 1980? 

THE UITMESS: Um-hum. 

MR. SILBER: 1980. So we had two policies it seeros 
to me that were quite generally known that would have had 
said that we would not sell weapons systems to Iran. There 
were several laws that had to be consulted to see if it 
actually was prohibited or not. It's not clear to me that 
it was prohibited. 

But in any. event, the upshot of it is that under 



ONCIASSIRED 



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NAME: 
973 
97«4 
975 
976 
977 
978 
979 
980 
981 
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983 
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985 
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987 
988 
989 
990 
991 
992 
993 
99U 
995 
996 
997 



HIR167000 



UNCUSSIFIED 



PAGE ^o 



section 3(a), last paragraph, of the Arms Export Control Act 
the President could not or his designee could not consent to 
a transfer by any third country of weapons that were sold 
under the Foreign Military Sales Act and the Arms Export 
Control Act. Just could not. 

MR. SABA: To Iran? 

MR. SILBER: Could not to Iran, yes. 

MR. SABA: Has there any way, waiver, notice, 
mechanism, that would permit the President, assuming he met 
certain conditions, to effect that transfer? 

MR. SILBER: If the particular weapons systems that 
are to be transferred had an original acquisition cost of 
* 1 U million or more, if it's major defense equipment, which 
Hawk missiles are, or the other thresholds that were 
referred to in connection with section 36(b) were met, ( I JV^ 
before the President consent to the transfer. if these 7^ 
assurances are received from the transferee, he could have 
the State Department notify the Congress under section 3(d) 
of the Arms Export Control Act and he could announce that he 
is changing American policy on selling to Iran, and that we 
ourselves would do it and therefore he sees no reason why he 
ought not to be able to consent to another country selling 
with our consent. That is assuming that there is no legal 
prohibition . 

If the legal prohibition is found in executive 



iinmim 



281 



NAHE 
998 
999 

1000 
100 1 
1002 
1003 
100U 
1005 
1006 
1007 
1008 
1009 
1010 
1011 
10 12 
1013 
1014 
1015 
1016 
1017 
1018 
1019 
1020 
102 1 
1022 



HIR167000 



UNCIASSIHED 



PAGE m 



/^i^ 



orders or lists of terrorist countries, then, obviously, 
those documents have to be revised in accordance uith the 
authority under which they were promulgated. If (Hi uu tP I niij 
flat prohibition in the lau against sales to Iran, he would, 
of course, have to ask for an amendment of the law by the 
Congress . 

But there is a procedure for changing the 
application of these laws in a public, politically 
responsible manner. 

MR. SABA: What if the weapons aggregated are less, 
in value less than *1>4 million? 

nR. SILBER: Then there would be no requirement for 
prior notification to the Congress. If he wanted to adopt a 
different public policy, and if that were the only thing 
that were the bar to the consent, then he could announce a 
different policy. It would not necessarily have to be in 
reference to that particular proposed transfer. He could 
just say, on the advice of my cabinet, for example, I have 
decided that we should adopt a pro-Iranian stance in the 
Iran-Iraq War and we should be prepared to consider requests 
on a case-by-case basis of weapons purchases from Iran. 

He would not have to say, and of course I'm 
planning to consent to this less than *1i4 million transfer 
by a third country. 

HR. SABA: So your understanding is there wouldn't 



UNClASSra 



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MAKE: 

1023 

102U 

102S 

1026 

1027 

1028 

1029 

1030 

1031 

1032 

1033 

1034 

103S 

1036 

1037 

1038 

1039 

1040 

104 1 

1042 

1043 

1044 

1045 

1046 

1047 



HIR167000 



UNCLASSIFi'ED 



PAGE 42 



i 



be a requirement in that case ior congressional 
notification? 

MR. SILBER: Mould not be a requirenent, but he can 
always have consultations. 

MR. SABA: But there would still be a requirement 
even in that case, would there not, to obtain in advance of 
the transfer the Iranian assurances as to the disposition of 
the weapons on their receipt? 

MR. SILBER: That is correct. 

HR. KREUZER: But what requires him to announce a 
new policy, if it's under »14 million? Does 36(d) also 
require-- 

riR. SILBER: Ho. The last paragraph of section 
3(a) of the Arms Export Control Act says, in considering a 
request for approval of any transfer of any weapon, weapons 
systems, munitions, aircraft, military boat, military 
vessel, or other implement of war, to another country, the 
President shall not give his consent, unless the United 
States itself would transfer the defense article under 
consideration to that country. 

Now, if there were a law that said we, ourselves, 
could not transfer it, then, obviously, this law says he 
can' t[w»lr»^ consent. If it is not a law but a publicly (/l/ 
announced policy that we would not transfer it, he has to 
change the policy. And it would seem to me that if it's a 



UNCUSSIFIED 



283 




HIR167000 IllVlal M.l.lii' ITII PAGE U3 
policy that is not a public policy, obviously it can be 
changad in a nonpublic manner. But a publicly announced 
policy it seems to me has to be changed by a publicly 
announced revision. 

HR. KREUZER: Is that what that says? 

rtR. SILBER: That would be my interpretation of 
what that says . 

HR. GENZMAN: Can you read the language that you're 
using? 

HR. SILBER: Yes. In considering a request for 
approval of any transfer of any weapon, et cetera, to 
another country, the President shall not give his consent 
under this law, unless the United States itself would 
transfer the defense article under consideration to that 
country . 

And as far as I know, the State and Defense 
Departments have long construed that, since its enactment I 
believe in 1971, to mean that we would not consent, we could 
not consent--He, the State Department and the United States 
Government, could not consent to a transfer if either there 
was a legal prohibition or a public policy prohibition 
against that transfer. If it was merely a, what might be 
called a classified policy, then a classified policy could 
be changed by another classified policy revision. 

HR. KREUZER: sut you're interpreting in this 



UNClASSra 



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NAME: 

1073 
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1092 
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10914 
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1096 
1097 



UNtlASSlfltD 



HIR167000 lllalll MlllXll IkW PAGE MM 
Situation it's saying that because of public policy that you 
citkd that occurred since uai^in various executive orders, y. 
\ a» ^announced neutrality uith Iran and Iraq, that this is, in A 
fact, a public policy and therefore that the President would 
have to make a public policy statement, or state that public 
policy is nou being changed? 

MR. SILBER: Or words to that effect. He would not 
necessarily have to address a pending proposed consent to a 
third-party transfer. He could simply say we're changing 
our policy on selling to this particular country. 

MR. KREUZER: But if arms, in fact, did transfer, 
then we would have to have had a public policy statement 
from the President prior to that time? 

MR. SILBER: Not necessarily th« President. 
Presumably any-- 

MR. KREUZER: Or his designated — 

MR. SILBER: --authorized official. The Secretary 
of State. An Assistant Secretary of State for Hear East and 
Southeast Affairs could, for example, in testimony before 
Congress put in a significant phrase saying ue are now 
considering or would be prepared to consider on a case-by- 
case basis requests for purchase of arms by the Iranian 
government . 

There's a multitude of ways in which one can 
announce a policy change, assuming it's only a policy 



UNcussm 



285 



UNClASSinED 



KAHE: HIR167000 l| |1VI»» **'*'' " PUGE US 



1098 
1099 
1 100 
1101 
1102 
1 103 
110M 
1 105 
1 106 
1107 
1 108 
1109 
1110 
1111 

I 112 

II 13 

1 im 

1115 
1116 
1 117 
1118 
1119 
1120 
1 121 
1122 



Chang*, and that's all w* ' ta laiarzing to now. 

HR. SABA: Hr. Silbaz. you said that Stata and 
Oafansa hava long constzuad this pazagzaph. 

m. SILBCRi Uit-hua. 

HR. SABA: Hava thaza baan> to youz knowladga. 
uzittan manozanda pzapazad as to that eonstzuotion? Oz any 
oonstzuotlon? 

MR. SZLBZR: I baliava that thaza hava baan. I'va 
saan, I think I'va saan thaa. It would ba dliiioult to tzy 
to find tha« and pzoduca thaa> but I baliava that if you 
would chacK with tha Lagal Advisazjr Of f ica in Dapaztaant of 
Stata thay would agzaa that this pzohibltlon oovazad both 
law — lagal pzohibitions and publio polioy pzohibitlons . 

If you look at tha zaason that this law was anactad 
in I baliava it was 
govaznaant of India and tha govaznaant of Pakistan waza at 
waz in tha wastazn pazt of India and tha Pzasidant, at that 



n «i w WI4V &««»»v«K v«ft^ V ^M%^m a^s« m^« vats^^ v«\a 

I i^0 1* «1 l971, tha zaason was that tha yCvl 



tiaa Pzasidant NiKon, had announoad a stziot policy of 
nautzality- it tha saaa tiaa tha Bliali if Ti an ■■■Ion tha ^.J 
sida of tha Pakistanis and wantad to supply tanks oz zapaiz 
sazvicas foz Pakistani tanks, and tha Adainistzation was ^ 
baing faoad with a zaquast fzoa thaljThih nf Taatilto assist / 
in that affozt to suppozt tha Pakistani tanks in battla. 
And it was zavaalad in tha pzass. in tha Aaazican pzass. 
that tha Pzasidant had uzgad tha Saczatazy of Stata, who was 



UNClASSro 



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NAME: 

1 123 
1 12<4 
1 125 
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1 128 
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1 130 
1131 
1 132 
1 133 
1 134 
1 135 
1 136 
1 137 
1 138 
1 139 

1 mo 

1 lUI 
1 1142 
1 143 
1 1>4(t 
1 1(45 
1 1>46 
1 147 



HIR167000 



UNCLASSIFIED 



PAGE 46 



at that time Haniy Kissinger, that we have got to tilt moce 
to Pakistan. He was saying that in private to the Secretary 
oi State. At the same tine publicly ue had a policy of 
neutrality, and the Congress thought that this was an 
inappropriate way to handle this sort oi natter, so they 
enacted this provision. 

At the tine, I don't know that there was a legal , 
prohibition against consenting to Ixji iEeiilSlIl \transier of V" 
services or materiel to Pakistan. So it was enacted to 
remedy a perceived evil as a natter of policy, rather than 
as a natter of legal prohibition. Therefore, it would seen 
to me that that legislation goes beyond legal prohibitions. 
It goes to the substance of what your publicly announced 
policy is . 

MR. SABA: Let ne ask you a question. In the 
period June 1. 1985 until January 17, 1986, did anyone fron 
OSD ask your office for an opinion, whether fornally or 
informally, orally or written, in any way, having to do with 
the propriety, legality of a transfer by Israel of weapons 
systems originally obtained from the United States to Iran? 

HR. SILBER: No. 

HR. SABA: Bearing in nind that at the nonent 
you're volunteering this as a statenent, you have not been 
sworn: if you were sworn, would your statenent be the sane? 

HR. SILBER: Yes. 



UNCUSSIRED 



287 



NAME: 

1 1>48 
1 149 
1150 
1 151 
1 152 
1 153 
1 154 
1155 
1 156 
1 157 
1 158 
1 159 
1 160 
1161 
1 162 
1 163 
1 16U 
1 165 
1 166 
1 167 
1 168 
1 169 
1 170 
1 171 
1 172 



HIR167000 



UMCUSsm 



PAGE 47 



MR. SABA: I'll sorry to hav« askad, but I want to 
gat a vary clear statemant on this. 

KR. SILBER: Ko one asked ma of those details 
during that tine period oi the legality or propriety of that 
action. 

MR. SABA: Prior to this period and generally in 
the circumstances of your duties as general counsel to DSAA, 
uould you say that your understanding and opinion concerning 
the Arms Export Control Act was made known to the Office of 
the Secretary; that he > that the Secretary had knowledge of 
these restrictions in the Arms Export Control Act? 

MR. SILBER: I could not testify as to the 
knowledge of Secretary Weinberger or any other American 
official ' s . 

MR. SABA: But you provided them earlier with 
opinions to that effect? 

MR. SILBER: No. The opinions that I've provided 
over a period of time have been to DSAA and prior to my 
assumption to the duties of the General Counsel, DSAA. when 
I was in theAeanaral Counsel to ODD, I provided similar '^ U I 
advice from time to time, and possibly in writing, to ISA as 
well as DSAA. And I know I've discussed this with the 
Oiilca of the Legal Adviser in the Department of State from ^ . 

to AJi 

time. time in the '70's and early '80's. y 

HR. SABA: Did you have occasion to discuss the 



UNCUSSIRED 



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NAME: 
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1 17S 
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1 180 
1 181 
1 182 
1 183 
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1 185 
1 186 
1 187 
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1 190 
1191 
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HIR167000 



ytlCUSSIHED 



PAGE 48 



matter with Mr. Taft any time in 1985? 

MR. SILBER: No. 

MR. SABA: Do you recall having discussions uith 
hire prior to 1985, including the time when he was Counsel? 

MR. SILBER: I, of course, discussed many legal 
issues uith Deputy Secretary Taft when he was the General 
Counsel at DOD but I don't recall this subject ever coming 
up. I mean, this subject being the interpretation of that 
part of the Arms Export Control Act. 

NR . SABA: Yes, without regard necessarily to 
Israel or Iran. 

All right, I'd like to go back to the Israeli Hawk 
situation, but you all may have some additional questions on 
the law. 

riR. GENZMAN: Let rae ask a question. 

You have been citing to a provision that deals with 
transfers from the original purchasing country to a third 
party, have you not? 

MR. SILBER: Correct. 

HR. GENZMAN: Are you saying that the restrictions 
we've been talking about would apply if the U.S. were to 
want to sell directly to, say, Iran? That if there was a 
law or a policy, public policy to the contrary-let's :ust 
say a public policy to the contrary, that there would have 
to be an announcement of a contrary change in policy before 



mmum 



i 



289 



NAHE : 
1 198 
1 199 
1200 
120 1 
1202 
1203 
120M 
1205 
1206 
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1209 
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1213 
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12 15 
12 16 
12 17 
12 18 
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1220 
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HIR 167000 



UNCLASSIFIED 



PAGE 49 



that could be done? 



MR. SILBER: If I understand the question, yes, 

6. .... X 



that lia*- ray interpretation of the lau 

MR. GENZMAN: So, if it's your understanding that 
there is a public policy, then a presidential finding or 
some sort of secret directive could not do the 30b to permit 
a sale or transfer to such a country? 

MR. SILBER: That raises a very difficult question 

of the applicability of the procedures for control of covert 

_OV€iit 
activities on the rules and procedures for the /(W«^"7secur 1 ty 

Assistance program, which is a more than slightly 

contentious issue. If I uere to hazard ray own opinion, ray 

own opinion would be that the procedures for control of 

covert actions do not supersede th« laus and regulations 

that deal with the^vert Security Assistance program. 

Of course, this paragraph does not deal with 
consenting to transfer of items that were not transferred 
originally under the Arms Export Control Act. If they had 
originally been transferred under the Covert program, 
whatever restrictions were on that would presumably govern 
the further transfer. This section only deals with weapons 
that are transferred under the Arras Export Control Act. 

MR. SABA: Go ahead. 

MR. GEHZMAN: I haven't taken a look at that 
particular section, but does that section only deal with 



n-^ 






>^g.^ 



mmm 



0-88-11 



290 



NAME 
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12214 
1225 
1226 
1227 
1228 
1229 
1230 
1231 
1232 
1233 
1231 
1235 
1236 
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1238 
1239 
1240 
12M 1 
1242 
1243 
1 244 
1245 
1246 
1247 



UNCUSSIRED 



HIR167000 IIIVICI Pq.-lclltl II 11 PAGE 50 
transfers by the original purchasing country to another 
country and whether that is permissible? 

MR. SILBER No. It would also deal with transfers 
of the third country to the fourth country or the fourth 
country to the fifth country. 

MR. GEKZMAN: Fine. Does it deal with transfers 
directly from the U.S. to another country? 

HR. SILBER: No. That particular section or 
paragraph does not. 

MR. GENZMAN: Can you give me a citation for the 
section that deals with the direct transfers? 

MR. SILBER: That would be section 3(a) of the Arras 
Export Control Act. 

MR. GENZMAN: And you say you-- 

MR. SILBER: i'b sorry. 3(a) other than the last 
paragraph of 3(a). The last paragraph of 3(a) deals with 
third-party transfers; 3(a) in the beginning deals with the 
question of our sale or lease of weapons to. shall we say. 
second countries. 

MR. GENZMAK: So your construction that there has 
to be an announcement of a change m policy would apply 
g«n«rally to 3(a)'s provisions? 

MR. SILBER: I'n not sura I understand. 

MR. GENZMAN: Direct transfers to second countries-- 

MR. SILBER: Oh. No. 



UNCLASSIRED 



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HIR167000 



yNCUSSIFlEO 



PAGE 51 



MR. GENZMAN: --or to third to iourth to fifth. 

MR. SILBER: If the United States has a policy, not 
a law, but there is a policy against transfer to a 
particular country from the United States, and if the United 
States wishes then to make a particular sale, if there's a 
36(b) notification requited, obviously, ue are going 
contrary to the previously announced policy. If it is not 
under a 36(b) procedure, then the Congress would be notified 
on a quarterly basis after the fact that we had made sales 
to a recipient of a weapons system that previously had not 



been consistent with our policy. I don't know that we woul 
have to have a publicly announced policy .there . 



Kplhi 



i^v 



In the Bvert Security Assistance program there are / 



few secrets, and fewer that remain secret for more than 
three months, because of the quarterly reporting system. 

MR. SABA: Mr. Silber, I do have a last question. 
Is ray understanding of section 3(6) of the Arras Export 
Control Act correct in that, if the President were to 
receive information that a transfer of a defense article has 
been mada by a recipient without his consent, he would 
report that infornation to the Speaker of the House and the 
Senate Committee on Foreign Relations? 

MR. SILBER: Well that has been delegated also to 
the Secretary of State. The only thing that I can comment 
about that is that it requires that if there are any 



.71^ 



«IKSSW 



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HNtlASSra 



HIR167000 ||ls|j1 niJOll ILV t'AGE 52 
information, presumably any credible or reliable 
iniornation, and that there's a--that the transfer has to 
have been made, it's not ]ust a proposed transfer, there are 
many, many rumors in the trade--in the international trade of 
arms many rumors about transfers, possible transfers, 
transfers have happened. What this section requires is the 
President, through his delegate the Secretary of State, to 
tell the Congress when the information is of such a 
character that it is believable, and that it's only those 
transfers that would otherwise be in violation of the 
section requiring his consent. 

HR. SABA: All right. I'm going to leave this area 
and this subject. 

MR. KREUZER: I have one more question. 

BY MR. KREUZER: 
2 Earlier, Dr. Gaffney, you mentioned that between 
1967 and some point in time that we had delivered 1 , M82 
Hawks to Iran? 

A I said over the life of our Hawk program with Iran 
we had delivered y.HHZ. 

A And I have no idea when that program started or 

left. 

when the lastg * j delivery took place before the Shah ^ i»>* 1 
C And I think that you've mentioned that there were 
360 Hawks that had been ordered and paid for by Iran but 



^. 



UNClASSra 



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NAME 
1298 
1299 
1300 
130 1 
1302 
1303 
13014 
1305 
1306 
1307 
1308 
1309 
1310 
1311 
1312 
1313 
13 m 
1315 
1316 
1317 
1318 
1319 
1320 
1321 
1322 



KlASSffl 



Hy note only says that 360 Hawk missiles . diver ted 



^ 



4- 



HIR167000 llliail nUUII ■»■■' page S3 

weie never delivered because there had been a revolution m 
'79. 

A 

from Iran. 

2 Diverted. Where uere they-- 

A Uell, no. I'm :ust saying that presumably they 
uere somewhere in the pipeline, 'fe wrt) I assume since it sayg^-1 , 
360 ior Iran that probably there was an LOA and maybe 
production started on them, but that they were probably 
delivered out over time. I mean, other customers uere found 
ior them. 

2 So they were delivered probably to other customers. 

A Yes. 

B And in 1985 the Israelis-- 

A And any iunds, you see, that were owed to the 
Iranians m progress payments to date, up to the date would 
probably have b e e ]iL.i4Mita>JUk*«»M put into their trust fund as 
we sold them off. In other words, when you sell to another 
customer, they probably picked up the progress payments, and 
the money that comes in, some of it goes back to the Iranian 
Trust Fund and some would go in continued production, on a 
hypothetical basis. 

fi So, now I'd just like to jump away from that to 
1985. We sold a hundred Hawk missiles to Israel. 

A In 1982, we agreed to an LOA, a case. 



UNClASSra 



294 



NAME: 
1323 
132U 
1325 
1326 
1327 
1 328 
1329 
1330 
1331 
1332 
1333 
133U 
1 335 
1336 
1 337 
1338 
1 339 
13H0 
134 1 
1312 
1 3143 
13414 
1345 
1346 
1347 



HIR167000 



mMm 



<A^ 



PAGE 54 
2 We delivered a hundred Hauks . 

A And, in fact, (ShJ bl i iTj they were--and very ^X^ 
coincidentally--delivered in early November of 1985. Three 
year lead time, which is about-- 

e Do you know who else took delivery m 1985 of any 
Hawk missiles? 

A As I remember, there were about 70 Hawk missiles 
went to Korea about that time . 

2 Seventy Hawk missiles to North Korea? 

A Yes. 

2 In 1985? 

MR. SABA: Excuse me. I doubt that it was North 
Korea. 

BY MR. KREUZER: 
2 I mean. excuse--I'm sorry. 
A Didn't I say South Korea? 
2 To South Korea in 1985. Anybody else? 
A When I was checking about that time there was a 
number m the pipeline as well for the UAE. But since all 
the systems ware not in place in the UAE, they were heading 
for storage . 

2 So they would not have gone to the UAE? 
A They had not gone to the UAE. 

2 How about anybody else, other than the United Arab 
Emirates and South Korea? 



MUSSW 



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NAME 
13U8 
1349 
1350 
1351 
1352 
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13514 
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1357 
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1359 
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1361 
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1363 
136>4 
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1370 
137 1 
1372 



HIR167000 



yjiciASsro 



PAGE 55 



At about that time when I looked into it, there 



uate 3ust those three cases uhich were very active : the 
Israeli, the Korean--South Korean, and the UAE. 

Q li I said mm. would that-- 

A That triggers a meraory, yes, that-- 

2 Possibly H| 

A Something like that, but I don't remember. 
BY nx. SABA : 

e All right. Returning to our Israeli case, the LOA 
was executed m 1982, and when were the missiles actually 
delivered ? 

A When I checked on it m November '85, and this is 
around Hoverober 19 or thereabouts, it showed on our records 
as still in the pipeline; but then when I checked with the 
Army, they said, oh, they had been delivered--and I have to 
explain what I think ''delivered'' means--:ust a iew days 
before that. 

2 Why don't you go ahead-- 

A Now by what I mean delivered, we usually mean that 
they hava bean produced and the title has passed to the 
country at the manufacturer and the country is then 
rasponsible for transporting them from the manufacturer back 
to thaiz country. 

fi So delivery is, essentially, a legal shipping term. 
It might be fob.-- 



WUSSW 



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I 



HAKE: 

1373 
1374 
1375 
1376 
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1378 
1379 
1 380 
1381 
1 382 
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138U 
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1 388 
1389 
1 390 
1 39 1 
1392 
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1397 



HIR167000 



iiNcussra 



PAGE 56 



A Right. 



2 --the point of storage. It may be f.o.b. point of 
shipment . 

A When I say that they had been recently delivered, 
that did not tell ne where they were physically m any uay . 

e But the title has transferred? 

A Yes . 

fi That is your understanding of ''delivered''? 

A That's right, that the title had transferred. 

2 And as to that 1982 request for 100 missiles-- 

A Un-hvh^. 

2 --did there come a time when you learned when title 
had transferred to Israel on those missiles? 

A No. Just that it had been, just earlier in 
November of 1985. 

2 I see. So your understanding was that in early 
November 1985 the title to the 100 Hawks transferred to 
Israel . 

A To make it more precise, sometime before November 
19th. 

2 All right. Do you know what happened to those 100 
Hawks? 

A Ho. 

2 Did you make further inquiries? 

A No. 



MOK^a^^^ 



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HIR 167000 



iwssw 



PAGE 57 



e In regards to those 100 Hawks, was there ever a 
tine in which there were discussions, whether within the 
United States Government with Israelis or generally, 
concerning any subsequent transfer by the Israelis of those 
Hawks to a third party? 

A Not that I know of . 

2 All right. Dr. Gaffney, if I can turn to the 
period, now, of approximately November 1985. 

A Um-hiA^. /r 

2 And I would like to go through this period slowly 
and specifically, and I would turn your attention in 
particular to a day which Mr. Koch came to your office. 
What I would like is, if you could tell the story as much in 
your own words, I will try not to interrupt, since I would 
like to get a narrative as much as I can. You might begin 
by explaining in a general way how you came to be an Acting 
Director, and I'm particularly interested in calendar dates 
and m the details of conversations. "W, 

^^ 

A I came to be Acting Director \n , I think it was M 
roughly November 19th. I have a note in my book which says 
that I began Acting Director on 18 November 1985. 

2 And I take it the book you are referring to is-- 
A It IS :ust a casual book of notes that I keep for 
my taskings . 

MR. SILBER: Unh-unh. I would say that is what we 



«msw 



298 



HAHE: 
11423 
1142U 
1425 
11426 
1427 
11428 
1429 
1430 
143 1 
1432 
1433 
1434 
1435 
1436 
1437 
1438 
1439 
1440 
1441 
1442 
1443 
1444 
1445 
1446 
1447 



HIR 167000 



lifiCLASSiFIED 



PAGE 58 



ci'ofy 



can call a uork diary. 

THE UITNESS: A uorkf--yes. Sure, you can call it a 
uork diary or anything like that. 
BY MR. SABA: 
2 All right. So that on Movember 18, 1985, you came 
to be Acting Director. 
A Right. 

2 And hou is that you become Acting Director? 
A That's because the Director and the Deputy Director 
were both out of the country at that time. The Director was 
in Pakistan. 

BY MR. SAXON: 
2 The Director is General Cast? 
A General Gast. 

2 And the Deputy Director is-- 

A The Deputy is Glenn Rudd . And Glenn Rudd was at 
the Security Assistance Conference in Hawaii during that 
ueek. So without having a further note on it, I believe I 
was the Acting Director for that entire week, so that would 
have been five days. 
BY MR. SABA: 
2 The 18th of November was a Monday? 

A I think so. That would be 18, 19, 20, 21, 22--yes. 
So let's say 18th through 22nd. 

2 So there was an entire workweek-- 



UNCUSSIFIEO 



299 



NAME 
1448 
1449 
1450 
145 1 
1452 
1453 
1454 
1455 
1456 
1457 
1458 
1459 
1460 
1 46 1 
1462 
1463 
1 464 
1465 
1466 
1467 
1468 
1469 
1470 
147 1 
1472 



HIR 167000 



mssm 



PAGE 59 



2 --for which uere the Acting Director? 

A Right. 

2 Does your work diary reflect the last day on which 
you uere Acting Director-- 

A I don't think so. 

Q --in that period? 

A I don't see anything. I :ust made a list of the 
things on the 21st of November which I would report to GajJ 
and then it :uraps to 25 November, which I identify as a 
Monday. I have no notes on^22, which was a Friday. ^ 
probably spent most of the day writing my ^a*^-*^ what - 
happened-m- the-week report to Cast. 

2 All right. Going back to the beginning of that 
week, Monday, the 18th of November, do you recall from your 
memory or does your work diary reflect a meeting that week 
or contact from Noel Koch? 

A No. The only note that it first shows here is on 
19 November, where I put in my book a little note that said 
''220 Hawk missiles due for delivery November '85 through 
March '86.'' So I presume that I checked that out on 
Tuasday, November 19th. and that was-- 
BY MR. SAXON: 

2 Give us the dates again, please? 

A Tuesday, November 19th. 






UNtUSSIFIED 



300 



NAHE: 

1U73 
1I*7M 
1"475 
11476 
1477 
1478 
1479 
1480 
1481 
1482 
1483 
1484 
1485 
1486 
1487 
1488 
1489 
1490 
1491 
1492 
1493 
1494 
1495 
1496 
1497 



HIRI67000 



yNMSinEO 



PAGE 60 



2 No. The dates iot delivery for the 220. 
A November '85 through March '86. And presumably 
that's because on more likely Tuesday, the 19th of November, 
Noel Koch had come to me and said ue need to find out 
whether there are any Hawk missiles which are available for 
delivery . 

2 That's Koch--k-o-c-h? 

A K-o-c-h. And at that time he was Acting Assistant 
Secretary, ISA. 

MR. SABA: oii the record a moment. 
[Discussion off the record. 1 
BY MR. SABA: 
2 Dr. Gaffney, I call your attention to your work 
diary, and I would like to enter for the record as Exhibit 1 
your entries for the 19th of November 1985 which constitute 
two pages of your work diary. 

(A document was marked 
Deposition Exhibit No. 1 
for identification.) 
BY NR. SABA: 
2 And calling your attention to the first page, to 
the bottom right-hand corner, there is an entry that states 
'•220 Hawk missiles due for delivery November '85-I1arch 
'86. ' • 

A Yes. 



UNCLASSIRED 



301 



HIR167000 



ONCISSSIFIED 



PAGE 61 



2 Can you tell us how that entry came to be? 

A That's because I went down to our Comptroller, or 
Data nanagement Division, and asked them to give me a 
computer printout oi all Hawk deliveries over time. 

2 And what caused you to take that action? 

A That's because Noel Koch asked ne to find out 
whether we have any Hawk missiles and where are they. 

S Did Mr. Koch come to youi office? 

A I don't lemembaz specifically. I suspect he called 
me up to his office, which would be the appropriate way to^— jF^^^- 
do It. It is only a ^^rw*—»w»r jliuiJ^ few steps down the /\ 
hall. I was sitting in the Director, DS AA ' Sy of f ice at the 
time . 

2 I have for Exhibit 2 a calendar, which is Mr. 
Koch's calendar, and I have the page reflecting the events 
of November 19, 1985. 

(A document was marked 
Deposition Exhibit No. 2 
for identification.) 
BY HR. SABA: 

2 I'll provide it to you and you will note that there 
is an entry, approximately 12 o'clock, which states, ''To 
General Powell with Hank Gaffney.'' 

A Yes. 

2 Perhaps that will help you to r.eoall what 




«5l 



302 



hahe ■ 

1523 
1524 
1525 
1526 
1 527 
1528 
1529 
1530 

153 1 
1532 
1533 
1534 
1535 
1536 
1537 
1538 
1539 
1540 

154 1 
1542 
1543 
1544 
1545 
1546 
1547 



HIR167000 



transpired 



UNCUSSIFIEO 



PAGE 62 



A Yes. As I reraeraber xt, the best I can and it's 
kind of vague, he had asked rae to find out where there are 
Hawk missiles and he said that it's a very hush-hush 
project. And then later-- 

2 And this uas-- 

A This uas Noel Koch. 

2 I'm sorry to interrupt. 

Noel Koch came to your office. 

A I don't remember. Or probably called me down to 
his office . 

2 So you went to his. It uas not a telephone call. 
It uas a meeting face to face? 

A No. I think it uas face to face.' 

2 All right. And what did fir. Koch say to you in 
that meeting? 

A Now, to the best of ray knowledge, it was this is a 
very hush-hush project. Colin Powell--! don't knou if he 
brought Colin Pouell's name up at that point, but he said ue 
need to find out uhether there are any Hawk missiles 
available, let's put it that way. And hou many. 

2 Did he say uhy? \V/ 

X "p*! ^ it'- "^^-^ the best of my memory, he said"^^' 

it uas some sort of very hush-hush project and it's the 
front office uants it. And I don't knou uhether it uas then 




■■n 



\IJ 



303 



BNWSsro 



^ 



HIK167000 |||HJL.n%/^*" •^-' PAGE 63 
or^^«^HNW4^ a short tin* lat«z thatI^^i>*«»»^M>Wj. ha was 
uozklnj dlzaetly with Colin Pouall, th« Military Assistant 
to SECDEf. But lat«z on in tha morning, as this shows, h« 
said: '*i«t's 90 down. Colin Powall wants to talk about 
this zaquast.'* So wa want down to saa Colin Powall. 

fi Just focusing slowly on that ilrst aaating, ha 
said — ha askad you whathaz thara ara Hawk aissilas availabla, 
how many, it was hush-hush, a iront oiiica projaet. 

A Yas. 

fi Has that tha axtant oi tha eonvazsatlon? 

A Yas. 

fi Has thaza any aantion oi tha dastlnation oi tha 
aissilas in that first eonvarsation? 

A Not that I ramambar. 

fi Has Israal aantionad? 

A Not that I ramaabar. 

fi Iran mantionad? 

A Not that at that vary initial staga. 

fi Kara any datas mantionad in that first maating? 

A No. And as a pazsonal opinion, tha way Noal Koch 
was addrassing it was that this is tha first tima ha'd avar 
haazd of anything Ilka that and ha raally didn't know what 
was antailad. 

fi All right. So you hava this maating. About how 

O 
long did that maating taka plaea: 



UNCLASSIHED 



304 



NAHE: 
1573 
157U 

1575 
1576 
1577 
1578 
1579 
1580 
1581 
1582 
1583 
158U 
1585 
1586 
1587 
1588 
1589 
1590 
1591 
1592 
1593 
15914 
159S 
1596 
1597 



HIR167000 



UNCUSSIRED 

Only a coupla of minutas . 



PAGE 64 



fi And then what did you do following that maeting? 
HR. SAXON: Before you get to that, let me ask one 
question . 

BY MR. SAXOH- 
2 What did you understand Hr . Koch to mean when he 
said that the front office wanted it? 

A 
Powell wanted it for Weinberger. And as the week 
progressed, Powell wanted it for Weinberger to take to an 



ne 

r- ^ '-+- ^ 

( We il l pe e tl y ^^ later on, ^Iml^ became clear that X, 



4^ 



NSC meeting, or a meeting in the White House. X thought 
Mas. NSC meeting. 

BY MR. SABA: 

2 But in stating in that first meeting, the front 
office wants it, he wasn't more specific? 

A I can't remember. You know, it obviously didn't--it 
was not something that grabbed me. 

8 So that meeting was a few moments. Then what did 
you do? 

A Then I went and Z got the data printout, from our a 
Data Management Division, of all the Hawks Qni^^*-" order to^^ 
find out which were in the immediate pipeline. 

S Whan you say all the Hawks, specifically what-- 

A Hawk missiles. 

2 That's all the Hawk missiles ever made or all 



UNCLASSIFIED 



305 



HAKE: 
1598 
1S99 
1600 
1601 
1602 
1603 
160<4 
1605 
1606 
1607 
1608 
1609 
1610 
1611 
1612 
1613 
161>t 
1615 
1616 
1617 
1618 
1619 
1620 
1621 
1622 



":::::--° uNCLASSiFiED "" " 

A All Hauk missiles ever sold through Foreign 
nilitary Sales. 

S So this printout would show me from day one all 
Hawk missiles ever transferred to a foreign country under 
Foreign Military Sales? 

A Yes. 

2 Would that printout also tell me Hawk missiles 
currently in the pipeline? 

A Yes, which was my basic intent, to-- 

Q Mould it tell me of the number of Hawk missiles in 
the United States military inventory? 

A Ho. 

fi Mould it tell me of the number of Hawks currently 
in production in the United States? 

A For foreign customers? 

2 One. 

A For foreign customers, it would give an indication 
of that. 

2 Mould it give an indication of Hawks in production 
for the United States military purposes? 

A Ko. 

2 And did you obtain a printout? 

A Yes. 

2 Where is that printout today, do you know? 



UNCUSSIHED 



306 



NAME: 
1623 
162*4 
1625 
1626 
1627 
1628 
1629 
1630 
1631 
1632 
1633 
163>4 
1635 
1636 
1637 
1638 
1639 
16M0 
16141 
16M2 
16M3 
16UU 
16145 
16>46 
1647 



«"""•• UNCLASSIFIED "" " ^ 

A ^ J a uli! i > Tf« il XL MtUltS ^ didn't k«*p it in my sal«^ ^ 

Z d«stroy«d it shortly aitap^tfcAi b bj | ill > <*--- ^•- ^"ra^ X 

was Acting Ditactor. 

fi Do you iiaan within a waak or — 

A Yas. Wall, I don't know. Yas, I think it was 
within a waak, ox within a coupla oi waaks Z would say. 
It's a fairly bulky thing — 

a So now you hava a printout — 

A 



Yas. 



--oi, assantially, all FHS Hawks avar aada- 
Ua-hiili^. 



--and thosa in tha pipalina-- 

Yas. 

— and thosa in tha production — 

Yas. 

--for rns purposas? 

Yas. 

And what did you do with that documant? 

It was naant to just giva ma an initial 
approKlaatlon. which is shown on tha first paga of ay notas 
thara. That is, that this yialdad that thara wara 220 Hawk 
■Issilas dua for dalivary, Movaabar 1985 through Harch 1986. 

fi I saa . So that tha notation on Exhibit 1 is a 
rafaranea to tha printout? 

A Yas. Tha information gatharad froa that printout. 



UNClASSra 



307 



HAME: 
16(48 
16149 
1650 
1651 
1652 
1653 
16514 
1655 
1656 
1657 
1658 
1659 
1660 
1661 
1662 
1663 
166t4 
1665 
1666 
1667 
1668 
1669 
1670 
1671 
1672 



HIR167000 



mmmii 



PAGE 67 



S It is not a reference to the request by Fir. Koch; 
that is, he didn't ask you to find 220 Hawks? 

A No. It was just--it's solely the number that were 
available . 

2 And continuing, what did you then do with the 
printout? 

A Well, what I did then — now I don't know. I think by 
the time I had that, that as Mr. Koch's notes show, we went 
down to see Colin Powell. 

2 I see. I want to return to that 220 number to make 
sure I understand. 

This is 220 in the pipeline at that time, and what 
do you mean by available? 

A Hell, due for delivery, off production, in that 
period November '85 through March '86. The printout was in 
sufficient detail to show that. 

2 Would these be Hawks which had already been 
committed to Iran? 

A They were all on sales cases, yes. 
BY HR. SAXON: 

2 Were you given that time period by Mr. Koch? ; 

A Not that I re — not that I remember. I think it was 
more of /^j u n l i iiu w T ; what ' s available right now. /T\ 

2 So the reference to delivery November '85-March '86 
means delivery to--to whom? 



miASsra 



308 



1673 
16714 
1675 
1676 
1677 
1678 
1679 
1680 
1681 
1682 
1683 
168M 
1685 
1686 
1687 
1688 
1689 
1690 
1691 
1692 
1693 
16914 
1695 
1696 
1697 



HIR167000 



yiUSSIRED 



PAGE 



68 



A Well, to the best oi my recollection, there was--and 
I'm very confused about it at this point. There were the 
hundred to Israel in there. There uere possibly some number 
for the UAE. Roger has mentioned that there uere some for 
mm. and I seen to renember 70 for Korea. 

S These would all be missiles--these 220 missiles, 
then, would be missiles for which u« had a contractual 
obligation-- 

A Exactly. Exactly. 

2 --to provide. 

A Yes . 



y H t ^ uf have the contractual ability \J\^ 



MR. SILBER: Could be diverted, though 
THE WITNESS 
to divert them and to reschedule the delivery for the 
customer . 

BY HR. SABA: 
fi All right. 

A But, of course, the customer has to be told at some 
point . 

fi And therefote the characterization of the missiles 
as available in your mind meant that they were missiles 
which currently have been produced, are scheduled to be 
delivered to various countries at some short time frame, but 
which we have a contractual right to another source if that 
became our intention? 



UNCUSSIFIED 



309 



NAME: 
1698 
1699 
1700 
1701 
1702 
1703 
1704 
1705 
1706 
1707 
1708 
1709 
17 10 
171 1 
17 12 
1713 
1714 
1715 
1716 
1717 
1718 
1719 
1720 
1721 
1722 



HIR167000 



UNCLASSIFIED 



PAGE 69 



A Well possibly, yes. 



S All right. You now have the printout. 

A Um-hih^. 

Q And what happened next? 

A I went down to see, I don't know whether it was 
then or after we saw Colin Powell around noon, but I went 
to-- 

8 How did you come to see General Powell at noon? 

A Well, as I remember, to the best of my memory, Koc 
^^iM^^came by the office and said, we need to go right down 
now to see General Powell about this . 

2 At that point did you have the printout? Do you 
recall ? 

A I might have--gee I I don't even remember. Or 
whether I had some little note or I--I don't think I did. I 
don't think I did. 

e All right. And then you went to see General 
Powell? 

A Yes. 

2 At this point, up to this point as you had to see 
General Powell, had you made — other than your work diary 
entry, had you made any other notes? 

A I believe the product iron that session with Powell 
was this piece of paper. 

HR. SABA: This will be Exhibit 3, I believe. 



UNCLASSIHED 



310 



KAHE: 
1723 
172M 
1725 
1726 
1727 
1728 
1729 
1730 
1731 
1732 
1733 
1734 
1735 
1736 
1737 
1738 
1739 
17140 
1741 
1742 
1743 
1744 
1745 
1746 
1747 



HIR167000 



DHtUSSIFlEB 



PAGE 70 



I 



THE WITNESS: Though I can't swear, I might have 

gotten this as a request from Powell on the phone, because^w\, 

it looks like I had this par ticular [r r» *» Hw i wj ) DSAA notepad \' 

jT^gh y available. Or I might have grabbed it^fuu lljt«w7/when 

I went down to see Powell. 

BY MR. SAXON: 

B But you are reasonably certain this iniormation-- 

A But there is no question that this list of 

questions came from General Powell. 

BY MR. SABA: 

2 All right. And it may have been in that noon 

meeting ? 

A Yes. 

2 Is this note limited to this single page? 

A Yes, as far as I know. 

HR. SABA: All right. Then we will mark this page 
Exhibit 3, and it is a single piece of paper which is a 
photocopy of handwritten notes on a notepad marked ''Defense 
Security Assistance Agency.'* 

(A document was marked 
Deposition Exhibit No. 3 
for identification.) 
BY HR. SABA: 
2 You then went to see General Powell with Mr. Koch? 
A Urn- hulk. 



UNCLASSIFIED 



311 



KAHE- 
1748 
1749 
1750 
1751 
1752 
1753 
175U 
1755 
1756 
1757 
1758 
1759 
1760 
1761 
1762 
1763 
176U 
1765 
1766 
1767 
1768 
1769 
1770 
1771 
1772 



HIR167000 



UNCUSSIFIED 



PAGE 71 



2 Did Mr. Koch tell you on the way to the meeting 
what the substance of that convetsation was to be? 

A He was speculating what this--I can't remenber 
whether it was on the way down or on the way back. I think 
on the way back, ^k a*! he was speculating that this had r~WS- 
something to do with the hostages and that's why it was so 
hush-hush. And I would hazard a guess at that time, without 
remembering the words, that it had to do with sales to Iran 
in connection with the hostages. 

Q Let's go down to see General Powell, and what 
transpired in that meeting? 

A Either in that meeting or on the phone ha said. I 
need this Kind of information. 

e And it was a result of a request from General 
Powell that you created these notes? 

A Yes. And those look like, as if I'd taken them 
right off as he was saying them, either while I was sitting 
there at the phone or standing there in his office. 

8 Could you-- 

A It's easier just to take them down in that sequence 
off the phone, rather than standing in his office. 

fi Let's take a look at the exhibit. The top says. 



'Hhat worldwide stocks in other countries.'' 
A Um-hu^. 



This is a question? 



UNCUSSIFIED 



312 



NAHE: 

1773 
1774 
1775 
1776 
1777 
1778 
1779 
1780 
1781 
1782 
1783 
1784 
1785 
1786 
1787 
1788 
1789 
1790 
1791 
1792 
1793 
17914 
1795 
1796 
1797 



UNCLASSIHED 



^ 



HIR167000 %^l Wkf l^r^^ll ■■■■^ PAGE 72 

A Yes, ) * 1i* * ' b / t .^/ that's a good question because, in 
iact, that particular question night have been what really 
triggered me to go to the Data Management Division to get 
the printout, because that would tell you all that was in 
other countries. 

2 The next item on the note is the number 500. What 
did you understand that to mean? 

A That we were looking for up to 500 missiles. 

2 This is jhat General Powell told you? 

A Yes . 

2 And ''iron where'' presumably is what? 

A This I don't Know. It could be, you know, where 
would we get them from. 

2 Do you recall, when he asked you these questions 
did you have the number 220? 

A I don't recall. 

2 Moving just to the right of the question and 
circled in a little section of the note, it says, conceal 
what looks like ultimate destination. What caused 
note ? 

A I don't know. It was obviously added later on 
the conversation. 

HR. GENZKAK: Excuse ma. 
BY HR. GENZMAK: 

2 Is all of this writing your handwriting? 



-^ 






UNClASSffi 



313 



HAHE 
1798 
1799 
1800 

180 1 
1802 
1803 
180>( 
1805 
1806 
1807 
1808 
1809 
1810 

181 1 
1812 
1813 
I81>4 
1815 
1816 
1817 
1818 
1819 
1820 
1821 
1822 



HIR167000 



UNClASSra 



PAGE 73 



A This is all my handwriting. 

BY HR. SABA: 
Q General Powell requested you about the cost of the 
nissiles ? 

A Yes, what do they cost. And that's per missile. 
8 And General Powell asked you concerning the 
requirements o£ legal transfer? 

A Yes. Including what notices we have to give, which 
means to Congress. 

HR. SILBER: The "I," what does the^^-M" mean? 
THE WITNESS: "How do I legally transfer?'* In 
other words, it's-- 

HR. SXLBER: Powell? You? The President? 
THE WITNESS: Anybody. How does one legally 
transfer . 

BY njL. SABA: 
2 And the next phrase, ''break into small phrases,'' 
what is the genesis of that note? 

A I suspect it's the general perception that could 
you break it into small packages to gat under the thresholds 
for reporting to Congress. 

Q I take it then that you may have provided hin with 
SOB* inioraation at that point as to the notice required, or 
did you take it that he understood? 

A I took it that he understood. I think he generally 



HNtUSW 



314 



KAHE: HIR167000 



UNCIASSIHED 



PAGE 7«4 



1823 

182M 

182S 

1826 

1827 

1828 

1829 

1830 

1831 

1832 

1833 

183U 

1835 

1836 

1837 

1838 

1839 

18M0 

18141 

1842 

18M3 

ISMU 

18i«5 

18it6 

18X7 



undarstood. I might hava nantionttd it to him. but I think 
ha just ganarally undarstood. 

fi Has thaxa any legal discussion at this point? 

A No, not that I xamambar. 

2 Tha naxt phrasa says, ''What countries can't I 
legally transfer to.*' 

A Yes. 

e Was that his question to you? 

A Um-h>l^^. 

e Did you answer at that point? 

A No. 

fi And looking at the bottom, the last note. I'm not 
sure I can read it. Could you tell us what the very last 
line. "If-- 

A If gave — and I apparently underline gave, meaning 
gave away without charging any cost I assume — what third 
country transfer restrictions. That's all it says. I'm not 
quite sure what that all meant. 

Q Do you recall what the genesis of that notation is? 
It suggests that a recipient country would give away tha 
weapons . 

A Or it might suggest that we give them away without 
eKtraoting a price, a cost, without any payment being made. 
But I don't even remember. 

HR. SIIBZK: If wa had given tham. 



wmm 



315 



HXK167000 UilllAuUH 




PAGE 75 
THE HITNESS: Yes, li we gave them. 
riR. SILBER: Hot to the middle country. 
THE WITNESS: Yes. Right. Maybe. Although that 
could also be read, and I just don't even remember, that if 
Israel gave them to Iran, what third country transfer 
restrictions would ra >> y ! And that's probably more likely 
the interpretation that-- 
BY MR. SABA: 

Q But at the time what was the conversation that 
caused you to write the note? 

A I don't know. I don't remember. But these are 
nearly verbatim, let's put it that way, which also accounts 
for the strange way it comes out. 

2 So these are notes take — 

A In other words, I'm scribbling as he's talking on 
the phone. I think that's the best interpretation of that. 

2 Just to the left of this series of questions, there 
seems to be a note saying ''Would we have to tell Congress 
of transfer?'' with an arrow pointing up to ''reporting 
requirement 3(d).'' 

A Um-hiti^. Yes. 

Q What caused you to write that note? 

A Obviously, I ran out of paper at the bottom and 
then started working up the left-hand side, where the 
question from Colin Powell would be ''Would we have to tell 



UNCLASSIFIED 



316 



KAHE: 

1873 
187I4 
1875 
1876 
1877 
1878 
1879 
1880 
1881 
1882 
1883 
188i« 
1885 
1886 
1887 
1888 
1889 
1890 
1891 
1892 
1893 
1894 
1895 
1896 
1897 




HIR167000 y|^V*»l •^^'■" ■""' PAGE 76 
Congxass of tha transiaz?'* Now, with that pleca oi note in 
hand, I subsaquantly want to Jaczy Sllbar and said: ''What 
is tha provision oi tha lau that zagulatas third country 
tzansfars?'* And ha said 3(d), so I put it down. 

Q In othaz uozds, is it cozzact that tha notation on 
tha leit abova tha azzow, ''zaporting zaquiranant 3(d).'* 
was a notation mada subsaquant to tha naating? 

A Yas, that's corract. 

2 But tha notation balow tha azzow, ''Mould wa hava 
to tall Congrass of tzansfaz?'* is Colin Powall's question 
to you at that naating? 

A Yas. Yas. You'll nota tha stzong suggestion as ua 
talked along hare that they weze thinking oi a tzansiez like 
izoB Iszaal to Izan. 

e Moving up tha nazgln on tha lait-hand side, there 
is a ''*, quantity, detailed descziption. ' ' Is that a note 
contenpozanaous to tha naating with Powell? 

A Yes. I think so. And also, ''sensitive 
technology*' iollows iron that. It's dollazs. quantity, 
detailed dasoziptlon — conna — sensitive technology. Now why I 
put that right thei 
XK. SILBER> 
THK WITNESS' Tha 
MR. SABA: All zlght. To tha extent possible. I'd 
zathez avoid too nuch speculation — 



.z. I don't know^ cUi^'(V ;« Wo^(V''^t ^. 
ER> Hhat ymiThavi tn tnH r-nTmi naybe. Q{ 
lat's possible. That's possible. ' 



HNIIASSW 



317 



HIR167000 



llNWSSlflED 



PAGE 77 



M- 



THE UITNESS: Yes. Sux*. 

MR. SABA: --or hindsight. I'd rather try to 
understand what the contemporaneous understanding uas-- 

THE WITNESS: Oh. Yes. Yes. 

MR. SABA: --oi the witness. 

THE WITNESS: You know, in looking at that, as I 
look at it, it does look like a later note which caree after 
I had scanned through 36(b) to see what the reporting 
requirements were under 36(b). 

MR. SILBER: (d). 

THE WITNESS: |^^ I think it attaches here to what ^' 
notices . 

MR. SILBER: Oh. 36. 

THE WITNESS: Because then you pick up the 
sensitive technology which is prominent in 36(b) and I don't 
think it's as prominent in 3(d). 

MR. SILBER: I sea. Hot for 3(d), I see. All 
right. 

BY HR. SABA: 
2 Looking back again, up to the right, the ''conceal 



ultimate destinations.** 

A Um-h»i\. 

Q I know we just went over that and I want to make 
sure. Looking at it again, was that a note made in the 
conversation with General Powell or was that a note made 



>: 



UNCUSSIFIEO 



318 



KANE 
1923 
192>4 
1925 
1926 
1§27 
1928 
1929 
1930 
1931 
1932 
1933 
1934 
1935 
1936 
1937 
1938 
1939 
1940 
19m 
19U2 
19(43 
19i4i( 
19<45 
19146 
1947 



HIR167000 



UNCLASSIFIED 



PAGE 78 



later on? And again — 

A It looks lika it was mada later on because it's in 
the sane handwriting, the same as the '"sensitive 
technology'' phrase. And I don't know what it refers to or 
what I was asked. 

fi So you had the meeting with General Powell. In 
addition to these questions which you took down on the 
notepad, what else was discussed in that meeting? 

A An example would be, conceal ultimate destination, 
is it possible. 

[Hr. Silber conferring with the witness. ] 
BY MR. SAXON: 

Q Let me simply make sure I understand your last . 
statement. 

It's your testimony that that would represent the 
words conceal ultimate destination, but you don't recall 
whether you were asked how we could do that or if you were 
instructed that that's what we would want to do; is that 
correct? 

A Right. 

C Is there anything else you can recall about those 
words, ''conceal ultimate destination''? 

A No. 

HR. KREUZER: Could I ask you a question? Did we 
cover what other countries might be sources? What other 



UNCUSSIHED 



319 



KAHE: 
19U8 
19U9 
1950 
19S1 
1952 
1953 
1954 
1955 
1956 
1957 
1958 
1959 
1960 
1961 
1962 
1963 
196U 
1965 
1966 
1967 
1968 
1969 
1970 
1971 
1972 



HIR167000 



UNCLASSIFIED 



PAGE 79 



countries night be sources? 

HR. SABA: I think ue did. 
BY nR. KREUZER: 

2 That was a question to you from General Powell? 

A Yes. That would certainly trigger me to get a 
complete worldwide printout of all the Hawk missiles we 
sold. 

2 And that was a question he asked? 

A Yes. Yes. 

BY HR. SABA: 

fi In addition to the questions which you listed in 
this notepad, what else was discussed in that meeting? 

A That's about it, that I remember. 

2 And Hoel Koch was with you in that meeting with 
General Powell? 

A Hell he was in a meeting with General Powell. As I 
say. and I think about this longer, it is — this sounds like a 
list of requirements I took down over the phone, rather than 
standing up. say. with a pad in my hand. 

2 Do you recall ii this was prior to your noon 
meeting? 

A Ah. no, I don't. 

2 All right. Do you recall what transpired at the 
meeting between yourself. Mr. Koch and General Powell? 

A No. It's all very hazy. 



ONCUSSIFIfD 



320 



1973 
197U 
1975 
1976 
1977 
1978 
1979 
1980 
1981 
1982 
1983 
198U 
1985 
1986 
1987 
1988 
1989 
1990 
1991 
1992 
1993 
1994 
1995 
1996 
1997 



wmvm 



V. 



HIR167000 laiVltl MlllJIE ILaV PAGE 80 

2 Do you racall if, that day, anyone told you on that 
day, Novambar 19, as to the ultimata destination intended 
ior these weapons 

A I don't remenber, but it was very clear to me that^S^- 
it was Iran and (T_^ [ 1 i i n' L J l doubt very much that I invented \ 
that. 

2 And you think it was clear to you on the 19th of 
November? 

A I wouldn't swear to it. Gael I'm sworn. 
( Laughter . 1 

A How did you coma to know that? Has it Colin 
Powell? Was it Noel Koch? Do you recall how you came to 
know it was Iran and somehow connected with hostages? 

A Tha earliest that I think I could have known that 
or speculated on it was that Koal Koch and I, and I think it 
was walking back up from Powell's office, said that he 
thought it had something to do with the hostages and he 
thought it had to do with Iran. 
BY HR. SAXON: 

2 And in that conversation, did ha-- 

A But that did not sound from him as if he was 
directly privy to information of that sort. 

2 And in that context, ha did not mention anything 
about the NSC or Colonel North or a broader Iran initiative, 
did he? 



uNcussm 



321 



KAME: 
1998 
1999 
2000 
2001 
2002 
2003 
20014 
2005 
2006 
2007 
2008 
2009 
20 10 

201 1 
2012 
2013 
20 1U 
2015 
2016 
2017 
20 18 
20 19 
2020 

202 1 
2022 



HIR167000 



umssm 



PAGE 81 



A Absolutely not. Nothing like that ever cane up. 
HR. SILBER: NSC? 

THE WITNESS: Hell. I was to provide this kind of 
information to Colin Powell and, as I think back on it, I 
must have given them some sort of handwritten sheet of paper 
which contained things like what appeared here. 

KR. SABA: The witness is referring to handwritten 
notes which we'll have entered on the record in a while. 

THE WITNESS: Yes. But I have no strong 
recollection that I actually turned in a handwritten piece. 
BY MR. SABA: 

2 But let's stay--we're only at lunchtime, November 
19th. Did General Powell indicate in any way to you the 
purpose of his questions? 

A No . 

fi Did he indicate how you were to convey answers to 
the questions, whether by orally or by memorandum? 

A He just wanted the information on these Hawk 
missiles . 

2 Did he indicate that you should prepare a memo? 

A Later I believe he asked me to prepare a talking 
paper for Weinberger to carry to an NSC meeting. 

2 When you say later, what period are you referring 
to? 

A Probably the next day. 



W\>S»B 



82-708 0-88-12 



322 



NAME: 
20231 
202(4 
2025 
2026 
2027 
2028 
2029 
2030 
2031 
2032 
2033 
203(« 
2035 
2036 
2037 
2038 
2039 
20*40 
20(41 
20(42 
20^3 
20>4U 
20115 
20116 
20U7 



HIR167000 



UNCUSSinED 



PAGE 82 



2 All right. We'll coite to that. Just again staying 
uith the 19th, did you have any further discussions that day 
with either Mr. Koch or Hr . Pouell--or General Powell? 

A Not that I remember. 

2 And it's your recollection that it was that day 
that you also obtained the computer printouts and you make 
reference to 220 in your work diary? 

A That's right. That's right. 

rtR. SABA: oii the record for a moment. 
[Discussion off the record. ] 
BY HR. SABA: 

Q Referring to Exhibit 2, there is a reference in nr . 
Koch's calendar at 2=30 p.m. that he was interrupted in a 
meeting or a conversation he was in having to speak with 
you. 

A Um-h»h^. 

S Do you recall the reason you interrupted him and 
the substance of your conversation with him? 

A Hy guess, my speculation is that having been asked 
around--soiiewhttEtt between 12:00 and 12:30 to find 
information, by 2=30 I had some information which we could 
then carry down to Colin Powell. 

fi Do you have a specific recollection of what? 

A Ho. 

HR. SABA: All right. I would now like to 



l)NCUS»D 



323 



NAHE: 
aOKS 
20(49 
2050 
2051 
2052 
2053 
ZOSU 
2055 
2056 
2057 
2058 
2059 
2060 
2061 
2062 
2063 
206M 
2065 
2066 
2067 
2068 
2069 
2070 
2071 
2072 



liNMSifO 



HIR167000 lj||^^S.riV^I* ■kk' PAGE 83 
introduce Exhibit U , I believe, into the record, which is a 
handwritten note. 

(A document was marked 
Deposition Exhibit No. U 
for identification.) 
BY MR. SABA: 
2 And, Dr. Gaffney, could you tell us if the note is 
in your handwriting? 

A Yes, it IS in my handwriting. 
2 The note states: 

•'1.'' and then it says, ''100 to Israel shipped 
two weeks ago . 

''2.'' and then there is a ''11 tomH^^gone; 
others delivered to FF.*' And I can't read your last 
sentence . 

A The rest is a Xeroxing thing because it's the same 
words. 

HR. SILBER: From the back of another page. 
THE WITNESS: Probably, yes. 
BY HR. SABA: 
C All right. Can you tell us what this note 
represents? 

A Well, okay. The printout wasn't in sufficient 
detail. I had to go to the Army. I went to Mr. Bill 
Jackson in the Army to get further information, and my diary 



WlASSinED 



324 



NAME: 
2073 
20714 
2075 
2076 
2077 
2078 
2079 
2080 
2081 
2082 
2083 
208U 
2085 
2086 
2087 
2088 
2089 
2090 
2091 
2092 
2093 
20914 
2095 
2096 
2097 



HIR167000 



UNCLASSIFIED 



PAGE 8U 



note on 19 Novenber. a page narked 36, has a little note 
there that says, ''Check uith Bill Jackson tomorrow. *' 



And you're referring, are you not, to Exhibit Ho. 



1 ? 



A Yes. 

e Page 36. The second page of that exhibit. 
[ nr . Silber conferring with the witness.] 
THE HITKESS: And it says, ''Check with Bill 
Jackson tomorrow.'' So tomorrow would be 20 November, and 
he got back to me with this particular information first 
off. 

BY HR. SABA: 
2 So you believe that this information came to you on 
the 20th of November? 

A Yes. And he called me on the phone and I grabbed 
the nearest piece of paper which I had. I wasn't at my own 
desk; I was sitting at the Director's desk and he keeps a 
clean desk. So I took a piece of paper off a cable which 
was in the ''Out'' box and took this note off his phone 
conversation with me. 

HR. SILBER: It's just a tear, a corner. 
THE WITNESS: Just to tear a corner. It didn't 
have any material on it and, coincidentally , it had a date 
of 19 November on it, which is appropriate since cables take 
about a day to get in. And it was probably 20 November when 



ONCUSSIFIED 



325 



lIHCLASSIFe 



HIR167000 131 9lJl_mjLS|| IIbV page 85 

I got this particular note back from fir. Bill Jackson. 
BY HR. SAXOK: 

2 Who and where is Bill Jackson? 

A Bill Jackson is the — on the Amy staff, an 
organization called DALO-SAC — s-a-c--and he is the, let's see. 

There is an Assistant Deputy Chief of Staff for Logistics 
for Security Assistance, otherwise called DALO-SAC, and Hr . 
Jackson is his deputy, a civilian. 

2 So the answer to ny question is he as the deputy to 
who? 

A Deputy to the Assistant Deputy Chief of Staff for 
Logistics . 

BY HR. SABA: 

e Would it be your understanding that the number 100 
shipped to Israel, number 11 gone tom^mwould then be 
subtracted from the number 220 entered on your work diary 
the previous day? 

A Yes. 

2 And that it could be inferred that to your 
knowledge on the morning of the 20th there were 109 Hawk 
missiles available? 

A Yes. although I never went through that particular 
calculation. 

fi That was ay next question. Did you go through that 



calculation? 



wussw 



326 



HAI1E = 
2123 

auM 

2125 
2126 
2127 
2128 
2129 
2130 
2131 
2132 
2133 
213>4 
2135 
2136 
2137 
2138 
2139 
21U0 
2141 
21(42 
2 1>43 
ZlUt* 
2145 
21U6 
2 147 



HIR167000 



Dsmssro 



PAGE 86 



Well, I don't remembez. The more important thing 



was the next handwritten note that you may want to enter at 
this time. 

MR. SABA: All right. That will be Deposition 
Exhibit 5. 

(A document was marked 
Deposition Exhibit No. 5 
for identification.) 

THE WITNESS: Which has prominently the word ''Red 
River'' in the middle of it. 

MR. SILBER: May I interrupt at this point? 

MR. SABA: Off the record. Yes. 

MR. SILBER: Well, I'd like — 

MR. SABA: --on the record? 

MR. SILBER: Yes. 

MR. SABA: Fine. 

HR. SILBER: I just want to mention, if it becomes 
critical to either a prosecution or a witness before the 
committee or something like that, the originals of these 
notes are in my safe and have been since last 
November--December . Okay. 

There are actually two scraps of paper, and, if I'm 
not mistaken, they're written on both sides. And so some of 
this is on the back, and that's why this is the Xeroxing 
through from the other side of the page. Okay. You have 



iciAssre 



327 






HIR167000 li^'jj.f .:.J<t..x'.'S' iSM PAGE 87 

two scraps of paper^ both w£itt«n on «ach sid«. Okay, 
rtayba it's a little sinplai to sea it. But I. in order to 
protect and preserve it, I just have locked it up, and I've 
copied it for everybody. li it's ever necessary to produce 
it , come to ne . 

nx. SABA: uell, thank you. 
BY MR. SABA: 

fi When was this note prepared? 

A Hell, thinking oi that, that it might have been on 
the back, it looks like a subsequent raiinament oi the 
inioraation from Hr . Bill Jackson, who had queried down 
through the Amy staii. First oi all. he'd been able to 
tell me that the 100 to Israel and the 11 to|||HH|^|were not 
available, they had gone. Subsequent checking showed that 
there were, in fact, in hand, in stock sitting in the Red j 
River Arsenal (w««^ 16M aissiles and that they cost| j »< > il » e|* ~^| 
h mi 99 ^ 4300.000 apiece. 

Kow clearly from the note on the top oi the page. 
77 oi those were destined ior the UAE. What the other 87 
were. I don't know. 

C Did this iniornation coae that day? 

A Can't swear, but certainly it's very likely to have 
COB* on the 20th. Right have cone through on the 21st. 

fi Hhat is the reierence in the note to "1i(6K each"? 

A I don't know, because clearly the ''300K'' was 



UNCLASSIFIED 



328 



NAME: 
2173 
2174 
2175 
2 176 
2177 
2178 
2179 
2180 
2181 
2182 
2183 
218U 
2185 
2186 
2187 
2 188 
2 189 
2190 
2191 
2192 
2193 
219U 
2195 
2196 
2197 



«"-- llNCUSSirlED ■ 

circled and that was what I understood tc 



PAGE 88 

:o be the basic price 
of them. 

2 When you say the price > do you mean the cost to the 
U.S. Government or the price under an FMS sale? 
A The price under an FMS sale. 

BY HR. SAXOM: 
2 Could 146,000 have been the price you were told the 
Israelis were going to pay for each of these? 

A Mo. I would not go so far as to say anything like 
that. 

BY KR. SABA: 
2 Did you convey any-- 

A There might possibly be, and it's too large--the 
numbers don't track. I mean, there's a difference between 
the production price and the FMS price because we have to 
add testing and-- 

MR. SILBER: Surcharges. 

THE WITNESS: --and other surcharges on it to get 
from the individual missile price to the sale price, but 
that shouldn't double the price. 
Right, Jerry? 

HR. SILBER: Yes. 

THE WITNESS: So the ''1U6K each'' remains very 
cryptic . 

BY HR. SAXOK: 



UNCUSSIFIEO 



329 



NAME: 
2198 
2199 
2200 

220 1 
2202 
2203 
22014 
2205 
2206 
2207 
2208 
2209 
22 10 

221 1 
22 12 
2213 
221M 
2215 
2216 
2217 
2218 
2219 
2220 
2221 
2222 



HIR167000 



UNMSSm 



PAGE 89 



2 Before we go o±£ the record, can I just ask for the 
racord have you ever told Bill Jackson the reason you were 
requesting this information? 
A No. 

2 Did you mention Iran? 
A Ho. 

2 Did you mention Israel? 
A Ho. 

2 Did you mention hostages? 
A No. 

MR. SILBER: Is the question, subsequent to the 
conversation? I mean, up until now? 
HR. SABA: At any time? 
MR. SILBER: Or at that time? 
HR. SAXOH: At that time. 
THE WITNESS: No. Nor subsequently. 
BY HR. SABA: 
2 We're still in November 20th, 1985. 
A Um-h»fl(|_. 

2 Is this a note of the same day? 
A I don't know. 
2 All right. I will enter Exhibit No. 6. 

CA document was marked 
Deposition Exhibit No. 6 
for identification.) 



V 



UNCUSSinED 



330 



NAME: 
2223 
222U 
2225 
2226 
2227 
2228 
2229 
2230 
2231 
2232 
2233 
2231 
2235 
2236 
2237 
2238 
2239 
22i40 
22>41 
22(12 
22(13 
22UU 
2245 
22t«6 
22147 



UNCIASSIHED 



HIR167000 lllllli Ir^Klllll ll_LI PAGE 90 

BY MR. SABA: 

e Aza thas« your numbars? 

A That's my handwriting. 

2 Do you tacall tha circumstancas undaz which you 
wrote the note? 

A Ho. sthar than tha general circumstances that we 
ware discussing . 

8 Do you recall what you did with tha information on 
these three handwritten notes; that being Exhibits H, 5 and 
6? 

A Well, tha ultimata product now, by this time I 
somehow had gotten tha word to prepare a talking paper for 
Secretary Weinberger to take to a meeting at the White House 
or an NSC meeting. I think it was an NSC meeting. 

Q How did you get that information? 

A I was requested to do so by Colin Powell. I don't 
remember that Noel Koch was in the loop on that one. By 
this time Powell was talking directly to ma. He called me 
at home one night, too. 

fi Do you recall whan that was? 

A No. It would have to be in this time frame, 
though. Whether it's the 20th or the 21st. I don't know. 

fi But you think it was tha 20th or tha 21st7 

A Right. 

fi And General Powell called you at your home? 



UNCUSSIHED 



331 



KANE: 
22U8 
22U9 
2250 
2251 
2252 
2253 
225t4 
2255 
2256 
2257 
2258 
2259 
2260 
2261 
2262 
2263 
226U 
2265 
2266 
2267 
2268 
2269 
2270 
2271 
2272 



HIR167000 



uNCUSsra 



PAGE 91 



A On ona occasion during this exazcis«. But I don't 
zananbar what ha aven said to ma at that tima . It was all 
moving very fast. 

MR. SILBER: But ha did say something about 
preparing something for-- 

THE WITNESS: At some point ha said, please prepare 
me a talking paper. 

BY MR. SABA: 

2 And did he tell you what this talking paper should 
contain? 

A Ha must have, but I don't recall how much detail ha 
asked me to put into it. 

2 Did he indicate what the paper was for? 

A Yes; for Weinberger to use as a talking paper when 
he went to a meeting. 

S Did he say when that meeting would occur? 

A No, he didn't, although the feeling was that it was 
very imminent. That it could happen on, I believe, Thursday 
or Friday. Sounded like it was sort of on call. 

Q Did ha give you a deadline for the paper? 

A That I don't remember. 

2 But he stated that the paper was to be provided to 
him that ha might provide it to Secretary Weinbarger-- 

A Um-hvtn^. 

2 — for a meeting to be attended by the Secretary — 



uNciASSire 



> 



332 



KAnE: 
2273 
2271* 
2275 
2276 
2277 
2278 
2279 
2280 
2281 
2282 
2283 
22814 
2285 
2286 
2287 
2288 
2289 
2290 
2291 
2292 
2293 
229U 
2295 
2296 
2297 



HIR167000 



a--yes 



CNMsm 



PAGE 92 



a —at th« NSC? 

A Yas. 

2 But he did not give you a date or a deadline? 

A Not that I renember. 

S In requesting that you prepare that paper, did he 
mention Iran? 

A I can't remember any spaciilc conversation along 
that line. 

S Did he mention Israel? 

A I can't renember that specifically either. 

KR. SAXON: Let me interrupt, and say he would have 
had to have because the point paper you prepared is titled 
''Hawk Missiles for Iran.*' 

THE WITNESS: You took the words out of my mouth. 
MR. SILBER: Shouldn't do that. 

THE WITNESS: I'm just saying I'm not recalling a 
specific conversation but clearly I knew enough to make it 
very explicit. So it had to do with Iran; and in the body 
of that nemo, the possibility that they might be transferred 
from Israel was also a possibility. Remembering that had 
b««n a possibility from the very first conversations ue had; 
in other words, what's entailed in third-country transfers. 

BY MR. SABA: 
2 I'll show you a photocopy of your work diary for 



UNCUSSIHED 



333 



HIR167000 



WUiSSW 



PAGE 93 



tha day Novenbar 21st, 1985, pag* 38. 

A Right. 

fi And I Hill nark it Exhibit 7. 

A Y«S. 

HR. SABA: I Hill havA this naxkad. 

(A docuBttnt was aarkad 
Daposition Exhibit Ko . 7 
ior idantiiication. ) 
BY HR. SABA: 

& I'll call your attantion to tha uppar lait-hand 
cotnar oi tha paga, and I would ask you to axplain tha aight 
points thara . 

A Tha aight points on that aza By outlina oi a 
talking papar. 

S What causad you to writa thosa aight points thete? 

A Thay had to ba stinulatad by Ganazal Powall. It 
doas not look lika tha kind of thing that I would hava notad 
down oii oi talaphona convazsations . Too naat. 

2 I saa . Has thaza a spaciiio nunbaz of Hawks in 
Bind? Dizaoting youz attantion to tha fizst two questions, 
which iBply a caztain nuBbaz . 

A By that tiaa I think thay waza kind of attachad to 
tha 120 nuBbaz bacausa that was tha nuBbaz that--wall, now I 
don't know. I zaally don't know. All wa knaw was 16M wata 
available and that tha nuBbaz that wa bagan discussing was 



UNCLASSIHED 



334 



NAME: 
2323 
232it 
2325 
2326 
2327 
2328 
2329 
2330 
2331 
2332 
2333 
233>4 
2335 
2336 
2337 
2338 
2339 
23(«0 
2341 
23*42 
23U3 
23(t>4 
23(t5 
2346 
2347 



HIR167000 



UNCLASMD 



PAGE 94 



120. So ioE som« reason, X was told to discuss 120 in ray 
talking papax. So I did. 
BY HR. KREU2ER: 

2 Was there any discussion of, at that point where 
you were told to discuss 120 vice 164, was there an allusion 
made to funds available that would constitute a ceiling that 
would be the equivalent oi 120 Hawks versus 164? 

A No. Nothing like that. 
BY HR. SABA: 

S Turning your attention to the third point, was this 
point in response to a request iron General Powell-- 

A It was, indeed. 

2 What was the request? 

A The request, just--it's near speculation because I 

can't reraenber exactly what he said. But I got the very 

I 
clear impression from General Powell that I should write a ^ 

pretty negative paper ^ \liat Weinberger was against this and>0^ 

I was to identify the reasons why and pointing out, with 

regard to the law, the legal requirements. 

fi At this point. Dr. Gaffney, you understood that you 
were being tasked with this as the Acting Director of the 
office? 

A That's correct. Solely as the Acting Director of 
DSAA. 

2 Hhat is the reference to ''above threshold'' in 



UNCUSSIHED 



335 



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UNCussra 



HAHE= HIR167000 |1|\|1 | nWirirll PAGE 95 

23U8 
23M9 



it«B 3? 

A ^ilillUMlB Jto us it msant Indicat* in th* nano tha^ V 
th* pxlc* that would hav* to b« paid fox 120 missilas would 
put it abov* th« congrassional notification thrasholds; 
i.a., you would hav* to notify Congxass. 

fi Hhat can you tall us about what Ganaxal Powall told 
you about itam >l? 

X I simply don't xamaabax. 

e Itam 5? _ 

A I don't ramambax that aithax, but> obviously, V^^cJC..^ 
know, thaxa paj ■ ilii>LUJji i n i< ■i m«3 '»***^ hava baan a *^ 
discussion at soma point as, if wa lat Isxaal go ahaad and 
dalivax tham and than wa backfill, that's antailad in that 
pxocaduxa* 

e I saa. And in that convaxsation about backfilling 
Isxaal fixst, was it known to you at that point who tha 
ultimata — what countxy tha ultimata dastination was? 

A Yas. Yas. 

fi So that by tha 21st of Movambax you knaw that thasa 
missilas waxa dastlnad fox Ixan? 

A Uttaxly claax. 

fi Uttaxly claax? 

A That wa waxa talking about Ixan, and that wa waxa 
talking about Isxaal. 

fi Uaxa you also talking at that point about hostagas? 



miASsra 



336 



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ONCLASSifiEO 



HIR167000 IIIVBll i£.'&.'ftll II II PAGE 96 

A Only because of Koel Koch's speculation. 

fi Did you use the word • 'hostage' ' in any 
conversation at this time with General Pouell? 

A I really don't remenber. Probably not. I was 
probably being fairly discreet about it all. 

2 Humber 6, what is--' 'Who and how pays?'' Could you 
explain what that means? 

A Hell. ^(*j_the question was how do you get the /T\ 
monies for them, because somebody would have to get money tVJf ' 
glat oe e the winij '7 Uu ' J li a ua lu g et lul n ii>e y tj ] buy the ^^ 
ones for the UAI that you'd taken from. 

2 That was a question which General Powell asked you?^ 

ftaca Son 

A Yes. That in- T~ COM as you see. 

I don't know whether he had asked me that in 
particular, but clearly by this time I was definitely 
thinking that if you were going to take them out of 
nissiles, say, intended for the UAE you were going to have 
to buy new missiles to replace them, and you were not going 
to go to the UAE to get more money. You would have to get 
money from that customer to pay for them. 

2 Had General Powell suggested any method of payment? 

A No. 

2 Had he suggested any structure to you? 

A No. 

2 All right. The next number, ''Repercussions: 



liNMsm 



337 



UNCLASSIREO 



HIR167000 LVI 1UL.niLJlLJrS{ Si-li PAGE 97 

Iraq, oth«r sailing countries.'* what was the genesis of 
that note? 

A I believe that I was asked by Powell to also put in 
my talking paper a list of the possible repercussions for 
the Secretary to use. 

C So this is — 

A I don't think I would have volunteered that. 

e So this constitutes a direction by General Powell-- 

A Yes . 

Q — to include these points in your paper? 

A Yes. 

2 And nuaber 8, ''How shipped'"? 

A I don't know. That must have been a question from 
Powell: you know, how would we ship these if we had to? 

2 Again, was there any suggestion as to the method? 

A No. 

2 Why is that a particular question? Why does that 
pose a special problem? 

A I really don't know. You would certainly have to 
find somebody to carry them. You could either use our own 
resources, defense resources, or you'd find a commercial \yr 
shipper. But you notice that^ my ^**i^*w*H*«^ii^i^g point X> 
paper I did didn't go into that, so I think I ducked that 
one . 

[Hr. Silber conferring with the witness.] 



UNCLASSIHED 



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2X38 
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2XX1 
2XX2 
2XX3 
2XXX 
2XX5 
2XX6 
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HIR167000 



UNSLASSIIlEfl 



PAGE 98 



i-hih^. That's possibl*. 



» 



> 



THE WITNESS: I just don't know what that really 
maant at that point. 
BY HR. SABA: 
fi ny thought is that it would ba talatad to your 
notation on coneaaling tha ultinata destination sinca tha 
shipping docunants nay or may not involve naaing the 
recipient country 
A Ua 

fi Has that discussed in any detail? 

A I don't reitenber. I don't renember anything like 
that. 

fi Looking at the exhibit, I can't help but notice an 
arrow through the point to a notation that says. ''Powell is 
not agitated. Told NSC to ease up.'' Is that a notation-- 

A That is a reference on a previous page to a project-v 
called y BOU. tfhich I iorget what that was. but that's — \Jt 
HR. SAXON: — unrelated to these matters. 
THE WITNESS: But unrelated to these matters. 
HR. SILBERs Sale oi F-15's to Saudi Arabia. 
THE WITNESS: yes. 
BY HR. SABA: 
fi It's a matter not related to these? 
A Exactly. 

fi And is it correct that notation--does that notation 
have any relevance at all to the eight points? 



UNCLASSinED 



339 



HIR167000 



UNCLASSIFIED 



PAGE 99 



A No, it does not have any relevance to that. 
2 All right. Upon making these notations in your 
work diary, uhat event next transpired? 
A I produced the ''talker.*' 

2 When you refer to the ''talker,'* you reier to a-- 
A --point paper which is entitled ''Hawk Missiles for 
Iran . ' ' 

MK . SABA: And we will nake this Deposition Exhibit 
Ho. 8. This is a typewritten, two-page document, originally 
classified Secret. 

MR. SILBER: I wonder who's declassified it, by the 
way . 

MR. SABA: It originally appears to be undated. It 
states: ''Point Paper. Hawk Missiles for Iran.'* 

(A document was marked 
Deposition Exhibit No. 8 
for identification.) 
BY MR. SABA: 
2 Did you prepare this document? 

A I prepared it and typed it on my own typewriter. 
HR. SILBER: Stamp it. 

THE WITNESS: And found the stamp, and stamped it 
myself. I forgot to put a date on. 
BY MR. SABA: 
2 I also note that it's not signed. Was that 



UNCLASSIFIED 



340 



NAME: 
2M73 
2U714 
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HIR167000 
intentional?" 



UNCLASSIFIED 



PAGE 100 



A No; a point paper by its nature is not a signed 
nenozandun . 

2 Do you recall the day on which you prepared this 
paper? 

A Ko. but it had to be on the 2 1st of Hovember . 
BY HR. SAXOM: 

2 Why do you say that? 

A Because my outline or points to be covered is dated 
Koveitber 2 1st from my diary, my work diary. 

riR. SXLBER: Why couldn't it have been the 22nd? 
BY HR. SABA: 

S Could it not have been the 22nd? 

A It could have been the 22nd. My own recollection, 
though, is that the NSC meeting could have happened on 
Thursday or Friday, and therefore I had to get it down there 
pretty quick. 

2 So you had the understanding that it was for an NSC 
meeting-- 

A Yes. 

2 — that week? 

A Yes . 

2 And Thursday would have been the — 

A The 21st, yes, of November. 

2 --the 21st November, and if the meeting was to be 



UNCLASSIFIED 



341 



HIR167000 



UNCLASSIFIED 



PAGE 101 



that ueek it would be that day or the next? 

A Yes. 

2 On the 21st or on the day you prepared the point 
paper/ did you have further discussions about its contents 
uith Noel Koch? 

A Not that I remenber. 

2 All right. Let us turn to the exhibits. I mean, 
to the exhibit. Exhibit 8. 

Youz understanding, then. Exhibit 8 is your point paper 
intended to enconpass the eight points shown in your work 
diary on the 21st oi November, and intended to be responsive 
to the questions of General Powell which you originally 
wrote down in what has been--Exhibit No. 3? 

A Yes. 

2 Looking at the exhibit, look again at the second 
notation as to $300,000, and there is a second sentence 
which says it is not a firm price, replacements could cost 
as reuch as «<437,700 apiece. 

A That's right. 

2 Were these numbers intended for the purchaser? Did 
you know? 

A I didn't know. They're just strictly the--they cost 
300,000 now and if you went out to the contractor, the line 
having shut down and considering inflation, to buy the 
replacements would cost this much. And that was an estimate 



"Ncwssm 



342 



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2538 
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2541 
2S((2 
25<43 
254U 
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2546 
2547 



yNCLf,SS!n[!) 



rtlR167000 ^f i M f^ BamI t-^"^ a t «o»B» pjcg 102 

provided to rae by the Amy. 

2 All right. Moving down the page-- 

HR. SILBER: Could that have been that 146 figure 
that you were wondering about earlier? The differential? 
THE WITNESS: Could be. 

KR. SAXON: But it doesn't come out in terms of 
the-- 

nR. SILBER: Doesn't come out exactly. 
THE WITNESS: It comes close, though. He might 
have said it cost 146,000 more to produce new ones, but 
that's just speculation on our part. 
BY MR. SABA: 
2 All right. Moving down the point paper to the 
paragraph headed ''The modalities for sale to Iran present 
formidable difficulties.' 
A 

e Could you explain the basis for the first point 
under that which states, ''Iran is not currently certified 
for sales, including indirectly as a third country, per Sec. 
3 of the AECA'*? Did you know that statement to be true of 
your own knowledge? 

A That was my understanding at the time. 
2 And how did you obtain that understanding? 
A I guessed. I figured given the embargo, mostly 
because of the fact that we had embargoed any further 



Um-hvnu. 



y 



MNClHSSlfe 



343 



NAME 
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HIR167000 



UNCUSSIFIED 



PAGE 103 



deliveries to Iran as a result of the Shah falling in 1979, 
that that embargo continued and many cases were tied up in 
international litigation, and that therefore from my 
standpoint I considered them not to be currently 
certifiable . 

2 Looking at the three subpoints in this paragraph, 
each of which appear to state a legal proposition, did you 
compose these three items from your own knowledge? 

A Yes. 

2 Did you refer to Mr. Silber? 

A No. The only question I ever asked Silber was 
what's the section that applies to third-country transfers, 
and he said 3(d). 

fi Did you make that request in connection with the 
preparation of this memorandum? 

A Or maybe earlier, when Colin Powell had first asked 
me what were the legal complications of a third-country 
transfer . 

2 Oo I take it that in preparation for writing these 
three paragraphs you did not go to Hz. Silber with the facts 
and request a detailed legal exposition? 

A No. No. 

2 Did you seek any other advice or assistance? 

A No. 

2 Did you have access to legal material? 




344 



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UNCUSSIRED 



* 



HIR167000 LIllUL.milJII ILLl PAGE 10<4 

A I had the n h »i>»J^— h l i> hiiiti D t> S brown book, 
entitled Legislation on Foreign Relations Through 1985, 
dated April '86. So I was using its predecessor. 

2 So, other than requesting a section of the AECA 
from Mr. Silber, you made no other inquiries-- 
A That's correct. 

2 --in expressing your legal opinion? 
A Right. 

2 Did you do that of your oun initiative or did 
anyone ask you not to consult with anyone? 

A Well I did that of ray oun initiative? 

MR. SILBER: You kneu, you were told it was a hush- 
hush project. 

THE WITNESS: Certainly it was a hush-hush project. 
And I thought if I could handle it in this way, in this 
detail without consulting further, I would. 
BY MR. SABA: 
2 Did anyone tell you not to consult further? 
A Well they conveyed to rae in the strongest terms 
that this is a very hush-hush project and I got the clear 
sense that the lives of the hostages might be at stake here. 

So that I certainly knew well enough not to tell anybody 
what it was about. 

2 Did either General Powell or Noel Koch tell you or 
convey to you the impression that you should obtain 



UNCLASSinED 



345 



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HIR167000 



WUSSIFIED 



PAGE 105 



additional legal advica? 

A Ko. 

e I take it in looking at the second of these 
subparagraphs as to congressional notiiication-- 

A Uii-hih|\ 

e What was the source oi your iniormation ior this 
paragraph? 

A 36(b) itself. 

S You consulted the text oi the statute? 

A Yes. Right. In effect, this is an encapsulation 
of the statute. 

C Would it be fair to say that prior to your writing 
this rneno you had general familiarity with the statutes? 

A Right. Especially 36(b). I hadn't ever really 
explored 3(d) before. 

MR. SILBER.' As a matter of fact, there's an error 
in 3(d). The 30 days can be waived, I believe. 

THE UITKESS: Oh, okay. Well, I tried to read it 
as closely as I could. 
BY MR. SABA: 

S Prior to writing this memo had you had occasion in 
the past in the course of your duties to provide legal 
advice to anyone else concerning — 

A I'm not a lawyer and I don't provide legal advice. 

2 Turning your attention to the third one, to the 



>. 



UNCLASSIFIED 



346 



NAHE: 
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HIR167000 



muw'E 



PAGE 106 



thitd subpaiagxaph. it stattts: ''Thus, avan if tha nissilas 
Haxa laundaxad through Israal, Congxass would hava to ba 
notiiiad. ' ' 

A That's a raiazanca to saction 3(d). 

S What did you undaxstand tha woxd ''laundaxad*' to 
naan? 

A It could maan ona oi a coupla oi things. Ona is 
you could taka a caxtain nunbax oi nissilas iroa this 
countxy and staga thaa thxough Isxaal on to Ixan, or you 
could lat Isxaal sail Hawks out oi its own stocks and than 
backiill than with dallvazias ixon tha Unitad Statas . 
Eithax way to na constitutad laundaxing nissilas thxough 
Isxaal to Iran. 

S Waxa thasa thxaa subpaxagxaphs eoncaznlng tha 
lagalitias oi tha txansiar discussad iurthax batwaan you and 
Ganaxal Powall? 

A No. I had no iuxthar discussion with hin. I 
dalivaxad tha original copy oi this point papar to hin and 
that's tha last I haaxd oi this particular point papax. 

fi Did you discuss thasa lagalitias iuxthaz with Noal 



Koch? 



A No. 

fi Hith NX. Silbax? 

A No. 

S With anyona alsa in tha Dapaxtnant oi Daiansa? 



UNCLASSIFIED 



347 




PAGE 107 



BY HR. SAXON: 
fi You delivered this yourself to General Pouell? 
A Yes . 

BY MR. SABA: 
2 Were additional copies made? 
A I itade a copy which I kept in my safe. 
2 Did you provide Noel Koch with a copy? 
A I don't remember; I might have. It would be 
consistent with the way we do things. 

Q Did you deliver this by hand to General Powell? 

A Yes. Yes, I did. 

2 In his office? 

A As I remember, yes. 

2 And do you Know the day when you delivered it? 

A No. 

HR. SILBER: Did you give a copy to Gast the 
following week? 

THE WITNESS ■• I don' t^r<5J f2yv^2>*nc)ar. 
MR. SABA: The question has been asked as to 
whether Dr. Gaffney gave a copy of the point paper to 
Dlr«ctor Gast upon his return to the office. 

THE WITNESS: I Simply don't remember. I certainly 
did inform him of it. 
BY HR. SABA: 




UNCLASSIFIED 



348 



HXnt HIR167000 
2673 



ttNWSSffl 



267M 

2675 

2676 

2677 

2678 

2679 

2680 

2681 

2682 

2683 

2684 

2685 

2686 

2687 

2688 

2689 

2690 

2691 

2692 

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269*4 

2695 

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PAGE 108 

fi Urn Hill COB* to that. But ioouslng on th* point 
pap«x its«li> did you pzovid* a copy to Gl«nn Rudd, th« 
Daputy Oitactor, on his turn? 

k I don't z«MaMb«r. I physically don't zanambaz, but 
to do so would hava baan eonsistant with my passing tha 
pzojaot ofi back to thaa. 

Q Continuing with tha papaz itsalf, tha naxt group of 
paragraphs spaaks to braaking tha sala into thraa or four 
packagas in ordar to avada congzassional notica . 

A Um-hik. 

fi Had it baan suggastad to you to find a way to 
struotura tha transaction in ordar that it could ba dpna and 
avada congrasslonal netlca? 

X No. About tha only rafaranca is back to whatavar 
axhiblt It was that tha handwrlttan notas wara on basad on 
my eonvarsatlon with Colin Powall whara — "Hhat noticas? 
Braak Into small packagas?" 

fi Ara you awara of tha lagal dlffaranca batwaan tha 
word ''avada'* and ''avoid*'? 

A No. I'm not avan suza of tha word ' 'laundazad, ' ' 
It's lagal status. 

fi In tha flzst paragraph thara is a rafaranca that 
all Administrations hava obsazvad a policy against tha 
splitting up. 



A Um-hth^. 



X 



mumm 



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MAHK 
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271 1 
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UNCLASSIRED • 



HIR167000 uJVuLHOOi'riLU "" "' 

& Did you Know that from your own knowl*dga? 

A Yas, basically my own knowladga. Z can't say that 
I had any track record oi it, but it's just that thara uas 
no casa that I had avar haard oi uhara wa had split to get 
past, to avoid a congressional notification. 

8 And in this next subparagraph, what was the basis 
on which you referenced in particular Chairaan Lugar and 
Fascell ? 

A It was pure speculation on ny part. That if you 
went up and triad to work a deal with Congress, naybe you 
could do something like this. 

S Was this paragraph based on any of your readings of 
the statutes? 

A Ko, it has nothing to do with the statutes. 

fi Did you mention those gentlemen because of their 
capacity as the chairmen of the-- 

A Solely as their capacity and not because of 
anything Z knew about their predilection to go along with 
such a scheme. 

2 Moving to the second page, of the political points. 
Z take it from your testimony just a little earlier that the 
listing of political drawbacks is in response to General 
Powell's request to be negative. 

A Yes. And to discuss the repercussions. 

2 And do these drawbacks reflect facts from your own 



UNCUSSIHED 



350 



HARE: 

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HIR167000 



knouladgtt? 



UNCLASSinED 



PAGE 110 



A Th*s« ar« Antixaly out of my own head, based on ny 
own background. 

& Did you consult anyona els* in pseparlng thesa 
facts? 

A No. 

MR. SABA: X hava no fuxthar questions on the point 
paper. Itself. 

rtR. SAXOK: I have one ox two quick ones. 
BY MR. SAXON: 

fi Dr. Gaffnay, to the best of youx knowledge, was it 
an accurate statement that Iran was not currently certified 
fox sales, including directly as a third country, for 
section 3 of the AECA? 

A I can't say that it was, I don't know. But I 
questioned the — to the extent I knew it, it was accurate. 

Q And that would be true likewise for the statement 
that Congress must be notified of all sales of *14 million 
or more? 

A Yes. That was a simple read right out of the law. 

Q And likewise, the statement that even if the 
missiles were laundered through Israel Congress would have 
to be notified? 

A That was my reading out of section 3(d). 

2 Your statement that the customer countries, UAE and 



uNcussra 



351 



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mm 



HIR167000 III^I.I U >*.«;.•■*':> il PAGE 111 
Korea/ would have to b« told that thair delivatias had been 
rescheduled-- 



A Um-hih»^. 



Q --would you care to render an opinion as to whether 
that would have had any diplonatic repercussions? 

A It would certainly have diplomatic repercussions. 
It's a serious inhibition to performing the sale. 

2 Uith regard to the next page in which you discuss 
specifically the political drawbacks, even though you didn't 
consult anyone and even though these statements were your 
own, you say they were drawn from your eKperience; is that 
correct? 

A Yes. 

2 So would it be your opinion at the time, would it 
have been your opinion that if Iraq found out, as you say, 
they would be greatly irritated? 

A Um-hin^. 

2 And did you believe, as you stated, that if Saudi 
Arabia and the other Gulf States found out they would also 
be irritated and alarmad? 

A Yes. 

2 And was it your best judgment at the time that if 
Israel were the laundering country they would be greatly 
encouraged to continue selling arms to Iran? 

A That is my best judgment. 



X 



UNCLASSIFIED 



352 



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HIR167000 y|^W*»"'"^~ PAGE 112 

h a d ^^^^^^^^^^^^^^^^^Hr e p o E t s , 
perhaps unverified, that Israel had been selling arras to 
Iran and this is something that uas a point oi tension 
between our two countries? 

A That is correct. 

2 And you stated that if the sale became known all 
bars would be removed from other countries with which we had 
been having the same problems; specifically. Spain, 
Portugal, Greece, United Kingdom, Italy, and Germany, is 
that correct? 

A That would be sort of the end of Operation Staunch, 
wouldn ' t it? 

2 Ves , sir . 

And finally, you indicate that there would perhaps be the 
risk of prolonging and intensifying the Iran-Iraq war and 
compromising our influence over Israel and other countries 
to restrain sales. And so, in your judgment at the time, 
was that an accurate statement? 

A That was my judgment, yes. 
HR. SAXON: Thank you. 
rtR . GENZnAK: Could I follow up with a question or 

tMO? 

HR. SABA-- All right. Sure. 

HR. GEHZHAK: Are you ready to move on? 

HR. SABA: I'm ready to move on. 



353 



NAHE: 
2798 
2799 
2800 
280 1 
2802 
2803 
280(4 
2805 
2806 
2807 
2808 
2809 
2810 
2811 
2812 
2813 
281i« 
2815 
2816 
2817 
2818 
2819 
2820 
282 1 
2822 



HIR167000 



UNCLASSIFIED 



PAGE 113 



MR. GEKZHAN: Fina . Lat me ask a question or two 
about this. 

BY HR. GCMZHAH: 
2 With regard to the use oi your terms ''laundering' 
and ''evade>'' were these used by you in the context oi 
putting a negative slant on the paper? 
A Yes. indeed. Yes. 

KR. SILBER: You don't know the difference between 
•'evade'' and ''avoid.*' 

THE WITNESS: No, I Still don't. 
BY MR. GENZHAN: 
8 And with regard to your political drawbacks, can 
you state whether or not you overstated some of these 
political drawbacks in the context oi putting a negative 

slant on the issue? 

J^ I 

A Those are ncT overstatements . Those were ielt from 

the heart at the time. There was a deep conviction that 

those were the kind oi repercussions you had to anticipate. 

HR. GENZHAN: Very good. Thank you. 

BY HR. SABA= 

fi Dr. Gaifney, you have testified that you took this 

pmpex and hand-carried it to General Powell. Do you recall 

th« day you gave it to him? 

A No, I do not. 

2 And did he make further inquiry oi you on this 




>. 



DNCUSSIFIED 



82-708 0-88-13 



354 



NAnE: 
2823 
282(4 
2825 
2826 
2827 
2828 
2829 
2830 
2831 
2832 
2833 
28314 
2835 
2836 
2837 
2838 
2839 
28>40 
28(41 
28U2 
28(43 
28(4(4 
28(45 
28(46 
28(47 



HIR167000 



matter? 



UNCLASSIHEI) 



PAGE im 



A No, htt did not. 

C At that time? 

A Right. 

2 Ever again? 

A Not that I remember, no. 

S And at the end of that week or the commencement of 
the following uea'^ did you make a report on this matter to 
General Gast or Mr. Rudd? 

A I made a report on it to General Gast. 

2 And when did you do that? 

A That would have been presumably Monday morning, the 
25th of November, when he was back. 

2 And what did you tell him? 

A Oh. Hard to say, but ^TT^nRnTTT^^it is highly X"s 
likely that I showed him the point paper and said I prepared 
this for Colin Powell. 

2 Did you give him a copy? 

A Z don't remember. 

2 Did you tell him the matter involved possible 
transfer of Hawk missiles to Iran? 

A Yes. 

2 And did you express to him — 

A And I would have said that he had something to do 
with the hostages as well. 



(1 



UNCLASSIHED 



I 



355 



NAME 
28148 
2849 
2850 
2851 
2852 
2853 
285>4 
2855 
2856 
2857 
2858 
2859 
2860 

286 1 
2862 
2863 
286K 
2865 
2866 
2867 
2868 
2869 
2870 

287 1 
2872 



HIRI67000 



\lNtUS»« 



PAGE 115 



& And what was his tesponsa? 

A Ha just took it in. He did not make any specific 
cesponsa . 

S Did he ask further questions of you? 

A No. 

BY HR. SAXOK: 

2 Have you subsequently asked him if you gave him a 
copy of the paper? 

A No , I have no[m 
BY MR. SABA: 



^>: 



Q I'd like to show you a copy from your work diary, 
page UO, dated 25 November 1985--and it will become Exhibit 
9. And I direct your attention to a small notation in the 
middle of the page stating 360 missiles diverted from Iran. 
Why is that entry on that day? 

A I have no idea now looking at it as it springs up 
on the 25th of November. 

S Could that be in response to a request made to you 
by General Gast? T^'l 

A It's possible, but ^ e n *i>> _j )I think at that tim ^, 
I'm not likely to have been the one that he would go to for 
such a question, so I really can't connect this to anything 
else . 

BY HR. SAXON: 

fi If I can ask you about that same entry. Dr. 



oNCussra 



356 



yucussra 



HAKE: HIK167000 I I ll 113 nU&J 1 1 Ibl/ PAGE 116 



2873 
287<4 
2875 
2876 
2877 
2878 
2879 
2880 
2881 
2882 
2883 
288(( 
2885 
2886 
2887 
2888 
2889 
2890 
289 1 
2892 
2893 
2894 
2895 
2896 
2897 



Gaff nay. It saems quita simpla to ne . 

You told us in tha vary baginning whan you first inquired 
into thesa mattars you found out that 1,U<42 Hauks over the 
life of our dealings with Iran had bean delivered; is that 
correct? 

A Yes, that's right. 

2 And you told us that 360 additional Hawk missiles 
had bean bought by Iran prior to tha fall of tha Shah, but 
then were not dalivarad; is that correct? 

A Yes. 

2 And this page has both of those notations. 

A Yes. 

e It says 1,*(42 dalivarad and 360 Hawk missiles 
diverted from Iran. 

A 

2 Wouldn't that seem to suggest these 360 missiles 
they had bought but wara not dallverad want elsewhere? 

A Yes. Other customers were found for them I'm sure. 
BY HR. SABA: 

2 And you came to that knowledge, perhaps, on that 
day? 

A That knowledge would have been obtained from the 
printout that I had gotten earlier that week — or earlier the 
previous week. 

2 Do you know what other customers would have 



from Iran. 

Um-hi>^. ^ 



UNCUSSIREP 



357 



HAHE: 
2898 
2899 
2900 
2901 
2902 
2903 
290U 
2905 
2906 
2907 
2908 
2909 
2910 
291 1 
2912 
2913 
2914 
2915 
2916 
2917 
2918 
2919 
2920 
2921 
2922 



HIR167000 



UNCUSSIFIED 



PAGE 117 



leceived those 360? 

A Mo. Although all of that information would be 
available from DSAA, but I don't know if that's relevant. 

MR. SILBER: Let ne just mention that it is 
conceivable that some of the 360 were not ''delivered'' in a 
physical sense but were title transferred, and that would 
become what we call Iranian-titled assets and we would have 
them. They wouldn't be sold to anyone else except with the 
consent of Iran. 

MR. SAXON: Part of the frozen assets. 

THE UITNESS: Part of the frozen assets. 

HR. SILBER: Yes. 

THE WITNESS: Although I would doubt that very 
much, Jerry, because when I say ''diverted.'' it means that 
they were diverted to — 

KR . SILBER: Oh. sure. If you were to use the word 
''diverted,*' that undoubtedly means that they were sold to 
somebody else, not just kept in storage. 

THE WITNESS: And I remember there was a TS2-73, a 
sort of missile-minder system, which had been titled but I 
think was impounded. 

MR. KREUZER: So the 360 diverted, the diverted 
would apply to, say, the period since we froze their assets? 

THE WITNESS: That's right. Somewhere between '79 
and '85. They've sold off. 



UNCUSSIFIED 



358 



KAnE = 
2923 
292M 
2925 
2926 
2927 
2928 
2929 
2930 
2931 
2932 
2933 
293U 
2935 
2936 
2937 
2938 
2939 
29>t0 
29i«1 
29112 
29U3 
29tt'4 
29U5 
29146 
2947 



HIR167000 




PAGE 118 



BT MR. SABA 



fi Do you know if the point paper in fact was given by 
General Powell to Secretary Weinberger? 

A I have no idea. 

2 Do you know if there was a meeting of the NSC in 
which this paper was presented by the Secretary? 

A I have no idea. 

2 Do you know if General Powell took the paper to 
anyone else? 

A Ho, I do not know. 

2 I would like to call your attention to a work diary 
entry dated 6 December 1985, page 55, and it will be 
Deposition 10. 

(A docuaent was marked 
Deposition Exhibit No. 10 
for identification.) 
BY MR. SABA: 

2 And I would call your attention to the notation in 
the upper left-hand side which makes reference to numbers of 
TOH's. Can you give us information about this entry? 

A My memory of all this is vary hazy indeed. \I Iimilb'-//^^ 
■fchit "^1 *nm I've tried to remember how I got into the TOH 
question. But, obviously, in early December, about two 
weeks after the Hawk question arose, something happened - when 
got me back into the loop, doing the same kind of exercise 



mm>m 



359 



NAni 

29>48 
29>49 
2950 
2951 
2952 
2953 
295M 
2955 
2956 
2957 
2958 
2959 
2960 
2961 
2962 
2963 
296U 
2965 
2966 
2967 
2968 
2969 
2970 
2971 
2972 



HIR167000 



mmmii 



PAGE 119 



on TOW nisslles. 

riR . SAXON: Let's go off the tecoid a second. 
[Discussion off the record. 1 
BY MR. SABA: 
2 Dr. Gaffney> I would show you now a copy of 
handwritten notes. I will tell you that these notes have 
been prepared by Noel Koch in approxinately April 1986, and 
I would direct your attention to the very first entry on the 
note which says, TOW discussed separately with Rudd and 
Gaffney in December, and ask you if that helps in your 
recollection pertaining to your own diary entry for the 6th 
of December, 1985? 

A Yes. Along with my diary entry on 6 December, it 
tends to confirm that. 

(A document was marked 
Deposition Exhibit No. 11 
for identification.) 
BY MR. SABA: 
S Do you recall then the source of inquiry to you 
that caused you to write that note? Who called you? 

A I really don't remember. I have this feeling that 
It was Armitage at that point, but I'm not sure. 

2 Could it have been Noel Koch who called you? 

A Could be. 

S But you don't recall? 



yUClASSlFlED 



360 



HXnZ- HIR167000 



UNCUSSIHEO 



PAGE 120 



2973 

297U 

2975 

2976 

2977 

2978 

2979 

2980 

2981 

2982 

2983 

298U 

2985 

2986 

2987 

2988 

2989 

2990 

2991 

2992 

2993 

299t4 

2995 

2996 

2997 



X don't ittcall. 



2 All right. Looking at tha notation itsalf, could 
you look at it again and try to axplain what it signifies? 

A Motica up on tha uppar left-hand corner it says 164 
minus 77, which happens to be the numbers of Hawk missiles 
that had been discussed before. And it almost strikes roe 
that people have said, well, we're not about to take away 77 
missiles from the UAE. You would leave us only 87 to deal 
with and that might not be enough. So now we're looking at 
TOH. 

fi Hhere would you have obtained this information 
from? 

A The numbers? 

2 The reference is made to Army inventory, 
scheduling, shipping dates. Would you have called someone 
else to obtain that information? 

A Seems to me at that time — well why I knew 3,300 TOH 
missiles were in play, I am not sura. I went to one of the 
members of my staff who buys TOH's for tha Special Defense 
Acquisition rund and I said, what do TOW s cost these days? 

Q Who would that have been? 

A That was Lanny James. 

e L-a-n-n-e-y? 

A L-a-n-n-y. His name is. formally, Langley James. 

And I said, ''What are TOW's costing these days?" and the 



^v'nrn 



%* 



361 



HIR167000 



UNCLASSIFIED 



PAGE 121 



upp«z limit h« gava me was about *1 1,000 ioz a TON II. 

Well. I can't say nhathar it was I-TOH or TOW II. So I used 

an upper limit. 

BY HR. SAXOK: 

Q And that's what the figure 11,000 represents? 

A That's right. 
BY MR. SABA: 

S And what about the figure 3,300? Where did that 
come from? 

A That must have come from Koch or Armitage. 

2 Did you understand this inquiry to be along the 
same lines as-- 

A Absolutely. 

Q --as the other inquiry? 

A Yes. 

fi That is, weapons destined for Iran? 

A Yes, that is correct. 

2 Did you provide this information to anyone? 

A Provided it to Glenn Rudd. 

Q Did you provide it to Koel Koch? 

A Possibly, but I don't remember it. 

S General Powell? 

t I don't remember that he was in the loop, or that I 
went to him on this occasion. 

2 Could the inquiry have come from Glenn Rudd? 



KNcussra 



362 



UNCIASSIRED 



KAHE: HIR167000 |l|l||| Hllllll II II TkGt 122 



3023 
3024 
3025 
3026 
3027 
3028 
3029 
3030 
3031 
3032 
3033 
303U 
3035 
3036 
3037 
3038 
3039 
30(40 
3041 
30M2 
304S 
30<4>4 
SOUS 
30U6 
30«7 



A Glann would b« unlikely to tap m« for this 
paxtlculaz piec* of information. 

Q So soitaona als« tapped you? 

A Right. 

2 Why would you than giva tha inio in this casa to 
Rudd? 

A It may hava baan, just to speculate for a moment 
without Knowing where Glenn was on that day. that ha was the 
Acting Director on that day, and that maybe he wasn't 
available at the moment and the requirement came to me 
because I had been involved in it previously. ^[r»«M^ I 
have the feeling that I did run around on it a little bit 
and then when Rudd came back I turned the thing over to him. 
BY HR. SAXOK> 

e You indicated that this most likely oame from 
either Noel Koch or Rich Armitaget is that eorrectr 

A Yes 

2 Mould you think it was possible that it could have 
come from Hr . Armltage? 

A Because previously Kooh had been the Acting ISA. 
and now Armltage was back as ISA. And I do distinctly (^Lk. 




. fif m I I uS^ ^^ 




talking to him about this in some | ^ 



UNCUssm 



363 



HIR167000 



UNCUSSIFIED 



PAGE 123 



S So you'ia vary claaz you talkad to Mr. Atmitaga 
soaatima aazly Dacaitbar '85 about TOW's to Izan? 

A Yas> I'm pzatty suza. 

fi Do you hava any diary antzias pzavious to 6 
Dacembaz that show any convazsatlons with Hz. Azmitaga? 

A Kothing batuaan that czyptic zafaranca to 360 Hauks 
on Kovanbar 25th and this on 6 Oacambaz. Sonatinas it's 
hazd to find stuii but I want thzough in gzaat datail to sea 
if I could find anything. 

Q And you baliava you would hava gottan tha ilguza of 
3>300 fzoa Saczatazy Aznitaga? 



A Yas. I would hava got it fzon on high soaawhaza, 
Azmitaga oz r««ik» I wouldn't hava dzaanad it up. y^ 

BY HR. SABA: 

Did you hava fuzthaz discussions aftaz tha 6th of 
Dacenbaz with Saczatazy Azaitaga on thasa TOW's? 

A Not that I zanenbaz. 

Q Hlth Koal Koch? 

A No. 

fi I'd Ilka to show you anothaz piaca of papar, which 
is fzoa tha dlazias of Noal Koch--it would be Exhibit 12, 
now — and it is a photocopy, but I would dizect your attention 
to tha entry for appzoxinataly 2=00 p. a. and it indicates a 
convezsation with you. Do you zacall that convezsation? 

A No. I don't. 



'^Ncussm 



364 



KAHZ = 
3073 
307U 
3075 
3076 
3077 
3078 
3079 
3080 
3081 
3083 
3083 
30811 
308S 
3086 
3087 
3088 
3089 
3090 
3091 
3098 
3093 
309<4 
309S 
3096 
3097 



11167000 %^V^\V ''*°* '^^ 

%.0^^^\^ (i docuMsnt was itazkad 

^^^yrXjnV Dapoaltton Exhibit No. 12 

V\^ iot IdantKication. ) 

BY Itt. SABA: 

a Do you hav« any — 

A And Z notie* that Glann Budd ooaas In at Z-t** on 
this. 

9 Yas . Do you hava any taoollaetlon of whathar that 
convazsatlon involvad obtaining Iniotnatlon on tha TOH's 
fzoa you7 

A Z do not zaaanbar. 

9 Zs it posaibla? 

A Zt's vary hard to ballava. Z'll turn to ay own 
caoozd and look. 

9 Plaaia. 

BY HR. SAXON' 

9 For Mhat it's HOEth> this notation which comas fzoa 
Hz Koch's diazy indlcatas NLK — Noal L. Koch— Acting Assistant 
Saczatazy oi- Daiansai so ha was tha Acting at that tlna on 
Januazy 7th. 

A Yas . Zt could hava baan soaa othaz quastion that 
caaa up, but my pagas on Januazy 7th and 8th don't show 
anything Ilka that. 

9 Do thay show any naatlng with Ganazal Powall on-- 
[nz. Sllbaz confazzlng with tha wltnass.I 



mmwi 



365 



KANE: 
3098 
3099 

3100 
3101 
3102 
3103 
310i« 
3105 
3106 
3107 
3108 
3109 
3110 
3111 
3112 
31 13 
31 It 
31 15 
3116 
31 17 
31 18 
31 19 
3120 
3121 
3122 



HIR167000 



UNCUSSIFIED 



PAGE 125 



'•^, 



BY MR. SAXON: 

fi Do«s youz diazy shou any antry on 8 January for a 
■■••ting with G«n«ral Powall or th« provision o£ anything to 
Noal Koch for Ganaral Powall? 

A Nothing on that whatsoavar. 
BY MR. SABA: 

fi Do you know if tha information on TOU's was 
includad in a papar providad to somaona in connaction with 
TOM'S? 

A Yas. It was almost an axactly similar point pap 
which was praparad^M*4jQ Glann Rudd I think took a copy of /^\ 
this and convartad it into a mamo concarning TOW's, and ha 
axpandad on it. Yas. And wa talkad about that papar. I 
ramambar cutting and pasting. 

fi Khan was this? 

A This had to ba in Dacambar. aarly Dacambar of '85. 
And I had a copy of that for a coupla of days, and Arnitaga 
told ma to dastroy it. 

fi You had a copy of what? 

A Tha TOH papar. A point papar vary similar to this 
but about TOH's. 

fi All right, lat's saa if I can raconstruct. You 
provida tha point papar to Ganaral Powall on or about tha 



22nd of Novambar. 
A Um-ha«|^. 



\ 



moASsW 



366 



NAME: 
3123 
31214 
312S 
3126 
3127 
3126 
3129 
3130 
3131 
3132 
3133 
313U 
3135 
3136 
3137 
3138 
3139 
31*10 

3im 

31tt2 
31it3 
3141 
31US 
3t*t6 
31<l7 




HIR167000 l9tVl£| niJVS^ ••»•■' PAGE 126 

S Appxoxiiiataly tha following uaak, you discuss the 
aattar with Ganatal Cast, and apparantly with Hz. Rudd and 
provida Kr . Rudd a copy of tha point papar. 

A '**-h-""'- I discussed tha mattar on Novarebaz 25th 



>■ 



in tha aarly morning with Ganaral Gast whan ha raturnad to 
wozK and probably showed him tha point papar I had provided 
to Colin Powell. 

BY HR. SAXON: 
S This is Hawks? 
A This is on Hawks, 
fi Okay. 

A Then apparantly two weeks later the TOH issue came 
up, in early Dacembar. and thara I found myself in the loop 
with Armitaga and with Rudd. 

By HR. SABA: 

And Rudd? 

Yes . 

And Rudd had a copy of your point paper? 

Yes. 

Is it a oopy that you furnished to him? 

Ya>. 

At that time or the prior time? 

Yes. so ha could modal tha TOW papar — 

At that time? 

— that ha than got into on that. In fact, I 



UNCLASSIFIED 



367 



NAME: 
31U8 
31l»9 
3150 
3151 
3152 
3153 
3154 
3155 
3156 
3157 
3158 
3159 
3160 
3161 
3162 
3163 
316U 
3165 
3166 
3167 
3168 
3169 
3170 
3171 
3172 



HIR167000 



UNCLASSIFIED 



PAGE 127 



probably turn«d out--I don't knou. No. Ko . Let ma 
just--lt's v«iy hard for iie to ramember it. But what I might 
hava dona uas start a TOU papar based on this and turned 
that TOW paper over to Rudd, who then further worked it and 
refined it and took it on from there. 

MR. SILBER: But you talked to Glenn about cutting 
and pasting? _j~^ >« 

THE WITNESS: Well, that's right, j ^muja j i aaj ^^^ 
What I think I had done was take copies of this and cut out 
the first parts having to do with Hawks, take the bottom 
parts having to do with transfers, and starting with the 
Hawk material on top, go on through the legal issues as I 
saw them. 

HR. SILBER: Yes. 
BY MR. SAXON: 

S And you understood that Mr. Rudd presented that 
point paper on TOW's to Richard Armitage? 

A Yes. 

e If you will look back at Exhibit 11 — 

A Which was what? 

S Gaff nay Exhibit 1 1 , and those are the handwritten 
notes of Noel Koch. Right here. 

A Yes. 



2 If you will look at item no. >t . 

h 

A Um-hi/m. 



DNCUSSm 



\ 



368 



NAME: 

3173 
317U 
317S 
3176 
3177 
3178 
3179 
3180 
3181 
3182 
3183 
318U 
3185 
3186 
3187 
3188 
3189 
3190 
3191 
3192 
3193 
319>4 
3195 
3196 
3197 



HIR167000 



UNCUSSIFIED 



PAGE 128 



2 It says. ''TOW pap«r locked in RLA saie> wouldn't 
l«t Rudd ke«p copy.*' 

A Yas. 

C Mould that seem to be the TOW paper to which you 
have reference? 

A Yes. 

Q Thank you. 

BY MR. SABA: 

2 For whom was this paper intended? 

A Hy assumption was it's the same sort of thing. 
Weinberger was still going to meetings at the White House on 
this subject. 

2 Did anyone tell you that? 

A No. 

BY KR. SAXOK: 

2 And you say that Hr . Armitage asked you to destroy 
the point paper? 

A Yes . 

2 And, as far as you know, was it destroyed? 

A I destroyed my copy. 
BY HR. GENZnAK: 

2 When did he ask you to destroy it? 

A Just about this time. About early December. 

2 And when did you destroy it? 

A At that time. 



UNClASSinED 



369 



NAME: 
3198 
3199 
3200 

320 1 
3202 
3203 
320U 
3205 
3206 
3207 
3208 
3209 
3210 

321 1 
32 12 
3213 
321U 
3215 
3216 
3217 
3218 
3219 
3220 
3221 
3222 



HIR167000 



UNCUtSSIRED 



PAGE 129 



BY HR. KREUZER: 

S That's th« TOW paper? 

A That's the TOH paper. 

2 Which Mr. Rudd refined? 

A Yes . 

2 And gave to Mr. Armitage? 

A Yes . 

2 And was subsequently told by Hr . Armitage he 
couldn't have access to it again? 

A Yes, I guess so. Yes. 
BY KR. SAXOH: 

2 But you had a conpleted copy, as I understand your 
testimony. After Hr . Rudd finished it, he gave you a copy 
You said you had it for a couple of days. 

A No. I would say I (TmJ lln.> J certainly had the 
earlier drafts and certainly drafts of what I had prepared 
first which Rudd then worked over. I can't say that I had 
Rudd's final version. 

2 But whatever drafts you had is what Mr. Armitage 
asked you to destroy? 

A That's correct. 
BY HR. GENZMAN: 

fi Was anything said about destruction of the Hawk 
paper ? 

A No. 




UNCLASSIFIED 



370 



KANE: 

3223 
322« 
3225 
3226 
3227 
3228 
3229 
3230 
3231 
3232 
3233 
3234 
3235 
3236 
3237 
3238 
3239 
32U0 
32141 
32U2 
3243 
3244 
3245 
3246 
3247 



HIR167000 



UNCLASSinEO 



PAGE 130 



MR. SILBER: And so you kept it? 
THE WITHESS: I kept it. 
BY MR. SABA: 
2 Returning again to nr . Koch's calendar of the 7th 
oi January, does this conversation assist you in recalling 
what that meeting might have been about? 
A No. 

[ Oii the record . 1 
BY HR. SABA: 
Q Do you recall if this natter came up at all? 
A Ho. I have no recollection whatsoever. 

[Mr. Silber conferring with the witness. 1 

MR. SAXOK: 

2 Let me catch up with one item that there appears to 
be a gap on. 

You indicated that from Noel Koch's handwritten notes it 
would appear that when he says, ''TOH paper locked in RLA 
safe,'' that's the one of which you had knowledge. That 
would mean at some point Noel Koch had to have become aware 
that there had been prepared a TOW paper. 

A Sure . 

C Did you make him aware of that? 

A I doubt that I would have volunteered it. 

Q To your knowledge, did rtr . Rudd make him aware of 
it? 



UNCUSSiFIED 



371 



NAME 
32U8 
32t(9 
3250 
3251 
3252 
3253 
325a 
3255 
3256 
3257 
3258 
3259 
3260 
3261 
3262 
3263 
32614 
3265 
3266 
3267 
3268 
3269 
3270 
3271 
3272 



UHCLASSIRED 



HIR167000 

A I don't know, [i^ UUuHlu' b^ "**>%'^ \^ 

S Let me ask it this way. Would you know who made 



PAGE 131 r^ 



Moel Koch aware that-- 

A Ho, I would not. 

2 Thank you. 

BY HR. GENZHAK: 

fi Did Aimitage say why he wanted the TON papei 
destroyed, whatever you had? Cv^^ 

A Ho. I think it was Just, there's a lot of dV \ 



sensitivity for all this and we've got to keep it as close 
hold as possible. 

HR. SILBER: How did Araltage know that you had a 
copy? 

THE WITNESS : Because he was in the loop and I 
believe, without recalling it specifically, that I went with 
Glenn Rudd to see him about the subject. 

MX. SILBER- And he asked if you had a copy? 

THE WITNESS: Yes. Right. 

BY HR. GENZKAN: 
fi Did he indicate that he just wanted your copy 
destroyed, as opposed to every copy? 

A It was a general thing: i think we should destroy 
all copies. 

S Did anyone ever bring up the fact that there were 
also in existence Hawk papers? 



X 



uNCUssra 



372 



HAME: 
3273 
3274 
3275 
3276 
3277 
3278 
3279 
3280 
3281 
3282 
3283 
328U 
3285 
3286 
3287 
3288 
3289 
3290 
3291 
3292 
3293 
32914 
3295 
3296 
3297 



HIR167000 



mj&iim 



PAGE 132 



No. No, b«caus« he hadn't been in on that one 



earlier . 



BY MK. SABA: 

2 Did you sea the final TOW paper? 

A I nay have but I don't remember it. 

2 Do you recall when it would have been completed? 

A It would have certainly been completed very early 
in December, at that time. Hell I don't know. I think Rudd 
had owed a product just about that time and he delivered it. 
It further went through a subsequent revision, though. 

S From your testimony, I have the impression that it 
was being prepared rather hurriedly, because there was a 
reference to cut and paste and provision of some earlier 
ideas . 

A Yes . 

S Is it possible that the paper was prepared within a 
day or two of the 6th of December? 

A Absolutely. 

BY HR. GEKZHAN: 

S FroB your recollection of the TOW paper, are you 
able to say whether it was any more sensitive than the Hawk 
paper? 

A No. 

BY HR. SABA: 

2 Is it possible the paper would have been completed 



UNCLASSIFIED 



373 



UNCIASSIFIED 



HUnZ- HIR167000 I lllULJlij W 1 1 ILaV PAGE 133 



3298 
3299 
3300 
3301 
3302 
3303 
330>4 
3305 
3306 
3307 
3308 
3309 
3310 
3311 
3312 
3313 
33m 
3315 
3316 
3317 
3318 
3319 
3320 
3321 
3322 



by tha norning oi tha 7th oi 0«c«mbar? 

A L«t'« >•• ■ dy nottt that I had on that subject was 
tha 6th of Daeaabar, Maan't it? 

e Yas. 

A I'm swxa it was just about urappad up. 
BY NB. SAXON' 

Q Hasa you told, aa with tha Hawk papar> that this 
papar was baing pcaparad ioz an upcoming maating at tha 
Uhita Housa/ an NSC maating ox othaz maating? 

A No, X don't samambaz. Z had tha imprassion, I 
carziad tha imptasslon that it was tha sama sozt oi scanazio 
bacausa I tamambac Hind oi saying to mysalf, my God, thay 
can't wrap it up it thay kaap having mora maatings on this 
sub jact. 

NR. SZ&BCB' But ii tha lawk papaz was succassfui, 
that might explain why you cut and pasta. In othaz wozds, 
ii tha SECDEF iound it iavozabla, tha fizst— 
THE HZTNESS: Oh. susa . 

HR. SILBIR' So you might out and pasta. 
BY HK. SABA' 

8 Ii wa waza to suggest to you that theze was a 
National Sacuzity Council maating on tha 7th oi Dacembez-- 

A Um-hvl^. ^ 

2 --at which thasa mattazs may have been discussed, 
would it seem cozzeot than that this papaz was being 



UNCIASSIRED 



374 



HAKE 
3323 
33214 
3325 
3326 
3327 
3328 
3329 
3330 
3331 
3332 
3333 
33314 
3335 
3336 
3337 
3338 
3339 
33U0 
33>41 
33>42 
33143 
331414 
33145 
33146 
33147 



HIR167000 



uNCUSsra 



PAGE 1314 



prepared for that meeting? 

A It would seem correct, and it could have been 
practically produced in tine for a meeting on the 7th. 
BY MR. GENZHAN: 

2 Did you ever receive any ieedback-- 

A No. 

2 --regarding the use of the Hawk paper-- 

A No. 

2 --or the TOH paper? 

A No. 

BY HR. SABA-- 

2 Did you sea the paper following the 7th of 
December, 1985? 

A No. 

2 Did you have any further occasion to discuss it 
with anyone? 

A Not that I remember. 

2 Here you requested to provide any additional 
information concerning TOH's or HAWK's? 

A No, that's the last I was into it. I think I, in 
the earlier Interview, Roger, X was Acting Director from 
February 20th through 25th and I thought I was in it then. 
I thought that's when the TOU's came up, but this subsequent 
recollection says it was rather back in December. 

2 In order to make the record correct, are you 



UNCUSSinED 



375 



KAME' 
33>48 
33'49 
3350 
3351 
3352 
3353 
335X 
3355 
3356 
3357 
3358 
3359 
3360 
3361 
3362 
3363 
336« 
3365 
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3370 
3371 
3372 



UNCUSSlflED 



HIR167000 lIllljl.nLJ^II IkV PAGE 135 
suggesting that at an earlier tiree> perhaps in an interview 
with soma of us, you had a recollection that in February of 
1986 you got involved in a TOW natter in Iran? 

A Yes. 

Q Is it correct to say that you do not have that 
recollection now? 

A That's correct. 

2 Is it correct to state that you were not involved 
in TON'S or HAUK's or the Iranian natter in February oi 
1986? 

A That's right. 

fi And is it correct to state, then, that that earlier 
reference is actually a reference to the period of December 
1985? 

A Yes. 

9 And that you have corrected your earlier impression 
by reference to your work diaries? 

A That's right. 
BY HR. SAXOK: 

fi And for the record, when you refer to an earlier 
interview would that be an interview with the House and 
Senate staffs with you on April 10th? 

A Yes . It was with Roger and Bud Aldridge and John 
Kields. 

e Bud Albright. 



UNCIASSIHED 



376 



NAME: 

3373 
337H 
3375 
3376 
3377 
3378 
3379 
3380 
3381 
3382 
3383 
338M 
3385 
3386 
3387 
3388 
3389 
3390 
3391 
3392 
3393 
339U 
3395 
3396 
3397 



HIR167000 



UNCLASSinED 



PAGE 136 



A Bud Albright, rather. 
Q Yes. 

[Discussion oif the record. ] 
BY HR. SABA= 
Q Finally, Or. Gaiiney, I want to show you this 
document, uhich is a handwritten note' 12 December 1986 on 
DSAA notepad. 



A Ura-huX^. 



X 



MR. SABA: This would be Exhibit 13. 

(A document was marked 
Deposition Exhibit No. 13 
for identification.) 
BY MR. SABA: 
Q Do you recognize the note? 

A Yes. It's my notes, my handwriting and it was done 
at Jerry Silber's suggestion when I turned this document 
over to him. 

S So that note was handwritten by you on the occasion 
of your providing Mr. Silber with the original of the Hawk 
point paper? 

A Providing him with a copy that I had in my safe, 
not the original. I do not have the original. 

e I see. But you maintained a photocopy in your safe 
and you provided that to Mr. Silber then? 
A That's correct. 



UNCUSHD 



377 



HIR167000 



UNCLASSIFIED 



PAGE 137 



fi And this note indicates that? 



A Yas. 

2 All right. I hav* some general questions now which 
I would like to ask. and I think Mr. Saxon has some 
additional questions as well. 

Concerning Hawk missiles and the November 1985 point 
paper-- 

A Um-h'v>i^. 

Q --did anyone make you aware at that time that there 
was> at the time period 18 November through the 25th of 
November, an action going on involving the transfer of Hawk 
missiles? 

A No. I had no knowledge whatsoever that something 
was actually happening. 

fi In connection with the request to determine Hauk 
missiles to-- 

A Although I sort of had the impression that this 
subject was under discussion. That it had presumably come 
up in the NSC before, and that it wasn't :ust an absolutely 
brand fresh subject. 

2 But did you have any knowledge-- 

A But I had no knowledge. 

2 that in that week there was an attempted transfer? 

A No, absolutely not. 

2 Has there any reference to that-- 



> 



UNCIASSIHED 



378 



KAHE: HIR167000 



3i423 

3U2U 

3>425 

3426 

3U27 

3M28 

31(29 

3430 

3M31 

3(«32 

31433 

3U3U 

31(35 

3U36 

31(37 

3((38 

3U39 

3U>(0 

3>4i(1 

3>(>42 

314M3 

31(t4U 

3t(ilS 

31(46 

341(7 



UNCLASSIFIED 

Ko, thAia was non« whatso«v«t. 



PAGE 138 



2 --at that tima or subsaquantly? 
A Un\-»Ai». 



>■■ 



2 In the requast put to you by Ganazal Powall as well 
as rtr . Koch, was there any zaquast that your inquiry focus 
on any particular type of Hawk or particular specifications 
for Hawk? 

A Hone whatsoever. 

2 Has there any discussion with you as to various 
altitudes that Hawks might reach? 

A Ho. 

2 Has there any discussions with you as to particular 
painting that might exist on different missiles which were 
to be provided to other countries? 

A Ho. 

MR. SILBER: You mean insignia, that kind of thing? 
BY HR. SABA: 

2 Or insignia? 

A Or the stenciled markings on the side of a missile, 
that kind of--nothing came up like that. 

2 Let me ask you a technical question, if I can. 

In the case of stenciled insignia on Hawk missiles, do you 
know if those are easily changed? 

A I have no idea. 

(Discussion off the record.] 



ONCUSSIREO 



379 



KAHE: 
3UU8 
34149 
3(150 
3451 
3452 
3453 
3454 
3455 
3456 
3457 
3458 
3459 
3460 
3461 
3462 
3463 
3464 
3465 
3466 
3467 
3468 
3469 
3470 
347 1 
3472 



HIR167000 



UNCLASSIFIED 



PAGE 139 



BY HR. SAXOH: 



e Along thesA sans linas. w«ra you «v«r told why tha 
Iranians uantad Hawk missllas? 

A No. 

2 Do you racall any discussion — 

A Of coursa> you know. I knau thaxa was a uaz going 
on cartalnly. 

Q Suza . 

A And this would ba soKathing usaiul for thaa to 
hava . 

fi Wara you told that tha Iranians might hava wantad 
missllas to shoot down high-flying Soviat survaillanca 
planas ? 

A No. 

2 Hara you told that at any point tha Iranians 
zacaivad Hawk missllas that did not hava that capability? 

A No. 

2 Hara you avar told at any point tha Iranians uantad 
Hawk missllas in tha numbar of 50? Do you racall tha numbar 
50 Hawks baing disoussad? 

A No. No. 

2 I guass I should ask for tha racord whathar you 
avar had any discussions with Colonal Ollvar North about 
Hawk missllas? 

A No. No. Nor of anything alsa. aithar. 



UNCLASSIFIED 



380 



KAME: 

31473 
3471* 
3U75 
3476 
3477 
3478 
3479 
3480 
3481 
3482 
3483 
3484 
3485 
3486 
3487 
3488 
3489 
3490 
3491 
3492 
3493 
3494 
3495 
3496 
3497 



HIR167000 



UNCLASSIFIED 



PAGE 140 



2 Saves us the rest of the aitetnoon. 
BY HR. SABA: 

Q Uhy was the number oi Hawks pared down? How do I 
get from 500 to 120? 

A I have no idea. 

S Could this have had anything to do with the cost oi 
the Hawks? 

A I wouldn't be surprised. 

Q When you had your discussion with General Powell 
and iniorned him of the cost oi a Hawk, did he have a 
reaction to that? 

A Hard ior me to remember, but I think the cost was 
considered remarkable. Five hundred missiles is a pretty 
expensive proposition. 
BY MR. SAXOK: 

2 Let me ask one more question in sequence with the 
ones that I was asking, and that is were you ever asked 
about the operational capabilities of the Hawk missile? 

A Ho. No. 

2 And you never gathered any data or transmitted any 
data about the operational capabilities oi the Hawks? 

A No, I didn't. 
BY HR. SABA: 

2 Did you have any conversations in November and 
December oi 1985 with any other United States Government 



UNCLASSIFIED 



381 



ONCUSSIHED 



HIR167000 l#l ItfLfllJIJII II II PAGE 1*4 1 

amploy«tt iron any othar ag«nt concerning eithat tha Hawks or 
tha TOH's? CV^ 

A No, I think ^ ''»a lal l iail ht y a w a t a w t J^ I'va mentioned^y 
all tha paopla that night hava baan involvad. 

e you had no discussions with anyona at tha Stata 
Dapartmant? 

A No, nona whatsoavai. 

a Tha Whita Housa stafi? 

A No. 

fi Tha CIA? 

A No. 

e All right. That's it on ny Hawk questions. 
BY MR. SAXON: 

ft Lat aa ask you ona question which I think you 
ansua'rad but I want to naka sura. 

Uhan you first got this raquast iron I guass nr . Koch on 
Hawks — 

B --and thara was a session in which you want down and 
you met General Powell. You told us that you had the sense 
that this was a front office operation, coming from the 
Office of the Secretary of Defense. 
. A .,.-*«r^V^, XI 

8 Has it your clear understanding that this was a 
tasking that was being done at the request of Secretary 



ONcmssra 



382 



NAnz = 

3523 
352(4 
3525 
3526 
3527 
3528 
3529 
3530 
3531 
3532 
3533 
353U 
3535 
3536 
3537 
3538 
3539 
3540 
3SU1 
3542 
35M3 
3541* 
3545 
3546 
3547 



HIR167000 



UNCLASSIRED 



PAGE 142 



Weinberger? 



A PoueJ.1 never said that to ne in so nany words. 

2 But is that an inference you drew from the 
circumstances ? 

A Sure. Because Powell would not want it just for 
his own curiosity obviously. And then as it turned <'"'tr\~'(Ny 
friiaLj he needed it for Weinberger's participation in ^^^X, 
meetings. First he wanted information and then it turned 
into a point paper. 

BY HR. KKEUZER: 

2 On this Hawk missiles for Iran point paper, it was 
emphasized more than one time to you by General Powell that 
the Secretary was not in favor of this proposed Hawk missile 
transfer to Iran and therefore he wanted all the ne:.ative- he 
wanted a negative point paper? 

A Yes. I certainly got that strong impression. I 
can't remember the explicit instructions, but there was no 
doubt in my mind. 

Q Were the same instructions forthcoming with regard 
to the subsequent TOW paper that was prepared? Were the 
same general terms more or less expressed; the Secretary 
does not support transmission of TOW's either, and he would 
like a negative slant on the TOW proposal? 

A I didn't have anything to the contrary, so we 
proceeded in the same line. 



Mmim 



383 



HIR167000 



UNClASSra 



PAGE 1U3 



e Would it also be fair to say that in looking at the 
Hauk proposal/ and. perhaps, at the TOW proposal, that it 
could constitute a set of ground rules or plans which would 
have to be followed in order to transmit-- 

A There was a desire to lay out the practicalities, 
the steps you'd have to follow. 

fi So in addition to being a negative paper on Hauk 
transnissions and TOW tr ansnissions . also these could 
constitute very practical papers on hou to get Hawk's and 
TOW'S to Iran? 

A Not very. Because, as you see, it didn't go into 
the detail how would you transport then, how would you 
arrange payment, how would you record the paynent. et 
cetera. Kone of those modalities were contained in it. 

2 How about from the point of view that what is 
covered in the paper such as reporting to Congress, meeting 
the word, if not the spirit, of the requirements for 
breaking the transmissions down into smaller packages, just 
those items addressed in the paper, would that be 
considered — 

A Sure. 

& — pretty good advice? 

A A little bit of — well. I don't know whether it was 
pretty good advice, but it's a bit of a how-to: if you guys 
really wanted to do this, these are some of the things you 



UNCLASSIFIED 



384 



NAME: 
3573 
3S7M 
3575 
3576 
3577 
3578 
3579 
3580 
3581 
3582 
3583 
358U 
3585 
3586 
3587 
3588 
3589 
3590 
3591 
3592 
3593 
3594 
3595 
3596 
3597 



wmw 



HIR167000 ^1^ Vi»' '"^ "^ " PAGE 144 

would have to do vis-a-vis the legal and congressional 
notification requirements. 
BY MR. SABA: 

Q Did you receive feedback on your Hawk point paper? 

A Ho. 

S Did anyone cone back to you and indicate how it was 
received or whether it accomplished anything? 

A No. |fii>>i iinhi^ ^^\ 

2 The TOW paper, do you recall how many pages it was? 

A It wasn't more than two pages, I don't think. 

2 Do you recall, though, whether in fact it was one, 
two or three? 

A No. I would have said two pages with a possible 
data page on the back, but I'm not sure of that. 

2 Did the TOU paper contain information or opinions 
as to congressional notification requirements? 

A Yes. Yes, Glenn Rudd refined it a little bit from 
what's shown here but did not change it in substance that I 
remember . 

HR. SILBER: Uhen you say the TOU paper, are you 
talking about the paper you prepared for Glenn or the paper 
that Glenn refined? And which is the one that you 
destroyed ? 

THE WITNESS: I destroyed — I can't say that, for 
sure that I had the final copy of what Glenn did, but I 



BNClASSra 



MftHE 
3598 
3599 

3600 
360 1 
3602 
3603 
360M 
3605 
3606 
3607 
3608 
3609 
36 10 
36 1 1 
3612 
36 13 

36 m 

3615 
36 16 
3617 
3618 
36 19 
3620 
362 1 
3622 



UNCUSSIFIED 



HIR167000 

'it- 
think "i^was pretty close to what he had done 



PAGE ms 



?S 



MR. SILBER: I see. 

THE WITNESS: And I think he showed rae the final 
paper before he sent it up. 

MR. SILBER: So the TOH paper is, really, from your 
knowledge, is your input to Glenn, rather than wasn't 
necessarily Glenn's. Although you saw it uhen-- 

THE WITNESS: No. I saw what Glenn had done to it. 
BY MR. SAXOH: 
e Do you recall that that TOW paper mentioned the 
Arras Export Control Act? 

A Yes. It had all these same points in it. I think 
Glenn changed some of the words but not the thrust. 
BY MR. GENZMAN: 
2 Rudd had no input into the Hawk paper? 
A No . 

2 Did anyone else? 

A No one had. That's solely rae, solely my product. 
2 Was there any reason why in the case of the TOW 
paper someone elsa had input? 

A Well because, as I say, I turned out a first cut 
and then Rudd was back from wherever he was back from and 
took it over . 

BY MR. SAXON: 
2 Let me run through a couple of questions on Hawks, 



UNCLASSIFIED 



?2-708 0-88-14 



386 



UNCUSSIFIED 



MAME: HIR167000 Wl 1 VI>f1UUII IL II PAGE 1<46 



3623 
362>4 
3625 
3626 
3627 
3628 
3629 
3630 
3631 
3632 
3633 
36314 
363S 
3636 
3637 
3638 
3639 
36it0 
3614 1 
3«4l2 
36143 
36UM 
Z6HS 
36M6 
36H7 



ii I can. Dr. Gaiiney. 

To go back to thft discussion about giving th« missiles to 
on* country-- 

l ie UU TTBH^ ^ 

2 --tha not«s w« went through in sarliftr exhibits 
leierenced that. 

A Yes. 

e Is it youx recollection that that was in the 
context of if ue were to give the* to one country would that 
help us avoid the problea of notifying Congress? 

A I would suspect so. without really remembering what 
that notice that I. and X strongly underline the word, 
''gave.'* And Z think that was the Mind of context in which 
it came up. 

a All right, sir. 

A There's no dollars involved. How could there be 
any thresholds? Klght, Jerry. 

HI. SIIBEKs Not true. Not true. The answer to 
your question Is it doesn't make a damn bit of difference 
whether it was given or >eld~ 

HK. SAXON: No. that's net the answer to my 
que'^tion because Z didn't address it to you. 
NX. SZIBKK' Yes. Kight. 

nt. SAXON: z addressed it to the person who made 
the notes and was involved in the discussions. 



uNcussra 



387 



HIR167000 PAGE IM? 

THE WITNESS: Yes. And the answer is to the best 
of i»y knowledge. 

BY MR. SAXON: 

2 When staff members of the two committees met uith 
you earlier, you told them that General Powell reacted with 
some shock when he found out that he couldn't secure the 500 
Hawks. Is that correct? 

A Oh, I think so. I think he was. 

2 And what would you say, in your opinion, was the 
reason for that shock? Was it because he would have been 
unable to get the Hawks? 

A They just weren't available. 

2 But would that have surprised him, that he didn't 
have that many available, or would it have upset him-- 

A It would have upset hin because he would 
immediately start thinking that if he couldn't get it for 
the important customers you're going to have to start 
tearing it out of the Army's hide, and that's--and then when 
you look, and then, you know, our war reserve position was 
not that great on these things. 

2 So would it be your sense from the numbers you 
looked at that if we were to try to provide any sizable 
number of Hawks it could have a readiness impact that would 
be adverse to U.S. interests? 

A You bet. Yes. 



UNCUSSIHED 



388 



NAME: 
3673 

3674 
3675 
3676 
3677 
3678 
3679 
3680 
3681 
3682 
3683 
36814 
3685 
3686 
3687 
3688 
3689 
3690 
3691 
3692 
3693 
369>4 
3695 
3696 
3697 



HIR167000 



UNCLASSIFIED 



PAGE 1(48 



Q And you told the staff members in the previous 
interview that when you briefed General Gast about the Hawk 
matters that he reacted with some surprise to the briefing; 
IS that correct? 

A I uould say that he acted as if he had had no 
foreknowledge of this kind of thing ever before. 

2 Which uould be the reason for his surprise? 

A Yes. 

2 Was there ever a mention of a presidential finding 
during either the Hawk or TOW discussions to which you were 
a party? 

A No. 

2 I believe you've indicated that you received a 
clear impression that your involvement on Hawks was not the 
first time that the issue of Hawk sales to Iran had come up; 
is that correct? 



A No. My impression was it was not the first time ,^: 
that a discussion of something like this as a way to get the 
>me up. >hat we ue 



»y to g« 
hostages out had come up. ^hat we were entering an ongoing / 
discussion of some kind, but whether it had ever attached to 
Hawk, I couldn't say. 

2 And on what would you base that impression? 

A It's a pure impression jgPl U.^^ just from Powell. I / 
guess it was just a sensing I had. Because I had the 
opposite sense from Noel Koch. That Noel had never heard of 



Jh 



wsmm 



389 



aNtmssiHii) 

anything lik* this b*ioia. It was as big a suxpiisa to hinSw^ 
as it Has to aa . J^tmm mm ^i t was claazly not soaathing that /^ 
ha had baan yzivy to baioza as iaz as I could saa. 

fi In any discussions you had with Noal Koch, did ha 
avaz tall you that ha had baan involvad with nagetiating 
with tha Zszaalis on tha rciea of TOM aissilas to ba sold to 
Xzan? 

A No. 

fl Did you •vax hava any discussions on tha issua oi 
pcicias oi TOM alssllas ethax than tha sisfla ilguza 
zailaetad in yout diary oi •It. 000? 

A No. No. 

t Bid you avas in^uita into any TOW yzica iiguzas 
othax than that aaa? Za athaz Mozds, did you gat involvad 
in Hall what would a basic TOM cost oz what is zaylacaaant 
cost, .at eatata? ^ 

A Hall. Z aavaz got dOMB to tha basic, which Z knaw^^^C^^ 

^S5^ would cost sesatking lika •3.S00 soaa yaazs baioza. In x* ^ 

talking with ay guys. Z talkad only about cuzzant yzoduction 



NAnC= HIK167000 
3698 
3699 
3700 
3701 
3702 
3703 
370*» 
3705 
3706 
3707 
370« 
3709 
37 to 
37 It 
37t2 
3713 
37m 
3715 
3716 
37 t7 
37 1« 
3719 
3720 
372 1 
3722 



pzicas. which zanga izea 9,200 to 1 1 .000«^M*i4i-T«<rtlW*> H^T 



X 



fi Did you avaz yass that TOM pziea. thosa TOH's in 
curzant yzoduetion. aithaz ioz tha Z-TOH oz TOH ZI which you 
just said waza batwaan ^9.200 and aiKOOO-'did you ever pass 
that TOU pzica on to anyona? 



UNCLASSIRED 



390 



3723 
372U 
3725 
3726 
3727 
3728 
3729 
3730 
3731 
3732 
3733 
?73M 
3735 
3736 
3737 
3738 
3739 
37i»0 
37m 
3742 
3743 
37t««l 
3745 
37116 
3747 



HIR167000 



BNCussra 



PAGE 150 



A Probably passed it to Rudd . He didn't ask me 
further about it since he's very much better than I am 
finding out uhat-- 

C To the best of your recollection, did you ever give 
that figure, yourself, to General Powell? 

A No. 

2 Did you ever give that figure to Mr. Armitage? 

A I personally did not. 

2 To Mr . Koch? 

A Ko , not that I remember. 

2 Did you ever get any feedback as to whether Hawks 
or TOU's had gone forward either to Israel in this time 
period or to Iran? 

A No feedback whatsoever. 

2 Did you ever get any feedback as to whether these 
shipments and transfers which were being discussed had been 
shot down for any reasons dealing with legality, readiness, 
or anything else? 

A Only that when( jFu B J i iT ! we went through the Hawk SJc5>. 
exercise and than revised the exercise in the guise of TOU's 
a couple of weeks later, I just said, wall , X^cer tainly /> 
haven't been able to move on this issue. 

2 But that was a conclusion you drew on your own? 

A Yes. 

2 Finally, has anybody sought to talk to you in 



ONCUSSIFIED 



391 



UNCLIiSSra 



HAHE: HIR167000 V I ' V*** ■** '^ " ' PAGE 151 

37U8 recent months or since these matters became public back in 

37>49 November which in any way could be construed as an attempt 

3750 to get you to color your testimony or slant your testimony 

375 1 or change your testimony in any way? 

3752 A Yes. I talked to Armitage yesterday. 

3753 e And what did he say to you? 

375U A He said'- Look. Really, I was out of the country 

3755 most of February '86, and it just doesn't seem to me I could 

3756 have been involved then. So when you told people that the 

3757 TOW issue had come up in February, I just really don't think 

3758 it happened. I think it was'^jS early December. ,^-^3^ V 

3759 So X went back into my book and here is this small 

3760 reference to TOW, and I believe that. 

376 1 2 So we can understand what you said, he was 

3762 refreshing your recollection with regard to a time period 

3763 that involved him and, in fact, your consulting your notes 
376M reflected that perhaps he was right? 

3765 A Yes, that's right. 

3766 Q Was there anything else that he said or did that 

3767 you would construe as any pressure to have your testimony 

3768 come out in a particular way? 

3769 A Ho, not at all. 

3770 HR. SAXOH: That's all I'vej^t. 

377 1 THE WITNESS: The only thing I would add on that 
3772 was when I informed Gast upon his return November 25th, 



ONCLASSIFIED 



392 



NAHE: 

3773 
37714 
3775 
3776 
3777 
3778 
3779 
3780 
3781 
3782 
3783 
37814 
3785 
3786 
3787 
3788 
3789 
3790 
3791 
3792 
3793 
37914 
3795 
3796 
3797 



HIR167000 



UNCUSSIFIED 



PAGE 152 



1985, I think when we cycled back into the problem a couple 
of weeks later with Armitage on TOU's, he said: Did you 
tell anybody? 

And I said: Yes. I told Gast. I cut hint in. 

And he chewed me out for cutting in Gast. That's :ust a 
measure of how tight they were trying to hold the issue. 
BY MR. SABA: 

8 Was Gast involved in those TOH's, in that TOW 



paper : 



Did you briei him on it? 

Hot me. no. . Tigured that would be up to Rudd 




^ 



Since November 1st, 1986 until the present time, 
other than representatives oi our two committees, to whom 
else have you spoken concerning the events in November, 
December, January '85-86? 

A Oh, a few of my colleagues. r*tj t i i^ subsequently when 
all of the testimony started coming out, I've been showing 
people copies of this memo. 

2 And have you provided any testimony to any other 
investigators ? 

A No. Who was--let's see. 

HR. SILBER: How about Walsh? 

THE WITNESS: Yes. The Walsh people came around. 

MR. SILBER: Did they know about the document? 



X 



UNCLASSinED 



393 



HIR167000 



uHCUSsm 



PAGE 153 



THE WITNESS: Ho. They had not seen the document. 



lid not. I said go get it iron th^eneral \,' 



BY MR. SABA: 
fi To which document do you refer? 
A ny point paper. 

BY HR. SAXON: 
2 When was this when they sau you? 
A About two weeks ago. 

BY HR. SABA: 
2 Did you provide them with a copy? 
A Ko, I d 
Counsel . 

tlR. SILBER: Got to be good for something. Right? 

BY MR. SABA: 
2 Ware you interviewed by any representative of the 
Justice Department in November or December of 1986? 

A Nobody from the Justice Department has been around. 

Okay. Thursday, in DSAA Conference Room with Walsh 
investigators Cliff Sloan and Bob Braver. 

BY HR. SAXON: 
2 What day was that, sir? 
A That was the 5th of June. 

BY KR. SABA: 
2 1987? 
A Yes. 

HR . SABA: X have nothing further. 



'ii>. 



UNCLASSIFIED 



394 




MAHK: HIR167000 ilrlUI_ntJ V*' ■■•^ PAGE 154 



3823 

38214 
3825 
3826 
3827 



MR. GZNZHAK: X hav* nothing iurth*r. Thank you. 

tlK. SABA: Thank you very nuch. Ha apprttciat* your 
coopazatlon. 

(Hharaupon, at 12:>48 p.m., tha daposition was 
concluded . ] 



UNCIASSIHED 



395 




396 




397 



1 9 November i i M^ J /^^^er 



324/42 



1-J^ 



8:30 



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230 



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9-» 



330 



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TaA^ fs^^f^/^. 4 r 




niini:r\r\iii 11 



7:30 tgjs-" ^J, J. ■ ;. , 



'Ml 



l.,^±±. 



398 




^ • XOhot cotv^"WiW can't- 
SA^"^ V<jOW± q^^^ coAii^ 



lOecla'isilied/fleleased on 



iO(%888 



^^inder ptovisions ot E 12356 
By K Johnson, National Secufily Council 



mm\m 




399 



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/»/<?/>»>«_ 










T*e«iMaa/iwiz 



• 1^1 e »tK ««*«»•»{. ■";•>;; 



11 



, ■"■""''••-'••"uri{yCc:Ti 







400 




aJo (j/^7^ 



^^.>&^^ 



'3 



50M^ 



vr'.T 5:; !-.:;-! c.'L0.123Si, 



!]»>^i:uss'5^^fD 



401 



^mmn 



/\}jb i!>7P*' 



4s ^«^<<a.ljO^ 



: DEPOSITION 
i EXHIBIT 



(^) 



■■OeciassifieOTeleased on_10»^»B8 
imflec provisrcro o( E !?3% 
bv K Johnson. National Scclm!/ Council 



^''^'5^-r • : 



UNClASSlHtB 



402 



l^^ 



^msim 



2Ui2!Jt^ 



Hail jcxy>4* ^jraduea.^ 



fiTPQgr Tti SAST. 



2^fW.SQQi Till ^^mJ AyiLj? 




Tc ki fS gC 






elava)oy^l^ar^t• ag r^uSH 



C O-pfodugH'ftrt earJorH u^yt 



Vioi nacii ^A "HtrnjUft t<i 



VATO Cg«yip ' ^ly "^ 



IkJd-^tl^.lh M^giragJ. 



; DEPOSITION 
EXHIBIT 



-Z. 




Partially Decias3itieJ/nei.;ased onjoffsgg 

unrtei pioiiiiuns or E ;?j55 

by K Johnson. Nationa; 3ecu:i:y Council 



UNCLASSIFIED 




403 




wtmm 



/vo Op'^ 



-.ere a : 
^ 5 a-.- 



Zi 



a ; 1 a i: 1 e r ; i - : -, o . 
:;; ; les a: Red Si 
■rrea. 5e\en o:" 
foregone. 



5 J ; t a ? ; e : 
!r Arsenal 
•. e s e are i : 



^ r -- e -. 3 . cast .■_■'' 
;e . an; rep lace-.e: 



: r e ; ; r. = a 
intended 



:oui 



T'-.-js , :'-.e t;:al bill ior ::: -iissiles '.ould be S^*4:.5 •illi:-.. 
.c this, applicable en ar;es -culd iiave to be added NaJ ;c?t. 
adr.mis t ra t lin cnar^e, packing and transport charges, plus 
storage'. 

The missiles for Korea and 'JAE would have to be replaced, so 
DSAA will need the money to replace them. 

The modalities for sale to Iran present formidable difficulties: 

-- Iran is not currentl\- certified for sales, including 
indirectly as a third country, per Sec. 3 of the AEZA. 

-- Congress must be notified of all sales of SIJ millicn 
or more, whether it is a direct sale or indirect to a 
third country. The notice must be unc lass i f ied (except 
for some details), and the sale cannot take place until 
10 davs after the notice. The 30 days can be waived fcr 
direct sales, but the third country transfer has no such 
provision, and notice must still be given in anv case. 

■- Thus, even if the missiles were laundered through Israel, 
Congress would have to be notified. 

It IS conceivable that the sale could be broken into 5 or - 
packages, m order to evade Congressional notice. 



-- While there is no e.tFlicit injunction against sp.if.ir.; 
up such a sale isub;ect to check... \ the spirit and the 
practice of the law is against that, and all Ad-iinist ra 1 1 
have observed this scrupulously. 

-- It IS conceivable that, upon satisfactory consultation «: 
Chairmen Lugar and Fascell and their minoritv- counterpart 
they might agree to splitting the sale into smaller 
packages . 

The customer countries !'J'-\E and Korea) would have^to be told tha" 
their deliveries had been rescheduled, but we would not have :o 
tell ther w-.^ . he would not want to charge the- r.ore for later 
deliveries . 



*=♦*«%• Oeclassihed/Relfasea on 10 PfSf/g 
under ptonsio.ns oi E 12356 
by K Johnson. National Secui.ty Council 



UNCLAWD 




5^ 




404 




mvimm 



.n^ e\ er found out, t'-.ev wo-'.i be jreatlv ;rritat*i. 
"-?.r jiur;e5 of sup;:- ire rore reaiilv accessible tha-. 
:.-i-'i, hs-.ever, so t-.ere .ouli be ns effect in that 
res-ecr . 

Saai; -r3b:a anj the ct^.er Culf States would also be 
■.rr;:a:ec and alamec. 

If Israel were used a« the laundering eountrv, thev wcjli 
be jreatlv encouraged to continue selling to Iran, an:' :; 
expand their sales. 

It the sale becase known, all bars would be removed fror. 
sales by such countries as Spam, Portugal, Greece. UK. 
Italy, and FRC, countries who are only barely restrained 
fron overt, large sales to Iran now. 

'.r. short, the r;5k ;5 that of jrelongmg and intensify;-.; 
the Iran- Ira? war, while seriously csmyroimsiag US ittfl',ience 
over Israel and other countrivs to restrain sales to Iran. 



wmm^^^ 



405 



uusra 



7SNO/t5 



m 




406 




407 



/ 



mmm 



\<^^ DXL 



OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE 

INTtRNATIONAL SfCURITY AFPAIM 
^RICA REOlON 




iBy OectassitiedmeteiMd nn iftPtfS flS 

Ifldei BfOmsiCTS'ot £ !23b6 
'-■K Jatascn. Niwnd Secuniy CowKi 



t/-v 




ttv-' •• 


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r-K-.^ >Act » 1^ ,^•^ 






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p^;!^^ 827C8 4(;7 



■?/:^.; ;.■«■ 



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408 




wmmm 



409 



DEFENSE SECURITY ASSISTANCE 



nnmim 



I X Dfc ci 



Pac^yc:^ 



~lh<^ GcHoccheJ Hulking poin^is- 

<3^ci Oan. Colio Ptf>vo«eil(3iK2n 

r^",l. A 5^. -^ ^«^^^' ^'^^y , 

-fate 4d Gen. (?txo<zil. 



MMkt Oeclassitied/Released on lL££:fiSfc 
undei provisions ol EC 12356 
by K Johnson. National Secuiity Council 







-/.^ 




DEPOSITION 
EXHIBIT 

ff /3 



inter.ce; 



: f coul i c: 



be S36-5;. $ T.;: 
added >NR: cci 
charges , plus 



be replaced, so 



idable di f f icul t les . 

sales, including 
ec. 3 of the .AECA. 

es of SI J mi llion 
or indirect to a 
nclassif led (except 
51 take place until 
•j% can be waived fo: 
transfer has no suc^ 
given in any case. 

dered through Israe; 



ken into 5 or J 
t ice . 

n against splitting 
, the spirit and the 
and all .Adninis". ra t ; 



-- It is conceivable that, upon satisfactory consultat 
Chairnen Lugar and Fascell and their minority count 
they might agree to splitting the. sale into smaller 
packages . 

The custorer countries "'^E and Korea^ would have to be tcj 
their deliveries had been rescheduled, but ve^vould no- ^a^ 
tell ther why. l\e would not want to charge t..e- -ere .o. . 



de liveries 



410 



8TKN0GRAPHIC mNUTB ■ /So f i ^. 

UwvTiMd and UMdIted .. _ -. ""^ <^ " /T 

Not for Qaotatka «r 
DBpUcatkB 





yNClSSIFlEO 



Committee Hearings 

oTtte 

U^ HOUSE OF REPRESENTATIVES 



W 



/-^-^ 



I Declassified/Released on 

under provisions of E.O. 12356 
by N Menan, National Security Council 



OFFICK OF THE CLERK 
OOeo et Offldal Raportcn 





D 



CD^ *"? ' TW COWCS 



411 



DINKEL/mas 




DEPOSITION OF HENRY HAROLD GAFFNEY AND 
GLENN ALLAN RUDD 

Monday, June 22, 1987 



U.S. House of Representatives, 
Select Committee to Investigate 

Covert Arms Transactions with Iran, 
Washington, D. C. 



The Committee met, pursuant to other business, at 
10:45 a.m., in Room H-139, the Capitol, Roger Kreuzer 
presiding. 

Present: Roger Kreuzer, Joseph Saba and Robert Genzman, 
on behalf of the House Select Committee 

Also Present: Jerome H. Silber, General Counsel, 
Defense Security Assistance Agency, Department of Defense. 



^ Declassiffed/Released on Z'-^*^ '^° 

under provisions of E.O. 12356 
by N. Msnan, National Security Council 



412 





Nh«r«upon, 

HEMKY HAROLD GAFFNEy and GLENN ALLAN RUDO, w«r* 
called •• witn«as«s, and aftar having baan pravioualy duly 
sworn, vara axaainad and taatif iad furthar a» follows: 

EXANXMATIOM OH KHALr OF TBS NOOSB SKLBCT COIMXTTCE 
BY MR. XRSUSBRi 

Q Nr. Rudd, Or. Gaffnay, X would lika to call your 
attantion to Exhibit 1 which ia — Eahibit 2, axcusa aa, 
which ia aatitlad Proapaett for T— adiata Shipaant of 
X-Nawk and X-TOV Niaailaa and iin parafraph 1, undar X-Bawk, 
it atatas "Itoara ar« M4 viMilM availahla at Rad Rirar 
Arsanal, 7S intandad for tha HAS* — which X taka to 
■aan Onitad Arab ttsirataa — 'and •« for Roraa." 

To tha bast of year hnowlad g s , Nr. Rudd, and tha 
baat of year kaewladga. Dr. Oaffaey, do aithar ona of you 
knew what tha diapeaition waa of thaaa aiasilaa rafarancad 
in thia paragraph? 

' A IWitaass Gaff nay) X have no idea what tha 
diapeaition has baan. 

A (Witnass Rudd) X don't know off tha top of ay 
head, either. My presuaption is they were shipped to the 
countries . 

Q Has anyone ever discussed those missiles with 
you at any time, the disposition of them? 

A (Witness Gaffne^ Not with me. 



413 



9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 

20 

21 

22 

23 

24 

25 



BMJtiSSIHKT 



^ A (Witness Rudd) No. 

2 Q So no one has ever mentioned to you, you've 

never asked anyone, nor had any discussion with anyone 
^ about whether the 75 missiles designated for the United 
Arab Emirates and/or the 84 missiles for Korea were in 
fact ever delivered or where they are nowl 

A Well, I can say — the answer to that is no. I 
can say that I have heard no complaints from either the UAE 
or the Koreans that they have not got the missiles that 
they ordered, however. 

Q Have you ever seen any record indicating that 
they have been delivered? 

A I haven't seen one. 

A (Witness Gaffney) I have not. 

MR. SABA: That is it for the record. 
MR. SAXON: Other than to say both committees 
appreciate both of you gentlemen coming back for further 
deposition and helping us through the weekend to piece 
these docximents together. 

MR. SABA: Thank you very much. 
(Whereupon, at 10:47 a.m., the deposition 
concluded. ) 




PT 



414 



STENOGRAPHIC MIMJTBS 
Unrcrlawi and Unwlited 
Not for Qnotetka m 
DnpUoktloa 



BMUSSIR 



UNCLASSIFIED 



UNCLASSIFIED 



Committee Hearisffi 
VJS, HOUSE OF REPRESENTATIVES 



w 



Partially Oeciassified/Released on Vjt»<'^ g8 
undef t/fovisions ot E 12356 
by K jonnson. National Security Council 



OFFICK or THE CLKRK 
OOm of OOdal Baportan 




fuc 



oopr wo ^ OF — d — concg 



415 



OINKEL/mas 



UNCUSffD 



DEPOSITION OF HENRY HAROLD GAFFNEY AND 
GLENN ALLAN RUDP 

Monday, June 22, 1987 



U.S. House of Representatives, 
Select Cosnittee to Investigate 

Covert Arms Transactions with Iran, 
Washington, D. C. 



The Cosnittee met, pursuant to call, at 8:45 a.m., 
in Room il-139, the Capitol, Joseph Saba presiding. 

Present! Joseph Saba, Roger Kreuzer and Robert Genzman, 
on behalf of the House Select Committee. 

John Saxon, on behalf of the Senate Select Committee. 

Also Present: Jerome H. Silber, General Counsel, 
Defense Security Assistance Agency, Department of Defense. 



Pirtuily OeclissfMmeleawd m ^ J* * -> DO 
undet pnMsons of E 12356 
by K Jotnton. lUdonil Sicucily Counci 



UNCLASSIFIED 



416 



2 
3 
4 
S 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



iwsaaM 



Whereupon, 

HENRY HAROLD GAFFNEY, JR. and GLENN ALLAN RUDD , 
were called as witnesses, and after having been first duly 
sworn, were a a tamiwatt ^ n and testified as follows: 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

Q Good morning, Mr. Rudd, can you state your full 
name and current position for the record? 

A (Witness Rudd) Glenn Allan Rudd, Deputy Director^ 
Defense Security Assistance Agency. 

Q Dr. Gaffney? 

A (Witness Gaffney) I am Henry Harold Gaffney, 
Director of Plans in the Defense Security Assistance Agency. 

Q Both of these gentlemen were deposed last week 
and this deposition this morning is — or can be viewed 
as a continuation of those earlier depositions. 

Mr. Rudd, I'd li)ce to show you a document which 
we will label Exhibit 1. It is entitled "Possibility 
for Leaks". It is two pages. It is undated and it is 
unsigned. I will ask you if you recognize the document 
and if you could tell us something about it? 

A (Witness Rudd) Yes. I recognize the document. 
I either prepared it as an original or I did an extensive 
rewrite of a document which would have been prepared by 
Dr. Gaffney in preparation for a meeting with Assistant 



iiMM ftCCSCICB 



417 



llNCLASSffl 



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



Secretary Armitage, which I am now sure happened on the 
6th of December, 1985. 

(Deposition Exhibit No. 1 was marked for 
identification. ) 

BY MR. SABA: 

Q So the paper was prepared for Richard Armitage, 
Assistant Secretary of Defense for International Security 
Assistance; is that correct? 

A Yes. 

Q And -- 

A (Witness Gaffney) For International Security 
Affairs. 

Q Affairs. 1 am sorry. Do you recall when the 
meeting was with Mr. Armitage? 

A (Witness Rudd) It was on the day of December 6, 
1985. 

Q And on that day, you provided him with this 
paper? 

A Yes. 

Q Can you please tell us what your intention was 
in writing the paper? 

A He had asked for the legal ramifications of the 
possible sale of Hawk and TOW missiles, either directly 
to Iran or as a replacement for an Israeli shipment to Iran. 

Q Did he provide you any additional guidance by 



418 



1 

2 

3 

4 

S 

6 

7 

8 

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

24 

25 



UNCUSSiritD 



way of where he wanted this paper to go, for example? 

A Not that I could recall. I know now, but 
I didn't — I can't recall that he did at the time. 

Q And can you tell us what guidance you used 
in preparation of this document? 

A I just called on my own — my own knowledge as 
to what laws, security assistance laws I thought could be 
involved with making the transfer. 

Q You were generally familiar with those laws and 
regulations? 

A Generally, yes. 

Q You have occasion to be familiar with them 
in your daily duties? 
A Yes. 

Q Very briefly, what do those duties include? 
A As the Deputy Director for the Defense Security 
Assistance Agency, I am — we are responsible for program 
direction of the worldwide security assistance and 
foreign military sales program which is — has a wide 
range of statutory limitations. 

Q Would it be your duties in the normal course 
of your business from day to day to make yourself familiar 
with those laws and regulations? 

A Yes. Although normally, of course, I would 
call on our lawyers assigned to the DSA^for legal advice." ^ 



419 



wmm 



Q In preparation for this paper, did you call on 

the assistance of any other person? 

A No. Except probably Dr. Gaffney. He may have 
prepared the original cut. I don't know. But no legal 
advice. 

Q Just — Dr. Gaffney, do you recall if you prepared 
an earlier draft of this or provided Mr. Rudd material 
for this paper? 

A (Witness Gaffney) More than likely I would have 
provided him a copy of my Hawk Point Paper which I had done 
in late November for him to build upon. 

Q Do you recall yourself ever seeing this paper 
entitled Possibility for Leaks, Exhibit 1? 

A I remember Mr. Rudd working on a piece of paper 
like that, ^^^■■^^■[^■i^^B^''^ ^ remember he had 
expanded on what I provided in the Hawk Point Paper, 
but I don't remember him putting a title on it, the title 
Probability for Leaks. 

Q Do you recall — 

A I mean, the title Possibility for Leaks. 

MR. SAXON: You were probably more right the 
first time. 

BY MR. SABA: 

Q Do you recall his providing you with this or 
perhaps an earlier draft of the paper for review? 



^ 



420 




IN 



A I don't recall. He might have showed it to me. 

Q When the paper was completed, do you recall if 
Mr. Rudd gave you a copy of the completed paper? 

A I believe he did not. I believe I had just bits 
and pieces of it, probably — no. I would say I did not 
have a copy of this finished paper. 

Q Mr. Rudd, turning to — again, back to Exhibit 1, 
the Possibility for Leaka, what is the origin of the title 
of the paper. Possibility for Leaks? 

A (Witness Rudd) Well ~ 

Q Was this your idea? 

A It was my specific idea. The origin, of course, 
was really expressed in the first sentence of the paper, 
that there would appear no way that I could see that the — 
any transfer of arms to Iran, either directly or via — to 
replace shipments from Israel could be kept secret under 
the security assistance system. 

Q I take it therefore that the term "this project" 
in the first sentence refers to a transfer to Iran and that 
you understood that when you prepared the paper, the 
ultimate destination of the weapons was Iran? 

A That is correct. Or as a replacement to Israel. 
One or the other. 

Q Did you understand in preparation for this paper 
that hostages were i;onnected with this transfer? 

iiKim Aooicicn 



421 



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



iiHcussm 



A It was — I believe so. I believe that — no. 
am not sure that I knew that then. I em not sure. 

Q Were you under the impression that this was a 
closely held matter? 

A Oh, yes. 

Q Were you under the impression from -- were you 
under the impression that this was a matter which was not 



held as possible? 

A Yes. 

Q And therefore was to avoid any leaks? 

A Yes. 

Q And is the reference to leaks, including 
references to leaks within the government itself? As 
opposed to, let's say, the press? 

A Well, I think that the two go hand in hand. 

Q Moving along in the paper — 

MR. SAXON: Before you get into the substance of 
it, Mr. Rudd, do you remember if you were instructed by 
Mr. Armitage to slant the paper in any way? I don't mean 
slant in the pejorative sense, but simply to build a case 
for or against? 

WITNESS RUDD: No. No. I was not. 
MR. SAXON: As far as you can recall, it was 
just what are the legal ramifications? 

imoijccsncn 



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WITNESS RUDD: That is right. 
BY MR. SABA: 
Q Moving on to the second paragraph of the paper, 
I take it your first suggestion of a method involves that 
first sentence which conunences with "With the present"? 
A Yes. 

Q Can you tell us briefly what you intended by this 
first paragraph? I take it the paragraph under that, 
beginning "President must notify — " is actually a sub- 
paragraph of that first one, that is the second paragraph 
is not a second suggestion? 

A That is correct. It pertains back to the 
suggestion on 614. 

Q Could you explain to us what your first proposed 
method would entail? 

A The proposal would be that the President under 
the provisions of section 614 of the Foreign Assistance 
Act could waive this statute which requires normal notificatic 
under section 36(b) of the Arms Export Control Act. 

MR. SILBER: Excuse me. You made the proposal. 
There was no proposals. It is one of the three methods. 
MR. SABA: All right, yes. 
BY MR. SABA: 
Q Continue, please. 
A This would, in effect, if it were legal and — 



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as you see later in the paper, I recommended that the OSD 
General Counsel personally rule on this, but if legal, it 
would have at least reduced the number of people in government 
who would have to be notified of the transfer. 

Q Under 36(b), who would receive notification? 

A The normal method — the statutory requirement 
under 36(b) is that the House Foreign Affairs Committee, 
the Senate Foreign Relations Committee, Appropriations — 
MR. SILBER: Not Appropriations. 
WITNESS RUDD: The Speaker of the House. I'll 
have to looJc. 

BY MR. SABA: 

Q And the Chairman of the Foreign Relations Committee? 

A Well, certainly the Chairman of the Foreign 
Relations Committee, the Chairman of the House Foreign 
Affairs Committee, but I thinlt there are a couple of other 
statutories. 

Q Would this determination and this method proposed 
be in connection with a transfer directly to Iran? Is 
that what you were contemplating here? 



UNCLASSIFIED 



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,„ ,_ ,,. . 10 

A It could have' worked either as a sale to Israel to 
replace an Israeli transfer to Iran, or a direct sale to Iran 
as long as it was kept highly classified. 

The point that I wanted to add on 36(b) is that 
there is a wide distribution to both congressional staff and 
different committees and subcommittees of the Congress which 
goes well beyond what the statutory requirement of 36(b) is. 

MR. SILBER: By an informal convention, we distribut 
copies to appropriations committees, including the members of 
the House Appropriations Committee, each individual member. 
BY MR. SABA: 
Q So the normal 36 (b) notification has wide 
distribution in Congress and among congressional staff? 
A Yes. 

Q Would your proposed method of a 614 waiver involve 
a complete elimination of congressional notification in those 
circumstances? 

A That was a method, not a proposal. Yes. 

No, it would not. There would still — Section 614 
requires notification of Congress, just a more select group. 
Q In other words, the method that is suggested here 
would be — would involve a different form of notification 
than a 36(b) notification, but there would still be 
congressional notification required? 
A Correct. 



UNCLASSIFIED 



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11 



Q And this congressional notification required, 
however, would be on a more limited -- would be a more limited 
number of individuals? 

A Correct. 

Q The third bullet, commencing, "The OSD general 
counsel should be asked personally to confirm that 614 is 
legal under these circumstances, since this authority has never 
been exercised in any way," could you elaborate on that a bit, 
please? 

A Since I had not sought legal advice before I wrote 
the paper, this was a method which I thought was legal but 
it was certainly without precedent. I felt that the general 
counsel himself should be consulted before there were any 
effortsmade to actually follow through on it. 

Q So you didn't know of any situation in which Section 
614 of the Foreign Assistance Act had been used to waive the 
normal notification — normal congressional notification 
under 36 (b) of the Arms Export Control Act? 

A I did not, no. There had been no — this had never 
been done before. 

MR. SAXON: To your knowledge, was such an opinion 
ever rendered by the OSD general counsel? 

WITNESS RUDD: No, not to my knowledge. 
MR. GENZMAN: Why did you not seek legal advice in 
the preparation of this paper? 



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1 WITNESS RUDD: Because the possible project was so 

2 close hold that I had neither the desire nor the authority to 

3 go elsewhere. 

4 EXAMINATION ON BEHALF OF THE SENATE SELECT CO'IMITTEE 

5 BY MR. SAXON: 

6 Q Okay. 

7 A Let me elaborate on that. 

8 I was not authorized to discuss this project with 

9 anybody else. 

10 Q ' Mr. Rudd, before we go further, let me back up to 
1^ the previous paragraoh, that is, the third full paragraoh, in 

12 which you discussed how Section 614 waiver woulci operate. 

13 For the record, who would the President still have 
1* to notify in the Congress if he went the Section 614 route 

18 specifically? 

18 A The Speaker of the House and the Chairman of the 
'7 Foreign Relations Committee, as well as to consult with both 
'• the Chairman of the Senate Foreign Relations Coirmiittee and 
^' the Chairman of the House Foreign Affairs Committee. 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 
Q Would this be done in advance of the transfer? 
A I would — yes. The statute requires that it be 
done in advance. 

MR. SAXON: As I understand your explanation in 



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this paragraph, there would still have to be the normal 
letter of offer and acceptance executed; is that correct, sir? 
WITNESS RUDD: That is correct. 

MR. SAXON: Did you exoress a concern within this 
paper that in the process of executing the normal letter of 
offer and acceptance, that that goes through some bureaucratic 
channels of people who are fairly knowledgeable about these 
things and somebody might have raised an eyebrow if that route 
were followed? 

. WITNESS RUDD: Yes. 
BY MR. SABA: 

Q Even if there were a waiver under 614 and the 
normal 36(b) notification was not carried out, is it your 
understanding that the security assistance community, which 
includes a large number of Governmental employees, would in 
the course of processing the transfer become aware of the lack 
of 36(b) notification? 

A Yes, and would raise questions. 

Q That would be unusual; is that correct? 

A Yes. It would be very unusual. 

Q Moving along to the paragraph which is the fourth 
bullet, and it conmences, "The President can sign an 
emergency notification under Section 36(b) waiving the formal 
30-day notification," I believe the paragraph speaks for 
itself. Do you wish to elaborate further? 



iiKipi AQQinrn 



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14 



1 A NO 

2 Q Does the reference in the last sentence to this 

3 country's purchasing the missiles refer to Israel? 

4 A Yes. 

5 Q And it does not refer to Iran? 

6 A No. It could be true for Iran also, but no. 

7 Q No? And I take it that that paragraph contemplates 

8 a United States sale pursuant to the standard letter of offer 

9 and acceptance to Israel and that you had in your mind that 

10 there would be a further transfer by Israel to Iran of the 

11 missiles? 

12 A That would be the expectation, yes. 

13 Q And the next paragraph commencing — 

14 MR. GENZMAN: May I interrupt? 

IB Why did you refer to Israel by the term "this 

16 country" and why was Iran not mentioned? 

17 WITNESS RUDD: Well, if you read the entire paoer, 
•• you will see no mention made of either Iran or Israel, so that 
'• if the particular paper leaked, that the thought of the 

20 project might not be disclosed. 

21 BY MR. SABA: 

22 Q Returning to the paper in the fifth bullet, the 

23 last paragraph on the first page, I take it again in the third 
2* sentence that the inventory of the country involved is a 

a r„.„„c. to I,r..l7 [jMPIKQIPCni 



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A Yes. 

Q And again I take it that this paragraph 
contemplates a transfer of I-Hawks and I-TOWs to Israel and 
a further transfer by Israel to Iran? 

A That was my assumption. 

Q Do you have anything further to say about this 
paragraph? 

A No. 

Q I take it this paragraph reflects the standard 
method in which weapons would be transferred? 

A That's right. 

Q Turning the page, there is a final paragraph and 
it begins, "A further potential problem is associated with 
legalities of the third country transfer provisions of the 
Arms Export Control Act." 

I take it the paragraph speaks for itself, but I 
would ask you to elaborate as to what you intended by the 
last sentence. 

A I'm not sure I can really say just what I intended 
by the last sentence, although there probably would be a 
method for overcoming this problem. I didn't — I don't think 
— I am sure I didn't think it through at the time. 
Certainly if a country is determined to be eligible for sale 
by the President, then that country is also elilible for third 
country transfer. 



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Q But did you have anything in particular in mind 
when you refer to overcome or deferred? 
A Not that I can recall. 




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Q Had anything been suggested to you? 

A No. 

Q Would you say that this sentence is a suggestion 
for further considering rather than a conclusion on the 
basis of statute or plans that you had already looked at? 

A Most certainly. Certainly. 

MR. SAXON: Mr. Rudd , Is it safe to say that that 
paragraph on page 2 is written in contemplation that 
Israel would transfer the missiles to Iran? 
WITNESS RUDD: Yes. 

MR. SAXON: So when we are talking about a country 
to which we might not sell ourselves and so forth and the 
retransfer assurances, that is in the context of these 
probably being transferred (op definitely being transferred 
from Israel to Iran? 

WITNESS RUDD: That is correct. 
BY MR. SABO: 

Q Mr. Rudd, continuing to focus on this paragraph 
on page 2, it does connnence a further potential problem. 
How did you mean "problem"? 

A Well, a further potential problem would have been 
in the context of the whole paper, which is was that, as I 
tried to demonstrate all — any of the possible methods 
had significant risk for disclosure. 

Q So your understanding was that you were concerned 



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throughout the paper with maintaining a close hold on the 
fact that the weapons were to be transferred to Iran? 

A Yes. 

Q What did you do with this paper when you completed 
it? 

A T provided it to Assistant Secretary Armitage. 

Q Do you recall when you provided it? 

A On the 6th of December, 1985. 

Q Did he indicate in connection -- did he indicate 
why he wanted the paper? 

A Not to my recollection. 

Q Did he indicate that he was to provide it to the 
Secretary? 

A I can't recall that he did. I assumed he either 
was going to provide the paper or give a briefing to the 
Secretary. I can't recall that he said that, yet he may 
have. 

Q Did he mention that the Secretary required a 
paper in connection with a meeting the Secretary was to 
attend? 

A No. Not to the best of my knowledge. 

Q Do you recall that he told you to do — that he 
told you anything else in connection with this paper and the 
materials he used to 
A Not to retai 



prepare it? H^ jp| ji C IH rFj 

lin copies. "'l".-... . . -'*' 



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Q So he asked you not to retain further copies of 

this paper? 

A Correct. 

Q Did he tell you why he didn't want you to retain 
copies? 

A I think it was evident that any copy that was 
kept increased the possibility that the possible project 
would become known . 



Did he tell you that or did you just understand 



that? 



A I don't recall. 

Q Did, in fact, you keep any copies of the paper? 

A No, no. 

Q So when you returned to your office, you 
destroyed your work materials and the drafts and whatever 
else you had pertaining to this paper? 

A Yes. 

Q So is it correct that from the time you give this 
paper to Secretary Armitage you did not see that paper 
until when? 

A I saw the paper on — what is today? 

Q Today is Monday the 22nd. 

A What day did I do the deposition? 
MR. SILBER: Tuesday the 16th. 
WITNESS RUDD: I saw the paper next on the 17th of 



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June 1987. 



UNCUSSIRED 



BY MR. SABA: 
Q How did you come to see the paper on that date? 
A I asked for a meeting with Secretary Armitage 
and asked him if he recalled if I provided him a paper 
which had to do with TOW missiles. 
Q And what did he say? 

A He extracted a paper from his safe and said 
are you -- well, let me add a little bit further. I said 
I didn't recall that I had provided him a paper that 
specifically talked about TOWs but that it was my 
recollection that I had provided him a paper which had to do 
with legalities of the possible transfer. 

He reached into his safe and showed me a copy of 
this paper and said I don't know where I got it. Is it 
this one? I said yes, that is it, I'm sure. 

Q And did he provide you with a copy at that time? 
A No. 

MR. SAXON: Did he tell you what he ultimately 
did with that paper? 

WITNESS RUDD: No. 

MR. SAXON: As of last week, he didn't elaborate? 
WITNESS RUDD: He didn't tell me. I am sure it 
went to the Secretary the day after it was prepared, but — 
MR. SAXON: When would he have told you that? 



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WITNESS RUDD: I don't think he ever told me. I 
think I just deduced that from talk. 

MR. SAXON: Let me ask you a question along those 
lines that asks for a speculative judgment. If you feel 
uncomfortable making it, that is fine. 

But I'm asking you to look at the totality of 
circumstances as you know. Mr. Armitage has told us in his 
sworn testimony that he did in fact provide a legal paper 
to the Secretary prior to Secretary Weinberger's December 7 
meeting and he told us specifically it dealt with the Arms 
Export Control Act and the legal r2unif ications of such 
transfers as were being discussed. Based on what you know 
from the tasking he gave to you, and that this was a 
close hold, knowing what was involved, would it be your 
best judgment if he provided a paper to the Secretary on 
that day that it would be the one we are looking at now 
that you authored? 

WITNESS RUDD: Yes. 

BY MR. SABA: 
Q I have no further questions on the Possibility 
for Leaks paper. Exhibit 1. Does anyone else? 

Moving along , we have Exhibit 2 . 

(Deposition Exhibit No. 2 was marked for 



identification. ) 



"finimim 



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BY MB. SABA: 



lINCUISSIFe 



Q This is a document entitled Prospects for Inunediate 
Shipment of I-Hawk and I-TOW Missiles. 

Do you recall having seen this document before 
today? 

A I do not recollect that I saw the document 
before today. 

Q Dr. Gaffney, do you recall if you have seen this 
document before today. Exhibit 2, Prospects for Immediate 
Shipment, of I-Hawk and I-TOW Missiles? 

A (Witness Gaffney) Yes. I believe I saw that in 
early December of 1985, that I had a copy of at least a 
draft in my possession around that time. 

Q And do you recall the circumstances surrounding 
the creation of the paper? 

A It was a follow-on to the previous exercise 
in which I participated having to do with Hawks alone. And 
similar information was requested to be developed for TOWs 
as well. 

Q Do you recall who — from whom the request came? 

A Armitage. 

Q Do you recall approximately when? 

A Well, it appears to be around the 6th of December 



1985, 



And how do you date that? 







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A I had a note in my own work diary which had made 
brief reference to 3300 TOWs . I think it was on the 6th. 

Q And ~ 

A I don't have my diary here. 

Q That is all right. I believe the diary entry 
for the 6th of December was an exhibit in Dr. Gaffney's 
earlier deposition oi Tuesday, June 16 and he has now been 
furnished with a photocopy of that diary page. 

A On which the date has been cut off. 

Q ' One moment. I have another. 

A I should have brought it with me. 

Q I have a photocopy. 

A It says 6 December 1985. 

Q All right. Do you recall if the information 
contained concerning I-Hawk was provided by you? 

A Yes. Well, the data in there is material that 
I had gotten previously from the Army. There is some 
additional material in there which I did not develop myself. 

Q Do you know who did? 

A No, I don't. For instance, the reference to 
procurement lead time to replace [DELETED] missile 
would be about 33 months. I didn't furnish that. That 
came from somewhere else. 

MR. SABA: For the sake of an unclassified 
transcript, I'm going to ask that we strike the name of the 



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1 country which was just mentioned. I presume that's okay 

2 with you, Dr. Gaffney? 

3 A Yes. Certainly. So it would be procurement lead 

4 time to replace somebody's missile. 

8 Q Turning to the I-TOW section of this paper, do you 

6 recall if you provided the data that's contained there? 

7 A No. I don't believe I did. 

• Q Do you recall who else may have participated in 

9 the preparation of this paper? 
A . Well, in terms of the specific preparation of 

it as a paper, it would be just Glenn Rudd and myself. 
'* In terms of the information, we got the information from the 



Army. 



^* Q But your recollection is that you and Mr. Rudd 

" prepared this paper? 
16 



A Yes. I would say I furnished material to 
Mr. Rudd, who put this particular piece of paper together. 

Q Do you know of your own knowledge what happened 
to this piece of paper? 

A I assumed it went to Mr. Armitage, because it 
was at his request that it was being prepared. 

Q Mr. Rudd, I know you indicated you don't recall 
seeing this paper. Do you recall seeing or taking part in 
the preparation of a similar paper or exercise at this time? 

A (Witness Rudd) I don't recall it. I think that 



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Dr. Gaffney's explanation of it is logical. And I think 
that it's quite possible, A, that I saw the paper; and B, 
that I may have done something with it. I just can't 
recollect it even yet, but I don't think that means that I 
didn't. 

Q All right. 

Dr. Gaffney, your recollection is that you 
participated in the preparation of this paper, you did so 
with Mr. Rudd, that you did not provide the final draft? 

A ' (Witness Gaffney) That is right. 

Q And it's your understanding from your own 
recollection that Mr. Rudd provided the paper to Mr. Armitage? 

A Yes. We are talking about Prospects for Immedia^ y 
Shipment of I-Hawk and I-TOW Missiles, that paper? ^^VY*" 

Q That is right. 

A Yes. Well, I did not deliver the paper 
personally to Mr. Armitage. Since he requested it, I assume 
it had been delivered to him by Mr. Rudd. 

Q Your assumption is it went to Mr. Armitage but 
you did not deliver it? 

A That is correct. 

MR. SAXON: Mr. Rudd, you testified a few 
minutes ago that you did deliver to Mr. Armitage the 
Possibility for Leaks paper? 
WITNESS RUDD: Yes. 



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MR. SAXON: Do you recall without asking you 
whether you remember this particular document on I-Hawks 
and I-TOWs, do you recall whether the Possibility of Leaks 
document was the only one you delivered? 

WITNESS RUDD: It's possible that I delivered this 
as well as the Possibility for Leaks document at the same 
time. It's possible I delivered both papers. 
BY MR. SABA: 
Q Do you have any recollection of delivering a paper 
containii^g Hawk and TOW data to General Colin Powell? 
A (Witness Rudd) No. 

Q Dr. Gaffney, do you have a recollection of 
delivering — 

A (Witness Gaffney) No. 

Q The same paper containing Hawk and TOW information 
to General Powell? 
A No, 

MR. SAXON: Same question, Noel Koch? 
WITNESS RUDD: No. 

MR. SABA: Same question to you. Dr. Gaffney. 
WITNESS GAFFNEY: Same answer. This went to 
Armitage. I don't know whether it went on to Colin Powell. 
BY MR. SABA: 
Q Mr. Rudd, in your meeting with Mr. Armitage last 
week in which you asked him if you had prepared the paper 




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on TOWs, did he show you this paper, Exhibit 2, Prospects 
for Immediate Shipment? 

A (Witness Rudd) No. 

Q So the only paper Secretary Armitage showed you 
at that time was the Exhibit 1, Possibility for Leaks paper? 
A Yes. 

Q Did you have any occasion with Secretary Armitage 
last week to discuss this Exhibit 2, Prospects for 
Shipment? 

A , No. I thought that my memory had been confirmed 
that I hadn't seen the TOW paper. 

MR. SAXON: Mr. Rudd, did Mr. Armitage make any 
statement as to whether the Prospects — excuse me, Possibility 
for Leaks paper had been provided to the DoD General 
Counsel in the course of the House and Senate request for 
documents on these matters? 
WITNESS RUDD: No. 

MR. SAXON: He didn't comment one way or the 
other? 

WITNESS RUDD: No. 

MR. SAXON: What else can you tell us about your 
discussion with Mr. Armitage last week? 

WITNESS RUDD: It lasted for not over two or three 
minutes. I asked him to refresh my memory as to whather 
I provided him a TOW paper which was [the discussion ofjthe ^ 



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last deposition. He showed me that paper. I said fine, 
I've seen it. I am talking now about the Exhibit 1, 
Possibility for Leaks paper. 

MR. SAXON: In the normal course of your business 
dealings with Mr. Armitage, going back to late '85, early 
'86, was there an occasion in which you inquired or he 
offered that any of these papers he had received had gone 
forward to the Secretary, that the project went forward, 
or anything along those lines? 

• WITNESS RUDD: Not to my recollection. I don'.t 
recall discussing this subject with Rich Armitage after that 
meeting of the 6th of December. 

MR. SAXON: And you testified last week that m 
January, we believe it was in the first week or so of 
January, you dealt with Noel Koch on a related but slightly 
different tasking with regard to basic TOWs; is that 
correct? 

WITNESS RUDD: Yes. 

MR. SABA: Before we go on, following the 6th of 
December, for the remainder of December 1985, did either 
of you — my question first to Mr. Rudd, second to Dr. 
Gaffney, did either of you have anything further to do with 
provision of information in connection with Hawks or TOWs? 

WITNESS RUDD: Well, I did. I did in January of 
1986, yes. II&IAI AOOirifni 



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MR. SABA: My question is only to December, 
Mr. Rudd. 

WITNESS RUDD: No. 

WITNESS GAFFNEY: No. I had nothing to do with it 
after the 6th of December. 

MR. SAXON: Going to January of '86 with Mr. Koch, 
did you ask hj.m at any time does this relate to the exercise 
we went through in December with you and General Powell and 
Mr. Armitage on Hawks and I-TOWs? 

, WITNESS RUDD: Well, I didn't know Powell was _ 
involved at the time. I don't know whether I asked him 
that or not. I obviously did. 

MR. SAXON: Did he volunteer this was a follow-on, 
a different approach, a new avenue of solving the same 
problem of getting the hostages back? 

WITNESS RUDD: He certainly said that it was 
a consideration for getting the hostages back, yes. 

MR. KREUZER: Who said that? 

WITNESS RUDD: Noel Koch. 

MR. SAXON: Let's go off the record for a second. 

(Discussior off the record.) 

MR. SAXON: Let's go back on the record. 
EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 

BY MR. SAXON: 
Q Mr. Rudd, we want to shift gears entirely from 



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it V- 

the two exhibits we have been looking at and go directly 
to our conversations with Mr. Koch which we believe to 
have been in early January 1986 and about which you 
previously testified. Let me clarify a couple of things 
if we may. 

Do you recall specifically telling Mr. Koch 
after you had gotten some data for him on the pricing 
of basic TOWs and the like and gotten back with him to 
provide that data to him, do you recall telling him anything 
about whether this transaction could go through normal 
FMS channels and whether Congress would have to be 
notified and if in fact in your opinion you thought it 
might have to go some other route? 

A (Witness Ruddj I told him that I could see no 
way that we could provide 4000 basic TOW missiles to 
Israel under normal security assistance channels and 
expect that it could cover the fact that Israel would — 
these would be to replace a shipment from Israel to Iran. 



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Q That reason being there is no way why? 

A The primary reason was that it — Israel would 
only need basic TOW missiles if it would already — if it had 
depleted its stocks of basic TOW missiles by a shipment. 
A sale of TOW-II missiles would have been much more logical, 
considering Israel's needs. 

Q So if I can understand your testimony, the 
knowledgeable people on the Hill who would have had to be 
notified would assume that if Israel were buying TOW missiles 
from us, .they would be buying TOW-II or I-TOW, and the 
inference they would draw if Israel was buying basic TOWs, 
they might be transferring them elsewhere? 

A Not just on the Hill, but throughout the Executive 
Branch also, and the press, because this would be an open 
transaction. 

Q All right. That takes care of part of it. 

What did you then suggest as to another means of 
this transfer taking place? 

A I suggested that the only possibility of keeping 
it secret would be to provide the missiles through black 
channels by which I meant have tne CIA buy the missiles from 
tne Army and ship them directly to Israel, because at the time 
we were talking about a replacement of TOW missiles which 
might be shipped from Israel to Iran. 

Q So if I understand your testimony, that would be 



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a transfer from the Army to the CIA under the Economy Act and d 
then it would become an intelligence activity or a covert 
activity and the CIA would then ship them to Israel ar.d then 
if the destination were to be Iran, Israel would transfer the 
missiles to Iran? 

A Either as a trans-shipment or replacement. Yes, 
that's right. 

Q You are fairly clear that you recall having that 
discussion and making these points to Mr. Koch? 
A . Yes. 

Q Do you recall whether you ever made these ooints to 
your boss. General Cast, the Director of DSAA, in any 
briefing you subsequently gave him? 

A It is quite — it is probaible that I did. 
Q And do you, to your own independent knowledge, know 
whether General Cast ever had a subsequent conversation with 
Mr. Koch himself about these matters? 
A No. 

MR. SABA: Or Mr. Arroitage? 
WITNESS RUDD: No. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 
Q First, Dr. Gaffney, I believe you earlier 
testified that — about the 25th of November, General Gast 
returned to the office and that you provided him with a 



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briefing concerning your — what we call the Hawk Point Paper? 

A That is correct. 

Q Did you inform anyone else about this briefing to 
General Cast? 

A No, I did not. No. Just General Cast alone. He 

was the only one. 

Q Did you inform anyone else that you had provided 
General Cast with a briefing? 

A Well, later on in December, when we were talking 
about this particular exercise, with Mr. Armitage, I told him 
— he asked me who else — had I told anybody, and I said yes, 
I'd told General Cast. 

Q What did Mr. Armitage say? 

A Well, he told me I should not have told General 

Cast. 

Q Did he indicate why? 

A No. But I assume that it was because he wanted 
to keep the number of people involved in this down to the 
absolute lowest number. 

Q Mr. Rudd, I just would like to try to summarize a 
bit, if I can, the testimony on Exhibit 1, Possibility for 
Leaks, so that I can create a more clear record of this. 

Please interrupt me or correct me if I am wrong. 
I will go through a few quick questions. 

My understanding of this document is that you were 



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asked to provide a legal summary of the methods for the 
possibility of a transfer of certain weapons to Iran, possibly 
through Israel; is that correct? 
A (Witness Rudd) Yes. 

Q Is that the reference in the first sentence to this 
project contemplates that t/oe of transfer, that is, to Iran 
possibly through Israel? 
A Yes. 

Q That the first method discussed in this paper is 
that contained in the first bullet, and that would be that the 
President would make a determination under Section 614 of the 
Foreign Assistance Act, which would waive the 36(b) 
congressional notification provision; is that correct? 
A Yes. 

Q That even if the President made such a determina- 
tion under Section 614, the President would still be required 
to notify the Speaker of the House and the Chairman of the 
Foreign Relations Committee of such a waiver? Is that 
correct? 

A Yes, that is what the paper says. The law is a 
wee bit different from that. But there is congressional 
notification involved. 

Q So even if there was a Section 614 determination, 
although the normal notification of the 36(b) would not be 
required, there would still be required congressional 



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notification in advance of the transfer? 

A Yes. 

Q And the next paragraph, which begins, "The OSD 
general counsel," refers to your desire to have the matter 
reviewed further by counsel; is that correct? 

A Yes. 

Q And it further reflects your own excerience in 
having no precedent for the use of Section 614 in this manner? 

A Yes. 

Q Moving along, the second legal method proposed is 
an emergency notification under Section 36 (b) of the Arms 
Export Control Act, but you note that you could not provide 
any explanation as to why an emergency would exist for 
Israel's purchasing the missiles; is that correct? 

A Yes. 

Q And the third method expressed in the last option 
on the page would essentially be the standard procedure which 
would require a total of a 50-day notification period to 
Congress? 

A Yes. 

Q I understand that the matters discussed on page 2 
make a reference to the fact that notwithstanding 
congressional notification issues discussed on page 1, there 
are, in addition, third country transfer provisions of the 
Arms ExDort Control Act which must be satisfied? 



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UNCLASSiflED 



36 



A Yes. 



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MR. SABA: I have no further questions. 

MR. KREUZER: I have one final question, if 
everybody else is through. 

MR. SABA: I understand where you are going, Roger. 
That is fine. 

At this point I believe the unclassified portion of 
this transcript is completed. I believe Mr. Kreuzer's 
questions might be viewed as classified. 

MR. KREUZER: I was going to avoid mentioning the 
names. 

MR. SABA: I would just as soon you do, if we can 
do it this way. 

(Whereupon, at 10:45 a.m. the committee adjourned 
and proceeded to executive session.) 



I 




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vlth • krue dlMMtioa M tiM peasUlllty •( eoa^roalM. 

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tha for«l«n Malttaae* Act. wtileli «a«l4 waiv* tha ttatuta ^leh 
raquirta th« normal Caofraaaleaal aotlCleatloa tiadar Saetloa 
)«(k) of tha Arva tiport Ceatrol Aet (ABCA). 




• rraaidant auat aotify tha Spaakar of Ua ■eaaa and tha 

Chairman of tha Peraifh lalatioaa Coaalttaa. »rovl4a a writtan 
)uatlfleatloa, aa4 eonaalt vlth both tha Chalrmaa of tha Poratqn 
talatlona Coaalttaa and tha Chairmaa of tha Poraifa Aifalra 
Coaalttaa. Thia eaaU ha 4ona in a eU8aifia4« eloaa-hold aann* 
and ia tha boat proopact for oliainatinf laafea froa Coo^raaaion* 
aoureaa. lewavar, tha prohlaa weald eeaa vith actually axacati 
a Uttar of Offar (bOA) for tha aatarial without dia«lealnf to 
tha antira Saeurity haaiatanea CoaBttaity that tha Praaldant had 
waivad tha aaad for Saetioa M(h) aotifieatioa (laadquartara 
Army, OSMAC, and iOCQM# all ara awara of tha la^al raqvir«Mne 
aet to proeaaa tha bOAa vithoat tha Mlh) aatifleatioa procaaa). 

- Tha OtO Oanaral Coanaal ahoald ha aakad paraoaally to confirm 
that Saetioa 414 ia la^al oadar thaaa eiremaataacaa. tinea thta 
authority aavar hat boon asareiaad ia thia way. 

- Tha Praaidant eeald aifa an aaaraaacy aotifieatioa aadar 
Saetioa 34 (h), walvla« tha formal M-day aatlfieatioa pariod. 
Thia raqoiraa a eartifieatioa that aa aaarfaaey aaiata, and tha 
raaaoaa tharafor. «illa thia aatifieatiaa waald ha elaaaifiad, 
tha diatrihatioa o( tto taatiaa M(h) aatiaa ia aaeh hroadar tha 
woaU ha traa far tfea Saatiaa Sll datarmlaatiaa aaatioaod abova 
Additioaally, tha Sacmrity Aaaiataaea CaaBaaity waald hava to b« 
iaformad that tha fraaidaat had aada tha Marfoaey datormiaatioa 
aad waivad Saatiaa Mih) hafara tha lAh aaald ha pcaparad aad 
laaaad. Thara waaU ha aa faad aaplaaatiaa aa ta why aa 
aaartaaay waald aalat far Ula eaaatry'a parehaaiaf tha aiaailaa 

• Tfea Uat aatlaa, if tlaa parmita, waald ha ta traat tha aala 
aa a faatlaa aaalaaalflad aatlaa aadar Saatiaa M(h). Thia weal 
raaaira tha fall 1«-dhf aatlttaatlaa paflai fiaaladla« tha ao-da 
iafar«il aatica) far Caafraaaiaaal rawlav. taU nyttaM ara ia 
tha lawaatary a< tha oaaatry iawalvai* aa« U ia paaalhla that 
tha aatifieatiaa waald flaw thtaafh wlthaah ^aaatlaa. Thia 
alMat cartaialy aaaU fea traa far t-IMKs la tha qaaatity 
eoataaplatadt tha X-ffOH «Matitlaa ai«h« m alfhh aat eaoaa 
latiaa. 



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coBtin h/ I -nf I I 



XOPISS 



DEPOSITION OF GENERAL JOHN ROGERS GALVIN 

Saturday, Junr 13, 1987 

U.S. HOUSE OF REPRESENTATIVES 

Select Committee to Investigate Covert 

Arms Transactions with Iran, 
Washington, D.C. 



Partully DeclassiM/Released on. 

under provisions of E 12356 
by K Johnson, National Security Council 



lJjiN88 




The Committee met, pursuant to call, at 9:00 a.m., 
in Room B-352, Rayburn House Office Building, with 
Joe S'aba presiding. 

On behalf of the House Select Committee: Joe Saba, 
Staff Counsel; and Roger Kreuzer, Investigator. 

On behalf of the Senate Select Committee: John 
Saxon, Associate Counsel. 

On behalf of the Witness: Colonel Quentin Richardson, 
Office of the Chairman, Joint Chiefs of Staff; and Lt. Colonel 
Richard C. Rankin, USCINCSO Executive Assistant, HQ USSOUTHCOM. 



UNCUSSm 



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Srtff-a 



455 



URtut^iiffir 



Whereupon, 

GENERAL JOHN GALVIN 
having been first duly sworn, was called as a witness herein, 
and was examined and testified as follows: 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 

BY MR. SABA: 
Q Good morning, sir. 
A Good morning. 

Q General Galvin, let me introduce myself. My 
ncune is Joseph Saba, Counsel for the House Committee, and 
my colleague, John Saxon, for the Senate Select Committee. 

Also present — and I would appreciate it, 
gentlemen, if you would each introduce yourselves for the 
record. 

COLONEL RICHARDSON: I am Colonel Quentin 
Richardson. 

Lt. Colonel Rankin: Lt. Col. Dick Rankin. 
MR. SABA: Thank you. 
BY MR. SABA. 
Q General Galvin, would you please state your full 
name, your current organizations, station and present duty. 

A My name is John Rogers Galvin. I am currently 
the SACEUR designate, that is the Supreme Allied Commemder, 
Europe, designate in betwe'en stations, having just left as 
Commander in Chief ot^b^United States Southern Command, and 



M^ United States South 
M-ftSSIflEDL 



456 



IIKEeNShIuke' 



1 on -my way to a new assignment in Europe in the NATO 

2 organization. 

3 Q General Galvin, could you please relate for us 
^ briefly the time you commenced your duties as CINC of 

5 SOUTHCOM and the period in which that duty officially ended. 

6 A I commenced my duties in March of 1985 and my 

7 duties ended last week on the 5th of June, 1986 — I mean, 

8 1987. 

9 Q Could you please relate to us the nature of your 

10 duties, and specifically in terms of how you relate in your 

11 command to each of the MILGROUP commanders in each of the 

12 countries in Central America. 

13 A My duties with relationship to the MILGROUPS in 

14 Central America is that I am the immediate commander, that is, 

15 the next higher commander of the MILGROUP commanders. The 

16 MILGROUP commanders actually work for the ambassador. They 

17 take orders from the ambassador in the different countries. 

18 So it is, in effect, a shared responsibility of 

19 the command by the ambassador and myself. It is an interesting 

20 arrangement. I am what is called the Senior Rater. Let me 

21 correct that. No, that's right, I am the Senior Rater, which 

22 means I write the efficiency report or effectiveness report 

23 for the commanders of the military groups. The military group 

24 falls within what is called a Country Team, meaning those 

25 people who work for the eunbassador. 



DdCLil^/Ftffia^ 



457 



umassifRr 



- Q Does the ambassador have letter import into the 
rating of those officers? 

A The ambassador does, if he wishes to do so. 

Q I see, but he would not necessarily. 

A He makes a choice. He can either have no input 
if he so desires, or he can send a letter or a message. 
Some ambassadors send messages that say, "I feel the commander 
has done a good job." Other ambassadors don't have anything 
to say. 

Q How, from a day-to-day point of view — how does 
the command 'structure relate? How do the MILGROUP commanders 
report to you and how do you supervise their activities? 

A This varies with the 17 countries. The most 
intense and close relationships are in the countries where 
most is going on, from my point of view, at least, and that 
would be, for example, in El Salvador, where, in the period 
of about two years and three months, I visited there 
approxiMJnately every two weeks, or about 50 times. 

I also have what's called Task Force El Salvador, 
which is an ad hoc group meeting zkbout once a month in which 
the MILGROUP commander comes down to my headquarters in 
Panama from El Salvador, reports in, talks about what he's 
been doing, gets advice from me and my staff. I also have 
staff visits — in other words — and I also have communication: 
with him so that there's almost a daily interface in terms of 



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19 
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olmCJIfltli 



1 either myself or some representative of my staff calling up 

2 there to the MILGROUP commander or one of his people, and 

3 then there are face-to-face meetings about every two weeks. 

4 Now that would be for El Salvador. That would 

5 range all the way down now to some countries, for example, 

6 Paraguay, in which I might see the MILGROUP commander once 

7 every three or four months . 
3 Q Thank you. 
9 General, when you assumed your duties as CINC 

10 for SOUTHCOM, what briefings were you given, particularly 

11 with reference to the Boland Amendment and assistance to the 

12 forces opposing the government in Nicaragua? 

13 A I was briefed on the Boland Amendment as to 

14 the meaning of it. I was provided, also, I believe I asked 
<e for It and was provided paperwork on the amendment. That is, 



a fact sheet explaining what was prohibited by the 



^j Boland Amendment, which, in effect, prohibited just about 



everything from my point of view, that is, the Department 
of Defense. 

Q Vfho provided you with that? 

A My legal advisor, who is a staff judge advocate, 
and that would be, in my case. Colonel Cooker. 

Q Could you spell that. 

A C-o-o-k-e-r. 

Q And Colonel Cooker was an Army 



MCUSSIBEIL 



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A He is an Army colonel currently stationed in 
United States Southern Command as the Staff Judge Advocate. 

Q And do you recall what you understood the 
Boland Amendment to require at the time you assumed command? 

A Let's see — I certainly recall it now. I can't 
remember what I recalled exactly at the time I assumed 
command, but I think it was the same as I do now, which is 
that the Boland Amendment, when it was in effect, prohibited 
assistance to the Nicaragua resistance forces by any members 
of the Department of Defense. 

Q And did you understand that to be the case during 
your -- the entire period of your command or did you 
understand that there was any change in that position 
during the period you have been in command? 

A There was a change — there were several changes 
in the position as it went along. There were changes which, 
in effect, if you want to use the word "liberalized" to the 
Boland Amendment. That is, there was a change — I'd have to 
look up the dates where intelligence could be provided to 
the resistance forces. 

And then, of course, there was the change when, 
on the 18th of October of '86, when the 100 million was 
provided. 

Q Did you understand that until, at least, 18 October 
1986, and from the time you assumed command until that date. 



IWKlLfi BPiT*tfilnn 



460 



8 



IMOHSttBEfcT 



1 that no military assistance and support was permitted to 

2 forces opposing the government in Nicaragua? 

3 A Yes. 

4 Q General, what was — at the time that you assumed 

5 command, what was your overlap with General Gorman? 

g A We didn't have an overlap — or we had maybe a 

7 couple of hours of discussion, but I had been in contact with 

General Gorman before that. 
g Q And had you been provided by General Gorman 
1Q briefings as to the activities in each of the Central 
American countries? 

A No . 

Q On assuming command, what guidance, if any, did 
you provide to each of the MILGROUP commanders in Central 
America on the Boland Amendment or on assistance to the 
Nicaraguan resistance forces? 

A As I went around over time, I did not do that 
immediately on assuming command, because when I assumed 
conmand, I was given to understand by my staff that the 
MILGROUP commanders understood the Boland Amendment. Then, 
as I went around and saw them, I assured myself that they did 
have this understanding. In other words, I asked them, have 
you had any occasions where people wanted you to do anything 
that would be in violation of the Boland Amendment? And I 
might not have specifically mentioned the Boland Amendment as 



MUSSIEE 



461 




'WHil^flP' 



8 



such, but in those general terms. 

I assured myself, one by one, with the commanders 
who had been involvj 



Z assured myself that they were aware of where 
they stood. 

Q Sir, afere you provided a briefing on taking command, 
or sometime shortly thereafter, as to the activities of 
private Americans or others providing supplies — resupplying 
the contras? 

A No. 

Q Did you come to be aware that there were such - 
groups providing such support? 

A Yes. 

Q Tell us when and how you came to be aware? 

A Well, I gradually came to be aware of this; 




In that period, through references that people would 
make and through the contacts that I had in the military and 
outside and through, you know, coordination with other 
agencies and so forth, I came to be aware that there was 
activity that I called benefactor activity that was going 




462 

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' ' Q Can you tell us in your own words what you 

^ understood that activity to be, and I'm focusing more on the 

^ initial period just after you took command, rather than what 

* your knowledge may have come to be since then? 

5 A My understanding of it was that in the United 

6 j States and outside the United States, there were people 

7 who, for their own reasons, patriotism or other reasons, 

8 were supporting the contras, and they were doing this by 

9 providing money, which was then used to buy supplies and 

10 those supplies were being shipped into the contras in one 

11 way or another. 

12 Q Did you -- did you knew specifically who the 

13 benefactors or the donors were? 

14 A No. I didn't. 

15 Q Did you come to know who the providers of this 

16 support or resupply effort were? 

17 A During the period we're talking about, what I felt 

18 I knew about them was that they were hired pilots flying 

19 airplanes or hired crews perhaps with boats, but as to what 

20 was the organization behind that, I didn't know. I thought 

21 that I had some feelings that they were retired military 

22 involved in it, eunong others, because I noticed, either there 

23 or here in visits to Washington or somewhere, retired 

24 generals — one of the retired generals — I can't remember 

25 his name — 



wmmL 



463 






10 



Q Was it Singlaub? 

A I noticed that he seemed to be involved in it, but 
at the time, I figured that he was involved from a personal 
point of view -- in other words, I knew General Singlaub 
was a man who felt very strongly about such causes and that 
he was involved from his own personal — for his own 
personal reasons. 

Q Did General Singlaub have occasion to, during 
the period of your command, to meet with you or speak with 
you about his efforts? 

A No. No, I didn't meet with him at all. 

Q Were you aware at any time during your command ' 
that General Secord was involved in the resupply of — 

A No, I wasn't. 

Q Did you'occasion during that period to speak 
to General Secord or meet General Secord? 

A No. No. I've never met him. 

C Did anyone mention to you that General Secord 
was involved? 

A I don't think so. 

Q Richard Gadd? 

A No. 

Q Mr. Dutton? 

A No. 

Q So I takfiL it that, although you were -- and correct 




JL^UVJL 



464 



iWltltKIHtt' 



11 



1 me'if I'm wrong -- although you were aware of a private 

2 effort involved in operations to resupply the contras, you 

3 were unaware of the specific identity of the individuals 

4 providing that support? 

5 A That's right. 

6 Q And those persons, to the best of your knowledge, 

7 that I just mentioned, in particular being Secord, Dutton 

8 and Gadd did not meet you or speak to your during the period 

9 of your command? 

10 A No . 

11 Q General, I thought I would proceed with the 

12 deposition going through, at this point, through a 

13 country-by-country set of questions and then proceed to some 

14 more general questions. 

15 A Okay. 

■jg Q Realizing that in certain cases, the information 
•J7 overlaps. 

Turning first to Guatemala, during the period of 
your command, who was the MILGROUP commander in Guatemala? 
A Let's see -- there was — 
Q Colonel David McLaughlin? 

A McLaughlin, Dave McLaughlin was the MILGROUP 
commander, that's right. 

Q And how did you relate, in terms of frequency of 
contact and supervision to Colonel McLaughlin? 



ision to Colonel McLaugnim 

IMASSIBElL 



465 



ilNtU$Sifl» 



12 



^ " A I didn't visit him very often. Between my visits 

2 to him and his visits to me, they probably averaged once 

3 a quarter, every three months, every two months. I had other 

4 contact sometimes with him by message or by telephone, but 

5 I didn't get up to Guatemala very much. 

6 Q Was it Colonel McLaughlin or the MI13R0UP 

7 commander's duty in Guatemala to provide you with regular 

8 reports as to everything going on within his — within his 

9 command? 

10 A Yes . 

11 Q And do you recall, was that done by Colonel 

12 McLaughlin? 

13 A Yes, it was. 

14 Q Do you recall if Colonel McLaughlin mentioned 

15 General Adderholtz or an organization called the Air 

16 Command Association? 

17 A He did not. 

18 Q Did you have any occasion to know of General 

19 Adderholtz — 

20 A No. 

21 Q — or of his activities in Guatemala? 

22 A No. 

23 Q General, in terms of security assistance to 

24 Guatemala, what input would you have had in your command 

25 situation in terras of determining what United States policy 



5 of determining what unitec 



466 



tweumiiB^r 



13 



1 an<r actual security systems would be in respect to 

2 Guatemala? 

3 A The security systems in respect to Guatemala 

4 is determined by the Country Team with the leadership, the 

5 lead in that would be the MILGP.OUP commander, Colonel 

6 McLaughlin. He would make up. — the basis of it all would 

7 be an annual report in which he, working with the host 

8 nation and with the ambassador and the rest of the team, 

9 analyze the military aspects of the country and came to 

10 conclusions as to what military assistance was needed. 

11 After approval of that by the ambassador, that 

12 would be forwarded, with an information copy to me, and 

13 then forwarded to the Department of Defense and the State 

14 Department. Actually, there was more to it than that. I 

15 would be involved in advising Colonel McLaughlin and my 
15 staff would, on what we thought that he should put in the 

17 report. 

18 However, the final judgment on it would still be 

19 the ambassador. If the ambassador felt it was a correct 

20 report, he would approve it, and if not, he could make 

21 changes in it. He would have the final say on it within 

22 the Country Team. 

23 Q For the period of your command, could you tell us, 

24 in your own words, what the development of our security 

25 assistance program i 






467 



HNtmBEIr 



14 



A Yes, it was zero to start with because the U.S. 
Government felt that the Guatemalan Government, which was 
a military government, was a — was not the proper democratic 
government for the country and, therefore, the U.S. 
Government withhelcf military assistance. There wasn't any 
military assistance. There may have been a small aunount 
of what's called IMET, which is training, that is, money to 
put people — military people in military schools for 
training courses. 

As I recall it, there wasn't even that. Then, 
toward — in the second year of my time, the government -- 
or the first year, the government changed over -- the military 
turned the government over to the civilians and there was 
a good democratic election, and Cerezo was elected president. 
Then after that — 

Q Excuse me, sir, just for the record, ]ust to give 
us a time frame, can you recall about when that was? 

A Cerezo was elected president about the first of 
1986, January '86, perhaps, but I'm not sure of that date. 

But anyway, then we began pushing harder, "we" 
meaning the ambassador. Ambassador Piedra and myself, 
McLaughlin to press the State Department and Defense 
Department to support military assistance for Guatemala 
because there was a guerrilla problem and they needed it. 

And even^u&lJLvL, we^id get some military assistance 



wmm 



468 



• •■■A* ■ liailMM^ 

iMffflaiHMir 

Vmllinioificv 



IS 



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amounting to about $5 million. 

Do you recall when the first military assistance 
grant occurred? 

A No. I'd have to try to find that. I don't 
recall that. 

Q Do you recall if there was a sum of approximately 
$300,000 for military training in 19S5? 

A That sounds like it would b« right, but X don't 
specifically recall the sum. 

Q During that period, were you aware of any link 
between our 'military assistance to GuatesMla and position of 
the Guatemalan Government, whether of the 1985 regime or* 
1986 regime, in connection with its attitude toirard the 
contras? 

A No, I wasn't aware that there was any connection 
in there. 

Q All right. 




469 



UlASSinED 






mmm 



470 



■ja^ 



UNCUSSIFIED 






/d Ifi^L. 



UNCLASSIHED 



471 



yNciAssra 



?^' 



l7 






UNCLASSIFIED 



472 



UNCLASSIHEO 






UNCIASSIHED 



473 



UNCUSSIHEO 



W 



ow 



'ToViL, 



UMCIASSIFIED 



474 



ONSHlSSIflWi' 



26 



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Sir, do you recall who, during the period you 
had command, was the MILGROUP commander in Honduras? 

A Colonel Ray Garcia was the MILGROUP commander ■ 
during most of that time. 

Q Do you also recall relating to Colonel Jerry 
Clark? 

A Yes, Jerry Clark was Garcia 's predecessor. 

In — General, if you will bear with me and ask 
you the same question I asked in the case of Guatemala, and 
that is, how did you relate to first Colonel Clark and then 
his successor. Colonel Garcia? 

A Well, I related to them much more closely than 
with McLaughlin because of the nature of the country and the 
mission that we had. In other words, I saw them more often. 
I saw Clark about every two weeks. 

Q Could you explain that, in your own words? 

A Explain why I saw them? 

Q Why? What that relationship was. 

A In Honduras — first of all, to compare that with 
Guatemala, in GuatanaJ-a ^ js J. ^^^ ^W^Jir > we had very little 



475 



imi^flf^ 



27 



military program because the Guatemalan Government was 
not a government that the U.S. Government was pleased with. 
On the other hand, in Honduras, we had a strong military 
program, which included the MILGROUP, but also Task Force 
Bravo, which was 1,000 man force at Palmerola, and a series 
of exercises that we were holding. 

So, therefore, I was in Guatemala -- I was in, 
correction, Honduras more often and I saw Clark and Garcia 
on the average of once every couple of weeks. 

Q This would involved primarily their coming to see 
you or you going to Honduras? 

A Primarily my going to see them in Honduras, and 
on occasion, say once every quarter of the year, their coming 
to Panama to see me. 

Q During the period of your command, did you have 
discussions with, first. Colonel Garcia, and then Colonel 
Clark concerning the large number of Nicaraguans ^^^H 
^^^^^^^^^^^^^^|opposed to the Nicaraguan Government? 

A Yes, I did. And the other way around, first 
Clark and then Garcia, yes. 

Q What was the nature of these discussions, and do 
you recall what was said and concerns expressed? 

A First of all, these discussions would be one facet 
of a very complex series of discussions on a wide variety of 
subjects in Honduras, but almost always, something would come 



mmmi 



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undbmr^ 



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up about what the contras were doing. And Clark and then 
later Garcia would report to me whatever he knew about what 
was going on. 

I needed to know — I tried to know about all 
military activities in the region. Z wanted to know about 
what the Sandinistas were doing and what th* contras were 
doing, and I had intelligence means at my disposal to find 
out some of that. 

Part of that was to discuss it with the MILGROUP 
commanders, but also with anybody else that I could find in 
the Country Team who knew something about it 

So I did discuss each time — 
I asked them what they knew, what they had heard, and they 
reported to me different pieces of intelligence information 
about the contras and the Sandinistas. 




477 



mssm 



^P[^e^ 



^Hro 3 2 






UNCUSSIHED 



478 



'VNIUPRn' 



33 




if you had 

conveyed that information onto your superiors or to — first, 
to your superiors at the Department of Defense? 

A I don't recall that I passed that on specifically 
to the Department of Defense, no. 

Q Do you recall if you passed that on to anyone 
working at that time for the NSC? 

A I don't specifically recall that, no. No. 

Q Did you, in terms of specific individuals, do you 
recall relating that information to Colonel North? 

A No, I don't recall that. 

Q To either. JiJPSt, 




479 



mmmv 



34 



A I don't recall relating that to anybody, really. 
You know, there were -- I saw all those people when I would 
come to Washington, lots of people. My job was to coordinate 
all of these people. 

I assumed during that time that people like that 
knew these things; they knew that thare were benefactor 
airplanes^^^^^^^m^^^^^^^^^^^^^^^^Hand these 
were in support of the contras. 

But it wasn't something that I would, therefore, 
feel it necessary to report to somebody. 




480 



irassiRED 



^4K^^ 



37 



^/^^' 






MM 




481 



IMtSSiffil'^ 



38 




Q Do you recall that there were discussions, first 
with General Lopez and then subsequently with his successor, 
Regalado, concerning the provision by the United States of 
Northrup F5s? I believe F5-Es, but certainly F5s. 

A Those discussions, I don't believe took place with 
Lopez. It was later that those discussions came up about 
the F5s. 

Q Do you recall when they came up? 

A I don't recall exactly when. I believe, though, 
that it was during the term of Regalado, and not of Lopez, 
and the reason I don't is that there was a gradual approach 
to the queztion of F5s. It began with an analysis, with a 



^irirVfenQInl ^biT' 



482 



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2 

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mmmv 



39 



request for parts for the Super Mysteres. There were 
complaints by the Hondurans who owned the Super Mysteres 
that they couldn't get parts and they needed ^o get them and 
so some Super Mysteres were moved up to the United States 
under a military assistance program and were refurbished, 
including things like they needed new canopies; you couldn't 
see out of the old canopies, and they needed .lew electronics. 

Then it became increasingly obvious that you 
couldn't continue to refurbish Mysteres because parts were 
becoming less and less available and more costly and more 
difficult to' find. Then there came a study of how long 
could the Super Mysteres last, and I think the U.S. Air 
Force conclusion was something like 1992; that would be the 
end of them. 

Then we began to have sessions with the Hondurans 
on what did they W2mt to do to replace the Super Mysteres; 
did they want to replace them and then gradually that worked 
its way into the F5 question. 

Q Do you recall 'approximately the F5 question 
became an issue and a request by the Hondurans? 

A I would say toward the end of 1986. 

Q End of 1986? 

A Yes. 

Q General, do you recall any discussion concerning 
the F5s( 



JgHl^^iLainiCcblimi 



PUBLIC PAPERS OF THE PRESIDENT 



{ 



483 



twftAssinffl^ 




40 



at a meeting held by the 
JCS on 13 December 1985, in which — 
A 1985? 

Q 13 December 1985. 

A No, I don't recall a meeting in the JCS about — 
wait a minute, let me see. Mo, I'd have to refresh myself. 
I don't recall that meeting. 

Q General, I'd like to show you a document which 
you may or may not have seen before, so I would invite you 
to read it in the event you haven't. It will be marked 
General Galvin Exhibit 2 and it is a photocopy of a CIA 
document, and it is marked "Secret." 

(The following document was marked as 
JG Exhibit 2 for identification.) 
COMMITTEE INSERT 



mmmi 



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mms 



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(Pause.) 

THE WITNESS: I've never seen this message before. 
BY MK. SABA: 
Q Would you, sir, care to comment on the message 
for the record. 

A The message concerns what the CIA perceives as 

by ^° ^^^^^^^^^^^^^^^^^^^^^^^^^H 

My comment on it would be that throughout 
the period of the Boland Amendment, and this would be -- and 
this message is dated 15 August "86. Throughout the period 
of the Boland Amendment, there were discussions between my 
headquarters and the JCS concerning questions of the — - 
whether or not if the Congress deemed it appropriate -- let me 
put it this way. I was asked several times what were my views 
on how the U.S. Government should deal with the contras. 

And my views were, at that time, that the contras 
are a military operation and the U.S. Government ought to deal 
with them militarily, and I sent messages to that effect to 
the JCS, saying, if I had my druthers, I as the commander and 
the individual responsible for military operations of the 
United States in this region, would want to have direct 
involvement with the contras, but there was always paragraph 
2 or something in there in which I would say, "But I understand 
that that may not come about. If it does come about, I would 
do it in the following way. If it doesn't come about, I'll 



IHfbaflvmMcltrr 



485 



rJJAIAI JLOAiTirti 



42 



support in whatever ways are being appropriate," meaning 
legal. 

Q Could you explain to us the reference here to 




A Well, I'm not exactly sure of what they're talking 
about here, but I am sure of what I have recommended at 
various times. What I recommended early on in my tour was 
that if the Congress allows 




I talked this over — the CIA, too. Of course, the CIA 
did not support that. The CIA felt that they should continue 
to operate there. 

I felt that if it were permissible, if that were 
legal to do, and we were looking ahead at that time to a 
vote — remember, in the summer of '86, we had been thinking 
all the way around since the spring that there was going to 
be an imminent vote and there were possibilities that all of a 



:e and there were possibiiii 

MCLASSM 



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sudden, the Defense Department would get told to go ahead 
and do this. Now, whether those were remote possibilities 
or not, nevertheless, I wanted to be prepared if they did 
say that. 

So I did some planning along those lines while the 
fact is that it never came about; the'"? was no permission 
given for that and so we never did any of this. I never 

as this thing would imply. 
In fact, the CIA position was they didn't want 
to do it that way. But that's what I think they are 
referring to here, although this is the first time I've 
seen this message. 

They -- I think that the agency is saying, we would 
prefer that the military not do that. 

Q Then it was your understanding that -- certainly 
at some time prior to that, it had, at least, been your 
recommendationl 




A Well, it was my recommendation with caveats. In 
other words, all of us working that message traffic understooc 
that there was no way the U.S. at that time could provide 
any military assistance to the contras and we weren't providing 
any and — that I knew of, anyway, and we would have to wait 
until a vote was forthcoming from the Congress. And there 
were people in the Congress who were saying, "We'd like to see 



MCLISSIBEIL 



487 



UHGUSSBItiT 



44 




this thini.^^^^^^^ 

And 1 felt that there was some chance, 
whatever, 15, 20 percent chance, that somebody would come up 

say, ^° ^^^^^^^^^^^^^^^^^^^^1 ^^ 

case, I wanted to be s.t least somewhat prepared for that. 

MR. SAXO:;: Sir, to whom did you make that 
recommendation? 

THE WITNESS: To the JCS. The JCS asked me my 
views. They said, "State your views on how this whole thing 
should be run if you had your druthers ," and so I said, "If 
I had my druthers, I would run it." That's the basic thing 
that I told them. 

And I also told the agency that, and the agency 
said, "Fine, but if we had our druthers, we would run it." 
BY MR. SABA: 
Q But it is correct to state that it had been your 
recommendation 

A That is correct. 

Q You understand this to be a response to that 
recommendation by another agency which had its own views? 
A Yes. 

Q Directing your attention, then, to the December 1985 
period — 

MR. SAXON: Before we leave this document, can I 
ask one question? 






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MR. SABA. Please. 
EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 

BY MR. SAXON: 
Q General, I would simply ask if you agree with the 
assessment of the agency in numbered paragraph 2 where they 
?*-ate, and I 




That's right. 
Again, I would say in that that I hadn't worked 
my way through all of these things. I was -- obviously, there 
were legal problems; there were political problems; there 
were many other problems, but I wanted to come on the net 
with the statement from a military point of view as to how 
this kind of effort should be run and then let people decide 
whether or not they really want it to go in that direction 
or in some other direction, but as the military man in charge 
of the region, I did not;^ people to think that that wasn't 
important to me, that how the U.S. Government supported the 
contras would not be important to the Commander in Chief in 
Southern Command, and that he would simply stand back and say 
' I prefer that the CIA run this or I prefer that the State 



UmASSIQEO. 



489 



'Wflt^lHfflF 



46 



Department run this, 

I felt that It was incumbent on me to state as 
a commander how I felt. And I made no effort to conceal that 
at all. Obviously, it was classified, but -- what I mean 
by that is that I said that to the JCS; I said that to the 
CIA, and I may have said that to others, saying that in my -- 
that was my view of how you run a military operation. 

MR. SABA. I would like to stay with the document 
so we might as well stay on this. 

BY MR. SABA: 




490 



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Q And did you not, in fact, report that and support 
that view in late 1985 to JCS? 

A I can't remember when, but my view, as I said, was 
if it were legal and approved by the Congress, the best way to 



I 





_T 



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■lifiiniipoinrii. 



48 



support the contras would be with the U.S. military support; 
that's right. 

Q So it would be correct to say that you did take 
the policy decision advocating decisive military assistance? 

A Yes, that's correct. 




Q Just for the sake of the record, what would be the 
purpose, from a military security point of view, for Honduras 
possessing F5s, and I recall, and correct me if I'm wrong, but 
the numJDer we're talking about was about 12. 
A That's right. 

The purpose of it would be to defend Honduras. 
The Hondurans ha^^^^^^^^^^^^H in their Army, 
very small Armyfl^^^^f^^^B^ They had always, in the past 
two decades, relied on air as their defense because they had 



492 



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this- small Army and also because, if you look on the Nicaraguan 
border, or even on the border with the other countries around 
them, there are no roads out there. There is little population 
in that area, and it is very difficult to get up in there. 

The Hondurans had initially tried to buy 155 
artillery, in fact, they bought four artillery pieces in 1984, 





they still continued 
to rely on close air support and fighter bomber aircraft in 
small numbers to defend the country. 



Now, we were trying -- we had been trying to 
develop the ground forces and mobile forces, to some degree, 
in Honduras, but that's a slow development. Because of their 
lack of development and because it definitely was possible 
that the Sandinistas would attack Honduras, I preferred to let 
the Hondurans counterattack with their air because that kept us 
out of the first parts of any kind of fight that the Hondurans 
would get into with Nicaragua. 

That was basically my rationale. 




I might have, as I looked for all the different raunifi cat ions 



looked for all the differei 

mmm. 



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f the F5s, I might have at some time said, "Giving F5s to 
Honduras also shows U.S. sustains support,' and I do believe 
that it does.] 




Q Just for the record, sir, looking at that same 
issue in the mirror image, do you know 




A No. No, I don't. 

First of all, I don't see how we could do that. 
You can't say that you're going to give F5s to Honduras because 
it's a congressional decision anyway. It has to go through 
Congress. 

One of the things that I constantly told Regalado 
is that I support you on F5s, but I don't know if you're going 
to get them. This thing is going to have to go through the 
U.S. Congress. You need a fallback position and I, by the way, 
had one, which would be that we would work on helicopter support 
for them because if they didn't have FSs and they still had 
the border problems, we could perhaps with Huey helicopters 
substitute those and get people out to the border. We would 



iMAiSSUIini, 



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look- at gunships, that is, fixed-wing gunships as the AC47 to 
do that because I wasn't really sure until two weeks ago that 
we actually were going to get the F5s. 

Q I suppose General Regalado wasn't fully sensitive 
to the problems in obtaining congressional approval for anything 
the Executive wants. 

A Probably not 




MR. SABA: I don't have any further questions on 
Hunduras. You gentlemen might have some. 
MR. SAXON. I have a couple. 
EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 
BY MR. SAXON: 




495 



imStiligr 



52 



- Q Did you communicate that at any point to 
Colonel North? 
A No. 

Q I'd like to show you what should be marked as 
Deposition Exhibit 3, a letter -- a memorandum for President 
Reagan from Admiral John Poindexter. This document, on its 
face, does not bear a date, but from the context, it would 
appear to be late 1985. 

Let me give you a moment to read that, sir. 
(The following document was marked as 
JG Exhibit 3 for identification.) 
COMMITTEE INSERT 




Pr 



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53 



(Pause.) 

THE WITNESS: Okay. By the way, this last part 
brings up this question it looks like we were talking about, 
depending on when tHe date was. It ties the ESF to pending 
internal economic reforms. That was my understanding, also, 
if the dates are right, that we're talking about, you know, 
was the ESF used as leverage. It was my understanding that 
it wasn't; it was used for internal — pending internal 
economic reforms. 

BY MR. SAXON: 
Q General, what I'd like to, there are a couple 
of paragraphs I'd like to read to you, sir. The context o'f 
this doctiment has to do with apparently Salvadoran and 
Honduran commitment to aiding the Nicaraguan resistance 
forces > Beginning in the background, it states, and I quote: 
"After the negative vote on military assistance in April 1985, 
the Honduran Government 




In El Salvador, President Duarte was 
criticized by his political left for supporting the 
U.S. proposal." 

It continues: "Today's House vote against additional 
assistemce to the Nicaraguan democratic resistance is liable to 
have the same effect unless steps are tciken to reassure both 



presidents. 






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UHKU^HB^ 




A trip by a 

high-level delegation will help to re^sure them and their 
military of our determination to succeed in aiding the 
resistance and in ensuring their security." 

Under "Discussion," it states, "As a result of the 
National Security Planning Group meeting this afternoon, it 
was decided to dispatch Assistant Secretary Elliott Abrams,. 
General Jack Galvin (USSOUTHCOM) , and a team of specialists 
to the region. The visit by the team and the letters at Tabs 
A and B will assure the Governments of El Salvador and 
Honduras that regardless of today's vote, you, personally, 
and the Administration are determined that the Nicaraguan 
resistance will recieve the support they deserve. In Honduras, 
we are prepared to provide expedited and, if necessary, 
enhanced security assistance to deal with their border problem." 

Let me ask you first, sir, did such a trip take 
place by you and Secretary Abraims? 

A There was a trip, but I'm not sure it appears to 
be associated with this letter. I'm not sure. There was a 
trip that took place -- is that the March '86 -- are you talking 



uiusmiL 



498 



•"Wt^fRfflr 



5S 



1 about March '86? 

2 Well, it's a trip that took place in March '86, 

3 right around Easter time, in which Elliott Abrams called 

4 me and asked me to meet him in Honduras, and I did. We had 

5 a meeting at the airfield on a Friday with General Regalado, 

6 President Azcona and ?°veral other people. Also, Elliott 

7 Abrams had brought along people from the Military Assistance, 

8 which is called DSAA, General Cast's office — not General 

9 Cast, but Colonel Royer and others. We met and the purpose 

10 of that visit was to encourage the Hondurans that, indeed, 

11 although the Congress may have voted in a certain way on a 

12 certain bill, that didn't mean that the United States di3 

13 not support its allies. We would continue sustained support 

14 for Honduras. 

15 Q So in the memorandum where Admiral Poindexter 

16 writes, "In Honduras, we are prepared to provide expedited 

17 and, if necessary, enhanced security assistance to deal with 

18 their border problem," 
19 
20 

21 I Is that a fair reading, sir? 

22 A I probably would have said it a little bit 

23 differently, but that's a clear reading. I would have said 

24 it was to encourage the Hondurans of our sustained support. 

25 But yes, that's a fair reading, too. 




IMASSiEe. 



499 



UttSUSSif^ 



56 



LIEUTENANT COLONEL RANKIN: Sir, can I refresh 
your memory? I think this is the period when the Hondurans 
were — the Nicaraguans were crossing the border at Easter 
time, and so the reference to the border is encouraging 
the Nicaraguans — 

THE WITNESS: Yeah. 

LIEUTENANT COLONEL RANKIN: -- and notJ 



THE WITNESS: Hondurais, throughout the period that 
we're talking about, constantly felt that --.the Hondurans 
that I dealt with constantly felt that they did not receive 
the kind of support they should from the United States 
that they were allies, they had a letter from President 
Reagan which he had given to President Suazo at a meeting 
in a portic^ of the White House saying "We are their 
allies and we will sustain support for you." They referred 
to this letter often and the general thrust was, we are 
out here on the front line. ^^^^ 

are threatened by the 

Sandinis ^^^^^^^^^ 

l and we don't get enough support from 
the United States. 

At the time, if I'm correct, assuming now that 
this was the time of that meeting, because this thing 
doesn't have a date, but it looks like you're correct, this 



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was the meeting mentioned in this piece of paper. At that 
time, the Sandinistas had about six batallions up on the 
border near Yamales, and they were threatening Honduras, 
and, in fact, two days later, they did attack into Honduras, 
as you recall. 

They were threatening Honduras and a vote in 
the Congress — I forget precisely what vote that was, but 
there had been a negative vote with reference to Honduras 
in the Congress, in the U.S. Congress. Elliott Abrams 
said something to me like, "We need to encourage the Hondurans 
They are in bad shape over this vote and the threat on the 
border and I'd like you to meet me in Honduras. I want to 
offer them some encouragement." 

At that meeting — that's the way he talked — 
he said — it was Elliott Abrams who talked and we were 
all there to support the U.S. Government's position and 
Elliott Abrams said words to the effect that "We understand 
that you are doing a great deal 



Ln defense of your own country and we realize that you're 
threatened by the Sandinistas. We have supported you and 
you should have no worry about the fact that we recognize 
you as an ally and we will come to your assistance. We are 
prepared at this time to offer you additional support and 
we've brought some people along," and he pointed out 
Colonel Royer, and said, "We've brought some people along 



MiMiaL 



501 



-UNEUiSiEfr 



58 

who will go over with you in detail some possibilities of 
support that we could offer you at this time." 
That was the idea of the meeting. 
Q And when, sir, would you date that meeting? 
A That was at Easter of '86, and specifically, it 
was what — 

LIEUTENANT COLONEL RANKIN: March 21st. 
THE WITNESS: March 21st. 
BY MR. SAXON: 
Q Let me show you, and ask that this be marked 
as deposition exhibit 4, a cable from the NSC to the 
American Embassy in Tegucigalpa, San Salvador, and San 
Jose, and give you a moment to look at that. It is dated 
March '86. 

A Okay. 

(The following document was marked as 
JG Exhibit 4 for identification.) 
COMMITTEE INSERT 



mm^ 



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(Pause.) 

THE WITNESS: This was the trip. 

BY MR. SAXON: 

Q All right, sir. It indicates "The following is 
the revised itinerary for the Abrams/North trip." It lists 
the itinerary, and in numbered paragraph 3, it says 
"The traveling party consists of Abrams, North,] 
and Walker. Gen. Galvin will join the party in Tegucigalpa 
for the remainder of the trip." 

A Uh-huh. 

Q • Does that appear to be the trip that you are 
referring to? 

A Yes. 

Q I only have one further question on this and it 
goes back to the issue of the F5s. Were you present, sir, 
in late 1986, and I believe the trip was in October, in 
which Colonel North — excuse me, I don't know if Colonel 
North — recall if he was on this trip, but Elliott Abreuns, 

Ray Burghardt, from the NSC, came down and made 
a swing through Central America, and particularly to Costa 
Rica and Hondurasi 




A I have taken several trips with that group. In 
fact, Abrams has always made it a point to include the 
Defense Department afi st^^iMprk ipt. ciose coordination, so 



mmm 



incMi 



503 



iifimm 



60 



anytime Abrams made a trip to the area, he called me and 
said, "I'm going to be making this trip. I sure would like 
you to come along. Can you do that?" Anytime we had a 
meeting of embassadors, he invited me. 

I made a trip like that. I can't recall the 
exact date. I made a trip with t-^^ose people. I remember 
going to Costa Rica and I think what happened is that I 
didn't go to all the countries because of some other 
conflicting schedule, or I did go to Costa Rica and we 
talked to Arias. It seems to me that it was shortly after 
President Arias was elected or was inaugurated. 

Q Do you recall if you went on the Honduran leg 
of the trip? 

A I'm not sure. I'm not sure. 

Q The reason I asked, when the Washington 
contingent of that returned, ^^^^^^^^^wrote a memorandum 
to Director Casey. This would have been in early December 
of 1986, in which he outlined the trip, indicated that it 
had been relatively successful, but that as these things go, 
the Costa Ricans and the Hondurans wanted something in 
return for their support of U.S. policy in the region. 




504 



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The Hondurans specifically wanted aircraft, and 
they either wanted F5s or they wanted American financing 
to help them purchase Israeli equipment. In his memorandum 
to Director Casey , ^^^^^^^^kmdicated that he had checked 
with DOD and that the Pentagon was working the requirement 
on the F5s. 

la that something you would have any knowledge 
of, sir? 

A I don't have any knowledge of those two 
requirements — those two events -- requests by them. 




505 



WtfmSSiEBT 



62 




But the decisions that were made around the 
F5, the thrust of that whole thing was how do the Hondurans 
defend themselves? Are we going to try to take 10 years 
and build them better ground efforts so that^ican do this, 
which would mean all kinds of logistics and fire support 
and training and so forth and we would — and it would take 
a long time to do, or shall we go for a short-term fix, 
which would be to agree with them that they should continue 
to rely on their Air Force and we went for the short-term 
fix because we felt the ^ort-term threat was really there. 

Now, I won't say, though, that there wasn't some 
aspect in there of "Look what good guys we are for you; we're 
getting you the F5s. Now why don't you be more supportive 
yourselves?" That aspect was probably there. But what I'm 



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siying about is from my own personal opinion anyway, that 
was not the main point. That could have been a peripheral 
point they made. 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

Q General, I just have one last point before we 
leave Honduras and, just for the sake of the record, I 
have a document which we will mark as General Galvin Exhibit 
5. It is a document generated by Mr. George at the CIA. 
It is marked "Secret." It is dated, apparently, 13 November 
1985, and it indicates that a copy was provided to you. 

I show this to you now and I am interested - 
particularly in the last full sentence on the first page 
in item number 2, which states thati 




TThe following document was marked as 

JG Exhibit 5 for identification.) 
COMMITTEE INSERT 



IMASSIFa 



507 



wmmrr 



64 



BY MR. SABA: 
Q I would ask you if, first, you received that 
document, if you recall receiving the document. 
A No, I didn't receive this document. 
Q Would you like an extra few minutes to read 
the document. 

A Yes. But I can tell by looking at it that I 
didn't receive it. I've never read this before. 
(Pause. ) 

MR. SAXON: General, you note that numbered 
paragraph 5. at the very end indicates who it's being made 
available to. The information. 

THE WITNESS: The information. 
MR. SAXON: Yes, sir. 
BY MR. SABA: 
Q Do you recall receiving the document? 
A No, I didn't receive the document. 




508 




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MR. SABA: I have nothing further on Honduras, 



MR. KREUZER: Joe, I have some. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. KREUZER: 




fuintiiiiifr 



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LASSIHED 







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EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 

BY MR. SAXON: 
Q General, I apologize. I told you I was through 
with Honduras, but apparently I'm not. 
One second. 



HCLASSMIl 



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69 



MR. SABA: Off the record for a moment. 
(Discussion off the record.) 
MR. SABA: Back on the record. 
BY MR. SAXON: 
Q Let me then show you this exhibit on Honduras 
and ask that this be marked — I believe it would be exhibit 
6, and that's a copy for you, sir, and I'll give you a 
moment to read it. 

(The following document was marked as 
JG Exhibit 6 for identification.) 
"COMMITTEE INSERT 




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JUlOi a ^^--^ — 



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(Pause.) 

THE WITNESS: Okay. 

BY MR. SAXON: 
Q Sir, I'm not going to get into the matters in 
numbered paragraphs 2 through 4. I think we have a good 
understanding about what went on there, so I simply want 
to ask you if — by the way, this is a cable from 

of the agency, and in April of 1986. Would I 
be correct in saying that the matter referenced in 
paragraph 1 is what we discussed earlier in which you made 
your recommendation to the Joint Chiefs that there should, 
perhaps, if the Congress were willing and the legal 
arrangements worked out, there should be 




A That's right. 

Q -- and this is a further statement that the 
agency differed in that view? 

A Yes. 

Q All right, sir. That's all I have on Honduras. 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

Q Leaving Honduras, we journey south again to 
Costa Rica. Again, sir, I would ask that same opening 
question as to- Costa Rica, which is was the MILGROUP 
commander with whom you dealt and what t,he relationship 



UllrlliJtpgtfiplF m 



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between you and him was. 

A John Taylor was the MILGROUP commander for most 
of the period and my relationship with him was that I saw 
him about once a month. We had a fair amount of activity 
going on and so we got together and discussed it about 
once a month. 

Q Did that generally involve you going to Costa 
Rica or his coming to you? 

A Generally my going to Costa Rica. 
Q What briefings, if any, did you provide — I 
believe it was Lieutenant Colonel Taylor — concerning the 
assistance that uniformed U.S. personnel might provide to 
the Nicaraguan resistance? 

A I told Taylor on my first visit — I recall that 
specific one — that I wanted him to have absolutely no 
contact with the Nicaraguan resistance and that I would 
view it with great concern if he had any kind of involvement 
in that. 




il()LASMD.m 



515 




JJ^aJ/bv ja) 



UNCLASSIFIED 



516 



oNcussm 






UNCUSSIRED 



517 







Q Did you become aware of support that Colonel 
Taylor was providing to aircraft providing assistance to the 
Nicaraguan resistance? 

A No. In fact, to this day, I had concluded that 



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UNttASSIFIffl^ 



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1 '^'aylor was not involved in that kind of thing. Taylor told 

2 me that he was not involved, that he had no knowledge of 

3 activities in support of the contras on this south flank. 
^ Q Is it correct you had no knowledge, then, of any 
5 coordination by Taylor with Costa Rican airport personnel 
g involving landing of aircraft in Costa Rica? 
-, A I had no knowledge of that. 
Q Q Did you have any knowledge of Taylor's or 
Q soireone under Taylor's direction assisting in approximately 

May 1986 with a plane loaded with lethal equipment stuck in 
the mud in an airportN in Costa Rica? 

A No, I didn't know about that. 

Q Did you have any information about Taylor's 
provision of assistance at an airport he and others 
referred to as Point West? 

A I've never heard the reference "Point West." 

Q This would be an airstrip 
which was built at that time and it was used in 
assistance to the contras. Were you aware — and it was 
sometimes called Hamilton's. 

A I wasn't aware of it called Point West or 
Hamilton's, but I was aware that there was an airfield somewhere 
in there that was used by the contras. 

Q How did you become aware of that airfield? 

A I think I became aware of it — let me see 



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I'm not sure how I became aware of that. I 
might have -- no, I can't speculate. I'm not really sure 
how I got that information. I didn't get it in writing or 
something. Somebody mentioned it somewhere, and I remember 
that -- and this was -- it seems to me that I became aware of 
that — I was going to say after the 100 million. I think 
I became aware of that after the 100 million time, so it 
would have been after October of '86. 

Q All right, I'll get back to that chronologically, 
but just to follow my questions for the record, is it correct 
that you --. were you aware of any orders that Colonel Taylor 
gave to persons under his direction to service aircraft " 
landing either at that airport or at San Jose International? 

A No. 

Q Did you receive any reports concernir 




A No. 

Q Did you participate in any meetings, whether 

alone or others ,^^^^^^^^^^^^^^^^^Bconcerning 
airstrip? 

A No, I didn't. 

Q With President Arias? 

A As I said, I went to that meeting with Arias that 
we mentioned earlier. I don't believe that that meeting had 



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anything to do with the airstrip. I don't recall the 
airstrip being mentioned. 

Q There was no conversation, then, and I'm looking 
at the period roughly May 1986 with President Arias 
concerning that airstrij 




A Not that I recall. 

Q At approximately that period of time when I'm 
interested in, roughly the transition between President 
Monge and President Arias, do you recall if you knew of the 
airstrip at. that point in time? 

A Yes, I did. 




Q To refresh your recollection referring to the 
meeting in April of 1986 in attendance with Colonel North, 
newly elected President Alvarez and Ambassador Tambs, 

Abrams, Burghardt and yourself, do you recall 
the airstrip question coming up at that meeting? 

A I don't recall it coming up at that meeting, but 
I do recall that at the time of the change in presidents is 
when I became aware that there was an airstri 




521 



'VNClASStHIS' 



78 



Q Do you recall who informed you about the 
airstrip? 

A It seems to me that it was Ollie North, but I 
don't -- I can't 'Teally remember. 

Q Would that have been in person at that time or 
would it h^"e been by a memo? 

A It would have been in person because he didn't 
write any memos, and I would see him, you know -- he didn't 
write me any memos. 

.MR. SAXON: I think you, sir, would be about the 
only person- to whom he didn't write memos. 

MR. SABA: That's why I smiled. He wrote memos 
to the world at large. 

THE WITNESS: He didn't write me any. I think 
he may have told me. I seem to remember a discussion, either 
with Ollie or with Ambassador Tambs to the extent that 
there was an airstrip, that it was being used by benefactor 




BY MR. SABA: 
Q What was the conclusion of that meeting? 
A I'm not sure it was a meeting — do you mean 
the meeting that you just went into with all those people? 
Q With Colonel North, in terms of just providing 



you the information? 



WASSiREiL 



522 



25 



HttttlMSr 



79 



1 '.. A I'm not sure there was any conclusion to it. 

2 I don't think that that information was provided directly 

3 to me. I might have been at a meeting where I heard that 

4 information. There was no — we didn't have any connection 

5 at that airfield and so there was no, you know, there was 

6 no time that I was asked to do anything about it or anything 

7 like that, but somehow I bec£une aware of it, I think because 

8 I was in the meeting, in a group where that airfield was 

9 discussed. 

10 Then I asked something like, "Where is it," and 

11 I found that it was up — you know, I found the location 

12 of it. I remember that that location happened to be one -that 
was on my route f light^^^^^^^^^^^^^^^^^^^^^^^Bso 

14 could verify myself that, indeed, there was an airfield 

15 there that had been improved. 

IS MR. SAXON: For the record, sir, this secret 

17 airstrip was also on the flight path of commercial aircraft 

1g going in that area? 

19 THE WITNESS: Yeah, I would assume that's right. 

20 BY MR. SABA: 

21 Q Do you recall having discussions at this time — 

22 and again, I'm referring to the time that President Arias 

23 was elected and we have a transition in the regime, being 

24 April-May 1986, with Ambassador Teunbs about the airstrip? 
A No, I don't recall a discussion with him about 



I 






523 






80 



that. Really, with Ambassador Tantbs primarily I talked 
about military assistance programs that we had going and 

1 noticed that he was careful not to mention other things. 

I 
I knew about this airfied, but he didn't bring it up or talk 

about it, or talk about any activities that had to do with 

the contras. And I just respected his silence on that 

point. 

Q Do you recall a meeting with President Monge 
after the election but prior to the inauguration of 
President Arias in which the airstrip was discussed? 

A . No. I don't remember tJtat th^t airstrip was 
discussed in my presence with^ President Monge or with 
President Arias. 

It might have been, but I don't remember it. 

Q You don't recall any discussion of that? 

A No. 

MR. KREUZER: Do you recall, perhaps, toward the 
end of President Monge 's term in office, before President 
Arias was due to come in, that there might have been a 
meeting with some people from Washington, D.C. 




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81 



at his ranch that I attended 




[Ambassador Tambs , and I think maybe 
Elliott Abraims was there for that. 

I think that there was some -- 




BY MR. SABA 

Q Do you recall if the airstrip — or any discussion 
about the airstrip came up in that meeting with — 

A No, I don't recall that it did. I'm not sure 
that I have complete recall of that meeting, but I don't 
recall that it came up. 



cn)HJbnAyH'tfgT 



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82 



Q Moving forward in time and President Arias 
becomes president of Costa Rica, do you recall discussions 
with President Arias concerning the airstrip? 

A I went to another meeting, this time at Arias' 
house in town, in San Jose, with basically the same group 
of people, and Arias — and I don't think it would have 
come up there because there were quite a few people at 
that meeting, that is, on the Costa Rican side. There must 
have been half a dozen of the key Costa Rican Government 
figures there. 

Q . In the private meetings among the Americans 
who were there at the time, was there discussion of the . 
airstrip? 

A There must have been enough so that I knew the 
airstrip was there. I got that out of discussions, I think, 
at those private meetings that there was an airstrip and 
that we needed to try to have continuing use of it as the 
administration changed. 

Q Do you recall in those discussions whether there 
was discussion of aid, whether economic or military, to 
Costa Rica linked to or in connection with that airstrip and 
the maintenance of the airstrip?. 

A I don't remember that being brought up that way. 

Q Do you recall shortly afterward what decision 
President Arias made . about the airstrip? 



TOBlABgiflfifr 



526 



Mmffli* 



83 



^ - A Yes, he wanted the airstrip — he wanted the use 

2 of the airstrip stopped and I think he made public the fact 

3 that the airstrip was there. He wanted it known that he did 
* not support that; that the previous government did. But he 
5 did not. 

C Q Did he convey to you in advance of that decision 

7 what his decision would be? 

8 A No. 

9 Q Do you know if he conveyed in advance his decision 

10 to other members of the U.S. Government? 

11 A I don't know that. 

12 Q Following his decision concerning the airstfip, 

13 was there any further discussion as to the military assistance 

14 we would or would not provide to Costa Rica? Discussions 

15 among U.S. personnel? 

16 A No, not that I can recall. We have done more in 

17 Costa Rica since that time than we did before. I mean, 

18 we've been building roads and bridges and exercising there, 

19 *o there wasn't any discussion that I was in on that said 

20 we're going to cut back and I was never told to cut back 

21 on anything we were doing with Costa Rica. 

22 Q Were you made aware of the details concerning 

23 the Americans or foreigners using the airstrip and the purposei 

24 of the airstrip? 

25 A No. I was generally aware that benefactor 






527 



fHGlA^llimir 



84 



aircraft were coming in there. That was my understanding 
of it. I think that it went into the period of the 100 
million. I'm not really sure now. 

Q The airstrip is closed down after Arias takes 
over, basically in May of '86. 

A So it did not, yes. 

Q Obviously, the period I'm most concerned with 
is early '86, moving into the transition and then the 
airstrip is closed down. 

A Yes. What I was aware of is that benefactor 
aircraft, ao-called, were flying in and out of there, and 
they were supporting the southern front that way. 

Q During this period -- let's go back to the March 
trip, March 1986, and subsequent trip in April of 1986, I 
believe you had on both occasions discussions with Mr. Abrams. 

A Yes. 

Q Did the airstrip come up in the context of those 
discussions? 

A Not that I recall, no. 

Q Or with Colonel North? 

A No. I think those discussions came up in Costa 
Rica at the meetings we had there. 

Q And in Costa Rica, were these discussions between 
you and these gentlemen together or singularly? 

A I think they were discussions that had to do with 



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myeelf, Tambs, North -- he visited there once or twice when 

was there possibly ^^^^^^^^^^^^^^^^| sure 
about him, but I think so. 

Q Did you have any private conversations with 
Colonel North on the subject? 

A He may have mentioned — you know, normally what 
I tried to do was see North, either prior to or after RIG 
meetings or see him in his office a few times -- I saw him 
there -- to generally find out what he was doing or what 
the NSC was doing in my area, or in the area I like to considei 
mine. 

Those were basically coordination meetings, -and 
he may have mentioned — because I have recall of hearing 
of the airfield more than once, hearing of the airfield 
several times. It would be mentioned, "We're using the 
airfield for resupply." 

Throughout that time, my understanding was 
legitimate resupply based on benefactor-type activities. 




Q When you referred to "We're using the airstrip 
for resupply," do you mean "we" in the sense of the 



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1 Department of Defense or is that "we" in the sense of 

2 Ollie's reference to the United States or some other "we"? 

3 A \"We" in the sense of civilian benefactors who 

4 are helping out. My understanding of Ollie's activities 

5 was that he was the go-between and the coordinator of 
g assistance, U.S. and other foreign assistan"--? to the contras 
7 that was being done by other countries or oy U.S. people 
g who had money they wanted to put in that direction. 
g Q Did he at any time during your command ask 

1Q you in your capacity as CINC SOUTHCOM to provide support 

I'j assistance .or anything to that benefactor; 

■)2 A No, he didn't. 

13 Q I want to turn for a moment to one more Costa 

■^A Rica matter, but do either of you have any questions? 

15 MR. SAXON: I have a few, yes. 

1g MR. SABA: Why don't you go ahead for a moment. 

.|-7 EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 

^Q BY MR. SAXON: 

^g Q Let me continue on the airstrip. General. 

You indicated a moment ago that you were aware 
that the private benefactor network was using that airstrip 
in support of the southern front. Do I understand you 
correctly? 

A Yes. 

Q And would your understanding have extended to the 






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fact that their cargo included lethal suppliesl-i 

A No, I didn't know what cargo they had. 

Q Did you ever discuss the use of that airstrip 
with Lieutenant Colonel Taylor? 

A I don't believe so. 

Q Did you ever discuss the use of the airstrip 
with Army Major Francisco Alvarez? 

A No, I don't think so. 

Q Do you recall if he ever told you of efforts 
that he had engaged in, either by himself or with a 
Sergeant Sanchez at the request of Lieutenant Colonel 
Taylor to aid the private supply operations at that 
airstrip? 

A No. He never told me anything about that. 

Q Did you ever discuss that airstrip withi 




A I never discussed the airstrip. I might have 
been at — I might have heard it in a discussion where he 
was present. 

Q Did anyone ever tell you in one of those 
discussions or did you hear reference to the fact that the 
CIA directed the contruction and paid for the construction 
of that airstrip? 

A No, I didn't know that. 

Q Did you ever have occasion to discuss the 



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1 existence of the airstrip and/or the private benefactor 

2 in that war with Mr. Armitage at the Department of Defense? 

3 A No, I didn't. 

4 Q With Secretary Abrams? 

5 A I don't think so, no. 

6 » Were you aware of — 

7 MR. SABA: I have another one. Secretary 



S Noel 

9 THE WITNESS: No, no. 

10 BY MR. SAXON: 

11 Q _ Were you aware of the effort by Colonel North 

12 in the spring of '86 — I don't have the docvunent in front 

13 of me, so I don't have the precise date, for which I 

14 apologize, but there was an effort by Colonel North which 

15 he conveyed to Admiral Poindexter in the memorandum to 

15 concoct a cover story about the use of that airstrip, its 
construction, its funding, et cetera, should the press 
find out about its existence and its usage. 

Is that something which you would have any 



20 Icnowledge about? 



A No, I didn't know about the cover stor_y. 

Q And I take it, then, that you would not have 
any knowledge as to whether Colonel North was correct when 
he asserts in this memorandum that he cleared this cover 
story regarding the airstrip with^^^^^^f Secretary Abrams, 



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and Secretary Armitage? 

A I hadn't heard about that. 

Q In your discussions with Colonel North about his 
activities in being the go-between, the coordinating point 
for contra resupply efforts, did he ever tell you about 
the involvement of General Secord, Albert Hakim, Richard 
Gadd, any of the players whose names have come out in recent 
weeks and months? 

A No. He mentioned — now and then, he mentioned 
General Singlaub. He might mention something about Singlaub's 
activities,, but he didn't mention Secord or those others 
and I didn't know they were involved in this. 

Q While this doesn't relate directly to Costa 
Rica, it flows from the previous question, did he ever 
mention to you, sir, that in any way, money to support the 
contras would be coming from arms sales to Iran? 

A No, he didn't. 

Q Finally, on Costa Rica, did Ambassador Tambs 
ever tell you directly or did you hear from anyone else 
in the embassy there or in the MILGROUP that Ambassador Tambs 
had indicated to them that his mission in being sent to 
Costa Rica was to open a southern front? 

A No , no . 

MR. SAXON: That's all I have right now. 
MR. KREUZER: I have — 



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- MR. SABA: I'll get back to you, but I have — 
he covered some of my questions and I just want to follow 
on with one question for the record. 

As you have noticed, we have mentioned that 
several military personnel assigned to the MILGROUP may have 
been involved in support provided to aircraft landing in 
Costa Rica. 

You have indicated that you didn't have knowledge 
of that support, nor had you issued any order with respect 
to: that support, and I believe it was your testimony — correct; 
me if I'm wrong — that you had specifically on assuming 
command cautioned Colonel Taylor that he was to avoid such 
support. 

THE WITNESS: That's right. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 

BY MR. SABA: 
Q Assuming that I such support, in fact, took 
place, could you explain how it would occur that members 
of the military might be so engaged in the absence of a 
set of orders in the usual chain of military command? 

A I First of all, that's a very small military 
group. There are only a couple of people there. 

Second, as I said, when you look at the 
organization of the military group, as I mentioned early 
in this discussion, there is a dual chain of command in that 



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1 I have responsibility when it comes to the military 

2 expertise that those officers are providing to the Country 

3 Team, but they work for the ambassador. They are there 

4 at his convenience. He can say, "I don't want this 

5 officer anymore," or "I want to extend him," and normally, 

6 although I would have some say in that, I would support 

7 whatever the ambassador would like to do. 

8 ^ I think that possibly the reason why some of 

9 that information — or the reason for those activities, 

10 if there is a good reason — there is no good reason, by 

11 the way, but there is — one can come to some conclusions 

12 and that is that those are isolated officers who have 

13 intermittent contact with me and my headquarters and who 

14 are -- who feel that they are working for, in this case, 

15 Colonel Taylor who is working for Ambassador Tambs. 

15 (But I still can't account for any — I can't 

^j give you a good reason why they would take an order from 

13 Taylor, for example, or why Taylor would take directions 

19 that he didn't think were correct; that is, legal. 

20 Q I But it would be fair to say, I suppose, that 

21 if he was not acting on direction of his military superiors, 

22 it is presumed that he was given direction elsewhere in the 

23 embassy — 

24 A I Either that or he was acting under his own 

25 volition. 

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MR, SAXON: Sir, you've said that he would have 
had two bosses in the military chain of command, you and 
directly the ambassador. 

THE WITNESS: Uh-huh. 

MR. SAXON: Is it possible that he could have 
a boss,^^H^|^^|^^^^^^^| 

THE WITNESS: The answer to that is no. I mean, 
he knows that he's — any MILGROUP commanders knows he is 

foi^^^^H^^^^^^^^^^^^He ' s for the 
ambassador. to^^^^^^^^^^^^^^^^Hin 

sense. 

MR. SAXON: If Colonel Taylor did something at 
the direction or request ofj 

would it be your assumption that that would be 
something that he either expressly cleared with Ambassador 
Tambs or knew that Ambassador Tambs gave his approval? 
THE WITNESS: Yes. 

MR. SABA: I have no further questions on 
Costa Rica. 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 

BY MR. KREUZER: 
Q Sir, Lieutenant Colonel Taylor — did you ever 
how frequently did you see Lieutenant Colonel Taylor? 

A Oh, about once a month or sometimes it went 



once every two months. 



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1 _. Q Did he ever discuss with you or did you ever 

2 discover or know that he may have been having contacts with 

3 aunns dealersj? 

4 A No. He never discussed that with me and I didn't 

5 know anything about that- 

6 I did, as I say, reinforce with Taylor what I 

7 had told him initially, as I did with the other MILGROUP 

8 commanders, and that is, remember that you are not in a 

9 position where you can help the contras because we military 
10 can't be involved in that. 

1-) . MR. KREUZER: Okay. Thank you, sir. 

12 MR. SABA: We are certainly more than two-thirds 

13 through thjs deposition, but if someone would like a break, 

14 we can take a 5-minute break. 
LIEUTENANT COLONEL RANKIN: I'd like to — we 

1g don't need to take a break, but I'd like to at least call 
17 an independent counsel with whom we ' re supposed to meet 
afterwards and advise him — 

MR. SABA: I would like a 5-minute break. 



20 (Recess.) 



MR. SABA: Back on the record. 
Unless there are further questions about Costa 
Rica, we'll move up the coast to El Salvador. 



537 



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94 



EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

Q General, I begin again in El Salvador with the 
same initial question, which was do you recall who the 
MILGROUP commander was and how did you relate to him and 
.;hat were those circumstances? 

A The MILGROUP commander was Colonel Jim Steele, 
and I related to him primarily through visits that I made 
to El Salvador, which were about once every two weeks. Plus 
visits that he made to my headquarters which were about 
once a month or perhaps once every six weeks. 

Q What was the nature of the relationship bet\<een 
SOUTHCOM and the MILGROUP in El Salvador? What occasioned 
these relatively frequent visits? 

A Well, of course, I was the commander of Steele, 
as was the ambassador also. We've discussed that. The 
war in El Salvador was my primary — my top priority, and 
Jim had a very important job with 55 people there trying 
to influence the outcome of the war. 

Q What was the nature of the military assistance 
we provided during this period of El Salvador? 

A We were providing in terms of funding, we were 
providing something over $100 million a year, and we had 
55 people in the country who were administering that funding 
and were providing advice and assistance tactically, on the 







538 



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1 tactical level to the Salvadoran Armed Forces. 

2 Q Could you tell us a little bit more about what 

3 the nature of that tactical assistance involved? 

4 A Well, it involved everything from national 

5 planning at the national level of the integration of the 

6 military forces into the national effort to defeat the 

7 insurgency down to individual and collective training at 

8 the training centers and a tactical training and advice 

9 at the brigade level. There were six brigades. And assistance 

10 at the high-staff level in San Salvador. 

11 Q • At the brigade level, would this have involved 

12 the use of U.S. Special Forces? 

13 A Some of the training, mobile training teams 

14 which were sent to El Salvador at various times to provide 

15 training were Special Forces. 

IS Q Do you recall if there were Special Forces at 

17 Ilopango? 

18 A There were no Special Forces stationed at 

19 Ilopango. There might — there is a Salvadoran airborne 

20 battallion stationed there and there are other Salvadoran 

21 units which are like Special Forces units stationed there. 

22 So at different times, there might have been small teams of 

23 Special Forces, U.S. Special Forces, training the Salvadorans 

24 Q Would it be fair to say that our — that those 

25 individuals would have reasonably accurate knowledge of 



THwiMmmTHnrP 



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^•^^ 



9« 



military eventi in their districts? 

A Yes. 

Q Would it be reasonable to presume that they 
would have knowledge of military movements and placement of 
significant equipment? 

A When you say "they," you mean Special Forces 
people or all of — 

Q Yes. No, the mobile training units. 

A They might, they might, but remember, they 
would come and go. They were not stationed there. They 
would come 'and go. They might stay a week or two or maybe 
even a month. 

Q I direct the same question, then, to the next 
level up, which would be did their superior officers? 

A The people who were stationed there on a 
permanent basis would — and if the individual's job 
took him out to a place, say at Ilopango, he would know 
what was going on at Ilopango. He would know if aircraft 
case in and out and other activities unless they were 
very closely covert activities. I assume he would know. 

Q Were you aware of a warehouse , 




I was aware of a warehouse or warehouses! 



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as to the warehouse and the material contained 
In the warehouse? 

A No, that I know of. 

Q How did you become aware of the warehouse? 
A I talked to members of the military group, and 
they told me about it. 

Do you recall to whon you spoke? 
A 'I think it was Jim Steele. 

Q And he informed you about this warehouse? * 
A He Informed me that there was a warehouse 
Q By any chance, would you have had an occasion 
to speak to Master Sergeant Bazelwood? 
A Mo, not about this. 

Q What did Colonel Steele tell you about the 
warehouse? 

A Colonel Steele told me the warehouse existed. 
He said that this CIA representative — not CIA representative 
but the — 

MR. SAXONt Felix Rodriguez. 

THE WITNESS! Felix Rodriguez. 

MR. SABAt Also kno%m as Max Gomez. 

THE WITNESS: Also known as Max Gomez, knew about 



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That's what 



it-| 

Jim told me. 

BY MR. SABA: 

Q What did you come to understand of the role of 
Felix Rodriguez? 

A Well, I saw Felix Rodriguez when he first Ccime 
in and his role was to assist in what were called 




a high-ranking 
guerrilla leader, was picked up in one of these strikes. 

Max Gomez would go on those strikes. He would 
assist the Salvadoran Air Force in those operations. My 
impression also was that Max Gomez liked to get into other 
things, too. I mean, he seemed to be a very active, very 
dedicated perse 

Q Did you come to know that he provided assistance 
as well to the contras? 

A I don't know whether I did come to know that 
specifically or not. I'm not surprised that he did. My 
impression of Felix Gomez was that if he provided assistance 
to the contras, it was definitely some — it was an add-on 






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1 to- the main thing that he was doing, which was this 

2 training in tactical operations. 

3 Q Do you Icnow if any members of the MILGROUP 

4 provided any assistance to Max Gomez in his activities 

5 relating to the contras or the resupply effort? 

6 A No, I did not know that. I heard recently 

7 about providing Max Gomez with an automobile. I had not 
6 heard that until maybe a couple of weeks ago. 

9 Q Apart from what you may have heard a couple 

10 of weeks ago or in the press in connection with the current 

11 hearings, did Colonel Steele or anyone else from your 

12 MILGROUP in El Salvador inform you that — of activities 

13 in support of the contras? 

14 A No. Colonel Steele was in a very difficult 

15 position in which I felt he was. He had to be out at 

^g Ilopango all the time; he had to be working with the Armed 

17 Forces there; he was the military man in charge there of 

^Q military activities, and therefore, 

I worried about Steele and so I 

20 talked to him fairly often, saying, "Don't have anything to 

21 do this^^^^^^^^^^^^H If are or 

22 ^^^^^Hstay away from it." 

23 I, several times, discussed this with him, 

24 saying words to that effect. 

25 Q Referring back to Exhibit 4, which was simply a 



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schedule of an itinerary of these individuals, you will 
note that one stop, though apparently a relatively brief 
one, was at Ilopango. Do you recall the purpose for stopping 
there and what transpired? 

A Right now, I don't, no. 

That was the trip in which the basis of the 
trip -- if I'm not mistaken, wasn't that the trip to 
encourage — 

Q This was the March 1986 trip and it shows a 
stop — and presumably — the aircraft left Tegucigalpa 
and went to Ilopango, and according to the exhibit, you 
joined the party at Tegucigalpa and, therefore, would have 
accompanied them to Ilopango where the party appears to have 
remained for several hours. 

A I'm not sure that I did accompany them to 
Ilopango. What happened on this was that I had taken leave 
and so I came — I was at the beach with my family and I 
came up to Tegucigalpa, but I was also, although I wanted to 
respond to Elliott Abrams' request, I was also kind of 
anxious to get back to Panama. I'm not sure I went over 
here. I think I might have come up in my own aircraft, and 
then just turned around and flown back. 

Q When you refer to "up," you mean Tegucigalpa? 

A To Tegucigalpa, that's right. 

Q So you do not recall having accompanied the 




544 



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1 party to Ilopango? 

2 A No, I don't. I my' have accompanied them, but I 

3 don't recall anything about that. 

4 Q Do you recall why the party went to Ilopango? 

5 A This was a visit to the area to encourage the 
g leadership in Honduras and El Salvador -- encourage them 

7 about the nature of — the sustained nature of our support. 
I believe the Poindexter memo is associated with this 
visit? 

1Q Q That's correct, sir. 

^^ A ■ And what Admiral Poindexter says there is 

<2 correct, as I understood the visit. It was to provide -. 
•13 encouragement. 

Q Who would have been at Ilopango to encourage? 
A It would have landed at Ilopango in order to 
go to see President Duarte, I assume. 

Q Yet they went on to San Jose, Costa Rica. There 
is no other stop at El Salvador, so your understanding 
was that they were going to see the president at Ilopango. 

A I think so. Let me look at this again. It 
went "Arrive Ilopango at 1305 and depart Ilopango at 1530," 
so that's simply the airfield at San Salvador and President 
Duarte, of course, has his office there in San Salvador, and 
I assiime that what this was was a visit to see him. 

Q Generally, are you familiar with a piece of 



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equipment called a KL-4 3? 

A I think it's a piece of secure equipment. 

Q Do you have one for your use? 

A I don't call it a KL-43. I had different ways 
of securing a telephone. 

Q It's a TRW-manufactured — sometimes referred 
to as a TRW. 

A No, I don't have tbat particular piece. 

Q Were you aware that Max Gomez had one available 
to him? 

A -No. 

Q Were you aware that Colonel Steele made use ' 
of the machine for particular secure transmissions? 

A No. 




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You know, there was a question — there's a 



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question in my mind as to whether it wa^^^^^g activity 
or North's activity. You remember that -- and I think 
this occurred at about the time that there was a 
transfer over. In other words, it was more close to, 
it seems to me, close to the time when the Boland Amendment 
was going to go out and the hundred million was coming in 
because I remember that there was a question about who's 
running what. This is a North^^^^^question. 

Q Would it help to recall if Mr. McFarlane or 
Mr. Poindexter was the National Security AdvisEr, that 
taking place at the end — the transition being at the end 
of '85? 

A It seems to me that Poindexter was there then. 




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Q Was it your understanding from your conversations 
witq^^^^Jjand North that they were causing this assistance 
to take place; that is, if you were asking why this is going 
on and when will it end, the implication is that the person 
to whom you're directing your inquiry has some direction 
and control in that. 

A Well, my understanding was that they had 
connections with the people who were doing this and that they 
could make it stop. I really didn't think that Ollie North 
was running an operation. I thought he was monitoring an 
operation. 

I didn't think that -- I'm convinced that^^^^B 
Iwasn't running an operation that was illegal, so that's 



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why I think the dates must have been after the Boland 
Amendment part because really^^^^w^asn't into that kind of 
effort prior to the Boland Amendment.^^^^^l was always 
involved in bringing up the task force that was going to 
support the State Department in their efforts. 

So I don't want to imply that^^^H wa= doing 
something wrong there, I think, because I don't think he 
was. My knowledge now is that^^^^fwas not. So, whether 
I mentioned it to him simply because he could influence — 
or he could mention it to North or something else like that, 
I don't knoV. 

I don't believe we're talking about something 
where^^^^H was running an operation at the time when you 
couldn't do that. 




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A Well, at that time frame, I must have spoken 

to North about it, and not ^^^H because — 

Q Excuse me, this would 've been October '86 in 

looking for a calendar period. 

LIEUTENANT COLONEL RANKIN: I think I can help 
you clarify that. 

THE WITNESS: Yes. 

LIEUTENANT COLONEL RANKIN: I think it was in 
the February '86 time frame that you — that Steele made 
you aware of this and then you brought that to the 
o-f ^^^^^^Hand 

THE WITNESS: But I'm trying to think of why^ 
would^^^^^H-- why would I -- 

LIEUTENANT COLONEL RANKIN: That was at the time 
of the humanitarian assistance — 

THE WITNESS: Okay, maybe that's what it was. 
I was trying to figure out why I would tell^^^^^becausc 
I do remember talking toj 




553 



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BY MR. SABA: 
Q I understand that, sir, but apart from the 
humanitarian assistance, there's a suggestion here that it 
was understood that^^^^^^^^land North, together or 
separately, had the ability to direct or stop, at the least, 
the flow of materials, including lethal materi 




and we're looking at the period of the first six months of 
1986. 

A Well, those were the oily contacts that I had who 
would know anything about this. I wasn't sure that they 
could do anything about it. But I mentioned it to both of 
them, saying, in effect, "If you can make this stop, you 
should take a look at doing that." 



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But I didn't have anybody else to go to. I 
didn't know any other contact. 

Q Just so we're clear on the record, my understandin 
then, is that you went to^^^^land Mr. North in an effort 
to suggest that the assisti 




A Yes. 

MR. SABA: All right, I'd like to stop for a 
moment. Do -you — 

MR. SAXON: On El Salvador? 
MR. SABA: On El Salvador. 
Why don't you go ahead. 
EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 

BY MR. SAXON: 
Q General , let me go back to the^^^^^Vwarehouse 
and ask you what you knew about its construction. Was it 
already there when Colonel Steele informed you about it? 

A My impression is — yes, it was already there 
when he told me. 

Q Did anyone tell you. Colonel Steele or otherwise, 
about who constructed it or had it constructed and who paid 



for it? 



MASSIOa. 



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(WSt/ISSIS^T 



112 




Q Did Colonel Steele ever tell you that he 
rendered any assistance in its construction? 

A No. 

Q Do you know, or did you ever have any dealings 
with a Lieutenant Colonel Rankin, Air Force, not Lieutenant 
Colonel Rankin here today — 

A Yes. 

Q 

A 

Q Do you know him, sir? 

A ■ Yes. 

Q Did he ever tell you anything about this 
warehouse? 

A No. 

Q I would take it, then, you would not know 
whether he had any involvement in aiding the construction 
of that warehouse? 

A I wouldn't, no. 

Q Let me ask you a couple of questions about 
Colonel Steele. Did he ever indicate to you that he was 
aiding in any way the private benefactor resupply network? 

A No. In fact, I told him to make sure he didn't. 

Q To your knowledge, did he ever provide any 
tactical information, weather information or anything else 
about locations of landing zones or anything that would have 



556 



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1 as'Sisted the air drops in the southern front? 

2 A Not that I know of? 

3 Q As far as you know, did Lieutenant Colonel 

4 Ranking aid the private supply network in any way? 

5 A Not that I know of. 

6 Q Let me ask you about Felix Rodriguez through 

7 the median of Colonel Steele. Did you and Colonel Steele 

8 ever talk about Felix Rodriguez or Max Gomez? 

9 A Yes. 

10 Q Did Colonel Steele ever tell you that Felix 

11 Rodriguez was aiding the southern front? 

12 A No. 

13 Q Did he ever tell you that that's the reason why 

14 Felix Rodriguez was sent to El Salvador? 

15 A No. In fact, he told me that the reason Felix 

16 Rodriguez was sent was to work the^^^^^^^^operations . 

17 Q Did he ever refer to Felix Rodriguez as the 

18 United States Government's no-pay mercenary? 

19 A No. 

20 Q Did he ever tell you that he had been assigned 

21 the task of monitoring the activities of Felix Rodriguez 

22 in assisting the southern front? 

23 A No. 

24 Q Let me ask you some questions directly about 

25 Mr. Rodriguez. 



MMSIFJED.. 



557 



VNtl/^tRBr 



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Did you ever talk to him yourself? 

A Yes. 

Q And did he ever tell you he was engaged in 
any activities to aid the southern front, specifically 
the contras operating there? 

A No. 

Q Did you ever talk about Felix Rodriguez with 
General Gorman? 

A No. 

Q Would you have any knowledge that General 
Gorman was 'instrumental in having Felix Rodriguez brought 
to El Salvador? 

A No. 

Q Do you have any knowledge that General Gorman 
provided a plane to fly Felix Rodriguez from Panama to 
El Salvador for his initial meetings] 




A No. 

Q What about any cable traffic initiated by 
General Gorman to Ambassador Pickering or from Ambassador 
Pickering to General Gorman about Felix Rodriguez.. 

A I didn't see any. 

Q Would you have any knowledge of the fact that 
General Gorman assigned or asked Colonel Steele to monitor 
the activities of Felix Rodriguez with regard to 



iicus^ififa. 



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DNiLffSStRlD^ 




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OSiSASSKlSlfe' 



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- Q Final question that I have with regard to El 
Salvador, were you aware of any efforts by Master Sergeant 
Hazelwood to participate in mobile training teams that would 
travel throughout Central America and providing training 
to the contras? 

<\ No. No. Hazelwood was a trainer of the Civil 
Defense and that's what I thought he did all the time. 
MR. KREUZER: I have a couple. 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. KREUZER: 

Q ' Sir, across tovm, I believe, is the national 
military headquarters in El Salvador, and General Blandon 
is the commander in chief — 

A That's right. 

Q Did you know him? 

A Yes. 

Q Did you have any discussions ever at all with 
him about contra support or status or anything like that? 

A No. 

Q Colonel George Maynes works, I believe, in that 
headquarters. 

A Yes. 

Q He's the U.S. ~ 

A He's the attache. 

Q Attache. Did he ever have any discussions with 



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22 
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1 you ~ 

2 A No. 

3 Q — about 

4 A Not about the contras, 

5 Q And there's a Lieutenant Luis Rodriguez, I 
g believe, who was also there. 
J A Not with him either. 
a Q No discussion. 



A No. 

MR, KREUZER: Okay, thank you. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 

BY MR. SABA: 
Q General, I have an exhibit which I think is 
appropriate in continuing this El Salvador matter. I believe 
it will be General Galvin Exhibit 7, and, sir, take a few 
moments to review it. 



JG Exhibit 7 for identification.) 
COMMITTEE INSERT 



Wn 



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10 



18 
19 
20 
21 
22 
23 
24 
25 



HIIL 



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UUIITLU' 

1 - (Pause.) 

2 MR. SABA: For the record, the exhibit is a 

3 memorandum. It is classified "Secret." It is for John 

4 Poindexter from Oliver North, and is dated January 15, 

5 1986. It indicates as its subject a meeting with General 

6 Jack Galvin, USSOUTHCOM. 

7 It is a one-page memor€mdum. 
g (Pause.) 

9 MR. SABA: First, sir, I'd as)c you if you are 

familiar with the meeting that is referenced, Thursday, 
11 January 16,' 10:30 a.m.? 

■^2 THE WITNESS: Yes. '' 

13 BY MR. SABA: 

Q Sir, directing your attention to the first 
paragraph of this memorandum, do you provide this 
information as to your recommendations on plans for effective 
17 support to the democratic resistance forces in Nicaragua? 
A I thinJc that this was about the seune time that 
we were in a discussion with the JCS on what should be the 
military support. This is the thing we talJced about earlier. 

You )tnow my views on that. The meeting with 
Admiral Poindexter was — I believe this was the first 
meeting that I had with him, of a total of about two or 
three meetings. Poindexter, if I'm not mistaken, was fairly 
new at that time — wasn't that the time that he came in? 

UMPilL^JFJL 



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1 - Q Essentially correct. 

2 A And I wanted to find out what his views were and 

3 what the NSC's views were with reference to different things 

4 in Central America, but especially with reference to 

5 Nicaragua. How did the NSC view Nicaragua? 

6 Since I had been discussing earlier this question 

7 of how do you support the contras, if you are allowed to 

8 do military support, and I had also discussed that with 

9 North and I think with Abrams and with^^^^^l I can see 
10 that Ollie would put that in there, but I don't believe we 
It actually eVen discussed that matter because, first of all, 

12 I was presenting that to the JCS so I wouldn't take something 

13 that I hadn't gotten an answer from the JCS on and take 

14 it up with the NSC, although I might have touched on it. I 

15 might have said something like, "It would be better to 

1g support this with military — with a military organization, 

17 rather than the CIA." This represents — 

13 Q If I can, sir, in arranging for this meeting, 

19 there is an implication in this first paragraph that you had 

20 a prior discussion with Colonel North as to vrtiat those 

21 specific recommendations might be. Did you have such a 
discussion? 

A I think that I told North that I'd like to meet 
with Poindexter. In fact, I'm sure that I told North that 



25 I'd like to meet with Poindexter simply to make the contact 



wmmL 



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HNf^iSSra 



120 



SQ. that I would know him. I didn't know John Poindexter up 
to that point. 

But also, I had discussed, although I don't 
think it was connected with this meeting, I had discussed 
with North or he had discussed with me -- we had discussed 
what would be the way the military could support the contas 
if the military were told to do so. 

As I say, I may have -- and I was drifting into 
this second paragraph, if you don't want to -- 

Q Please, go ahead. 

A • Well, I may have mentioned this to Poindexter, 
but it wasn't the purpose of the meeting. The purpose of 
the meeting was for me to talk to Poindexter about Nicaragua 
and how did the NSC see the different facets of this question 
of Nicaragua. That's what I did discuss with him. I 
remember saying that I wanted to check out with him my 
impression of where the NSC was coming from and see if I 
had it right. 

Q What did he tell you? 

A He said, "Yes, you do have it right."] 




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24 

25 




I said, "Thank you. That's what I really wanted 
to know. " 

Q Did you ask him what they do intend to do? 

A No, I didn't. You know, I felt that I knew that 
if they didn't intend that -- and I really, this was just 
sort of clearing the air, I felt that I needed to hear from 
those guys bn that question because I was the military man 
down in the region and I didn't want things to be going bn 
that I didn't know about. 

If anybody was really thinking about something 
like that, I needed to know it. And he said -- and I said, 
"I don't believe you are thinking that way at all," and he 
said, "You're absolutely right; we are not thinking that 
way. " 

Q Was there any discussion with Admiral Poindexter 
concerning the private support that was going on at the time? 

A No. Not that I remember. But this — 

A With Colonel North? 

A No. This memo is, to me, kind of a typical North 
memo in which it implies that a whole lot more is going to 
happen than was really intended to happen in there. 



liAi£US£iElEJl, 



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fHoUSSIfJfflr 



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2 

3 
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6 
7 
8 
9 
10 
11 
12 
13 
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16 
17 
18 
19 
20 
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25 




Q How would you be able to form a judgment as 
to whether this is a typical North memo if you told us 
earlier you never got a memo from Ollie North? 

A I won't say it's a typical North memo; that's 
probably semantics are not right. I haven't read any of 
North's earlier memos, but it was typical of Colonel North 
in that there was always a tendency, as I saw it, to somewhat 
exaggerate what was going to be discussed or said. There 
was a certain element of exaggeration which came out often. 

Q Do you believe that Colonel North was attributing 
perhaps to you or to General Gorman in paragraph 2 views 
that may have been his own? 

A I think so. I don't -- for example, I don't 
know that Gorman was an active -- I know Gorman very well, 
and I don't know that he was an active proponent for a greater 
role for the Special Forces. Gorman never mentioned any of 
that to me, anywaviBViiiiSorman and I have been in close 



566 



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2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

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16 

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19 

>) 

•21 
22 
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24 
25 



contact for years. I feel that among the military people, 
I know him quite well and it doesn't really sound like him. 

Q Did North express to you his dissatisfaction 
with the ability of the agency to produce a coherent military 
strategy? 

A I think that there was always a question that 
North felt that the agency couldn't do this job very well, 
and I tended to agree with North, but then I felt that that 
got blown out of proportion and I think it is here. In 
other words, I felt that — I didn't feel strongly that the 
agency could not do the job. I felt the agency could do 
the job, providing they had the right people, and — 
but I felt that the military could do it better. 

I think that that got exaggerated, too. 




567 



imSSBEftr 



124-A 




MR. SAXON: Were there any discussions that 
you were party to on this topic that would have involved. 
Master Sergeant Hazelwood? 

THE WITNESS: No. 

MR. SAXON: Were you aware of any discussions 
that would have had him going to Costa Rica and working 
for Ambassador Tambs on missions arranged or directed by 
Colonel North? 

THE WITNESS: Ambassador Tambs once asked me for 
help in getting Hazelwood to, when he finished his tour in 
El Salvador, to come and work for him in Costa Rica. 

EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 

BY MR. SAXON: 
Q Did he say what he wanted Hazelwood to do for 



him? 



UNCLASSIFIED 



568 






^)^t"»5 :1 i'ii'i 




iFIED 



h^^ 



r^ 



^aJ/BD j^ 



/o l^i^ 



^ j 



ffilASSIFIED 



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125 



1 

2 
3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

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15 

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18 

19 

20 

21 

22 

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24 

25 



A He did, and as I recall it now, it was in 
training of the Royal Guard at Morcielego, which is where 
we had a training base and we were training at that time 
Royal Guard. But I'm not really sure of that. What I am 
sure of is that he said -- he asked me to use my good 
offices to see if I could get Hazelwood to come over there 
and I said, "Does Hazelwood really want to do that; he's 
already spent all this time in El Salvador. I should think 
he'd want to transfer back to his unit again in the States," 
and he said, "No, I've discussed it with Hazelwood and he 
would like to do it." 

So I said, "All right, I'll see what I can dp-" 
Q Did the ambassador specifically have a 
recollection of where he might be assigned in Costa Rica? 
A I don't remember now whether we discussed it. 
I think we did, but I can't remember, but it was something 
routine. In other words, it was work with the Royal Guard 
or do something. It wasn't something to do with the contras. 



Q General Galvin, returning to the exhibit and the 
final paragraph ctf. tlifi^exhiJpiyt » which b a ingc "Finally," 



670 



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11 

12 
13 
14 
15 
16 
17 
IS 
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1 looking at the second sentence — second and third sentence, 

2 it indicates that "General Galvin is cognizant of the activit 

3 underway in both Costa Rica and at^^^^^^^Bln support of 

4 the DRF." And it goes on to state that "General Galvin 

5 is enthusiastic about both endeavors." 

6 Would you characterize those sentences as 

7 correct or not? 

. A I would characterize them as semantically 

_ correct in the sense that I was cognizant. It depends on 

what he means, of course. 

. Let me answer it this way. North had told me 
about the airfield and had discussed other matters 

But I don't know that 
I was or am today cognizant of all the activities that were 
going on. But I did know about- those. 

Q Was this a conversation just prior to the meeting 
with North? 

A I think it probably was. 

Q Do you recall the conversation; what North told 
you about the airfield; his involvement with them? 

A I remember at one point that North said something 
like, "Well, we finally have the airfield," but this was 
in a conversation, I think, in San Jose, where North said, 
"We finally have the airfield operational," or something 
like that. "There had been some problem with a contractor and 



IMliSSlHEtt- 



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iUli^frir' 



127 



now we will be able to get supplies to the southern front." 

Again, I thought that what we were talking about 
was benefactor supplies, so I probably was enthusiastic. 
I am an enthusiastic supporter of the contras in the sense 
that I think they can win. 

Q Did he convey to you that these supplies would 
include lethal equipment? 
A No . No . 

Q Did he indicate to you who would be actually 
bringing in these supplies? 
A No. 

Q You indicated that earlier that you were not . 
really enthusiastic about| 
A That's right. 

Q Did you convey that to Colonel North -- 
A Yes. 

Q — because he seems to indicate that, in fact, 
you were enthusiastic about] 

A That's right, he does. But in fact, I was the 
opposite. 

Q He refers in his last sentence to going to 
Costa Rica with you after the meeting, which occurred 
January 16th. Did he accompany you back to Costa Rica after 
that meeting with Admiral Poindexter? 

A There was a — I think that that was the same 



iiNHi t^mvi\ 



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Bttttil^t^ 



128 



1 date. Ollie North took a vacation; he took leave, and took 

2 his wife and was traveling to — or wanted to get a flight, 

3 as I understood it, anyplace where he could get out on a 

4 beach and relax for a while. So I said to him, "Why don't 

5 you come to Paneuna? I fly back and forth about three times 

6 — about once every three weeks. I could at least get you 

7 in one direction if you went out and signed up because you 

8 can go out and sign up for space available and fly on an 

9 airplane, and my airplane, because of the times it leaves 

10 and everything, is never full. I always take everybody that's 

11 available, but it's never full." 

12 So, I said, "Why don't you fly down to Panama?" 

13 He said, "I'll think about it," and then later, he said, 

14 "I don't want to fly to Panama, but Ambassador Tambs has 

15 asked me to come down and stay with him." He was friendly 

16 with Ambassador T2unbs and so I flew him down to Panama. I 

17 couldn't stop in Costa Rica. I flew him down to Panama and 

18 then he got an airplane ride from Panama — he got a 

19 civilian airplane, you know, an airlines, and flew up to 

20 San Jose. 

21 MR. SAXON: Do you know about when that would 

22 have been, sir? 

23 THE WITNESS: I think it was this date that we're 

24 talking about here. It must have been right after this 

25 because he's saying, "I will be flying with General Galvin 



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t(5' Costa Rica after the meeting and will return Tuesday 
morning. " 

This was — he went down just for a few days; 
not a long time. He went down for, you know, three or four 
days' vacation. 

BY MR. SABA: 

Q He accompanied you, then, on the return flight 
to Panama following the meeting with Admiral Poindexter? 

A I think it was that flight back; yes. 

Q Do you recall your conversations with him on 
that flight to Panama concerning the meeting that the memo 
discusses? 

A No, I don't recall that. I'm sure we talked 
all the way down, but I don't recall something about that. 

Q Did you make any memorandum of your conversations 
with Colonel North? 

A No. 

Q Did he ask you whether Admiral -- was he present 
in the meeting? 

A He was present at this meeting. 

Q He was present at the meeting — 

A Yes. 

Q — with Admiral Poindexter. 

Did he express any opinion as to how the meeting 
had gone? 




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1 " A I don't recall that he did. 

2 Q On the return flight, did he discuss the 

3 activities ^^^^^^^^H or , in particular, Felix Rodriguez? 

4 A I have no -- I have no recall specifically of 

5 what we talked about on that flight. 

6 MR. SAXON: Did he mention anything that was 

7 aoing on elsewhere in the world, such as Iran? 

8 THE WITNESS: You mean on that flight? 

g MR. SAXON: In that time period that we were — 

10 was there any opening to Iran; we were thinking of shipping 
■J1 arms to Iran? 

12 THE WITNESS: No. Ollie talked to me about ' 

13 things -- and you know, I would see him sometimes and he would 

14 say, "I'm going to be making a flight to England. I've got 
•jg to work the hostage problem." I knew he was working the 

■jg hostage problem in the Middle East and I was astounded, in 
17 fact, to find that the same guy who would be working the 
1g benefactor problem in Central America would be working the 
ig hostage problem in the Middle East, and a couple of times, 
2Q I said, "I can't believe the kinds of things they've got you 

doing. How do you work this and then go over and work the 

hostage problem in the Middle East?" 
He said, "Well, I do. " 
I was surprised by a lot of things, but I was 

definitely surprised by that 



UNCLASSIHED 



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rnimm 



131 



MR. SAXON: But did Iran ever come up? 
THE WITNESS: No, he didn't ever bring up Iran, 
When he said "England, " 




And he, a couple of times, said, "I think that I am 
going to be able to get some hostages freed in the Middle 
East. " 

BY MR. SABA: 

Q Did he discuss with you in this time period, or 
at any other time period, but I think it might well have been 
in this time period, obtaining HAWK missiles? 

A No . 

Q Did the conversation of HAWKS or TOWs arise on 
that airplane trip or in this period of time? 

A No. He mentioned several times to me Project 
Democracy, which I understood was this loose tie-in -- I 
understood it as a loose umbrella organization for people 
who wanted to support the contras . And he would say to me , 
"I'm working an issue today in Project Democracy," or 
something like that. 

MR. SABA: I have nothing further on El Salvador. 
I do have a few questions on Paneuna. 

EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 
BY MR. SAXON: 

Q Just to follow on this point and make sure that 



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we^ve covered this issue, at any point, did Colonel North 
ever ask you, as an Army officer, about TOW missiles; what 
they cost; what the pricing of them would be; anything like 
that? 

A No, no. 

Q Did he ever indicate what we might be providing 
to anyone else to get some of those hostages back? 

A No. 

MR. SAXON: Okay, that's all, Joe. 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
' BY MR. SABA: 

Q Moving on to Panama, General, I have a few 
questions .^. 




577 



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33 ^A^^ 






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EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 

BY MR. SABA: 
Q ' Do you know why, or by what authority. North 
would exclude you from knowledge] 



A No, I don't know precisely why. North excluded 
me from a lot of things that were going on in my region. 
The purpose of myknowing North and going to see North was 
to find out what's going on in Central America because I 
cim the guy militarily responsible through the U.S. Government 
for whatever happens or fails to happen in Central America 
from a military point of view. 

That's why I went to see North; that's why I went 



lall the other people. But North didn't 



tell me the things I needed to know. 



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\o 

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Q Sir, do you have any knowledge of involvement 
by the government or the Armed Forces of Panama in any 
way with the resupply effort for the contras? 
A 'No. 

MR. SABA: I don't have further questions on 
Pancima. I have a few standard questions that we ask, but 
you may have some . 

EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 
BY MR. SAXON: 




m/'NT'x r^T-i^^T M nil 



581 



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To i^U 



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BY MR. SABA 

Q General, I have a few questions of a nongeographicc 
nature. Do you know of a Ron Martin? 
A No. 
Q Do you know of any weapons warehouse maintained 

by a man called Ron Martin? 
A No. I know of a place^^^^^^^^^Hcalled the 
Supermarket . 

Q What do you know of the Supermarket? 
A The Supermarket, as -- I have never been there or 
seen it, but I understand that a lot of weapons came in 
from somewhere over seas ^^^^^^^^^^^B and were stored in 

a place called the Supermar 

which somebody 

thought they were going to make some money by reselling these 
weapons to the contras. 

The reason I've -- and I've heard often mention 
of the Supermarket around the embassy^^^^^^^^^^^H because 
the ambassador has been directed, and has been adamant that 
nothing out of the Supermarket will be paid for by the 
United States. That's where I keep hearing the term. 

Q Did you hear that those weapons, in fact, were 
intended for the contras and were seize 

A I'm not really sure of the details on it. 

Q Did yotfa^i^ve jn^ knowled<je_of , or hear talk of 

w. 





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price-gouging on the weapons in which the private suppliers 
were selling to the -- 

A Yes, I did. 

Q What did you learn of that? 

A I heard that the private suppliersi 





>re getting some kind of a cut out of 
selling the weapons to -- or the ammunition or whatever else 
to the contras and were charging them for t rucking the 

weaponsj 

That's what I — conversation to that effect, 
that there was price-gouging going on. 

Q Do you recall who you would have heard that 
information from? 

A It was around the Country Team in the embassy 

And the point was always, "We're not going 
to let this happen; we're not going to be involved in it. 
We will not be supportive of this in any way." 

Q Was there any indication that the middlemen 
involved, the suppliers, were making large profits on the 
sales? 

A Yes. 

Q What was the nature of that talk? 

A Well, just what you're saying is about what I 
know i)Out it, that the talk was that middlemen had made 




584 



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' or were trying to make large profits on it. 

2 Q By any chance, I may have asked you this, had 

3 you met General Singlaub? 

^ A I have met him, but only just to say hello. 

5 Singlaub has never discussed anything with me. 

6 Q So you've not had any discussions with or heard 

7 anything from General Singlaub concerning the price of these 

8 weapons? 

9 A No. 

10 Q Do you know, or have you met, Adolf o Calero? 

11 A No. 

12 Q Arturo Cruz? 

13 A No. 

14 Q Alfonso Robelo Corlejas? 

15 A Robelo, I think I met just once, you know, 

16 walking by and someone introduced me and I said hello, but 

17 I don't really — the three men, I don't know at all. 

18 Q And Eden Pastora? 

19 A No. 

20 Q What about Don Gregg? 

21 A No. / 

22 Q You haven't met Mr. Gregg? 

23 A I don't think so. 

24 MR. SABA: I'd like to review my notes a moment. 

25 Do you have some further questions? 



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vcwli^SlllSIr 



146 



EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 
BY MR. SAXON: 

Q Let me run through a few things. 

Were you made aware at any point an outfit called 
CMA, which stood for Civilian Military Assistance, and 
later Civilian Materiel Assistance operating out of the 
south, headed bv a gentleman named Tom Posey, which was 
attempting to provide arms through the private supply 
operation for the contras? 

A I've heard references to it, but that's really — 
about what you've said is about what I know. 

Q You never met Mr. Posey? 

A No. 

Q For the record, I'd like to run through a number 
of names and ask if you were ever asked or instructed by 
any of these people to be involved in any way in assisting 
the facilitating the private supply or private benefactor 
network. 

First, President Reagan? 

A No. 

Q Mr. McFarlane, when he was the National Security 
Advisor? 

A No. 

Q Admiral Poindexter? 

A No. 






586 



■WSIft^HBlr 



147 



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 




Of those people I've named, can you recall who 
you transmitted any information upward to with regard to the 
airstrip in Costa Rica, the private supply operations in 



IINHI Hf;! 



587 



UNJHSSBffiT 



148 



or any of the things you told us you got knowledge 
of one way or the other? 

A No. I didn't make reports about the benefactor 
flights or any of that. I knew it was going on. I assumed 
that everybody in the U.S. Government knew it was going on, 
and I didn't make any reports about it. 

Q Did you ever have occasion to discuss any of 
those topics with Nestor Sanchez before he retired from the 
Pentagon? 

A I saw a lot of Nestor Sanchez and I'm sure that 
we touched on those topics because I made contact with him 
almost every time I came back to the Pentagon and ha visited 
the region often. In terms of anything substantive, I don't 
remember anything substantive about it, except that we always 
exchanged information. We coordinated back and forth. 

Q Is it reasonable to assume that if you had been 
made aware of the airstrip or the operations! 
or any of the other matters that you've told us about this 
morning that you might have passed that on to Mr. Sanchez? 

A I might have. I might have. 

Q But you don't specifically recall having done 
so in those cases? 

A No. 

Q I've got a couple more documents to enter in, Joe, 
if you want to go ahead and do that. 




JlNCU^lFlfJ) 



588 



11 



16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



BNCtilSSIPIIflT 



149 



1 - MR. SABA: Why don't you go ahead 

2 I also have some documents, but I think that 

3 they're going to be, in that case, identical, so why don't 

4 you go ahead. 

5 MR. SAXON: Okay 

6 BY MR. SAXON: 

7 Q General, do you recall a visit to Central 

8 America in late 1985 right after Admiral Poindexter had 

9 become the National Security Advis^? 
■)0 A No 

■ MR. SAXON: I want to introduce several 

■\2 documents pertaining to that trip. The first one, which" would 

•13 be marked as deposition exhibit 9 is a memorandum for 

14 Admiral Poindexter from Colonel North, dated December 6, 1985 

1g (The following document was marked as 



JG Exhibit 9 for identification.) 
COMMITTEE INSERT 




ii^iflEIL 



589 



UNtLAssngr 



150 



(Pause. ) 

MR. SAXON: Have you had a chance to read it 
yet, sir? 

THE WITNESS: Yes. 

BY MR. SAXON: 
Q I specifically want to direct your attention to 
approximately the first third of this single paragraph, 
and that is in which Colonel North is talking about an 
upcoming trip by Admiral Poindexter to Central America. 

The third sentence and fourth sentence and I guess 
the fifth sentence is of interest, and that is, and I 
quote: "The trip wd be "billed" as a quick tour through 
the region to confer w/ top ranking U.S. officials to 
reinforce the continuity of U.S. policy in the region. In 
each location you wd meet w/ the U.S. Ambassador and be 
accompanied by Gen Jack Galvin, the senior U.S. Military 




590 



UNCUSSIFIED 



^a^.^lS 






wsmm 



591 




20 
21 
22 
23 
24 
25 



Q Let me have you look at a second document in 
the same time period that purports to relate to the same 
visit, and have that marked as deposition exhibit 10. 
(The following document was marked as 
JG Exhibit 10 for identification.) 
COMMITTEE INSERT 



afii,USSlflED 



592 



UMMFlffir 



153 



1 
2 
3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



(Pause. ) 

THE WITNESS: Okay. I think that -- I think 
that this is the same visit because I don't remember two 
visits, and I think that what I have here is the plan 
for the visit, which wasn't entirely followed. 




My impression was that 
Poindexter flew down -- I know for sure that Poindexter 
flew down. He spent one night; in fact, he stayed with 
me. We had a discussion. He arrived late in the afternoon; 
we had a discussion that evening about what he was going 
to say the following day. I gave him my two cents' wor.th. 
He asked me to accompany him. I went down there and then 
he left and went back. 

BY MR. SAXON: 
Q All right, sir, let me ask you a couple of 
questions based on this document. 

This is a series of memoranda from Colonel 
North to Admiral Poindexter in relation to a trip which 
is being discussed or proposed that Admiral Poindexter 
make. If you will look three pages into the document, 
you'll see a memorandum from Colonel North to Admiral 
Poindexter that's dated December 2nd, 1985. 

In the first paragraph, he says, second sentence, 
"The itinerary and substance of your meetings have been 




593 




1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 






.^' 



# 



22 



23 



24 



25 



154 



discussed with State," and he mentions Ambassador Walker, 
"and SOUTHCOM (General Galvin)." 

Sir, if you will flip further over to a document 
bearing the number N 31906, Colonel North likewise says, 
"Based on discussions with Walker at State and General 
Galvin, the following detailed itinerary has been proposed 
for Panama:" and he lists the itinerary. 

The page I'm particularly interested in is the 
next, and that is the N 31907, for what it's worth, that's 
the Senate Select Committee numbering of documents received 
from the National Security Council. You can see we've 
received a few. 

And Colonel North discusses the current situation 
and objectives for Honduras and states in the first 




594 




I want to ask you a couple of questions about 
these paragraphs, again recognizing that we can't expect 
you to know everything Colonel North writes to Admiral 
Poindexter or expect you to agree with it, but the reason 
I ask these' questions , he says that this itinerary, the 
need for the trip and so forth, has been coordinated wifh 
State and Ambassador Walker and in terms of SOUTHCOM with 




595 



v*** 



llfflSSIflED 









596 




16 
17 

18 
19 
20 



S 




^ 




24 



25 




BY MR. SAXON: 

Q General, let me ask you about one more reference 
in this particular exhibit, deposition exhibit 10. If 
you'll look further over, you'll see a memorandum dated 
December 10, 1985, to Admiral Poindexter from Colonel 
rth. 

A Uh-huh. 

Q And it bears the subect "Cable to posts advising 
of your trip to the Central American Region." 

The first sentence of the memo says, "The cable 
attached at Tab I has been coordinated directly to Elliott 



597 



mmM: 



161 



1 

2 
3 
4 
5 
6 
7 
8 
9 

101 
11 
12 
13 
14 
15 
16 
17 
18 












21 
22 
23 
24 
25 



Abrams, Amb. John Ferch, and General Galvin." 

If you would then look at the proposed cable -- 

A Uh-huh. 

Q -- flipping to what I believe is the next-to-last 
page, N 31912, halfway down the page, under the itinerary 
and purposes of the meetings, et cetera, at 1330 to 1530, 
it says, "Mtg at Palmerola w/Amb Ferch^^^^^ Gen Galvin at 
CTF Brc 




Sir, as far as you know, was this part of the 
cable coordinated with you by Colonel North? 

A I don't remember the cable, but I remember 
the point that comes out through here that this was to be 
billed as interest in the area and so forth. So I would 
say this cable did come to me, but I don't remember it 
specifically. 

Q I don't know, sir, that this cable was ever 
even sent. What I'm saying is it was proposed by North 
to Poindexter, saying, "Here is what we would send," and he 
says, "He's coordinating the content of it with you." 

A Yes. 

Q If you would look down at the entry to the log 
on that same page for the meetings at 1715 to 1820, " Mtg at 
La Aurora AB Guatemala City w/Amb Piedra, Gen Galvin, 




598 



IJP^lPr 



162 



1 
2 

3 

4 
5 
6 

7 

91 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
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23 
24 
25 



POLCONS, and remainder of U.S. team; wd like to meet briefly 




As far as you know, was this portion of the cable 
discussed and coordinated with you? 
A I don't think so. 




BY MR. SAXON: 

Q Sir, my final document — and I would ask that 
this be marked as deposition exhibit 11. That's a copy for 
you to read and one for the reporter. 

(The following document was marked as 
JG Exhibit 11 for identification.) 
COMMITTEE INSERT 



ummi 



599 




^. 



# 



22 
23 
24 
25 





163 



BY MR. SAXON: 
Q It IS a memorandum for Admiral Poindexter from 
Colonel North, dated September 26, 1986, and the subject 
is "Meeting with General Jack Galvin, USSOUTHCOM." I'll 
give you a moment to read that, sir. 

(Pause . ) 

THE WITNESS: Okay. 

BY MR. SAXON: 
Q Sir, if you would direct your attention to the 
paragraph at the bottom of page 1 under Contra Progreun -- I 
should say, by the way, that in the second sentence of the 
beginning of the memo. Colonel North, in discussing this 
scheduled meeting between you and Admiral Poindexter says, 
"GEN Galvin wants to raise with you several issues of immediate 
concern:" -- first is El Salvador funding, and then the 
contra program. 




Let me ask you first, sir, if that's correct 
and what you can tell us about that. 

A Yes, that's correct in what it says, that after 
the -- after I made my statement about how I felt the military 
should run the thing, then we all waited to see how it was 



600 



^ilSSJEiEfir 



164 



going to come out. 

By September, it was clear that in no way was 

-I 
the military, U.S. military, going to run this, and so 

at some time in there, August, September, maybe earlier than 

that, maybe July, I went to the JCS and talked to the 

Defense Department 




was initially brought up and you saw it 
in a memorandum that we discussed earlier today by 

He — at one point, I told^^^^fll said — because 
we always dealt aboveboard on all these things and I said. 




601 



IJf^CUSSIFlEO 



To 7^^ 



•ilkSSlfB 



602 




# 






25 



terms of SOUTHCOM being aware of what the contras were 
doing and carefully following the intelligence and so forth, 
that was in the loop. But in terms of our supporting them 
in any way, we were not supporting them. 

As you know now, to some degree, we are. In 
other words, the same intelligence that I'm getting out 
of the cage down at SOUTHCOM is going over to Langley and 
so forth 




603 







.19 
►0 

25 



MR. SAXON: That's all that I have. 

THE WITNESS: Okay. 

MR. SABA: General, that's all that I have and 
on behalf of the House Committee, and I believe the Senate 
Committee, as well, we wish to thank you for coming here 
today in what we know is a tight schedule. You came here 
voluntarily and it is a Saturday and we appre|i)r^te your 
taking the time. We appreciate your candor and your 
assistance in this investigation. 

MR. SAXON: If I can simply say for the Senate, 



604 






169 



1 I concur, and you allowed us to throw our questions at you 

2 for well over four hours. We appreciate that very much. 

3 We wish you well in Europe. 

4 THE WITNESS: Okay. It's a pleasure to come 

5 and see you. 

6 MR. SABA: Good luck, sir. 

7 (Whereupon, at 1:15 p.m., the deposition was 

8 concluded.) 
9 

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



mmm 



605 



k/iuitbu JG'l ^'Sa-if^ii :sa.-\t 




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tS & ■& MOlSi 30^ ^''^ wA».'NOTOs 

U ' \ : -^ N 6694 



KTMORANOUK fOR TH£ PR£SIDEKT 
FROM! JOHK K. POIMDEXTEP. 



SUBJECT: 
I«fu« 



Sp«eial Misfion and L«tt«rs to th« Pr««ld*nts oi 
El Salvador and Honduras 



How bast to raassura Prasldants Napolaon Quart* of El Salvador 
and Jot* Azcona of Honduras of our rasolva and coanltSMnt. 

Background 

Aftar tha nagativa vot* on allitary asslstanca in Apri l 19S5, tha 

Horduran Govarmrant reacted! 




In El Salvador, Prasidant Duarta was savaraly eritieizad by 
political laft fox supporting tha C.S. proposal. 

Today's Kousa vota against additional astistanca to tha 
N'icaraguan daaocratic rasistanca is liabla to hava tha sasa 
tact, nnlass staps ara takan to raassura both Prasidants.f 




trip 

>y a higb-laval dai4^1C10n will halp to raassura than fand thair 
■llitary) of our datansination to succaad in aiding tha 
rasistaae* and ia ansuring thair sacurity. Lattars to both 
Prasidant* (Tabs A and B) addrass spacific concarn* raiaad in 
di*cu**ion* with our •■ba**i*s this afternoon . 

Di*cu*sion 

A* a result of tha National Sacurity Planning Group naating this 
afternoon, it was decided to dispatch Assistant Secretary Elliott 
Abraas, General Jack Galvin (08SOUTBC0M) , and a teas of 
apacialist to the region. The visit by th* t*aa and the letters 
at Tabs A and B will assure the Governaents of El Salvador and 



ijNClASSSrPf^ 




608 I 

UNGLASSSF5E9 " 



N 6695 

Honduras that r«9ardl«st of today's vota, you, paraonally, and 
tha Adainiatration ara dataminad that tha Nieara^uar. rasistanca 
Ivill racaiv* tha support than dasarv*. Ir. Kondurat, w* «ra 
praparad tc prcvida axp«ditad and, if naeassary,. anhancad 
jsacurity assistanca to daal with their bordar problwLj w« ara 
also praparad to ralaasa a portion of tha SIOOM in Honduran ESr 
which has baan withhald panding intarnal aconoaie rafoma. Tht 
visit to CI Salvador and your lattar to Prasidant Ouarta ara mora 
aymbolic but, nonathalass, assantial. 

Raconnnandetion 

OK No 

That you sign tha lattars at Taba A and B. 



Praparad by: 
Oliver L. North 



W- 



Att4 


kchnants 
Tab A 
Tab B 


- Lattar to Duarta 

- Lattar to Azcona 






-^- 


-^ ^ 


- 


*- 


^m^ -*ir jr 


3r V 







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609 



NATIONAL SECURITY COUNCIL 

SECRETARIAT N 6696 

01 »'»I iuT X ON; tuaO-d -i-ax-il ^O^T.^l •»»-«i fi.t-li siOM-». 

A «»-'S *ss:smco oiST«ituT:oN 

s 

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s^u* '•» 

Of ■uCaOww iisfs •••l}2« 

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»M TMC WHlTI hOuSI 

C TO AMCMtASSv rtauciSAL** 

XAuCuaAtST SAN SALVAOOa 
auCmsasSy Sam j OtI 

I :n»o sccsTATf »ASM ec 

C SfC»fTe«o: J «>■«:««• 

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Sua^CC: aaeSIOCNTtAL MISSION 

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5 I sfc»tT) eN-:*c TjxT 

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[• T«I» CHANOfS •€■€ maO€ 8aS(0 ON »i«ON| Cit-S t >.«Cu IhOj T Tit 

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; - 3'3« ci.A*- ANo.f-s *»t ;"1|' ■■.■0«'lt!Oif c< t.O. 1?356 

i«]t Aaajvt -f3oCZS»L»», -OnOj'aS ■ - " -• -•'>•• 

f' ijj» os»*«- -f ;i.czs»t»» 

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V i»3» oe»*«T iLO^ONOo ' ^2.*^^ 1 

■ — 1 ' r/^ • / 

i It** AUBlVt JAN jOSt, COSTA BieA \ \ ^„/^ I 

I (IS Ot^*«T SAN JOSI ,, K 

01 4S AKSIVI ANOHtot AFS 

J T«t THAVttlNO »AaTY CONSISTS 0» A««AMS. NOB TM. HH|B AnO 

<»»l.»e« GtN. OALVIN WlCL JOIN THt FAUTT IN T | SljC 1 5iL P *^ ^CB THf-i, 

BfMAlMOt* O' THf T«IP 

oeCL: gaoi* 

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82-708 0-88-21 



610 




SVBJECT: 



Nicaragua: Pl«n« for l«provt««nt of ONO/FDM A.ri>i 
Reiupply Capability ""w/roji Atrial 



IWrOJWATIOW R£PORT. NOTJINALLr tVALOATEO IMTELUCENCE 




2. AS Of early Novaabcr 1985, th^nifit^fi^Tra!uafr 
Opposition/Nicaraguan D««ocratic fore. (UNO/fDN) was still -orkin« 
on pUns to i«?rov. its ability tor.supply ONO/PON units o^Ir-M^^ 
insida Nicaragua. ONO/fDN had b.an axpicting th. arrjvaj tr^tlSL 
of two C-7A Carxbou aircraft to fill this rtquira.J^t bJt pr^Umt 
in obtaining ti« two aircraft hava dala va d >h««r .r,r • P'OBiems 
indcfinit^^^^(H«adquarttrs CoiBnenfl^H|HBiMB^^^H«%... . , 

acquisition oi tha d-H aircraft.) Working through pr'tfatiS 
supporters in fcha Onltad states, ONO/fDH has obtained «i'7i'iill\r 
contract for th. rental of two C-123 -Provi^.r. >,...'itrf!V'tfV, .. 
^rews, whidh are eioected to ^mrTjv^tl^t^t^^^J^^ "ifcuic 



3c contract ca 



OECL: 



OATS ORV HUM 4-83 B 
CLASSIFICATION AND CONT 



filBirgBlSoiapIEaj^: 

_¥S 5. K2f5?, Uallcial Security C 



sforthe'^two 

ALL PORTIONS/CARRy'*-" :? \ 
OP OVERALL ;D0CDMENT. ^"^ " ' 



craft to 






i^4^^c. 



611 








UNCLASSIFIED 



(ly « coab.lncd total oI^BHhouri ptr aonth (or a duration of sii 
iBonthi.'^Th* con trie tor rwTTl supply pilotf, crtw^jnd Btchaniea; 
normal Bainttnanea.VillVb* parf owd outiidJ^^^^^fc Th« 
"1123 aircr atV^vill^'b'a /stationac ^^^' ^ ^^^^^ 

Tht slx-BontlT contract^^ 

3. Ai waa tha casa with tha C-7A aircraft, tha pilots and craws 
may ba U.S. citizans, but if so, thay will not ba idantifiad as 
such. Thay, andal^otha^oarsonnal associatad with tha projact, 
will ba confinad^mHpHBor to any othar ramota airfiald wbara 
thay may oparata. ONO/FON has in stock two ni9ht vision davicas 
which will ba issuad to tha C-133 pilots for thair night-tima 
missions. 

4.^|^|Bcomaant: rinding fa^vay to rasupply its units daap 
insida Nicaragua ramains a top UNO/jpiDNi prior ity, and tba dalay in 
tha arrival of tha C-7A*s was a satbTck. Tha C- 133 '-g rotridar* i« »n 
•van better aircraft for tha job at?,hand, and thaflHhours 
contracted for should go a long way^tbward solvif^^Ra rasupply 
problem. At BtAsen^^jNO/TDN is contracting on a sporadic basis a 
civilian DC-^^HHHi^B^° «>^'** .^Mi'>!V drops to ONO/FDN units in 
Nicaragua at a cost of CISS1S,000 pe£'0i-ight. This aircraft docs not 
have the most up-to-date navigationalj^quipnent, nor does its crew 
appear to have much experience in aerial rasupply operations. The 
standard C-123 'Provider* can carry'^about 8,000 pounds of cargo and 
fly at a normal speed of 200 miles per hour.) 



5. This 

Ambassadorsl~ 

to the Commander in Chiel 
distribution is being made. 



made available to the O.S. 



and 





aorge 
Deputy Director for Operations 




7 m^ 
UNCL«SSIFIED 'M^- 



612 



jp^' 




SOBJECTi.- 




Nicara^uAi Plana for Inprovtmtnt of UNO/rON Atrial 
Rt I apply Capability 



(13 Novtabar 19eS) 



DISTRIBUTION: 

- Each Addratsat 

- DCI 

- DOCl 

- NIO/LA 



Batad Ont 







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UNCLftS^IHED 




613 



eiUSSIFIED £^ 



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614 




> 



mmsm 



NATIONAL ftCUHmr COUNCIL 
WASHiNOTOM. O.C. ao«M 



ACTION 



January 15, 1986 
M£MO RANDOM FOR JOHN M. POINOEXTn 
FROM: OLZVZR L. NORTHi/ 

SUBJECT I 






307 



W 



M««ting with G«n«ral Jack Calvin, US80DTCH0M 

You ara achadulad to Mat with Ganaral Jack Galvln on Thuraday, 
January 16 fron 10s 30-11: 00 a.m. Ganaral Galvln has aom* apccific 
raconaandatlons on futura plana for mora af£activa aupport to tha 
Oamocratlc Raaiatanca Forcaa (DRF) In MicaraTua. In this ^agard, 
Elliott AbrahoM advisad today that Sanator Dola is drafting a 
bill which will provida ovart military support for tha CRT. Ba 
raportadly has Sanators Lugar, Buapars, and Boran as co*sponsors 
and Sanator San Nunn is considaring whathar or not to 'sign'>on.* 

Ganaral Gorman was and is an activa preponant of a graatar rela 
for tha Spacial Forcaa in training/ advising both tha Salvadoran 
military tha DRF. Ganaral Galvin aharas thia baliaf. Both 
ramain convincad that tha CIA lacks tha military axpartisa 
nacassary to adaquataly train and advisa tha DRF in an appropMata 
atratagy or avan tha propar tactics. Thair concam is not 
unfoundad. To this data, tha CIA has baan onabla to produca a 
coharant military atratagy, tha tactics to support sneh a 
stratagy, or to adaquataly train tha forca to accoaplish aithar. 
Admittadly, aoma of tha problam is bacauaa of our *oa again- 
off again' Congrassional rastrictions. But, no small part of tha 
problam ia a lack of axpartisa in tha paraadlitary sida of tha 
CIA oparationa diracorata. 




Finally, ganaral Galvia has askad that you agraa to pariodic 
(about oi^ a month) maatings with you to discuss sansitlva 
issuas. You ahoold b« awara that Ganaral Galvin iscoonizant of 
tha activttif s undarway in both Ceata Rica and ^tVHJlflH 

in support of tha DRF. Ganaral Galvflr is antansiastic 
Ikdaavors. I will ba flying with Ganaral Galvia to 
Coata Rica aftar tha maating with a ratara Tuasday morning. 

RECOMMEWDATIOH 

That you raviaw tha points abova prior to your naating. 

Approva 



Oaclaaaify: OAOR 







C^l^sa 



615 



yifCLASSIHED 



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£385 



616 



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tmc whitc housc 

W» S H I N o TO N 




' '"'-'- >r 'w. 



KIMORANDUM FOR JOHN M. POINDEXTEH 



FROM: 



SUBJECT I 



OLIVER NORTH 
PRIVATE BLANK CHECK 



J' 



R« yr trip to Centril America lAW vr ln«truetion. .i , 
Ai,rha«. w., .pproach.d r. hi. vltvj oJ JJ "fiiJuinf \^i°*V, 
next w..)c. Elliot ho f.pond.d tJ«? hi bi^.C., 2' w^!\*'^''^^ 
both nect$s*ry and urg.nt. Th« trip wd bi 'billL! ! * ^^)^ ^° 
-.our through th« r«,ien to conf.r W too r.nklni S « ' !,'?"^='' 
to r.inforc. th. continuity of "s polici iJ th. ;f-,*""'*^' 
..ch location you *,d .•.t W th. u sriiSo.IdoJ .JJ^ir* '" 
accompanitd by G.n Jack Calvin, th. i.nToJ 5?s! MuftJrv' 
Raprasantativ*. This approach will Drovld*_i:oir„-^f^ 

^!fir;j-;oSrdi?rirt;n:;;;.'r! ;?.:r? r ?H: -"-; - 

background that th. purpo.. of JiJr fir^t •ii^^*i^*'• "** 

«.t prxv.taiy w/ U.J. sific?;ir;: tirjt.isL tn.isif";;.'" 

^"»^f nf*« policy, that .v.n though our apJro"h !« tLl 

^JiriL^'**"?^"*^ "' *^' y^ "c.nd.ncy cSEmK. nj cJIJL and 
wu! rlJurJ'itV?!*!^ important that ySu v.nt th.r! tiruW.i 

:} itU^jjidi^r ^•j;ioJr:ha^^r;hVi.j;:,";j.rjs!."i[f;^irv. a 

PrivatilJ it !iM M^i*.** ""• '^^^ •'*•' y*»" r.turn. 
opo^!.! K.-C V "^ '^•IP to •n«ur. that thos. .ngag.d in th. 

s.curity Advisor. In short it h.lpa all around. 



SECRET 




Partially Declassified/Released ondA^uLiJ^ 
under provfsionJ of LO. 12356 '' 
by B. Reger. National Security Council 



^Mk 



617 






NATIOSIAL SECURrrV COUNClw 

WASHtMSTON C ViVX 



December 10, 1985 



( 

SYSTEK II' 

91229 

Xdd-on 



ACTION 

MEMORANDUM FOR JOHN M. POINDEXtkR ^ 

FROM: OLIVER L. NORTH^ 

SUBJECT: Trip to the Central America Region 



3ia99 



Attached at Tab I is a NSC Staff Travel Authorization Sheet for a 
proposed trip to the Central American region headed by VADM 
Poindcxter on December 11-12, 198S. 



Participants: 

VADM John M. Poindexter 

Asst Sec of State Elliott Abrams 

Pep Ass^ Sec of State William Walker 

Mr. 



LTCOL Oliver North 
G. Philip Hughes 



General 


Itinera 


V^-- 


Depart 


6:30 


p.m. , Wed, Dec 1 


Arrive 


11:00 


p.m. 


Depart 


9:00 


a.m. , Thuri, Dec 




(save 


one hour enroute 


Arrive 


9:00 


a.m. 


Depart 


10:30 


a.m. 


Arrive 


11:40 


a.m. 


Depart 


1:00 


p.m. 


Arrive 


1:30 


p.m. 


Depart 


3:30 


p.m. 


Arrive 


5:15 


p.m. 




(gain 


one hour enroute 


Depart 


6:30 


p.m. 


Arrive 


12:00 


midnight 



Andrews AFB 
Howard AFB, Panama 
(Remain Overnight) 
12 Howard AFB, Panama 

- change of time zone) 
San Jose, Costa Rica 
San Jose, Costa Rica 
Ilopongo AB, El Salvador 
Ilopongo AB, El Salvador 
Palmerola AB, Honduras 
PaLmerola AB, Honduras 
La Aurora AB, Guatemala Cit 

- change of time zone) 
La Aurora AB, Guatemala Cit 
Andrews AFB 

NSC will defray expenses for North and Hughes' travel. Travel will 
by military aircraft. Trip has been verbally approv ed bv ^oindextei 

RECOMMENDATION 

That you authorize Ric)c Benner to cut the appropriate travel orders 
for both North and Hughes. " .y;^ 

Approve Disapprove a?'^ "^i 

Attachment 

Tab I - NSC Staff Travel Authorization She 



Declassify: OADR 




wmm 







618 



i. TRAVELE.rS NAME; 'jJqpUL&lCt 0104)11 G. PhUip Huqh«, 

2. P0RPOSE{S), EVENT(S), DATECSj; ^° *eeoinp*ny VM)M Pe ind<xtT on 
_bri«t, low-prof iia t rip to Central Am«rican foion te conitr wjm' 
too ranJcinq U.S. ^(f iciali and to rainforce th« continuity n f n g ' 
policy m tha reoi^. (s«« covr memo tor itinarary) 



*» AT^UU 



3. ITINERARY (Please Attach Copy of Proposed Itinerary): see cover 



DEPARTURE DATE Wed, Dec 11 RETURN DATE Thurs, Dec 12 
TIME 6'30 p.m. TIME ^2;00 midnight 

4. MODE or TRANSPORTATION: 

GOV AI R XX COMMERCIAL AIR POV RAIL OTHE R 

5. ESTIMATED EXPENSES: 

TRANSPORTATION PER DIOt xx OTHER TOTAL TRIP COST • ' ' 

6. WHO PAYS EXPENSES: NSC XX . OTHER 

7. IF NOT NSC, DESCRIBE SOURCE AND ARRANGEMENTS: N/A * 



8. WILL FAMILY MEMBER ACCOMPANY YOU: YZS NO xx 

9. IF SO, WHO PAYS FOR FAMILY MEMBER (If Travel Not Paid by Travels 

Describe Source and Arrangements) n/a 



10. TRAVEL ADVANCE REQUESTED: $ 0.00 



11. RE.MARXS (Use This' Space to Indicate Any Additional Items You Wou 
Like to Appear on Your Travel Orders) : 



12. T-UVELZR'S SIGNATVRI: J HAjJV^ HoJj^ ^ 



f 



619 



NA TONAL S6CUWTY COUNCn. . 



D«c«mb«r 2, 198S 



SYSTEM 1 
51229 



'^1 



ACTION 






H ^A9C^ 



KEMORANDUM FOR JOHN M. POINDEXTER 

FROM: OLIVER L. NORThV 

SUBJECT: Trip to Panama and Honduras 

Based on You^ajiidance^arranqement^iav^b««n_J*d^^ 

with]^ 

^^^^^jDec 5) . The itinerary and subatanc* of your aeetinga 
^av^feen discussed with State (DASS Bill Walker) and SOUTHCOM 
(General Galvin) . 

Attached at Tab I is a NSC Staff Travel Authorization Sheet for a 
proposed trip to Panama and Honduras on December 4-5, l_985. 



Participants ; 
AOM John H. Poindexter 
Mr. Richard Armitage 
Mr. William Wa Pcer 

Mr.l" 



LTCOL Oliver North 
Mr. Raymond Burghardt 



General Itinerary (details at Tabs III and IV). : 

Depart 2: 30 p.m. , Wed, Dec 4 Andrews ATB 

Arrive 7:35 p.m. Howard ATB, Panama 

(Remain Overnight) 

Depart 9:00 a.m., Thurs, Dec 5 Howard AFB, Panama 

Arrive 9:50 a.m. Palmerola Afl, Honduras 

Depart 2:00 p.m., Thurs, Dec 5 Palmerola AB, Honduras 

Arrive 7:10 p.m. Andrews ATB 

NSC will defray expenses for North and Burghardt's travel. 

Attached at Tab II is a memo from you to Don Regan requesting 
a Special Air Mission (SAM) support for this trip. 

Tabs III and IV provide an overview of the situation and the 
objectives we hope to achieve in Panama and Honduras, 
respectively. Detailed talking points for your use during tne 
trip will be provided separately. 

^^^^■^H Apf available 
State (Walker), Defense (Armitage), CIA^^^^H and Ra7 
Burghardt concur. 



620 



onffrtT. 



RECOMMeWPATIONS 




H ^^^Q^ . 



1. That you authoriz* Rick B«nn«r to cut th« appropriate travel 
order* for North and Burghardt. 

Approve Disapprove 



2. That you initial and forward the memo at Tab II to Don Regan 
requesting SAM aupport for the trip. 

Approve Disapprove 



3. That you review Tabs III and IV prior to the trip. 
Approve Disapprove 

cc: Rick Benner (w/o Tabs II, III, and IV) 



Attachments 

Tab I - NSC Staff Travel Authorization Sheet 

Tab II - Poindexter Memo to Regan 

Tab III - Current Situation and our Objectives for Panama 

Tab IV > Current Situation and our Objectives for Honduras 



imm%^ 



621 




(«> EVtyT(#f,' trnTsp for Qgfieial m««tin<;« 



1. TRAVILEU' 

2 . PURPOSE (S) > EVENT (#f,' tJftf fs'lT ^ Tor official m««tin<;« in Panun« 



and Howdur^a D«ginhT «-^, tygj. 



4^5X3: 



3. ITINERARY (Picas* Attach Copy of Propoi«d Itinerary) ; »■« memo 

SYSTEM II 9 



DEPARTURE DATE w«<^' P*<= * RETURU DATE Thurt, D«c 5 

TIME ^ = 3° P-"- TIME ^'^° P-"- 

4. MODE or TRANSPORTATION: 

GOV AIR XX COMMERCIAL AIR POV RAIL OTHER 



5. ESTIMATED EXPENSES: - — .„.'---^ - 

($126.00 p«r tiiem for 

TRANSPORTATION PER DIEM XX OTHER - TOTAL TRIP COST S252.-00 

-. WHO PAYS EXPENSES: NSC ^^ . OTHES 



7. IF NOT NSC, DESCRIBE SOURCE AND ARRANGEMENTS; ^'^^ ^ 



8. WILL FAMILY MEMBER ACCOMPANY YOO: YES NO XX 

9. IF SO, WHO PAYS FOR FAMILY MEMBER (If Travel Not Paid by Traveler, 
Describe Source and Arrangemants ) : n/a - 



10. TRAVEL ADVANCE REQUESTED: S 0.00 

11. REMARKS (Use This' Space to Indicate Any Additional Items You Would 
Li)te to Aoo«ar on Your Traval Orders) : ' . 



TSAVZLER'S SIGNATURE: ^ QliP^ HCXM. • ■ffti'^^-' 

— IKffiSlBEt 



13. APPROVALS: 



622 



rWS^' 



THE WMITC HOUSC 






9«K?^ 



SYSTEM i: 

91229 



WASHINGTON 



-eewTiOCTtncr - 



H i\90A . 



MEMORANDUM FOR DONALD T. R£GAN 

FROM: JOHN M. POINDEXTER 

SUBJECT: Special Air Mi..ion (SAM) Support 

purpo.. of th. trij JI^trJ.J?2w^^h' °" =»«=«»^r' <-5. 1985. Th. 

America with )c«y gSv.JnlLt XJ^T )^*. '''^"•^^ •ituation in Cantral 

Th. itin.rary fir ?h!^T« ^ ."f^*^* ^" ^'**" ^"^ countri.a. 
t«ty zor tha trip is indicated balow: 



Proposed ItinTary i 



Depart 
Arrive 

Depart 
Arrive 
Depart 
Arrive 



2:30 p.m.. Wed, Dec 4 
7: 35 p.m. 



9:00 a.m. 
9:50 a.m. 
2:00 p.m. , 
7:10 p.m. 



Thurs, Dec 5 
Thurs, Dec 5 



Andrews AFB - 
Howard AfB, Panama 
(Remain Overnight) 
Howard AfB, Panama 
Palmerola AB, Honduras 
Palnerola AB, Honduras 
Andrews AFB 



cc: The Honorable Richard P. Riley 
Assistant to the President and 

Director of Special Support Services 



■-•ide: ;.-:/:,:.riscf E.O. 1?356 
by 2. Re-er. ;::»:,:.::i Srurity Ccuncll 



*mmii 




623 



\lHtUSSW 



.1 "S^^^^ 



«W 



//r/g 



8^7 



msm 



624 



'-;-*^*^ 



m^^ 



H l^'^^^ 



Based on dlscuisiont with Walk.r «t Stat* and Gtnaral Galvin th. 
following d.taiUd itinaary ha. be.n proposed for PanaSl: ' 

"Wednasday, December 4, 1985 ; 

^'^'- Arrive Howard XFB, Panama; proceed to USAJ Hdqtrs. i 

1940 - 2010: 30 minute briefing w/General Galvin at USXf Hdqtrs 
2010 - 2030: ProceedviaUSSOUTHCOM auto to SOUTHCOM Hdqtrsl 



2030 
2115 
2200 



2100 
2200; 
morn: 



[attendees: Poindexter, 



Recap briefing at CG, USSOUTHCOM residence w/U.S. 
team and General Galvin 

Poindexter RON at Qtrs 1 w/General Galvin; 
remainder of U.S. teaxD RON at Casa Carribe 



Thursday, December 5, 1985 



0700 - 0730; 
0730 - 0745; 
0745 - 0845: 
0845 -0900: 
0905 - 0950: 



Breakfast (Qtrs 1 and Casa Carribe) 
Proceed to USSOUTHCOM Op Ctr 
USSOUTHCOM regional security briefing 
Proceed to Howard Af B , Panama 
Enroute to Honduras via C-20 



I 



r F.O. 12356 
.• ;,::.it^ Cci:ncll 



\mBsm 



625 




«mAf|f« 



MITRED 



^^907 



CURRENT SITUATION/OB JtCTIVtS FOR HONDURAS 




Thursday, DecembT S, 198S 

"""^ Arrive Palacrola Air Ba$«, Honduras (save one 

hour cnroute -- 1 hour and 50 minute flight) 



7950 
1000 
1215 
1315 



1215 

1315 
1400 



Poindexter, U.S. team, and Amb Ferch 

Working lunch at CTF Bravo (U.S. military exei^ise 
hdqtri) 






1400 - 1910 

s- e e^fiT 




sriefTng by AmEmb Tegucigalpa 
rews AFB 



imx»jrh'"'" '"^' 



626 



'jAh^-i^^^ 



w^-.^j'j^rqj*^ - ^T- ' w w .j ij t ai jt <w 




ACTION 



UNClffllL ^rt 

CcmbT 10, 1985 ^^^KJuUjT^^ 



MEMORANDUM FOR JOHN M. POINDEXTIr 

'■"OW: OLIVER L. NORTf^ 

SUBJECT: C«bl« to Post! Advising of Your Trip to th« 
Central Aoiarica Region 

Th« cable attached at Tab I hat been coordinated directly with 
Elliott Abrami, Aab John Ferch, and General Calvin. Please note 
once we arrive in Panama aboard C-20 we will be using General 
Galvin s C-9 in-theater. This will allow sufficient rest for 
your aircrew and provide more space for traveling teaa 
in-theater. Paul Thompson has coordinated aircraft support and 
exchange of aircraft. 

RECOMMENDATION 

That you author^* dispatch of the cable at Tab I 
(Op Imned via^^H channel) . 

Approve Disapprove 



Attachment 

Tab I - Poindexter Cable to Central American Posts 



cc: Paul Thompson 
Philip Hughes 



PartialVyOec'^'-'-^J/^^ffco 123K 



nMtyi>Mt<^lM 



627 



UNIlSSIfEII 



FM: WHITE HOUSE 

TO: A*< EMB PANAMA CITY, PAWAMA 
AM EMB SAN JOSE, COSTA RICA 
AM EMB SAN SALVADOR, EL SALVADOR 
AM EMB TEGUCIGALPA, HONDURAS 
AM EMB GUATEMALA CITY, GUATEMALA 
USCINCSO, QUARRY HTS, PANAMA 

INFO: SEC STATE, WASH, D.C. 
SEC DBF, WASH. D.C. 
DIR. CIA, WASH, D.C. 
CHMN. JCS, WASH, D.C. 

SECRET //EYES ONLY 



H ^^^^^ 



SUBJ: VISIT TO CENTRAL AMERICA BY ASST . TO PRESIDENT FOR 

NATIONAL SECURITY AFFAIRS, DESIG. JOHN M. POINDEXTER (O 



1. SECRET— ENTIRE TEXT. 



2. THE PRESIDENT HAS ASKED THE NEW NATIONAL SECURITY ADVISOR. 
VADM JOHN M. POINDEXTER. TO MAKE A HASTY. LOW-PROFILE TRIP TO 
CENTRAL AMERICA TO CONFER WITH TOP RANKING U.S. OFFICIALS AND TO 
REINFORCE THE CONTINUITY OF U.S. POLICY IN THE REGION. IN EACH 



628 




*^^- 



LOCATION THE NATIONAL SECURITY ADVISOR WOULD LIKE TO MEET WITH 

U.S. AMBASSADOR, ^^^^^^^^^H AND SENIOR MILITARY 
REPRESENTATIVES. INVITATION OF CINC U.S. SOUTHERN COMMAND, ' 
GENERAL CALVIN, FOR USE OF HIS AIRCRAFT IN-THEATER IS <yiKPCQjLLY 
ACCEPTED. WASHINGTON BASED C-20 WILL PROCEED TO GOT^TEMALA TO 
RENDEZVOUS WITH WASHINGTON PARTY. 



3. PURPOSE OF THE TRIP IS TO MEET WITH U.S. OFFICIALS NOT REPEAT 
NOT WITH HOST GOVERNMENTS. PLEASE EMPHASIZE WITH HOST GOVERNMENT^ 
THAT NATIONAL SECURITY ADVISOR INTENDS THAT THIS BRIEF, INFORMAL 
FAMILIARIZATION TRIP WILL BE FOLLOWED AT A FUTURE DATE BY A 
LONGER VISIT WHICH WILL ALLOW MEETINGS WITH REGIONAL HEADS OF 
STATE A»D ADDITIONAL HOST GOVERNMENT OFFICIALS. AMBASSADORS 
SHOULD STRESS THAT THIS SECOND VISIT WILL PROBABLY OCCUR AFTER 
INSTALLATION/ INAUGURATION OF NEWLY ELECTED PRESIDENTS IN COSTA 
RICA, HONDURAS, AND GUATEMALA. 



4. WASHINGTON PARTY WILL ARRIVE VIA SAM C-20 AND CONSIST OF: 

VADM JOHN POINOEXTER, DESIG. NATIONAL SECURITY ADVISOR TO PRES 

ASST SEC OF STATE ELLIOTT ABRAMS 

DEP ASST SEC OF STATE WILLIAM WALKER 

MR. 

LTCOL OLIVER HORfH, NSC STAFF 

G. PHILIP HUGHES, NSC STAFF 

CDR PAUL THOMPSON, MIL ASST TO NATIONAL SECURITY ADVISOR 

2 WHCA COMMUNICATORS 




SBliRE'P 



mm'sm 



629 



-'-•^f-' 



SXfiAf ^ 




IA9U 



5. NATIONAL SECURITY ADVISOR WOULD LIKE TO BRIEFLY VISIT HOST 
NATION AND U.S. MILITARY UNITS IN THE REGION AND INFORMALLY MEET 
WITH CERTAIN KEY OFFICIALS INVOLVED IN AIDING THE IMPLEMENTATION 
or U.S. POLICY IN THE REGION AS INDICATED BELOW. WASHINGTON 
PARTY WILL BE INFORMALLY ATTIRED SINCE MOST STOPS WILL OCCUR AT 
MILITARY INSTALLATIONS. ITINERARY IS PLANNED AS FOLLOWS: 

WEDNESDAY, DECEMBER 11, 1985 
18 30 DEPART ANDREWS AFB 
2300 ARRIVE HOWARD AFB PANAMA 

(RON QTRS 1 U.S. CINCSO, GEN GALVIN) 



THURSDAY, DECEMBER 12, 1985 
0730 BREAKFAST AT QTRS 1 
0800 DEPART FOR VIP LOUNGE, HOWARD AFB 

0830-0900 WD LIKE TO MEET PRIVATELY IN VIP LOUUGE AT HOWARD AFB 
|^^^^^^|HaMB BRIGGS, gem GALVIN, SEC ABRAMS 
IF AT ALL POSSIBLE. 
0900 WHEELS UP FOR SAN JOSE, COSTA RICA 

(SAVE ONE HOUR ENROUTE - CHANGE OF TIME ZONE) 
0900-1030 WO PREFER MTG AT CARIARI HOTEL OR AIRPORT W/AMB TAMBS , 
3EN GALVIN, AND REMAINDER OF U.S. TEAM FOLLOWED BY 




630 




^A9A^ 



THURSDAY, DECEMBER 12, 1983 (CONT'D...) 
1030 WHEELS UP FOR ILOPONGO AB EL SALVAAOOR 
1140-1300 MTG AT ILOPONGO W/AMB ED CORR, GEN CALVIN, COL STEELE, 
AND MILGP CHIEF, AND^HwD LIKE TO MEET BRIEFLY M/DEF 
MIN VIDES AMD GEN BLANDON AND BRIEFLY INSPECT AIR 
FORCE /COUNTER- INSURGENCY ASSETS. BRIEF RE CURRENT 
OPERATIONS AND DISCUSSION OP COUNTER-TERRORISM PROGRAM 
WD BE HELPFUL. 
1300 WHEELS UP FOR PALMEROLA AB HONDURAS 

1330-1S30 MTG AT PALMEROLA W/AMB JOHN FERCB,^^HgEN GALVIN AT 
CTF BRAVO. WD ALSO LIKE TO HAVE OPPORTUNITY FOR 
PRIVATE REPEAT PRIVATE Ml 

1530 WHEELS UP FOR LA AURORA AB GUATEMALA CITY 

(GAIN ONE HOUR - CHANGE OF TIME ZONE) 
171S-1820 MTG AT LA AURORA AB GUATEMALA CITY W/AMB PIEDRA, 

GEN GALVIN ,^^H POLCONS , AND REMAINDER OF U.S. TEAM; 

WD LIKE TO MEET BRIEFLyI 





1830 
2400 



DISCUSSION OF 
COUNTER-TERRORISM PROGRAM WD ALSO BE HELPFUL. " 
WHEELS UP FOR ANDREWS AFB 
ARRIVE ANDREWS AFB 



uitAU^SaS 



631 



S8g!tt»~. 



^^^ 



^A9A^ 



6. WASHINGTON PAKTY R£QUESTS ASSISTANCE RE VISAS AND CUSTOMS 
CLCAMkNCE IN THAT TIME HAS NOT PERMITTED NORMAL VISA PROCESSING. 
R£GARDS, POINDEXTER. 



— SeCRflg. 




632 






117191 ■A. / <-- _ c/ ' 



To 'II 



ACTIOW 



f^ATioNAt. sacuvrv eoiNOk 
S«pt«ab«r 2<. 19K 



90173 



2S0 



MEMORANDUM FOR JOHN M. POXMDEXTC 
rROMi OLIVCR L. NORTH 



j 



ti 7 



20^2 



SUBJECT t 



.M««tln9 with G«n«r«l J«ck G«lvin, USSOUTHCOM 



You ar* schAdulad to 0M«t with GEN G«lvin on Monday, 
S«pt«mb«r 29, «t 3i30 p. a. GEM G«lvin wants to r«it« with you 
s«v«r«l lfl«u«t of ioRMdiat* concern t 

II Salvador funding . Tha Bouaa mark on Military Aasistanca 
to El Salvador raduead tha Adainittration's raquaat froai 
9U0M to 9111M. Funding at thii laval will not allow tha 
Salvadoran army to maintain its vital civic action program 
or to sustain tha National Campaign Plan. W« hava oaan 
hoping for Sanata action %rhieh would bring tha laval back 
elosar to $130-13SM and than Confaranca action, which would 
laava us at approximataly that laval. GKM Calvin has 
concarns that our attention to tha Hicaraguan rasistanca has 
distracted us from tha vary raal problems in 11 Salvador. 

Aa an indiea.tlon of Salvadoran disappointment and concern, 
yesterday, " 

It is important 
to note that this one example of dlsaf facti^rPin Central 
America is likely to increase when other Latin American 
leaders becooM sure aware of the dramatic shift in aid 
priorities froa Latin America to Africa. Next year, we will 
be spending about $1.4B in Africa and approximately 97S0M in 
Latin America •• alxaoat the reverse of this year's allocation. 




Declaisifyt OADR 




646AC9> 



'' ^2097 



Drugs. GEN Galvin wants to giv* t brief update on Operation 
BLAsf rURNA CE_and his asse ss ment of fu ture operations of 

thli kind. mm»gmgm^m/m/g/gmi/mimmmamm^ami^mm^^glggl^^^^ 




You might also mention that Al Keel is considering a trip to the 
region end that a kick-off briefing at SOOTHCOM would be helpful. 
For planning purposes, we would intend to have Al go shortly 
after the SIOOM is made available. 

RECOMMENDATION 

That you review the points above prior to your meeting on Monday. 

Approve . Disapprove 






^fiCAET 



'mmm 



634 



Original 



UNCMSSHDIiiT _ 

Stenographic Transcript of 



HEARINGS 
Before the 



UNITED STATES SENATE 



Washington. D.C. 



OR 



Dally Declassified/Released en lAiLLjJ. 
under provisions of E.O. 11,. j 
by N. Menan, National ??--■ ^ ., -^^-=r — ,^ _ ^p— 

ALCenSCN ^POfiT'NG 

(202) 628-9300 COW NO 

20 F STREET, N.W. 
WASHINGTON, D. C. 20001 




635 



UNMS§t£Wr 



3 

4 TESTIMONY OF FLORENCE GAMTT 

5 Monday, May 18, 1987 
6 

7 U.S. Senate, 

8 Select Comnittee on Secret Military 

9 Assistance to Iran and the 

10 Nicaraguan Opposition 

11 Washington, D.C 

12 Deposition of FLORENCE GANTT, a witness 

13 herein, called for examination by Counsel for the 

14 Senate and House Committees in the above-entitled 

15 matter, pursuant to notice, the witness being first 

16 duly sworn by JANE W. BEACH, a Notary Public in and 

17 for the District of Columbia, at the offices of the 

18 Senate Select Coomittee, 9th Floor, Senate Hart 

19 Office Building, at 10:00 a.m., Monday, May 18, 

20 1987, the proceedings being taken down by Stenomask 

21 by JANE W. BEACH and transcribed under her 

22 direction. 



uNCUSsiyjto 



636 



UNCLiyS^lFlED 



1 APPEARANCES : 

2 On behalf of the Witness: 

3 C. DEAN McGRATH, JR., Esquire 

4 Associate Counsel to the President 

5 The White House 

6 Washington, D.C. 

7 On behalf of the Senate Select Conunittee on 

8 Secret Military Assistance to Iran and the 

9 Nlcaraguan Opposition: 

10 VICTORIA NOURSE, Esquire 

11 Counsel 

12 Senate Select Committee 

13 Hart Senate Office Building, 9th Floor 

14 Washington, D.C. 

15 On behalf of the House Select Committee 

16 to Investigate Covert Arms Transactions 

17 with Iran: 

18 BUD HALL, — quig ^ 

19 House Select Committee 

20 United States House of Representatives 

21 Washington, D.C. 



UNCtl^lf^t^ 



637 



uNCLASStFlED 



1 PROCEEDIMGS 

2 Whereupon, 

3 FLORENCE GANTT 

4 was called for examination by counsel for the 

5 Committees in the above-entitled matter and, having 

6 been first duly sworn by the Notary Public, was 

7 examined and testified as follows: 

8 EXAMINATION BY COUNSEL FOR THE SENATE SELECT COMMITTEE 

9 BY MS. NOURSE: 

10 Q Mrs. Gantt, where are you presently 

11 employed? 

12 A At the White House, the National Security 

13 Council. 

14 Q And who is your immediate supervisor? 

15 A General Powell. 

16 Q And prior to that? 

17 A Admiral Poindexter. 

18 Q When did you begin work for Admiral 

19 Poindexter? 

20 A I'd been working with Admiral Poindexter 

21 from the time he came to the NSC. I think that was 

22 about five years ago. And then I was assigned 

23 directly to him when he became the Deputy, and I 

24 don't remember exactly what year that was. 

25 Q And you worked for him until he left the 



[jNCLAS^FJED 



638 



UNetftSSIFIED 



1 NSC. Is that correct? 

2 A That's correct. 

3 Q Could you give us just some brief idea of 

4 what your basic responsibilities were? 

5 A I'm his personal secretary, or his 

6 Special Assistant, and that basically is taking care 

7 of him in all respects — taking care of his schedule, 

8 maintaining his files, doing his typing, his social 

9 calendar, the whole thing. 

10 Q It runs the gamut. It sounds like you 

11 were probably a very busy employee — 

12 A Ves. 

13 Q — employee with the National Security 

14 Adviser, keeping track of him. 

15 Was it part of your responsibilities to 

16 log documents? We've heard something about a log 

17 for documents. Maybe you could explain that 

18 process. 

19 A We have a system by which most of our 

20 documents have a number. We have several systems, 

21 and~ 

22 Q Right. I understand that. 

23 A — and when the document would come in, 

24 the reason we logged the documents was merely to 

25 trace them in our office. In other words, if 



UNOkASSIF?Ee 



639 



UNCLASSIFIED 



1 someone wanted to know where No. 4279 was, it was 

2 much easier to have it on the log, instead of going 

3 to the first place it comes into and looking through 

4 their papers. 

5 When documents came into the Admiral, 

6 then I would log them in as coming to the Admiral. 

7 When they left his office, I would log them in to 

8 whoever they were going to. 

9 Q The fact that a document was logged in on 

10 whatever sheet this was — 

11 A It was on the computer. 

12 Q — would that indicate that he had seen 

13 the document, necessarily? 

14 A No, it meant it was in his office. 

15 Q I see. The next thing I want to ask you about 

16 is Admiral Poindexter's reputation that has been 

17 much discussed in the press, for note taking. You 

18 have been asked questions about this before, I know, 

19 but indulge me and let me ask the same questions 
2 again just for our record. 

21 Were you aware that he took notes at 

22 various meetings? And what type of meetings were 
2 3 you aware that he took notes at? 

24 A If he took notes, to my knowledge he kept 

25 a little book and he would wrate notes basically on 



UHCtA^IFitO 



640 



UNCLASSIFIED 



1 what he had to do as a result of a meeting. In 

2 other words, I thought they were basically tickler 

3 items. What he would do is he would have a note 

4 with a little square, and talk to so-and-so about a 

5 specific subject. And at the end of the time when 

6 he would talk, he would check that square. 

7 There were times when he kept minutes of 

8 a meeting, if he had gone to an NSPG and was the 

9 notetaker, then he took actual minutes. Other than 

10 that, I am not aware of his taking extensive notes. 

11 Q Now you mentioned a notebook. Was that a 

12 small, spiral notebook? 

13 A He started with a small spiral notebook. 

14 He started with a shorthand book. Then he went to 

15 his little notebook, his little black notebook. 

16 Then when he became the National Security Adviser, 

17 he basically used these sheets [indicating]. 

18 MR. HALL: Witness indicates yellow legal 

19 pad sheets. 

20 MS. NOURSE: Thank you. Dean. 

21 BY MS. NOURSE: (Resuming) 

22 Q So that prior to the time that he was 

23 National Security Adviser, he had the notebook; and 

24 later he used the legal pad? 

25 A Um-hmm. 



UNOIsl^lFlEO 



641 



UNIiftSSIFIED 



1 Q That explains — 

2 A Now he may have still kept his notebook, 

3 but, you know, I never saw that. I never saw any 

4 sheets come out on that paper, and he would give me 

5 the yellow sheets to file, occasionally. 

6 Q Would you retype any of these notes? 

7 A No. He was very meticulous and very neat 

8 in his writing, and he said it wasn't necessary for 

9 me to type them. 

10 Q And you would file the notes. Were there 

11 particular files for particular kinds of meetings? 

12 A Um-hmm. Basically, it was the 0930, 

13 which is the meeting with the President. I would 

14 file the notes as to what was discussed with the 

15 President. 

16 Before he went in to see the President, 

17 he would write a list of items that he was going to 

18 discuss. Then when he cane back he would check what 

19 was actually discussed. Then I filed that in the 

20 0930 file. 

21 I think that's basically the type of 

22 notes. And then I had a folder that contained 

23 handwritten notes, and if there were times I didn't 

24 know what to do with something and it was in his 

25 handwriting and he didn't agW'i'l^if''i^ "°^^'* P"^ ^^ 



82-708 0-88-22 



642 



UMCt<^*f*tO 



8 



1 In that file. But that was not a very complete 

2 file, by any means. 

3 Q To your kaowledge, you mentioned the word 

4 "bum." Was it his consistent practice to destroy 

5 the notes? 

6 A If he had completed everything on the 

7 note, he would just draw a line through it and say 

8 "bum," and I would bum it. That's what made me 

9 think they were basically ticklers, you know, to 

10 remind him to touch base with somebody on something, 

11 or to do something. 

12 Q Do you remember, where these the 0930 

13 notes? 

14 A No, the 0930 notes he basically would 

15 file. 

16 Q He would file those? 

17 A Um-hmi. 

18 Q So that when he would instruct you to 

19 destroy notes, they were generally of other types of 

20 meetings? 

21 A Hell, it might have involved items that 

22 had to do with the 0930 that he had made notes to 

23 himself, and then he transposed them to the yellow 

24 sheets, and then when he would take care of it he 

25 would just throw the little notes away. 



UNCtllSStFIED 



643 



UNCLASSIFIED 



1 Q I have seen notes. They are in here, and 

2 we may get to them eventually, of the family group 

3 lunches. 

4 A He also kept that type of thing. 

5 , Q Was that in a separate file? 

6 A Um-hmm. 

7 THE REPORTER: Did you say "yes"? 

8 THE WITNESS: Yes. 

9 MS. NOURSE: Unfortunately, the reporter 

10 only responds to words, and not to gestures and the 

11 other ways that we always communicate with each 

12 other. 

13 BY MS. NOURSE: (Resuming) 

14 Q Was there a separate file for NSPG 

15 meeting notes? 

16 A I don't think I kept it, because it was 

17 basically a system package, and most of that stuff 

18 was sent back. I may have had in my files mmmm an 

19 NSPG folder of notes that I was supposed to have 

20 typed for him from years back that I never got 

21 around to doing. I think that's the only NSPG file 

22 I had. 

23 Q Taking this a little bit out of order, 

24 back to the logging process, are you familiar, or 

25 have you ever seen any documents termed "non-log"? 



UNCL/rSSIFIED 



644 



UNCtimtFIED 



10 



1 A Um-hmin . 

2 Q What was your understanding of non-log 

3 documents? What was their purpose? 

4 A Non-log was usually something that didn't 

5 necessarily have to go into the historic files. It 

6 may have been something that somebody wanted to 

7 mentioned, but not necessarily thought it was 

8 sufficient for filing. 

9 Also, they were used for things that they 

10 didn't want to go through the system, not 

11 necessarily sensitive, but sometimes could be 

12 sensitive. 

13 Q Were non-log memos a common occurrence? 

14 Was it a rare occurrence? Could you give us some 

15 kind of estimate? 

16 A Common every day, every week, every 

17 month, no; but you could have a time where you might 

18 get non-log several times in one week, depending on 

19 you know what was going on, and the subject. But it 

20 was not on a regular basis, no. 

21 Q Did Admiral Poindexter ever instruct you 

22 to type or take dictation of a non-log memo? 

2 3 A Not to my knowledge, no. Most of the 

24 things that I did type for him I didn't always put 

25 in the system, though. You know, in other words, if 



UNCtASSIFiED 



645 



UNCLASSIFIED 



11 



1 It was a one-paragraph thing and he was sending It 

2 to the Chief of Staff, or to someone, I didn't 

3 necessarily put It In the system. Then those would 

4 be In his personal chron, official chron, I'm sorry. 

5 Q By not putting It In the system, you mean 

6 that It did not have a system one, two, three, four 

7 numiser, and go through the filing chains? 

8 A Um-hmm. Say If he were saying, send this 

9 down to Don Regan, "for your information as we 

10 discussed," then I would just go ahead and type it 

11 up, attach the copy of whatever they discussed, send 

12 it down, and then put a copy in his official chron. 

13 Q Would his official chron be the only 

14 place where those items could be located, since they 

15 were outside the system? 

16 A If it Involved discussing something at an 

17 0930, then I might double-file it, cross-file it in 

18 the 0930. I might cross-file, but those files would 

19 have all been his personal files, and I may have 

20 cross-filed it, but I'm not sure. It would depend. 

21 Q You would not senl^lt anywhere else to a 

22 central filing system? 

23 A No, huh-uh. If it didn't have a system, 

24 a nxunber, and if I didn't send it downstairs, it 

25 would just be in his official chron. 



UNeiftSSlFlED 



646 



UNCLASSIFIED 



12 



1 Q Were these typically short notes, as 

2 opposed to long memoranda? 

3 A Um-hmm. I'm a stickler for system. So 

4 even if not instructed, I would put it in the 

5 system. 

6 Q I just want to be sure I ask you all 

7 these questions before I get to these documents. 

8 Back to the System 4 documents. Did Admiral 

9 Poindexter ever ask you to retrieve an original 

10 System 4 document from Jim Radzienski or anybody 

11 else who might have had access to those files? 

12 A I don't know. I've been asked to 

13 retrieve originals, but whether he asked me I really 

14 don't know. Quite possibly, but I really don't 

15 know. 

16 Q Do you remember who asked you? 

17 A No. I have retrieved, but I honestly 

18 couldn't tell you. It's quite possible, but I 

19 really wouldn't remember anything specific. 

20 Q You have no specific recall as to the 

21 incident in which someone asked you to retrieve? 

22 A No, but I have been asked to recall. In 

23 the years that I have worked there, I have been 

24 asked. 

25 Q And was it your normal practice to return 



UNeiA^lFSED 



647 



UNCti^»ntO 



13 



1 thos* documents back to Jim RadzfWskl? 

2 MR. HALL: Was there ever an occasion 

3 when you did not return the original documents? 

4 THE WITNESS: That, I couldn't really 

5 answer, because the way the documents would be 

6 returned is they would be put in his out box, and if 

7 someone else handled his out box in my absence, then 

8 it would have been returned. 

9 I did not maintain a log of what I had 

10 called back — you know, called the original back to 

11 the office, and whether I in fact returned it or 

12 not. If it were sent in his out box, I would have 

13 returned it, yes; but he may have put it out, as I 

14 said, and someone else may have worked on the out 

15 box and they would have returned it. But our system 

16 was, when it came in the out box It was sent back to 

17 where it came from. 

18 BY MS. NOURSE: (Resuming) 

19 Q Did Jim Radzi^kl ever call you and ask 

20 looking for a System 4 original? 

21 A Um-hmm. 

22 Q Do you remember anything specific about 

23 that occasion or the document he was looking for? 

24 A No, I just remember that there were times 

25 when they were looking for specific documents — you 

UNetfiSSIF^ED 



648 



UNdASSIFIED 



14 



1 know, I couldn't tell you which ones. All I knew is 

2 they were System 4, and I would check and see if 

3 they were in my possession, or I would go through 

4 the Admiral's papers, and answer yes, or no. 

5 Q Is it correct that during the course of 

6 your duties you became familiar with Admiral 

7 Poindexter's handwriting? 

8 A Um-hmm . 

9 Q So that if I were to show you a document, 
10 . you would be able to tell me — 

11 A Well, 1 can try. 

12 Q — his handwriting, or how to decipher it? 

13 That is what we will get to in a minute. 

14 MR. HALL: Victoria, before we get to 

15 that, if I could ask, what did you understand his 

16 personal files to be, the compilation, the 

17 categories of materials in his personal files? 

18 THE WITNESS: "Personal files"? Or files 

19 that I maintained in the office? 

20 BY MR. HALL: 

21 Q You're differentiating between personal 

22 files that you maintained and other files that were 

23 personal that he himself maintained? 

24 A Um-hmm . 

25 Q Were you aware, first of all, of those? 



UNCtASSIFSED 



649 



UHCL*SSintO 



15 



1 A I maintained his files. 

2 Q All /iles? 

3 A Um-hmn . 

4 Q Did he have files that perhaps he placed 

5 copies of documents in that only he maintained? 

6 A No. Anything that only he maintained, he 

7 would keep himself, and he would not ask me to file. 

8 Q Were there such documents? 

9 A He had a stack of papers on his desk, 

10 yes, and there may also have been some papers in the 

11 safe that were left there and said, "do not put out 

12 on desk every day," and they were documents that he 

13 may have been keeping, for whatever reason, that he 

14 didn't need to have his working file on his desk. 

15 I remember when Mr. McFarlane left, there 

16 was a wad of papers that Admiral Poindexter just 

17 said keep in the safe until I get around to them, 

18 and they may have been things that were ongoing, or 

19 something for him to handle after Mr. McFarlane 
2 left. I never really went through the file. 

21 Q As to the categories of materials within 

22 those personal files, were you familiar with each of 

23 the categories? 

24 A The ones that I maintained? 

25 Q Yes. 



UMGlftSSIFtED 



650 



UNCLA^FIED 



16 



1 A Um-hnun . 

2 Q Did he have a filed folder marked 

3 "personal" that you did not? 

4 A No. Not — I had access to everything that 

5 he had. I did not bother with what he kept in his 

6 little safe. That was his working materials, and I 

7 had access if I were looking for a paper, I could go 

8 through it all — you know, sift through it to look 

9 for what I'm looking for, but I did not bother with 

10 those. I had enough to do, and if I didn't have to 

11 worry about those papers, I didn't. 

12 If he said "file," then yes, I did either 

13 file in my own safe, which I called "personal" but 

14 which was official and personal, or I would send it 

15 down to the system. 

16 Q The materials that he kept as his working 

17 papers, as you described, those were kept in a 

18 separate safe? 

19 A We called it the lock-up safe where I 

20 locked them up at night. That was basically 

21 everything that he had on his desk, things that he 

22 was maintaining, working files, papers that had to 

23 be acted on, and also files that he kept that he 

24 didn't want to dispose of yet because he was 

25 working, but not necessarily current, and not the 



UNCtirSSIFlED 



651 



UNetftSSIFIED 



17 



1 daily work at the moment. That would all go in the 

2 safe. 

3 Q Who had access to the lock-up safe? 

4 A Everyone in the office, including myself. 

5 MR. HALL: Okay. Thank you. 

6 BY MS. NOURSE: (Resuming) 

7 Q Some further questions on filing. The 

8 official chron, did you keep that? 

9 A Um-hmm. Yes. 

10 Q Did Admiral Poindexter keep a sensitive 

11 chron? 

12 A He did not. He kept two chrons: 

13 official and personal. 

14 Q And you maintained both of those? 

15 A Um-hmm. 

16 Q Were either of them in the safe? 

17 A They were both in the safe, in the same 

18 safe. 

19 Q His safe? 

20 A No, my safe. 

21 Q Okay. On the logging system, that 

22 Included logging System 4 documents as well as all 
2 3 other systems? Is that correct? 

24 A All except non-log. 

25 Q Did Admiral Poindexter dictate memos to 



^NCtA^IFit*^ 



652 



UNCLft^FlED 



18 



1 you? 

2 A Very, very seldom. 

3 Q Did he write them out in longhand and 

4 give them? 

5 A Vfes, but very little. / 

6 Q Did you ever have occasion to type ^p 

7 memoranda for the President that were non-log, or 

8 non-system? / 

9 A Um-hmm. Yes. 

10 Q Was this a common practice? 

11 A No, it was not a common practice. 

12 Q As a standard matter, would the memos 

13 that you would be asked to type that were going to 

14 the President, would they be on-system? 

15 A No, they would not be on-system unless he 

16 was drawing from a system package. If he were 

17 drawing from a system package, then I would put the 

18 same number as the system package. If he were just 

19 dictating a memo, then I would not put a number on 

20 it, and it would go in the official chron. 

21 Q To reiterate just what you said, the 

22 memos would be filed in the official chron— 

23 A Yes. 

24 Q — even if they were not on a system, 

25 these memoranda to the President? 



UNClftSS1F?r:D 



653 



UNCbA^f'^^ 



19 



1 A That's right. 

2 Q Now for a little handwriting analysis — 

3 unless, Bud, you have some more questions? 

4 MR. HALL: No, thank you. 

5 MS. NOURSE: If the reporter could mark 

6 this as Gantt Exhibit No. 1. For the record, this 

7 is a compilation of notes we believe to have been 

8 taken by Admiral Poindexter, and it bears our Bates 

9 stamp numbers N7822 to N7841. 

10 (The document referred to was 

11 marked Gantt Deposition 

12 Exhibit 

13 No. 1 for identification. 

14 BY MS. NOURSE: (Resuming) 

15 Q If you could leaf through this document 

16 and confirm for us, first of all, whether this is in 

17 fact Admiral Poindexter 's handwriting. By that, I 

18 do not mean th« portions that state "nonrelevant 

19 information, delete." 

20 A It is his handwriting. 

21 [Pause.] 

22 MS. NOURSE: If we could go back on the 

23 record and indicate that she has looked through 

24 that. 

25 BY MS. NOURSE: (Resuming) 



UNCIISSIF'FD 



654 



UNCUISSIFIED 



20 



1 Q Mrs. Gantt, if you could, tell us on each 

2 of these pages marked N31121 through N31140 — no, we 

3 have different numbers. 

4 A I have 7822. 

5 MS. NOURSE: Off the record for a minute. 

6 [Discussion off the record.] 

7 BY MS. NOURSE: (Resuming) 

8 Q Exhibit No. 1 is N7822 through N7841. If 

9 you could tell us, please, for each of the pages 

10 that have been marked as Exhibit No. 1, whether 

11 there appear notes from Admiral Poindexter on those 

12 pages? 

13 A Yes. 

14 Q On each of the pages? 

15 A On each of the pages. 

16 Q Thank you, 

17 Now on the first page of this Exhibit, 

18 N7822, there is a notation in the upper left-hand 

19 corner "0930, 3/7/86." Is this the type of material 

20 that would be filed in the 0930 file? 

21 A That's right. 

22 Q And you would understand this piece of 

23 paper I have handed you to be the notes taken by 

24 Admiral Poindexter at a 093 meeting? 

25 A No. These were the notes that he would 



UNCtHSSIFlEO 



655 



UNCLASSIFIED 



21 



1 make prior to going to an 0930, and he would draw 

2 his little — I see they're not boxes, but circles; 

3 and if he discussed it at the 0930 he would draw 

4 through it. 

5 Q I see. 

6 A There is a box [indicating]. 

7 Q Turning to the next page, N7823, there is 

8 a notation on the upper left-hand, "Shultz meeting 

9 with President." Is this an example of notes that 

10 Admiral Poindexter would have taken at the meeting 

11 with Shultz and the President? 

12 A No. This looks more like the same type 

13 of thing that he would write before he would go into 

14 the meeting. Now he may have added things after he 

15 got there, but this is the same type of thing. 

16 Now to me, this would mean that he didn't 

17 get the article the President gave Shultz, but that 

18 doesn't necessarily mean that. He could have been 

19 busy and just didn't check it. 

20 Q By "this" you're referring to the blank 

21 box on the first entry on this page? 

22 A Um-hmm. Usually when he would "JP" it at 

23 the top, that meant "I'm finished, file it." Then I 

24 would put that in the Shultz meeting with the 

25 President folder or file. 



UNetft^lF'itD 



656 



UN^ftSSlPiiB 



22 



1 Q So there's a separate folder for Shultz 

2 meeting with the President? 

3 A We had two folders, I believe, for 

4 Shultz. One was called "Shultz", and I think one 

5 was called "Shultz: Meetings with the President." 

6 It nay have been one file. I can't remember now, 

7 with different people that I've worked with, but if 

8 we have this, "Shultz: Meetings with the 

9 President," it would be strictly things that were 

10 discussed in Shultz with the President. 

11 If we had a regular Shultz file, it would 

12 be memos that we would get from Shultz, or things 

13 that we would send Shultz that were not in the 

14 system, and then it would be filed in that. 

15 Q Was it Admiral Poindexter's regular 

16 practice to hand you the notes after the meetings to 

17 be filed in the Shultz meeting with the President 

18 file? 

19 A Usually. Sometimes it would be a few 

20 days late, but usually he was very good, he would 

21 throw it right out after the meeting. 

22 Q If you could just give us an idea, in a 

23 year how big would these files be? 

24 A Not big at all. 

25 Q By "these files," I mean the Shultz 



UNm.«ssiF:ED 



657 



UNOASSJF'.tD 



23 



1 meeting with the President, or the 0930 file? 

2 A The Shultz meeting with the President 

3 sometimes were once or twice a week, twice a week at 

4 the most. Meetings with the President were usually 

5 once a day. So that would be five pieces of paper a 

6 week. 

7 Q Did Admiral Poindexter give you these 

8 notes on a consistent basis? In other words, would 

9 there be a note in that file for every meeting he 

10 had with the President? 

11 A Almost, but there were times when there 

12 wouldn't be. 

13 Q If you could, look on this page N7823. 

14 If you could help me read his handwriting, I would 

15 very much appreciate it. 

16 MS. NOURSE: Off the record for a minute. 

17 [Discussion off the record.] 

18 MS. NOURSE: Back on the record. 

19 BY MS. NOURSE: (Resuming) 

20 Q Mrs. Gantt, I wonder if you could 

21 decipher the second line after there is a notation 
2 2 "is real" and then there is one line which I won't 

23 discuss, but after that there's a word, I believe it 

24 says "crates." 

25 A That's correct. 



UNCtftS^JED 



658 



UNClftSSIF'^ED 



24 



1 Q Could you read the next two lines here? 

2 A "Crates of prohibited material, 

3 "business with Iran (Bermuda)." 

4 Q The last word is "Bermuda" you believe? 

5 A That's whatY^looks like. 

6 Q Okay. Fine. Thank you very much. 

7 If we could skip a couple of pages to 

8 N7825, this again in the upper left-hand corner has 

9 a notation "0930 11/24/86"; and then in the upper 

10 right, I believe this says, and could you confirm 

11 for me, "done JP"? 

12 A That's right. 

13 Q Are these notes that he would have taken 

14 before entering the meeting? 

15 A Um-hmaU) 

16 Q And then Indicated on the upper right- 

17 hand comer that he had done whatever it was that 

18 was discussed below. 

19 A It doesn't mean that he wouldn't have 

20 annotated them once he was in the meeting, but 

21 basically this is the type of thing he would do 

22 before going into a meeting. 

23 Q If we could, skip to N7830. Again, this 

24 notation has in the upper left-hand corner "0930 

25 7/2/86" and in the upper right-hand, "Done JP". 



UNCi:ASSIr:tD 



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UNe4AS$IF:ED 



25 



1 If you could, clarify for me what 

2 precisely this notes says. If you could read it 

3 into the record, I would appreciate it. 

4 A "Nicaragua Program 

5 — $400M [million dollars] in addition." 

6 Q Okay. Thank you. 

7 And skipping to N7837 — you have my note 

8 on here, which I will take off — "What does this 

9 say," my note says, and that is exactly what I am 

10 going to ask you. 

11 Again, on the upper left-hand corner this 

12 mentions "0930 1/22/86" "Done" in the upper right- 

13 hand corner. 

14 On the last line of this note above where 

15 it says "non relevant material deleted" I am 

16 interested in the first word of that sentence. If 

17 you could read it into the record as best you 

18 understand it based on your knowledge of his 

19 handwriting, I would appreciate it. 

20 A 7837? 

21 Q Not this line. Above the "non relevant 

22 materialA.J This line here [indicating]. I will ask 

23 you to read the third line of this message that I 

24 believe starts "Covertness" or "Correctness." 

25 A It looks like "Covertness of" something 



UNCt/)[SSlFSED 



660 



UNGLftSSIFIED 



26 



-4y 



1 "to Contras." And I don't know whether that is, I 

2 can't tell whether that's been scratched out and 

3 that's just one zero to Contras. 

4 Q I would interpret that as 

5 A Oh, well, yes, I guess now that you — it 

6 could be "aid," too. It could be a-i-d. 

7 Q Do you believe the first word is 

8 "covertness"? 

9 A It looks like "covertness." 

10 Q Moving on to another set of notes that 

11 have been produced from the White House. 

12 MS. NOURSE: Would the reporter mark this 

13 as Exhibit No. 2. 

14 (The document referred to 

15 was marked as Gantt 

16 Deposition Exhibit No. 2 

17 for identification.) 

18 BY MS. NOURSE: (Resuming) 

19 Q This is a four or five page dociunent 

20 marked our N numbers 8011 through 8016. They are 

21 handwritten notes. 

22 Mrs. Gantt, could you identify this? Is 

23 this Admiral Poindexter's handwriting? 

24 A Yes, it is. 

25 Q Do these notes look to be the kind that 



UNCUASSIFiED 



661 



UNCLA^IFIED 



27 



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



would have been in a small spiral notebook that 
he— 

A Yes. 

Q --took notes prior to the time he was the 
National Security Adviser? 

A He may have also used it afterwards. I'm 
not sure, but that's what they look like, yes. 

Q Looking on page N8015, if you could help 
us read this page, in particular after the third 
paragraph. 

A After the third paragraph? 

Q The third paragraph, I mean. 




Q Going back for a moment to the first page 
of this document, in the upper left-hand corner it 
mentions 0923. Would that be the time? 

A That's what it looks like. 

Q And the date in the upper right-hand is 
6/22/85? 



Um-hmin. 



UMCfcftSSIFtED 



662 



UNeiftSSIFIED 



28 



1 ■ Q One more thing. Looking on page N8013, 

2 after the reference to ^^^^^^^^^|Hthere ' s a word 

3 and a colon. Could you make that word out for me? 

4 A Oh, boy. 

5 Q If you can't, you can't. 

6 A I'm not sure what the first letter is. 

7 It looks like] 

8 Q Well, all you can do is attempt to use 

9 your best recollection of his handwriting. It's not 

10 crucial. I think we can move on. 

11 MS. NOURSE: If the reporter could mark 

12 this as Gantt Exhibit No. 3. 

13 (The document referred to was 

14 marked Gantt Exhibit No. 3 

15 for identification.) 

16 BY MS. NOURSE: (Resuming) 

17 Q This is two pages of handwritten notes 

18 marked N28892 to 28893. 

19 Mrs. Gantt, on the first page of these 

20 notes in the upper left-hand corner is the reference 

21 "DOM"l What is that? 

22 "a Daily Operations Meeting; the 8:00 

23 o'clock senior staff meeting. 

24 Q And the marks in the boxes in the left- 

25 hand side of this page would indicate to you that 



liNCLA^IFIED 



663 



UNeiftSSIF^ 



29 



1 these are items that Admiral Poindexter had written 

2 at the meeting, or maybe prior to the meeting? 

3 A It could be before the meeting, and it 

4 could be at the meeting. 

5 Q This note discusses a "1340 meeting with 

6 the President." 

7 A um-hmn . 

8 Q How often, to your knowledge, did the 

9 National Security Adviser, Admiral Poindexter, meet 

10 with the President outside of the 0930 a.m. 

11 meetings? Was this a common occurrence? A rare 

12 occurrence? 

13 A It was not a common occurrence, and I 

14 really off the top of my head could not say. It 

15 depended on what was going on. If we had a crisis 

16 going on, then he might meet with the President more 

17 often. But it is just difficult to say. 

18 Q Moving to the next page, N28893, on the 

19 upper left-hand corner is indicated "Family Group 

20 Lunch" and various items. Was there a separate file 

21 for Family Group Lunch notes, as well? 

22 A Yes. This is the type of thing where he 

23 may have had this note for the January 17 family 

24 group lunch, and at the meeting he may have written 

25 the future agendas, and this is the type of thing 



unciissif;ed 



664 



UHCU^S\fftO 



30 



1 that he may not have given me to file immediately 

2 after January 17. He may have kept this on his desk 

3 for the next FGL, and then he may have thrown it out 

4 after the next FGL. 

5 Then again he may have given it to me to 

6 file right at the 17th; but that was the 

7 inconsistency of giving it' to me immediately after 

8 the meeting. Sometimes there were instances where 

9 he did hold on. 

10 MS. NOURSE: If the reporter could mark 

11 this as Gantt Exhibit No. 4. 

12 (The document referred to was 

13 marked Gantt Exhibit No. 4 

14 for identification.) 

15 MS. NOURSE: That copy seems to have more 

16 pages. Could I just see that? 

17 [Discussion off the record.] 

18 MS. NOURSE: This is the document I am 

19 going to have marked, and I don't have an exact copy 

20 of it. This is a two-page document marked N31027 to 

21 31028. 

22 BY MS. NOURSE: (Resuming) 

23 Q Could you identify for us, Mrs. Gantt, 

24 whether this document is in Admiral Poindexter's 

25 handwriting? 



UNeiASSIFlED 



665 



UNCLASStFKD 



31 



1 A I don't think it is. 

2 Q Could you tell me whether on the second 

3 page of the document where there are notes on the 

4 bottom shortly above the independent counsel's AKW 

5 number, whether those notes are Admiral Poindexter's 

6 handwriting where it says "Add? Not legal?" 

7 A It could be. It looks, but I'm not 

8 positiva. 

9 Q Okay. Fine. 

10 MS. NOURSE: If the reporter could mark 

11 this as Gantt Exhibit No. 5. 

12 (The document referred to was 

13 marked Gantt Exhibit No. 5 

14 for identification.) 

15 MS, NOURSE: This is a set of handwritten 

16 notes, our Bates stamp numbers N 8025 through 8028. 

17 BY MS. NOURSE: (Resuming) 

18 Q Could you tell me, Mrs. Gantt, whether 

19 this document is in Admiral Poindexter's 

20 handwriting? 

21 A Yes, it is. 

22 Q Is the printing on these pages Admiral 

23 Poindexter's printing, as well as the handwritten 

24 notations? For example on the fourth line of the 

25 first page N8025, there is some script-like 



UNCLAI^IFIED 



666 



UNGIsl^lFIED 



32 



1 handwriting. 

2 A That's Admiral Poindexter's writing, yes. 

3 Q As well as the printing? Is that 

4 correct? 

5 A Yes. 

6 Q What about these notations on the side of 

7 the document where it mentions "no," for instance, 

8 on the first page? 

9 A I think it is his handwriting, yes. 

10 MR. McGRATH: The record should indicate 

11 that the reference in the lower left-hand corner is 

12 not that of— 

13 MS. NOURSE: "E-3" is the FBI reference. 

14 If the reporter could mark this as Gantt 

15 Exhibit No. 6, this is a document with our Bates 

16 stamp numbers N7514 through N7522, and has a 

17 handwritten note on the front. 

18 (The document referred to was 

19 marked Gantt Exhibit No. 6 

20 for identification.) 

21 BY MS. NOURSE: (Resuming) 

22 Q This, Mrs. Gantt, is the fzunous diversion 

23 nemo. I don't mean to surprise with you with 

24 anything. I do want to ask you whether the note on 

25 the front page, if you could confirm for us that 



umanssiFiED 



667 



UNCLI^inED 



33 



1 thia is Admiral Poindexter's handwriting? 

2 A Yes, it is. It is his handwriting. 

3 Q Could you read us the note, please? 

4 A "Keep this together for me. Iran. JP." 

5 I can tell you exactly where that's from. 

6 Q Okay. Why don't you tell us about the ^ 

7 Iran file. 

8 A Okay. The day that the Admiral resigned, 

9 he, before he left for the day, I think it was on 

10 that day, and it may have been the next day, I'm not 

H exactly sure what day. But anyhow, he bundled up 

12 some papers from his desk, and he asked me to keep 

13 them together for him, and I put them in my file. 

14 I didn't do anything with them. I just 

15 put them in my file. 

16 Q Did these documents go into your safe? 

17 A They went into — not the safe where I file 

18 his files, because that safe was relatively full. 

19 They went into the safe where I lock up my things, 

20 and the other girls lock up their things at night. 

21 Q How big was this file when he handed it 

22 to you? 

23 A I think, about that big [indicating]. 

24 Q The witness is estimating about — 

25 A What, two or three inches? 



UNCtfiSSIFIED 



668 



UNek^SSIFIED 



34 



1 Q — about two inches. 

2 A I really don't remember, but it was just 

3 a bundle of papers. I think it had a manilla folder 

4 on it, or around it, or in it. 

5 Q Did Admiral Poindexter keep an Iran file 

6 prior to that time? 

7 A No, he did not. At least I was not aware 

8 of it. He kept papers on his desk, but I did not 

9 know of any specific files that he kept that he 

10 entitled "Iran." 

11 Q So to your knowledge, this note, "keep 

12 this together for me," was written about the time 

13 prior to this departure? 

14 A Um-hmm. I think what he did was go 

15 through his desk and pull papers that had dealt with 

16 this subject, bundled them up, and gave them to me. 

17 He was disposing of all those papers. 

18 Q Were there any other papers that he — 

19 relating to the contras or Iran — that he asked you 

20 to safeguard, as well, when he was leaving? 

21 A I'm not sure if he gave it to me in one 

22 bundle, or if he added to it at the end of the day, 

23 or the next day when he found more papers that he 

24 wanted me to hold for him. I can't recall. I think 

25 there were two instances. Anyhow, I put them all in 



UNCtftSSlFtED 



669 



i>NOLIl$§IF'.Ed 



35 



1 the same batch that I had. 

2 Q And each time he would indicate that this 

3 was for the Iran file? Is that correct? 

4 A He would just say, "keep these with the 

5 papers that I asked you to hold," or "put these with 

6 that bundle I asked you to hold." 

7 Q Do you recall, if you could look at the 

8 memorandum, as I told you earlier this is the 

9 memorandum indicating that funds had been diverted 

10 from the Iran initiative to the contras. 

11 Do you remember ever seeing this document 

12 at or around the time we believe it was written in 

13 April of 1986? 

14 A No, not when it was written. I've seen 

15 it after. 

16 Q I'm going to ask you this question. I 

17 think I know the answer. When did you first learn 

18 of the diversion? Was it when it came out in 

19 public? 

20 A Well, before it came out in public. The 

21 morning that the Admiral resigned. 

22 Q Do you remember when the Admiral handed 
2 3 you this document, or put it in a pile with other 

24 documents, do you remember whether it had a cover 

25 sheet on it? Or you don't remember this is what it 



UNCt/rS^F?ED 



670 



UNCLASSIFIED 



36 



1 looked like? 

2 A I can't remember if it had — if the folder 

3 surrounded the entire bundle, or if the folder was 

4 on top of the bundle, but I know that it had a sheet 

5 of paper on top, and I thought it was just — you 
6. know, I really don't recall, but I thought it was 

7 just a blank sheet of paper. It may have even been 

8 one of those little stick-um notes that just said, 

9 keep this together for me. 

10 Q Did you go through the papers at all? 

11 A No, I just figured that it was stuff that 

12 had to do with Iran that he was going to use, or 

13 sort out when he had a moment, and I did not have a 

14 chance to go through it, and I did not go through 

15 it. 

16 I think the next day, or the weekend 

17 came, and I think that's when the FBI took the 

18 files. They didn't take these, though. 

19 Q They did not take these files? 

20 A No, because they did not take my files. 

21 So when I came in to work, I believe it was Monday 

22 morning, I jokingly said, look what I have. Then 

23 they said, turn them over immediately, and that's 

24 what I did. 

25 MS. NOURSE: If the reporter could mark 



UHCtl^lFlEB 



671 



UNCi#SSIFIED 



37 



1 this as Gantt Exhibit No. 1, we have more notes. 

2 -(The document referred to was 

3 ' marked Gantt Exhibit No. 7 

4 for identification.) 

5 MS. NOURSE: This is, for the record, 

6 four pages of handwritten notes' marked with our 

7 Bates stamp numbers N5362 through N5365. 

8 BY MS. NOURSE: (Resuming) 

9 Q Mrs. Gantt, could you tell us whether 

10 these are notes written by Admiral Poindexter based 

11 on your knowledge of his handwriting? 

12 A Yes, they are. 

13 Q On the first page of N5362, could you 

14 read for us the third entry on the first note which 

15 in the upper left-hand corner states "ODSM"? 

16 A The third that doesn't have the little- 

17 Q I believe it starts with "What is 

18 A "What is the real story on FDN 

19 atrocities." 

2 Q "Atrocities." Thank you. 

21 The next entry states, I believe, and you 

22 can tell me whether this is correct,! 

2 4 A That's correct. 

25 Q The reference in the upper left-hand 






UNClltSSiHED 



672 



UNGIASSIFI^I) 



38 



1 corner, ODSM, what do you understand that to be? 

2 A That's the Office Director's Staff 

3 Meeting. That's the Senior Staff meeting of the 

4 National Security Council staff directors. 

5 Q Were those notes kept in a separate file, 

6 as well? 

7 A I really don't remember. I don't think I 

8 had an ODSM file, but I'm really not sure. If there 

9 is a file, it would be in that drawer. 

10 Q Looking on N5364, I believe that's two 

11 pages on, if you could confirm for me the 

12 handwriting with respect to the reference that 

13 states "Meeting with President 0930"? 

14 A That's Admiral Poindexter's handwriting. 

15 Q Would this be a note that he had taken at 

16 the meeting? Or do you believe prior to the 

17 meeting? 

18 A It'B very difficult to say. 

19 Q I read this note as follows, and you can 

20 tell me whether you believe that to be a correct 

21 interpretation. 

22 "Meeting with President 0930. 

23 Discussed Speaking Breakfast" — 

24 A "Sperling," I think. 

25 Q "Sperling Breakfast." Is Sperling a name 



UNClfiSSIFSED 



673 



UNCtftS^IED 



39 



1 you recocfnize? 

2 A I think it is the news, the newsies, that 

3 have a breakfast. It is S-p-e-r-1-i-n-g. 

4 Q "Private aid to contras." 

5 A I think it's — I'm not sure if it's the 

6 newsies now, you know, but that's what it says, 

7 "private aid to contras." 

8 Q "Bud covered our plan." 

9 Then four points. The first: 

10 "3rd country assistance." 

11 Second: "non-lethal aid." 

12 Third: "intelligence restrictions." 

13 Fourth: "private humanitarian aid." 

14 A That's correct. 

15 Q If we could just go back again on the 

16 Sperling breakfast, if you could explain it again 

17 for me once more? I'm maybe a little bit dense on 

18 that. 

19 A I think it's a group of newsmen that get 

20 together, and it is out of the building. They have 

21 a breakfast every — I don't know if it's once a year, 

22 or maybe it's more, or maybe they have it every week 

23 or every month, and they ask various people to 

24 participate. At least that's what I think that is. 

25 Q All right, moving on. 



UNetftSSIfSED 



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UNCkl^lFIED 



40 



1 MS. NOURSE: Would the reporter mark this 

2 as Gantt Exhibit No. 8. 

3 (The document referred to was 

4 marked Gantt Exhibit No. 8 

5 for identification.) 

6 BY MS. NOURSE: (Resuming) 

7 Q This is a two-page handwritten note with 

8 our Bates stamp number N28884 to 28885. 

9 Mrs. Gantt, could you tell us whether 

10 this is a note written by Admiral Poindexter, to the 

11 best of your knowledge? 

12 A Yes, it is. 

13 Q Did he often write short, handwritten 

14 notes? 

15 A Yes. 

16 Q Of this type? 

17 A Um-hnm. Yes. 

18 Q This is written on 5/2 3. The name of the 

19 addressee in the upper left-hand corner is "Ray," I 

20 believe. Is that Ray, or Roy? 

21 A That's Ray. 

22 Q Do you believe that this is directed to 
2 3 Ray Burghardt? 

24 A Yea. That's why I would think it would 

25 be. 



UNeiASSIFiED 



675 



UNCLASSIFIED 



41 



1 Q Do you remember ever seeing this note 

2 before? 

3 A I might have. 

4 Q I understand, when you are managing paper 

5 flow. 

6 A Normally when I saw notes that I thought 

7 were difficult to read, I would retype them. 

8 Q Let me try and read this for you, and you 

9 can tell me whether it is correct. 

10 "Ray, 

11 "Please draft a short cover memo for the 

12 President and a response to include the following 

13 "Admit the problems of the past including 

14 the mistakes made in covert" — 

15 A It looks like it may be "program" or — 

16 Q Or "prg"? 

17 A Yes. 

18 Q Do you read that to be "prg"? 

19 A "Prg," yes. 

20 Q "Point factual errors when they exist. 

21 Sumnariz* the review conducted end of 1985 and the 

22 unanimous commitment by Cabinet officers in Jan 86 

23 and our campaign to get funds. Describe the mood on 

24 the Hill and our inability so far to break the funds 

25 loose. Admit the error in" — the next word? If you 



UNCLASSIFIED 



676 



UNCLASSIFIED 



42 



1 could halp m«, "appoint"? 

2 A It looks Ilk* "appoint**" or 

3 "appointmant". It looks li-k* "appointing", it's 

4 "appointing," "*rror in appointing Motl*y." 

5 Q "appointing Notl*y." 

6 A Om-ham. 

7 Q "Now things und*r" — "how" Is that 

8 "now"? 

9 A "Not things work und*r Abrams." 

10 Q "I suspsct this is pur* M*ng*s." 

11 A That's right. 

12 Q And sign*d with th* initials "JP." Is 

13 that corrsct? 

14 A That's corrsct. 

15 MS. NOURSE: Moving on, if th* r*port*r 
1< could mark this as Cantt Exhibit No. 9. 

17 (Th* docuaant r*f*rr*d to was 

18 aarkad Gantt Exhibit No. 9 

19 for idantification.) 

20 MS. NOURSE: Unfortunataly, D*an, I hav* 

21 no copi*s for you. 

22 BY MS. NOURSE: (R*suBing) 

23 Q Mrs. Gantt, if you could just tall us 

24 wh*th*r you can idantify this as Adniral 

25 Poind*xt*r's handwriting? 



UNCU^IFIED 



677 



UNCUSSIFIED 



43 



1 A Yes, it is. 

2 Q Aside from the — the record should reflect 

3 that the Xerox notations that happen to be in my 

4 handwriting say "Iran" and I think a reference to 

5 Admiral Poindexter are not in Admiral Poindexter's 

6 handwriting. Is that correct? 

7 A That's these, to that [indicating] and to 

8 this [indicating]. 

9 Q The bottom left-hand reference by the FBI 

10 to "P 21" is not in his handwriting. 

11 Mrs. Gantt, do these notes look to be the 

12 kind of notes he would make prior to entering a 9:30 

13 meeting or, to the best of your knowledge? 

14 A I don't think they would have been a 

15 9:30, because he was very good about putting at the 

16 top what specific meeting he was going to use the 

17 notes in. This looks like he just made notes. 

18 MS. NOURSE: Okay, I don't have anything 

19 else. 

20 EXAMINATION ON BEHALF OF THE HOOSE SELECT COMMITTEE 

21 BY MR. HALL: [Resuming] 

22 Q If I could go back for a moment, please, 

23 to what has been referred to as the diversion memo, 

24 number N7514~ 

25 MR. McGRATH: This is Gantt No. 6? 



UNCtl^lFIED 



678 



UNCti^lFIED 



44 



1 MS. KOURSE: Yes. 

2 MR. HALL: Yes, it is. 

3 BY MR. HALL: [Resuming] 

4 Q On that particular document, I am 

5 somewhat confused if he gave that document to you 

6 along with other documents which comprised the 

7 package perhaps two inches thick. I believe you 

8 indicated that that may have been the day before he 

9 resigned? 

10 A No. He didn't give me anything the day 

11 before. 

12 Q Then when did ha give those documents to 

13 you? 

14 A When he gave me something, it was either 

15 the day he resigned or the next day, or the 

16 following. I don't remember now. Was it a 

17 Thursday, or a Friday? It seems to me it was close 

18 to the weekend. But anyhow, I don't remember if he 

19 gave it to be exactly that very same day that he 

20 resigned. I think he did. And I think he also gave 

21 me some papers after— 

22 Q He resigned? 

23 A That's right. Maybe that Monday or 

24 Tuesday as he was cleaning out his desk. 

25 Q As he gave you those documents, was it 



UMetftSSiFiEH 



679 



UNCLASSIFIED 



45 



1 your impression that those particular materials he 

2 anticipated going through again? 

3 A Um-hmm. Yes. 

4 Q But this was the day that he resigned? 

5 A I'm not sure. 

6 Q Or the time frame thereabouts? 

7 A It was not before he resigned. I know 

8 that for sure. 

9 Q What gave you the impression that he may 

10 have gone through those documents again? 

11 A Well, I thought that possibly he would be 

12 using them if he had to remember what he was working 

13 with with Iran. I figured they were going to be 

14 working files for him. I didn't think anyone was 

15 going to come and take them. 

16 Q Certainly not. 

17 A And I figured he would be there for days 

18 to work on his files, and I thought he might be 

19 putting the file in order. And I could not tell you 

20 if this document was the very first document after 

21 this not*. This may have been down an inch, or two 

22 inches. In other words, I did not look through the 
2 3 papers. I was told when I was questioned before 

24 that this was in the package, and I was shown this 

25 document as being in the package with this note. 



UNCt«SStF!ED 



680 



UNGLA^lfftO 



46 



1 I think I was shown the package at the 

2 tlma whan I was told that. But when I received 

3 these documents, I did not go through. I just put 

4 them in the safe. 

5 Q Were there verbal instructions — 

6 A No. 

7 Q — associated with that? 

8 A It was sent down — it was a pile of things 

9 in his out box, and things that had numbers I would 

10 dispose to the Secretariat. Things that went to the 

11 Sit Room, I would send to the Sit Room. This 

12 package was bundled up, and it said, "keep together 

13 for me," and so I put it in my safe. 

14 MS. NOURSE: Let me clarify. This 

15 document marked N 7514 was not attached when you saw 

16 it to the document that — 

17 THE WITNESS: That's right. That's what 

18 I'm saying. 

19 MS. NOURSE: — is numbered N 7515. 

20 THE WITNESS: No. I recognize this 

21 document as it was pointed out to me when I was 

22 questioned, and I thought it was in the bundle of 

23 things. As I say, I think this may have been a 

24 little yellow slip put on top of the entire package. 

25 MS. NOURSE: That's what I was going to 



IJNdLA^IFIED 



681 



UN6iftSSIF!ED 



47 



1 ask you. The note, the handwritten note, you 

2 believe to have been on top of the materials that he 

3 handed to you? 

4 THE WITNESS: That's right. And we were 

5 busy, and I did not go through them. I just put 

6 them in the safe, as I say, figuring that he was 

7 going to use them to put them in order, or whatever, 

8 before he finally left. 

9 I thought we were going to have a chance 

10 to get all the files together to go to, you know, to 

11 the — we don't have central files, but to go to the 

12 NSC, or things that were in his personal files for 

13 him to take. 

14 Usually you work on files, and that's 

15 what I thought we were going to have a chance to do. 

16 I had no idea that we were going to lose our files. 

17 So I never really looked at this, because it was 

18 just not — it was not an urgent thing. I just stuck 

19 it in th« safe for him to ask for at some point. 

20 BY MR, HALL: [Resuming] 

21 Q I believe you indicated that the other 

22 safe was full, and that you placed that — 

23 A I stored it with my stuff, because I had 

24 the responsibility to get it back to him. So I just 

25 put it with my junk. 



UNCtffSSIFtED 



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48 



1 Q Did you relate the storing of those 

2 materials in your safe, as opposed to a safe which 

3 you would regularly store materials? 

4 A What do you mean, "relate"? 

5 Q Did you believe that those items had 

6 particular significance to them and were related to 

7 his resignation? 

8 A Absolutely no. I figured — well, I knew 

9 it had to do with Iran, because when I got the 

10 documents I saw it was Iran. When he said, keep 

11 them for me, I put them with my stuff as my working 

12 papers that he would eventually ask for. He did not 

13 ask me to file it, so I did not file the package. I 

14 kept it with my working papers. 

15 I figured that we were going to sort it 

16 out for the files. So that's why I kept it there. 

17 I figured he pulled everything from his desk that 

18 had to do with his problem. 

19 Q Did you ever have any discussion with him 
2 again concerning those documents, including that 

21 particular document? Did you ever have a discussion 

2 2 with him concerning those documents that he set 

23 aside for you to hold? 

24 A I laughed afterwards when the files had 

25 been taken by the FBI, and there was an article in 



UNClftSSIFIED 



683 



UNCUSSIFItO 



49 



1 the paper about Admiral Poindexter shredding his 

2 papers. My comment to the Admiral was, no wonder 

3 they thought you shredded your papers; I had all of 

4 your materials in my safe that dealt with Iran. And 

5 because they went through your safes and found 

6 nothing on Iran, they figured you shredded 

7 everything, and we laughed about it. 

8 Q When was that discussion? 

9 A After I found that I had this material in 

10 my possession, that the FBI had not taken it. 

11 Q Within a day or so? 

12 A When 1 came back to work, I think it was 

13 a Monday, because I think they took the files over 

14 the weekend. In fact, I'm pretty sure they took the 

15 files over the weekend. I think they took the 

16 combinations, or changed the combinations on a 

17 Saturday or a Friday night, and then I think Sunday 

18 they ceune and took the contents of the files. 

19 I just found it very amusing, and very, I 

20 guess, I didn't think unprofessional, but not very 

21 thorough that they did not take my files, too. 

22 Q What was his reaction to your comment, 

23 specifically? 

24 A I think then I said, then I immediately 

25 was told to turn them over to Brenda. And we just 



UNClftSSiF'.ES^ 



684 



UNCLASStF'ED 



50 



1 kind of laughed. 

2 Q What was Admiral Polndextar's reaction? 

3 A His reaction was the same, that they were 

4 not very thorough in taking all the files that were 

5 relevant. 

6 Q Nevertheless, you had them before you 

7 knew. 

8 A What do you mean? 

9 Q The documents, before you now. 

10 A I don't understand what you're saying. 

11 ■ g Put it aside. 

12 Can you recall what Admiral Poindexter's 

13 comments were concerning the documents that you 

14 indicated that they did not take? What was his 

15 specific reaction, if you can recall? 

16 A I told him that Z had turned them over to 

17 Brenda Reger, and he said, good. 

18 Q He said, "good'*? 

19 A Um-hma. 

20 BCAmWATIOW OH BEHALF OF SEWATB— Resumed 

21 BY MS. NOURSE: (Resuming) 

22 Q To your knowledge, did he ever look 

23 through this file again? 

24 A No. 

25 Q Did he have access to your safe? 



UmflSSIFIED 



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UNCbASStfU^O 



51 



1 A To my safe? 

2 Q Yes. Do you know whether he )cnew the 

3 combination? 

4 A He had access to them, but he would have 

5 had to ask for the combinations. I don't believe he 

6 had the combinations. He had the combination I 

7 think to his safe, but I'm not even sure about that. 

8 When I say "his safe," it is the safe in his office. 

9 It's not literally his safe. 

10 He never opened it and closed it, to my 

11 knowledge. I'm the one — or the Sit Room — 

12 Q You would open it and close it? 

13 A That's right. The Sit Room had access to 

14 it. They also had the combination. They had the 

15 combination to all our safes. But, you know, 

16 whether he had the combination to his safe or not, I 

17 don't know. I don't believe he had the combination 

18 to our safe. He never had any reason to. 

19 Q During the week or two prior to Admiral 

20 Poindexter's departure, do you remember, was there 

21 anything else that he asked you that might have been 

22 out of the ordinary in terms of filing or keeping 

23 papers together? 

24 A Absolutely not. We didn't even discuss 

25 the files, because we never thought they were going 



UNCtJtSSlF^EO 



686 



UNCLA^tfliD 



52 



1 to b* takan. 

2 Q Did Admiral Poindexter ever ask you to 

3 destroy documents in a way that you — 

4 A Absolutely not. Absolutely not. He 

5 would write "burn" on things — 

6 Q In the normal course. 

7 A That's right. And I did that all the 

8 years I worked with him. If he drew a line through 

9 it, if he sent a document out that didn't have a 

10 checkmark on it, like this [indicating] for 

11 instance. 

12 Q The witness is referring to N7823. 

13 A I would say, "Admiral, you didn't check 

14 your block," and he would say, that's okay, it's 

15 ready for filing. And sometimes if I said, you 

16 didn't check your block, he would go through it and 

17 you Icnow, kind of humor me and check it. 

18 MS. NOUKSE: Off the record a minute. 

19 [Discussion off the record.] 

20 gXAMIKATIOH BY COUNSEL FOR THE HOOSE— Resumed 

21 BY MR. HALL: [Resuming] 

22 Q You obviously are feuniliar with Colonel 

23 North? 

24 A Yes. 

25 Q When did you first come to work for the 



UNCLASSIHED 



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UNCkASSlFltD 



53 



1 National Security Council? 

2 A I started when I was 2. 1963. 

3 Q You've hel-d a variety of positions? 

4 [Laughter.] 

5 A Yes. 

6 Q Within the National Security Council? 

7 You started out your initial position at the NSC as 

8 what? 

9 A I was secretary to Charles Johnson, who 

10 was a senior staff member that handled atomic 

11 energy, nuclear treaties, that type of thing. 

12 Q Jumping ahead considerably to the early 

13 1980s when Lt. Col. Oliver North came to work for 

14 the National Security Council — 

15 A That's right. 

16 Q — do you recall under what circumstances? 

17 A I thought Mr. McFarlane brought him on 

18 board, but I'm not sure if he was already on the 

19 staff when Mr. McFarlane came. I really didn't pay 
2 that much attention. 

21 Q There came a point in time when Colonel 

22 North was placed in a particular section within the 

23 NSC political and military affairs section. Are you 

24 familiar with that? 

25 A Yes. 



IJNCbASSJr.EP 



688 



UHCU^iS?^^^ 



54 



1 Q Are you familiar with the fact that he 

2 had as subordinates Lt. Col. Robert Earl, and 

3 Commander Craig Coy? 

4 A That's correct. 

5 Q Do you connect anyone else with Colonel 

6 North in a subordinate position, aside from support 

7 positions? 

8 A No, except staff members that did work 

9 with him on various projects or various subjects 

10 that they were interrelated. 

11 Q You're familiar with the fact that 

12 Colonel North became involved in an initiative to 

13 sell arms to Iran? 

14 A I'm not sure when I became aware of that. 

15 I don't know whether I was very naive and didn't pay 

16 attention, if I ever knew, but I really don't — I 

17 knew wa were doing something with Iran, but I didn't 

18 know what until, I think, it became public. 

19 Q Did you routinely read the type of work 

20 that came into Admiral Poindexter's office? 

21 A No. You don't have time to read the 

22 paperwork that comes in. You look at the subjects. 

23 You would note the number, and the person that is 

24 writing it, so that if you are asked for the paper 

25 you recall seeing it come in. I am waiting for that 



UNCtimiF^ED 



689 



UNCLASSIFIED 



55 



1 paper from Jim Stark, has it come in? So you're 

2 knowledgeable about that. You don't have time to 

3 read papers. 

4 Q And you're aware that Colonel North — did 

5 you connect Colonel North with an Iran initiative? 

6 A Yes, I guess I did when I knew that Ollie 

7 was working on something sensitive, and I had an 

8 inkling it had to do with Iran. And, yes, I guess I 

9 did connect Ollie with that. 

10 Q Did you connect him with work on behalf 

11 of the contras for the NSC? 

12 A Oh, I knew he was working with Nicaragua, 

13 and that was part of his bailiwick, yes. 

14 Q How did you know that? 

15 A Because that was Ollie 's area, number 

16 one, and I guess I saw papers coming from Ollie 

17 North. 

18 Q And Colonel North would meet with Admiral 

19 Poindextar? 

20 A Yes. 

21 Q How frequently? 

22 A That's hard to say. I would have to 

23 go~ 

24 Q We're talking in the time frame of 1985 

25 throughout 1986. 



uwettssiF'F.n 



690 



liNCi-ftSS4F<ED 



56 



1 A That's very difficult to say. I have it 

2 on the record of schedule that are also in those 

3 files. I didn't pay attention that much. There 

4 were times when we had a crisis going, then a 

5 specific staff member would meet more than once or 

6 twice a day. 

7 There were times that Ollie never came to 

8 our office. 

9 Q Would he call prior to coming to Admiral 

10 Poindexter's office? 

11 A Normally, yes. 

12 Q Would he just show up? 

13 A There may have been times when he may 

14 have been downstairs working in the Sit Room, and 

15 there was a crisis going on, and he had to come in 

16 and report to the Admiral on something specific, and 

17 he may have just popped in. 

18 Basically when people C2une to see the 

19 Admiral, they rec[uested to see the Admiral. 

20 Q When Colonel North appeared in Admiral 

21 Poindexter's office, would the door be open? 

22 A The Admiral's door was always closed. 

23 Q Even if he was in there alone? 

24 A Even if he was in there alone. 

25 Q So in other words, he would allow entry 



UNCt/i^lFSEn 



691 



UNGiftSSIFitD 



57 



1 to a visitor, and the door would be closed, and the 

2 discussion would continue? 

3 A Um-hnm. And he would allow entry only 

4 when I buzzed him and told him that someone 

5 specifically wanted to see him. Nobody barged in, 

6 except maybe Don Regan, or the President, or 

7 something like that. Then, you know, I would just 

8 go like that [indicating], and they would walk in. 

9 Q Did you know of a specific animus between 

10 Admiral Poindexter and Lt. Col. North? Did you know 

11 of any disagreements or tension, arguments? 

12 A Sometimes I would detect frustration. 

13 Q On whose part? 

14 A On the Admiral's part, and probably on 

15 01 lie's too. You could tell sometimes, yes, that 

16 there was frustration or, you know, get out of here. 

17 Q And how would that frustration be 

18 articulated? 

19 A You could tell that he — 

20 Q Speaking of whom, please? 

21 A Speaking of the look on 01 lie's face when 

22 he came out, and if I would buzz the Admiral for 

23 something after he met with Ollie or he talked with 

24 Ollie, the Admiral would bark at me. At which time 

25 1 would give him a handful of candy to show him that 



UHCtft^lfJ^^ 



692 



UNCiJ^SlF'tD 



58 



1 h« naaded to be sweetened up. 

2 Q Did you )uiov of a specific disagreement 

3 between Admiral Poindexter and Colonel North, the 

4 subject matter? 

5 A No, 

6 Q Would Admiral Poindexter discuss with you 

7 the personality traits or work performance of his 

8 subordinates? 

9 A Sometimes I would see frustration, and I 

10 would make a comment, and he would say, well, he's 

11 just not doing what I want, or whatever; and I would 

12 say, well, why don't you fire him? 

13 Q VJho are you referring to? 

14 A No one in particular. There were several 

15 instances when there were times when he was upset 

16 over a specific person. Not Ollie, in this instance 

17 that I'm talking about, and I would say, well, why 

18 don't you fire him? And he would say, well, we're 

19 going to, or something like that. And that would be 

20 th« end of it. 

21 And a lot of times he would tell me to 

22 mind my own business. 

23 Q We can guess who that would be. But 

24 speaking of Colonel North, did you ever detect from 

25 Admiral Poindexter a specific area of disenchantment 



UNCLA1S^SIF!ED 



693 



UNCkRSSIF'tD 



59 



1 of th« work p«rforBanc«, anything that you can 

2 racall in particular? 

3 A Not In particular, no. 

4 MR. HALL: Thank you. 

5 BXMUHATIPH Qtf BEHALF 9f SEyATB— Rft>M<4 

6 BY MS. NOURSE: (Rasualng) 

7 Q I understand that you workad for Adairal 

8 Poindaxtar vhila ha was Oaputy? 

9 A That's corract. 

10 - Q If you could giv* us sobs insight, as far 

11 as you know, as to his ralationship with Mr. 

12 McFarlana. Has it a closa ralationship? 

13 A Closa? What do you maan? Personal? 

14 Q Personal . 

15 A Did thay socialize? 
1« Q Yes. 

17 A No. 

IS Q No? 

19 A No. The Adairal was not a very social 

20 bird. He was basically family. 

21 Q They had day-to-day contact, Z iaagine, 

22 though? 

23 A They had what? 

24 Q Day-to-day contact in the context of the 

25 NSC operation procedures? 



UNCLAfS!7:cO 



694 



UNClASSlFiEd 



60 



1 A That's correct. 

2 Q Let me ask you one more question about 

3 the diversion memo. Do you ever remember typing 

4 this document? You have seen this document more 

5 than once, I imagine, in various interviews. 

6 A I don't remember ever typing the 

7 document, and I don't think I did, because I would 

8 never have put "sensitive" there [indicating]. I 

9 would have put "sensitive" here [indicating]. That 

10 was my way of typing it, here [indicating], and 

11 underneath; or "Top Secret — Sensitive" or 

12 "/Sensitive." 

13 Q By "diversion" you understand that I mean 

14 the flow of profits from the Iran initiative to the 

15 contras? 

16 A Um-hmm . 

17 Q Do you ever remember typing any other 

18 document in which you remember having any reference 

19 to such a diversion other than this document, the 

20 April 4 docvunent that is before you? 

21 A I never even really read this document, 

22 so I don't even know what it says in it. The first 

23 time I ever heard of "diversion" was the day the 

24 Admiral resigned. 

25 MS. NOURSE: Okay, fine. Thank you. 



UNClirSSIFIED 



695 



UN€tftSSIF!ED 



61 



1 Bud? 

2 MR. HALL: Thank you, very much. 

3 MR. McGRATH: I would just like to 

4 Indicate for the record that Mrs. Gantt appeared 

5 here voluntarily today to cooperate with the 

6 Committee; that the matters discussed are at the Top 

7 Secret Zevel. 

8 MS. NOURSE: Certainly. And we thank 

9 Mrs. Gantt for her cooperation, and for her 

10 occasional humor, and for bearing with this heat in 

11 this room. 

12 [Whereupon, at 11:16 a.m., the deposition 

13 in the above-entitled matter was concluded.] 

14 * * * 



UNetAS€!F"«:d 



696 



UHCt1iSStf»W 



62 



1 

2 SIGNATURE OF THE WITNESS 



3 SUBSCRIBED AND SWORN to before me this 

4 day of , 1987. 



5 



6 NOTARY PUBLIC 

7 My Commission Expires: 



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SENS : T : ■ 



RILEASE OF AMIRICAK HOSTAGES IN BEIRUT 



7515 

Background. in June 1985, private American and Israeli citizens 
conun«nc«d an operation to effect the release of the American 
hostages m Beirut m exchange for providing certain factions ir. 
Iran with U.S. -origin Israeli military materiel. By September, 
U.S. and Israeli Government officials became involved m this 
endeavor in order to ensure that the USG would: 

not object to the Israeli transfer of embargoed materiel tc 
Iran; 

sell replacement items to Israel as replenishment for like 
Items sold to Iran by Israel. 

On September i^, the Israeli Government, with the endorsement of 
the USG, transferred 508 basic TOW missiles to Iran. Forty-eight 
hours later. Reverend Benjamin Weir was released in Beiz-ut. 

Subsequent efforts by both governments to continue this process 
have met with frustration due to the need to coomunicate our 
intentions through an Iranian expatriate arms dealer in Europe. 
In January 1986, under the provisions of a new Covert Action 
Finding, the USG demanded a meeting with responsible Iranian 
government officials. 

On February 20, 




"the first direct U . S . - Iranian coACl^t m oVer five years. At 
this meeting, the U.S. side made an effort to refocus Iranian 
attention on the threat posed by the Soviet Union and the need to 
establish a longer term relationship between our two countries 
based on more than arms transactions. It was emphasized that the 
hostage issue was a 'hurdle* which must be crossed before this 
improved relationship could prosper. During the meeting, it- also 
became apparent that our conditions/demands had not been accuratel% 
transmitted to the Iranian Government by the intermediary and it 
was agreed that: 

The USG would establish its good faith and bona fides by 
ifflDcdiately providing 1,000 TOW missiles for sale to Iran. 
This transaction was covertly completed on February 21, 
using a private O.S. firs and the Israelis as intermediaries. 

A subsequent meeting would be held in Iran with senior U.S 
and Iranian officials during which the U.S. hostages would 
be released. 

Immediately after the hostages were safely in our hands, the 
U.S. would sell an additional 3,000 TOW missiles to Iran 
using the same procedures employed during the September 1985 
transfer. 



mmin 



SENSITIVT 



728 



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ocur\i- 



SENSi-r; 



N 7516 



In •«Tiy March, the Iranian txpatriate intermediary demanded th 
Iranian conditions for release of the hostages now included the 
prior sale of 200 PHOENIX missilat and an unspecified number of 
HARPOON missiles, m addition to the 3,00C TOWs which would be 
delivered after the hostages were released. A subsequent meeti 
was held with the intermediary m Pans or. March 8, wherein it 
was explained that the requiraaent for prior deliveries violate 
the understandings reached in Frankfurt on February 20, and wer 
therefore unacceptable. It was further noted that the Iranian 
aircraft and ship launchers for these missiles were in such 
disrepair that the missiles could not be launched -«ven if provi 



t i 



de 

1 

From March 9 until March 30, there was no further effort 
undertaken on our behalf to contac^th^^^^ian Government or the« 
intermediary. On March 26 ,^H^^H||HQHH|<''^<^* *^ unsolicited 
call to the phone-dro^in Marylana wnicrT wJr had established for 
this purpose. ^^^I^^asked why we had not been in contact and 
urged that we proceed exp«ditiously since the situation in Beirut 
was deteriorating rapidly. He was informed by our Farsi-speaking 
interpreter that the conditions requiring additional materiel 
beyond the 3,000 TOWs were unacceptable and that w« could in no 
provide anything else prior to the release of our hostages, 
[observed that we were correct in our assessment of their 
'inability to use PHOENIX and HAJtPOON missiles and that the "most 
urgent requirement that Iran had was to place their current HAWX 
missile inventory in working condition. In a subsequent phone 
call, we agreed to discuss this matter with him and he indicated 
that he would prepare an inventory of parts required to make 
their HAWX systems operational. This parts list was received or. 
March 28, and verified by CIA. 

Current Situation . On April 3, An Gorbanifahr, the Iranian 
intermedi ary" arrived in Washington, D.C. with instructions from 
^^miJH to consuinmate final arrangements for the return of the 
hostages. Gorbanifahr was reportedly enfranchised to negotiate 
the types, quantities, and delivery procedures for materiel the 
D.S. would sell to Iran through Israel. The meeting lasted 
nearly mIt w-j-oht on A pril 3-4 ■ >"<^ involved numerou s calls 
Tehran, 




A Farsi-speaking CIA officer in 
attendance was abie"?^^T^^y the substance of his calls to 
Tehran during the meeting^ Subject to Presidential approval, it 
was agreed to proceed as follows: 

By Monday, April 7, the Iranian Government will transfer 
S17 million to an Israeli account in Switzerland. The 
Israelis will, in turn, transfer to a private U.S. 
corporation account in Switzerland the sum of S15 million. 



TOP S 



WLASSIFIEft SECRET 



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Ur OCUKL! 



stusiTrvt 



N 7517 



Or Tuesday, April 8 (or a: soon as the transactions are 
verified), the private U.S. corporation will transfer 
S3. 651 million to a CIA account m Switzerland. CIA will 
then transfer this sub to a covert Departjnent of the Arroy 
account in the U' . S . 

On Wednesday, April 9, the CIA will cotrmence procuring 
S3. 651 million worth of HAVTT missile parts (2«C 

line items) an d tran sferring these, parts to 

^^■■■■H^^^l^mi^m^^^^^M This process is 
^^Tmate^totalce sevenworl^n^days . 

On Friday, April 18, a private U^^^^rcraft (707B) will 
pic)c-up the HAWK missile partsB[|HH^and fly thea to a 
covert Israeli airfield for prepo^^^oning (this field was 
used for the earlier delivery of the 1000 TOWs) . At this 
field, the parts will be transferred to an Israeli Defense 
Forces' (IDF) aircraft with false marJtmgs. A SATCOM 
capability will be positioned at this location. 

ay, April 19, McFarlane, North, Teicher, Cave, 

and a SATCOM communicator will bo ard a CIA aireraf' 

ranKturt, Germany, enro ute t o Tehran. 

On Sunday, April 20, the following series of events will 
occur: 

U.S. party arrives Tehran (A-hour) -- met by 
Rafsan^ani, as head of the Iranian delegation. 

At A*7 hours, the U.S. hostages will be released in 
Beirut. 

At A-fl5 hours, the IDF aircraft with the HAWK missile 
parts aboard will land at Bandar Abbas, Iran. 

Discussion . Th« following points are relevant to this 
transaction, the discussions in Iran, and the establishment of a 
broader relationship between the United States and Iran: 

The Iranians have been told that our presence in Iran is a 
"holy commitment* on the part of the USG that we are sincere 
and can be trusted. There is great distrust of the U.S. 
among the various Iranian parties involved, without our 
presence on the ground in Iran, they will not believe that 
we will fulfill our end of the bargain after the hostages 
are released. 



TOP SECRE' 



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N 7518 




^^ GorbanifAhr ip^cifically mentionad that 
Ohadhalf 1 ' s «:forts to 'buy* the hotta<je$ could «ucce«d in 
the near future. Further, the Iranians art well aware that 
the situatit ,. m Beirut it deteriorating rapidlv «nd that 
the ability of the IRGC to effect the release of the 
hoitage« will become increasingly more difficult over tiae. 

We have convinced the Iranians of a significant near term 
and long range threat «roni the Soviet Union. We have real 
and deceptive intelligence to deaonstrate this threat during 
the visit. They have expressed considerable interest in 
this matter as part of the longer term relationship. 




The Iranians have been told that their provision of 
assistance to Nicaragua is unacceptable to us and they. have 
agreed to discuss this matter in Tehran. 

We have further indicated to the Iranians that we wish to 
discuss steps ^**<img "^o « cessation of host ilities between 
Iran and Iraq . 




The Iranians are well aware that their most immediate needs 
are for technical assistance in maintaining their air force 
and navj-. We should expect that they will raise this issue 
during the discussions in Tehran. Further conversation with 
Gorbanifahr on April *, indicates that they will want to 
raise the matter of the original 3,000 TOWs as a significant 
deterrent to a potential Soviet axsve against Iran. They 
have also suggested that, if agreement is reached to provide 
the 




The Iranians have been told and agreed that they will 
receive neith er— hlaae nor credit for th e seiiure/release of 
the hostages, 



mmm wmmim 



SENSITIVE 



731 



TOP 



mi^ssw 



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N 7519 



Tl>e rtsidual funds froffi this transaction *r« allocated as 
follows: 

S2 million will be used to purchase replacement TOWs 
for the original 506 sold by Israel to Iran for the 
release of Benjamin Weir. This is the only way that we 
have found to meet our commitment to replenish these 
stoctcs . 

$12 Billion will b« used to purchase critically needed 
supplies for the Nicaraguan Deaocratic Resistance 
Forces. This materiel is essential to cover shortages 
in resistance inventories resulting from their current 
offensives and Sandinista counter-attacks and to 
"bridge* the period between now and when Congressionally 
approved lethal assistance (beyond the $2S million m 
'defensive* arms) can be delivered. 

The ultimate objective in the trip to Tehran is to conanence the 
process of improving L" . S . -Iranian relations. Both sides are 
aware that the Iran-Iraq War is a major factor that must be 
discussed. We should not, however, view this meeting as a 
session which will result in immediate Iranian agreement to 
proceed with a settlement with Iraq. Rather, this meeting,' the 
first high-level U.S. -Iranian contact m five years, should be 
seen as a chance tc move m this direction. These discussions, 
as well as follow-on tal)cs, should be governed by the Terms of 
Reference (TOR) (Tab A) with the recognition that this is, 
hopefully, the first of many meetings and that the hostage issue, 
once behind us, improves the opp>ortunities for this relationship. 

Finally, we should recognize that the Iranians will undoubtedly 
want to discuss additiona^^ra^an^comie^^al^^^nsactions as 

'quids* for accoBmodatingflH|^^HI^HB^^mi|HH|^| ^ ^^*^"^' ' 
and Iraq. Our emphasis o^th^Sovletmll^^^^^an^subverslve 
threat, a useful mechanism in bringing them to agreement on the 
hostage issue, has also served to increase their desire for means 
to protect themselves against/deter the Soviets. 

RECOMMENDATION 

That the President approve the structure depicted above under 
"Current Situation* and the Terms of Reference at Tab A. 



Approve 



Disapprove 



Attachment 
Tab A 



U.S. -Iranian Terms of Reference 




SECREi 



SENSITI'.T 



732 




CRET 



SENSITIVE 
April 4, 1986 



TEWS or RlfERXNCE 

l.S.-IrT. Ditloqu* 



N 7510 



I . BASIC PILLARS OF l' . S . TOREIGN POLICY (Optional) 

President R*ag«n came into office at a time when Iran had 
had a certain impact on the American political proceas -- 
perhapa not what you intended. 

The President repreaented and enbodied America '• recovery 
from a period of weakness. Be has rebuilt American military 
and economic strength. 

Most uaportant, he has restored American will and 
self-confidence. The O.S. ii not afraid to use its power in 
defense of its interests. We are not intimidated by Soviet 
pressures, whether on arms control or Angola or Central 
America or Afghanistan. 

At the same time, we are prepared to resolve political 
problems on the basis oi reciprocity. 

We see many international trends -- economic, technological, 
and political -- working m our favor. 

II. U.S. POLICY TOWARD IRAN: BASIC PRINCIPLES 

A. U.S. Assessment of Iranian Policy . 

We view the Iranian revolution as a fact. The U.S. is 
not trying to turn the clock back. 

Our present attitude to Iran is not a product of 
prejudice or emotion, but a clear-eyed assessment of 
Iran's present policies. 

Iran has used 'revolutionary Islam* as a weapon to 
undermine pro-Western governments and American 
interests throughout the Middle East. As long as this 
is Iran's policy, we are bound to be strategic 
adversaries. 

Support of terrorism and hostage-taking is part of this 
strategic pattern. We see it used not only against us, 
but against our friends. We cannot accept either. 
Your influence in achieving the release of all hostages 
return of those killed (over time) is essential. 



WWSSfFIBPCRET 



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Declaf 



733 



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We ite your activity ir. many part* of the world, 
including evan Central America. 

The U.S. )cnows how Iran views the Soviet Union. But 
aubversion of Western interests and friends objectively 
serves Soviet interests on a global scale. 

Thus, our asaeasaent is that a decisive Iranian victor% 
in the war with Iraq would only unlcaah greater 
regional instability, a further erosion of the Western 
position, and enhanced opportunities for Soviet 
trouble-mailing . 

The U.S. will therefore do what it can to prevent such 
a development. We regard the war as dangerous in many 
respects and would liKe to see an end to it. 

Possible Intersections of O.S. -Iranian Intereeta . 

Despite fundamental conflicts, we perceive several 
possible intersections of U.S. and Iranian interests. 
I propose we explore these areas. 

First, the O.S. has had a traditional interest in 
seeing Iran preserve its territorial integrity and 
independence. This has not changed. The U.S. oppose* 
Soviet designs on Iran. 

Second 

Iran 




We are seeking an end to this 

conflict anc want CO" use an improved relationship with 
Iran to further that end. 

Third, we have parallel views on Afghanistan. Soviet 
policy thT « IS nalced aggre ssion, a threat to all in 
the reg ion. 

But our 
Ob] active la the same: the Soviets must get out and 
let the Afghan people choose their own course. 

U.S. Obiective Today . 

We have no illusions about what is possibTe in our 
bilateral relations. Perhaps this meeting will reveal 
only a limited, momentary, tactical coincidence of 
interests. Perhaps more. We are prepared either way. 

In essence, we are prepared to have whatever Jcmd of 
relationship with Iran that Iran is prepared to have 
■with us. 



NCUSSinfflECRET 



SENSITIVT 



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■- Moicow h<8 d«si9n« on parts o.' Iran, 



StNSITlVE 




^^^^w.re of sovi.t activity 



Sovitt plan 




How th«y would do it 



"" ih!^i*c '"Pt^^^ '^^ Sandini.ta r.gin. in Nicaragua aid. and 

U.S. car. help Iran cop* with Sovi.t thraat. 
IV. AFGHAMSTXN 

May be real value for Iran and f.S. to find ways to 
cooperate against Moscow xn Afghanistan. ^ ° 

j^^^^^^^^n|taria^ssi stance for refugeesH| 

We need tc know who you work with, what you already orovide 
adv.nt;:?," """^^ '° "P^°^^ ^""^*" cLparit".' '" '''' 

V. HARDWAJtl 

rlutL^h?"''"*' '° "•""• • ^^"^^-^ -^^^^'^V «"PP1V 

"' !h)I?h!^/^" •^®^"«i°" •"<» ultimate scope will depend on 
To!» tr.«" convergent or our divergent interests «m. to 
loom larger in the overall picture. 

What docs Iran want? 



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RPTS CANTOR 
DCHK DONOCK 



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Q^0^t^'^^i^ 



DEPOSITIOH or EILEK CLAYTON GARWOOD 

Wednesday, March 18, 1987 

House oi Representatives, 
Select Comnittee to Investigate 
Covert Arns Transactions with 
Iran. 
Washington, D.C. 



The select committee met, pursuant to call, at 11^00 a.m. 
in Room B-336, Rayburn House Office Building. 

Present: Thomas Fryman, Staff Attorney; George W. Van 
Cleve, Chief Minority Counsel; Ken Buck, Hinority Counsel, 
House Select Committee to Investigate Covert Arms 
Transactions with Iran 

James Kaplan, Associate Counsel and Timothy Woodcock, 
Senate Select Committee on Secret Military Assistance to 
Iran and the Nicaraguan Contras. 

Also Present: Duncan E. Osborne and Tom Loeffler, on 
behalf of the witness. 

Whereupon. 



.Jf^t^^NClASSIFJEO 



^lOC 



SHo, NaltamI Security Coond 



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27 
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33 

^ 35 

37 
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•(3 



HIR077000 



UNCLASSIFIED 



PtGZ 2 



ELLEK CLAYTON GARWOOD 

was callad as a witness and. having baan duly sworn, was 

axamined and tastlilad as iollows: 

HR. rRYHAN' On tha racotd. 

BY HR. FRYHAN: 
fi Will you stata youz nama iot tha zacotd? 
A Elian Clayton Garwood. Hrs. St. John Garwood, 
fi Hr s. Garwood, what is yo ur addrass? 
A ^^^^^^^^^^^^^^^Hf Austin. TaMas 
S Ara you appaaring hara today pursuant to a subpoenal 
A Yas. 

fi Z ask tha rapoztaz to aazk this doeuaant as Garwood 
Deposition 1. for idantiiicatlon. 

[Tha iollowing docuaant was aarkad as Garwood 
EhMibit 1 ior idantiiicatlon: ] 

*MTti»*m*M*m COHMTTEI INSERT ««««««««■ 



UNCLASSIF2E3 



744 



(UNCLASSIFIED 



NAME: 

44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 
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59 
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6 1 
62 
63 
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HIR077000 



PAGE 



BY HR. FRYHAK: 

Q I show you Garwood Exhibit 1 for idsntif ication , and 
asK you to look at that and tell ne if that is a copy of tha 
subpoena that was served on you? 

A It looks like it. 

2 Would you look at the attachment also? 

A Yes . 

e Thank you. 

Mrs. Garwood, are you a widow? 

A Yes. 

fi And what was your husband's occupation? 

A He was a Judge of the Supreme Court of Texas, and he 
retired. He was a Judge from 1948 to 1958 on the Supreme 
Court of Texas . 

2 And would you state for the record your educational 
backround? 

A I went to Smith College to get a B.A. in English, 
and later I went to the University of Texas and got my 
Master's in English, after we moved to Austin, which was 
about 1949-1951. 

8 Have you ever published any articles or books? 

A I have published books and an article or so, and 
some short stories. 

C How many books have you published? 

A Three. 



UNCLASSIFIED 



745 



UNClflSSIFJED 



NAME: HIR077000 - ■«» *^ ■ I I l_ LJ PAGE 

69 2 Could you identify th« books? 

70 A Yes. You want rae to tell you the names? 
7 1 • S Yes, would you tell ne the nanes? 

72 A ''Will Clayton, A Short Biography. •' That was 

73 published by the University of Texas in 1948. No, excuse 
7U ne . 19S&, then ''Come to Me, Ka*^4^«n , ' ' which was published 
75 about two years ago, a novel, and ''The Undying Flame, 

/- 76 Maria n a ai>< Moreno of Buenos Aires,'' which was published in 

77 the spring of 1986. 

78 Q And I believe you stated you have also published 

79 articles? 

80 A Yes. I published an article on early Texas 

r- • - 

81 A a da pen d »nce in the Southwestern Historical Quarterly, I 

82 think around 1950 or so, and I wrote some historical 

83 articles also for the Houston Chronicle, around the sane 
8>4 tine . 

85 2 Mrs. Garwood, after receiving the subpoena which 

86 calls for production of various categories of documents, 

87 would you state what steps you had taken to collect the 

88 documents called for in the subpoena? 

89 . A A good example of the documents called for in the 

90 subpoena, X didn't have, it seems to me. The other things 
9 1 like the copy of cancelled checks or the cancelled checks 

92 and the correspondence and brochures I went about 

93 collecting . 



UNCLASSIFIED 



746 



NAME: 

94 

95 

96 

97 

98 

99 

100 

101 

102 

103 

lOU 

105 

106 

107 

108 

109 

1 10 

1 1 1 

1 12 

1 13 

1 1U 

1 15 

1 16 



HIR077000 



<^NCl4SSIFa 



My lawyar coll«cted th« cancalled checks, Duncan, 
and I checked the bcochuzes and the cozzespondence and 
anything else that was called for. • 

2 And did you give youz lawyer, Mr. Osborne, a copy of 
the subpoena? 

A Yes. 

2 And you asked hin to collect any basic material that 
was called for in there; is that correct? 

A Yes, that is right. 

2 And an I correct in understanding the correspondence 
you collected yourself? 

A Well, the correspondence, yes, I collected. I 
already had it collected, and I gave copies of it to Hr . 
Osborne . 

HR. FRYHAK: I would ask the reporter to nark as 
Garwood Exhibit 2 for identification a collection of 
docunents headed by a typewritten financial schedule with 
the phrase, ''Anerican Conservative Foundation,'' on the 
first line. 

[The following document was marked as Garwood 
Ehxlbit 2 for identification: 1 

xxxxxxxxxx COHHITTEE INSERT ***»*»»*» 



UNCLASSIF3ED 



747 



HAHE: HIR077000 



UNCLflSSIFSED ». 



1 17 
1 18 
1 19 
120 
121 
122 
123 
12U 



tlR. rRYMAN: I ask tha laportar to mark as Gazuood 
Exhibit 3 ior idantiiication a collaction of documants . tha 
first paga of which is a nailgzam dizactad to Elian and St. 
John Garwood. 

[Tha following docuaant was aarkad as Garwood 
Ehxibit 3 for idantif ication = 1 

*M**»*Mx*x COHHITTEE IKSERT ********* 



UNCIASSIFJED 



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HR. FXYHAN: I ask th« rcportat to mark as Garwood 
Exhibit U for id*ntif ication a collAction oi docuitants. tha 
first paga of which is a lattar datad Dacambac 7, 1981 to 
Uastern Goals Endownant Fund. 

(The following documant was narkad as Garwood 
Ehxibit M for idantif ication = ] 

xxxxxxxxKX COHHITTEE IKSERT ««»**»««« 



UNCLASSIFIED 



749 



WUSSIfe 



NAME: HIR077000 --'»*#if fl ^ if PAGE 8 

133 BY HR. FRYHAN: 

134 e Mrs. Garwood, I ask you and your attorney, Hr . 

135 Osboin«, to look at Garwood Exhibits 2. 3 and U for 

136 idantiiication, and tall ii« if those ar* tha docunants that 

137 you have together collected in response to the subpoena and 

138 previously produced to staff counsel to the House Comnittae? 

139 Hrs. Garwood, you and your counsel have had an 
1U0 opportunity to review Garwood Exhibits 2. 3, and U . Do 
1(4 1 those exhibits contain copies of docuaents either in your 
1U2 possession or financial naterials relating to your bank 
1(43 accounts that were collected at your direction? 

1U(4 A They do, yes. 

115 fi And are only those two categories of materials in 

1(46 those exhibits, i.e., those exhibits compose exclusively 

1(47 either documents that were in your possession or financial 

1U8 materials at your direction relating to your accounts? 

1(49 A Yes. 

150 Q And is it your belief that Garwood Exhibits 2, 3, 

15 1 and (4 contain copies of all of the documents in your 

152 possession or under your control that were called for in the 

153 exhibits or attachments to the subpoena that was served upon 
15(4 you, which is Garwood Exhibit 1? 

155 A Yes, sir. 

156 . fi Hrs. Garwood, some of the materials in Garwood 

157 Exhibit 2 relate to a bank account at the Interfirst Bank in 



UNCLASSIFIED 



750 



NAHC 
158 
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16M 
165 
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167 
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17M 
17S 
176 
177 
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179 
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181 
182 



HIR077000 



UNCLASSIFIED 



PAGE 



Austin, Texas. Do you hava bank accounts at any bank other 
than that bank? 

A, No. not that I know of. 

2 And how nany accounts do you or entitles that ate 
lelated to you are there at that bank? 

A The account. I only have one account that I write 
checks on. That is the only one I know. 

fi And do you have any foundations with which you are 
associated ? 

A Yes . 

S And what is the name? 

A The Patrick Henry Foundation. 

fi Is that the only foundation? 

A Yes. sit. 

S And does that foundation have an account also at the 
Interfirst Bank? 

A Yes. 

fi Does it have accounts at any other bank? 

A I don't think so. 

fi So. so fat as you know, all of your financial 
transactions Insofar as they involve a bank are conducted 
through the Interfirst Bank in Austin? 

A Yes. 

fi Is that correct? 

A That is tight. 



unclassif;e3 



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10 



B nrs. Garwood, do you knoM an individual naaad 01iv«i 
Koxth? 

A y*s, sir. 

e Whan did you iirst aaat Hr . North? 

A I aat Hr. Korth in Hay oi 198U at Hilliaasburg. at a 
■••ting of a group that I balong to, a contarvativ* group, 
at tha swimiting pool. 

ft Hhat was tha na»a oi tha group? 

A It was tha Counoil ior National Policy. 

e And what was tha natura oi thia aaating? 

A It aaats iour tiaas a yaar, and thay ara all 
intarastad in policy, in tha national policy — a consaxvativa 
typa oi national policy. 

fi Who introducad you to Hz. North? 

A Hr. Andy Haasing. 

B Has this a aaatlng that want on ior savaral days at 
Williamsburg? 



Ceu^l* 



A It goas on ior a aaf r oi days, usually. 
K 

fi And hoM long did you aaat Mlth Hr. North on this 
iirst occasion? 

A I Mould say about 15 alnutas . 

fi And was it just you, Hr . North and Mr. Hassing that 
Mara prasant. or Mara othar prasant? 

A Thara Mara othar paopla all around tha SMlmmlng 
pool, and Ma Mara just In tha llttla group, you knoM, by 



UNCLASSIFIED 



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NAME : 
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HXR077000 yW^LftJibiriLU "" 

outselvfts. Dut th«ra wece nany p«opl« around th« pool. 

C Has it just the thre* of you in the group, or ueza 
others in the group? 

A No, there were no others in the group, just the 
three oi us . 

2 And what was the subject matter oi the conversation 
between the three oi you? 

A I think it was social, you know, ''It is good to be 
here in the sumnex or in the spring and be able to swim,'* 
things oi that sort. It really wasn't political. 

Q There was no discussion oi American ioreign policy 
or any national policy issue at that iirst meeting? 

A I don't remember ii there were. I don't think so. 

fi Have you met Hr . Kotth since that occasion? 

A Yes . 

2 In May oi 198>4? Do you recall the next occasion? 

A The next occasion, I must look at my little list 
here. It must have been in June oi 1985, and there was a 
meeting oi contributors to Hr . Channell's organizations in 
Washington, and I was there ior that reason. 

S And where was that meeting? 

A That was at the Hay-Adams Hotel. There was 
possibly, and I am not sure oi this, a Hhite House brieiing 
at that time, too, but I think there was, and it was over in 
the Executive Oiiice Building. 



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HIR077000 



UNCLASSIFIED . 



GE 12 



8 And how long did you sp«nd with Hz. Nozth at this 
nacting in Jun* of 1985? 

A Oh. probably 20 or 30 minutas, sonathing lika that. 
HR. OSBORNE: off tha racord . 
[Discussion off tha racord. ] 
HR. rRYHAK: Back on tha racord. 
BY HR. rRYHAN: 

C Mrs. Garwood. I hava baan asking you about your 
sacond maating with Mr. North, and you indicatad you thought 
it occurrad in Juna of 1985. Ara you cartain that that was 
tha Bonth of tha maating or sight it hava baan in that 
ganaral pariod? 

A It might hava baan in tha ganaral summar of 1985. 
It could hava baan in August. I am not sura. I Know I hava 
a traval notation that I want to Washington in Juna , but it 
could hava baan that I also want in August. 

e And you racall that this maating was at tha Hay- 
Adams Hotal? 

X Yas . 

fi And youz maating with Hz. Nozth was appzoximataly 20 
minutas. Z baliava you said? 

A Yas. in his of flea. 

fi Did you maat with Hz. Nozth both at tha Hotal and at 
his oiiica? 

A I don't zamambaz if ha waza at tha Hotal oz not. I 



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lananber on* mcating wh«n h« did com* to th* Hotal. but I an 
not SUE* Hh*th*E it was this m**ting or not> but to just 
talk socially to th* group of conttibutozs . 

Q But, th* substantiv* B**ting with He. North, if I 
might d*scEib* it that way? 
A Y*S. 

Occurr*d at his offic*? 

At his oiiic*. 

On this occasion? 

Y*s. 

And who *ls* was pr*s*nt at that naating? 

nr . Channall took ■* ov*e th*r* to Colonal North's 



A 

fi 

A 

2 

A 
oiiic* . 

fi Had you known in advane* that you m*e* going to b* 
masting with Hr . North? 

A I don't r*ii*Bb*r. I doubt it. 

fi So. you raoall what Hx . Channall said about th* 
m**ting baior* h* took you ov*r th*r*? 

A ''Z want you to ■**t Colon*l North." I as not sur* 
*Nactly, but I know aor* ox lass that Colonal North — w*ll. Z 
kn*w alxaady that h* had plannad Gxanada. Andy Itassing had 
told •* that, and so Z kn*w h* was lnt*rast*d in ix**doB 
il9ht*xs and th* d*BocEatio xaslstano* in Nlcaxagua. 
Z knaw that in a vagu* ganaxal way. 

fi So. Hx. Channall th*n took you ov*x to Kx. Noxth's 



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HIR077000 



office? 



UNCUSSIFSED 



PAGE 1U 



A Yas. 

fi And th« thte* oi you nat for approximataly 20 
nlnutes, as you zacall? 

A Approximataly 20 minutas . 

2 What was tha subjact mattar of that discussion? 

A As I zanambaz, ha showad us a map of Nicaragua, of 
CantEal Anazica laally, and shouad tha advances that had 
bean made by tha fzeedom fighters, and that was tha general 
discussion of freedom fighters, the cause of freeing 
Nicaragua of the communist Sandinistas. 

More than that, I really don't remember. 

Q Has there any discussion of American support for the 
contras ? 

A No, because I thinK we all realized that the 
Administration was supporting this resistance movement. 

2 Was there any discussion of any lack of military 
supplies or other supplies? 

A Ko. sir. there was not. 

fi Has there any discussion during this meeting of any 
contribution that you might make In any way to the contra 
cause? 

A I don't remember. Z don't think so. Colonel North 
never discussed or never asked me for a donation. If there 
were discussion oi this, it would have been after we had 



UNCLASSIFSED 



756 



HAME: 
308 
309 
310 
31 1 
312 
313 
311* 
315 
316 
317 
318 
319 
320 
321 
322 
323 
3214 
325 
326 
327 
328 
329 
330 
331 
332 



HIR077000 



liNCLASSIFSEO 



PAGE 



15 



left Colonel North's office between Hr . Channell and myself. 

S On this occasion in June of 1985> did you have any 
discussion of that sort with Hr . Channell after you left 
Colonel North? 

A There was probably discussion. There was always--on« 
of the purposes of the contributors to Hr . Channell's 
organizations was to help the resistance movenent and, you 
know, help with humanitarian aid for the resistance fighters 
aganst the Sandinista Government. This was generally 
understand, I think. 

S Did Hr . Channell use the phrase in discussions with 
you, ''humanitarian aid''? 

A Yes, the President had used it, and we had also used 
it. 

S What did you understand that to mean? 

A I understood it to mean things like medicine and 
food, perhaps primarily food, and boots and clothing, and 
perhaps the transport of the supplies in boats or trucks, 
things of that nature, ambulance supply. 

fi Did you understand that any of the funds that were 
being contributed to Hr . Channell's organization were ever 
being used for any publicity purposes within the United 
States? 

A No. Hell, some of his organizations, yes, but later 
on, not at this meeting, but latex on. It did develop about 



UNCLASSIF9Ei) 



757 



NAME 
333 
33M 
335 
336 
337 
338 
.0-. 339 
3U0 
SUI 
3<42 
3M3 
3>«4 
345 
346 
3i»7 
3<48 
3U9 
350 
351 
352 
353 
35(4 
355 
356 
357 



HIR077000 



UNCLASSIFiED 



PAGE 16 



the tine when there uere going to be new elections for 
Congress, that he would use the records oi the Congressmen 
in ads to influence the voters in their evaluation of the 
Congressmen . 

S And what point in tine was that? 

A It would have been somewhere mmmifr • when there were 
elections £M*«a0fttt0-r naybe about a year or six nonths before 
1986. at the tine when there were going to be Congressional 
elections, close to it. 

Q And one of the purposes of the funds in his 
organization was to use those funds for publicity or 
infornation purposes in connection with those campaigns? 

A This is true. yes. 

8 And another purpose throughout the period was what 
you understood as hunanitarian aid to the contras? 

A Yes, sir. 

Q Going back. Hrs. Garwood, to the chronological 
history of the meetings with Hr . North, the second meeting 
we have been talking about occurred in Mr. North's office. 
When was the next occasion which you met with Hr . North? 

A It seems to me the next occasion was in Dallas, when 
I M«s meeting with the United States Council for World 
Freedom, another organization that helps freedom fighters 
all over the world, in other countries as well. Afghanistan. 
Angola. 



UNCUSSlFltO 



758 



NAME: 
358 
359 
360 
361 
362 
363 
36>4 
365 
366 
367 
368 
369 
370 
371 
372 
373 
37M 
375 
376 
377 
378 
379 
380 
381 
382 



HIR077000 



UNCIASSIFJED 



PAGE 17 



2 And was this a neeting oi tha U.S. Council that 
Axtanded ovai saveral days? 

A It was. yes. 

fi And how long was Ki . North thara? 

A Uell. ha was only thara--ha wasn't at tha neating. 
He mat hiii--nr . Channall appaarad at tha naating. and I was 
suipzisad that ha had coma. Ha avidantly Knaw I was theia, 
and wanted to gat ma into contact with Colonel North, and 
told ma that ha wanted to take me that evening aiter dinner 
to the airport, where Colonel North was going to be stopping 
on his way somewhere else. 

2 So. you net at the airport in Dallas? 

A Yes, at an airport there, a saall airport. 

e And that was you. Hr . Channell and Mr. North? 

A And Mr. North, and Hr . Colero was there also. Ha 
was a member or a delegate to the general meeting, you Know, 
the U.S. Council of World Freedom meeting, Hr . Colero was. 

& What was Mr. Colero's iull name? 

A Adolio Colero. 

2 And what was his position? 

A Hell, we know that he was the head, one of the heads 
it turned out later, of the FDN. the deiiocratio resistance 
oi Nicaragua. Nicaraguan democratic resistance. 

2 So, the meeting at the airport was with the four of 
you? 



UNClASSIFiEO 



759 



HAKE: HIR077000 



UNCLASSIFIED 



PAGE 18 



383 
38U 
385 
386 
387 
388 
389 
390 
391 
392 
393 
39U 
395 
396 
397 
398 
399 
1400 
UO 1 
■402 
•103 
UOU 
MOS 
>406 
U07 



A Yes, and there was sonaone else there whom I don't 
remember, probably an official maybe. 

e And approximately when was this meeting? 

A This was in September of 1985. 

2 And about how long did this meeting with Mr. North 
and Mr. Colero last? 

A And Mr. Channell . It was about, I would say, it was 
around a half an hour meeting. 

S What was the subject matter at this meeting? 

A As I remember it, it was that some of the supplies 
that had been voted for the eo nte** * were not arriving, and 
they were being held back. They didn't have trucks to take 
them across the border. 

I understand it was from Honduras to Nicaragua, and 
there was some State Department directive that had held 
everything up, and that wouldn't allow them over in trucks, 
or wouldn't supply trucks, and they needed to buy trucks to 
get them over . 

2 Hhat sort of supplies were they talking about? 

A Hell, they were talking about supplies for the 
existence of these people, like humanitarian supplies, you 
know. 

fi Here they talking about acBS, also? 

A Ko , they were not. 

S So, they were only talking about trucks to 



UNCLASSIFSED 



760 



NAME : 
(408 
409 

U10 
U 1 1 
4 1 2 
4 13 
U 1 U 
U15 

me 

417 
418 
4 19 
420 
42 1 
422 
423 
424 
425 
426 
427 
428 
429 
430 
431 
432 



HIR077000 



transport? 



WLASSIHED 



PAGE 19 



A Yes. 

2 Boots and medicine, as you understand it? 

A Yes. As I understand it, the supplies had already 
been approved by the State Department, but the way to take 
them over was not, for some ridiculous reason, and so they 
were m a tight situation, where the supplies were there, 
but couldn't get across the border. 

2 And were they asking for any assistance from you? 

A Hell, the general tenor of the thing was that 
assistance was needed, and directly asked me. 

2 Did you meet with Mr. Channell alone after the 
meeting with Mr. North and Hr . Colero? 

A Oh, yes. Colonel North left and then nr . Channell 
took me back in a taxi to Dallas, outside of Dallas, and 
then he said, ''You know, you can help. It will cost so 
much, and can you help with that?*' 
And I said I would. 

2 Did he ask for any specific sum of money? 

A He always did ask for a specific sum, yes. He asked 
for 32,000, as I remember. 

fi Did he specify how you should make the contribution? 

A To his organization. NEPL? 

fi Aitar the meeting which I believe is the third 
meeting you described with He. North In September 1985 at 



UNCLASSIFSED 



761 



KAHE: 

1433 
(t3U 
U35 
<436 
t«37 
1438 
1439 
UUO 
I4U1 
(4 142 
14143 
14U(4 
UUS 
(4146 
14147 
14148 
>4>49 
■450 
1451 
M52 
1453 
45U 
(455 

use 

M57 



HIR077000 



UNCLASSIFSEO 



PAGE 20 



th« airport outside Oallas-- 

A That is right. 

2 When did you n«xt naat with Hr. North? 

A Z hav* in my marnory that it was in January oi 1986. 

2 And whara was that maating? 

A Ha had a briaiing at tha Hhita Housa, and I think 
tha maating--as a ruia. wa wara put up at tha Hay-Adams, and 
thara was a briaiing at tha Hhita Housa whara Colonal North 
spoka, Elliot Abrams, Assistant Sacratary of Stata for Latin 
Amarica spoka> and Prasidant Raagan spoka. 

2 How many peopla approximately wara in this group? 

A Hall, thara was a long tabla about twica as long as 
this, and thay want all around tha tabla this way and that 
way. so I would say about 2>4 mayba, something like that. 20. 

2 And the three speakers at tha meeting were North. 
Abrams and the President? 

A That is what I remember. 

2 And how long did this briefing last? 

A I would say about an hour and a half, something like 
that. 

2 Did you speak alone with Hr . North at any point 
during this day? 

A Not then. no. no. 

2 Hhat was tha subject matter of the briefing? 

A The briefing was about the situation in Central 



UNCLASSIFIEO 



762 



NAME: 

•458 
459 
■460 
M61 
162 
>463 
I46M 
t«65 
■466 
467 
■468 
469 
M70 
147 1 
472 
473 
474 
475 
476 
477 
478 
479 
480 
481 
482 



HIR077000 



UNCLASSIFiED 



PAGE 21 



Amacica and tha dangaz oi anothaz Cuba balng sat up in tha 
Hastazn Haaisphaza. and tha iact that thaza was a popular 
zasistanca damocratic movamant trying to stop this, and to 
ovar throw tha ooBBunist-doainatad govarnmant. which has 
batzayad tha so-eallad zavolution against Someza. by not 
baing a populaz zavolution or damocratic, baing cosaunistic 
instaad, and tha ganazal situation oi tha dangaz oi this 
sozt of thing happaning in Cantzal Aaazica, and tha way tha 
Administzation hopad to ba abla to pzavant it. 

S Has Hz. Kozth tha flzst spaakaz? 

A I think ha was. yas. 

fi And than Hz. Abzaas? 

A Yas. 

Q And than tha Pzasidant? 

A And than tha Pzasidant, yas. 

8 Has tha final spaakaz. Has thaza any discussion oi 
any naads that tha eontzas had at that point, in tazms oi 
any sozt oi aatazlals oz humanltazian aid? 

A Z don't zaally zamaabaz. I know that tha Pzasidant 
had alzaady publicly askad ioz huaanitazlan aid ioz tha 
izaadoa ilghtazs. and this was ganazally undazstood. 

Z think ha askad savazal tlaas publloly in spaachas. 
and whathaz ha zaitazatad this, ha say hava . Z don't 
zaaaabaz. Zt was so undazstood that it wouldn't hava stood 
out ii ha had said anything about it. 



UNCLASSIREO 



763 



KAHE : 
U83 
<«8l4 
•485 
(486 
M87 
1488 
■489 
<490 
M91 
■492 
1493 
14914 
•495 
M96 
M97 
■498 
U99 
500 
50 1 
502 
503 
504 
505 
506 
507 



HIR077000 



UNCLASSIFSED 



PAGE 22 



2 What did you understand to ba tha purposa of tha 
briaiing that was being held for this group? 

A Well. I understood that it was to brief them in on a 
bit of tha history of tha dangers that uara facing tha 
United States, our country, and Mr. Hario Colaro said, tha 
freedon fighters are the target of the connunists against 
the Central American countries. 

It is not Central Anarica, it is the United States. 
And I think we all realized this, that that was the target, 
the eventual target. 

Q What did you understand to be the reason why you 
were invited to this briefing? 

A Well, because I had been an enthusiastic support of 
President Keagan. and of his foreign policy as far as 
fighting against the connunist influence in Central America 
was concerned. I certainly had bean, and very much, for SDX 
also . 

2 You say there were approximately 2>4 people at the 
meeting . 

A It seemed to me there ware about that many. 

2 What other people do you recall attending in the 
group, other than yourself and the three speakers? 

A There was a Mr. and Hrs. Ramsey from Wichita Palls. 
It seems to me there was a Hr . And Hrs. Pantacost. a strange 
name, from near the border, tha southern border between 



UNCLASSIF!E3 



764 



NAME: 

508 
509 
510 
51 1 
512 
513 
51U 
515 
516 
517 
518 
519 
520 
521 
522 
523 
524 
525 
526 
527 
528 
529 
530 
531 
532 



HIR077000 



UNCUSSIfJED 



PAGE 23 



Texas and Hsxico, and th«n th«z« was a Mr. and Hzs. Harm. 
It ssens to n* th«y u«ze fzom th* cast soB«wh«za, iron 
either the east or--they wece fzom the north. It night have 
been Ohio . 

2 Is that H-a-t-m? 

A W-a-r-m, yes. Let's see ii I can think of sone 
others . 

I can think oi other people uhon I net from tine to 
tine in these groups that would neet to discuss helping the 
denocratic resistance. Hhethez they Here at that neeting or 
not, I do not knoM. 

2 Has Mrs. Keulngton at that neeting? 

A I never really net Mrs. Newlngton to be sure that it 
uas nrs. Kewington. I net soneone in a wheelchair once. It 
could have been Hrs. Kewington, but I don't renenber the 
nane . 

2 Uas Hr . Claggett at that neeting? 

A Claggett? 

2 Yes. 

A Ko, I don't renenber. 

Q Hz. Brandon? 

A I don't zenenbez that nane. eithez. I zenenber a 
Hz. Bennett izon San Antonio who was theze at one of the 
neetings, and I had known hln before quite well, Hr . John 
Bennett. I don't renenber whether he was at this neeting or 



UNCLASSIFIED 



765 



NAME : 
533 
5314 
535 
536 
537 
538 
539 
5M0 
5M1 
5>42 
5>«3 
51414 
SMS 

sue 
5147 

SMS 
5M9 
550 
551 
552 
553 
5S<4 
555 
556 
557 



HIR077000 



not. 



UNCLASSIREO 



PAGE 214 



fi Has Hi. Hoop«r at th« naating? 

A I don't tamembcx that nan*. 

S Who nad* th* arzangamants foe this naating at tha 
Uhite Housa? 

Uas it Ht . Channall? 

A nr . Channall did. 

fi Did you hava any contact with anyona in tha Hhita 
Housa itsalf about this aaating? 

A No. 

fi Did you hava any discussion Hith tha Pzasidant on 
that day othaz than tha discussion in tha group that you 
hava dasccibad? 

A Aitaz tha Pzasidant iinishad spaaking, wa aach cana 
up to shaka hands with hi« saparataly and wara intzoduced as 
we cana up, and I gava hin tha book about ny iathaz. ''Hill 
Clayton. A Short Biogzaphy,'' and ha thankad aa for it, said 
ha was going to put it in tha Prasidantial Library or 
sonathing lika that. 

fi And I baliava you hava tastiilad on that day, you 
had no saparata discussion with Hr . Nozthi is that zight? 

A That is corract. 

fi Has any discussion with Hz. Channall during this 
visit to Hashington in tha Hay-Adaas about contzibutions? 

A I think thaza might hava baan, bacausa I wrota hin a 



UMCLlVSSiratD 



766 



NAHE : 
558 
559 
560 
561 
562 
563 
56<4 
565 
566 
567 
568 
569 
570 
571 
572 
573 
574 
575 
576 
577 
578 
579 
580 
581 
582 



HIR077000 



UNCLASSIFIED 



PAGE 25 



check on a small puzs* bank book chack. 

2 Osbocna> can w* go off tha tacord hara? 
[Discussion off the tacozd. ) 

BY HR. ruinkH- 

2 llE . Gazuood, you used the phzasa ''small check.'' 
A 

What do you zefaz to whan you use that phrase? 

A I refer to the purse check> the small bank book that 
I keep in my purse, which includes small size checks. 

fi Is that a folding check book? 

A No, it doesn't fold. 

S It is just a smallez book. 

A It is a smallez book. 

e That will fit into youz pocketbook. 

A That is zight. 

S And do you have a different type of checkbook that 
you keep at your desk? 

A Yes. 

Q And how would you describe that checkbook? 

A Hall> that has three checks to a page, and they are 
longez chaoka, and there are stubs, which you don't have in 
youz other puzsa checkbook, which is quite a deprivation. 
You have to write it down in another little book. 

fi You dasozlbe the checks in youz purse as the small 
checks . 

A That is zight. 



UNCLASSIFiED 



767 



NAME : 
583 
58U 
585 
586 
587 
588 
589 
590 
591 
592 
593 
594 
595 
596 
597 
598 
599 
600 
60 1 
602 
603 
60U 
605 
606 
607 



HIR077000 



UNCLASSIFSED 



PAGE 26 



2 Do you hava any shorthand dascription for th« checks 
at your desk? 

A Ho. Those are just regular checks. The snail check 
also has a smaller nunber, I think as Duncan pointed out. I 
have down here checks 331 ior *55,000. They are smaller 
numbers . 

The ones--this is the three checks to a page book, 
begin with 6.000 or something like that. 

S During this meeting at the Hay-Adams, there was a 
discussion you recall with Hr . Channell about further 
contributions ? 

A Yes. 

fi Do you recall any discussion during the briefing at 
the White House about contributions? 

A I don't think they were ever that blunt in the 
briefings . 

Q Were they more oblique? 

A Yes, I guess that is what you would say. 

2 HoM would you describe how they proceeded? 

A Well, the situation was to trace In something of the 
history of the region of Central America, and then the 
danger to the United States and the fact that there was a 
group, a growing group of resistance fighters that needed 
help, and naturally, we knew that because the President had 
asked for hfclp for them from Congress, and It hadn't been 



UNCLASSIFIED 



768 



MAHE: 
608 
609 
6 10 
6 1 1 
6 12 
613 
61U 
615 
616 
617 
6 18 
619 
620 
621 
622 
623 
6214 
625 
626 
627 
628 
629 
630 
631 
632 



HIR077000 



UNCLASSIFIED 



PAGE 27 



voted at this tins axc«pt a lasssr anount than ha had asked 
for, and so, ua knew that they waia in need, and this uas , I 
an sure, stressed also in these talks, that with help from 
the United States, uhlch ue hoped to gat from Congress and 
hoped to get from private people also, the humanitarian aid 
that the President had asked for, that they could make a 
good deal of progress and establish a democracy. 

2 Was it stressed that they needed anything mora than 
humanitarian aid? 

A No. 

e Was that mentioned at all? 

A Ko , no, that wasn't mentioned at all. 

2 There was no indication of any shortage of military 
supplies ? 

A Ho . 

2 Of any sort? 

A No, no statement like that at all. Of course, we 
knew they did need military supplies, because the President 
had asked for military supplies, everybody knew that, as 
well as the other supplies, and the Congress had only voted 
what I guess they called non-lethal aid, but he was going to 
asX^gain, and we knew that. 

I don't remember anybody saying, you Know, they are 
badly in need of arms right now or anything like that, but 
we knew that they were, because tha President had asked 



UNCLASSIFfED 



769 



NAME: 
633 
6314 
635 
636 
637 
638 
639 
6<40 
6<41 
6M2 
6M3 
6MU 
6U5 
6<46 
647 
6U8 
6H9 
650 
651 
652 
653 
65>4 
655 
656 
657 



HIR077000 



UNCLASSIFiED 



PAGE 28 



Congress to h«lp th«ii in that way. 

2 Did you understand that any steps were being taken 
in any way to neet this shortage oi nilitary supplies at 
this tine? 

A I didn't understand anything like that, no, except 
that we were going to keep on asking Congress and hoping 
that Congress would vote it. In fact, pretty soon, the 
Senate did vote the military supplies, and the House didn't. 

2 Following this neeting that you have described at 
the Hay-Adans in January oi 1986, and the briefing at the 
White House, in which Hr . Korth participated, what was the 
next occasion that you net Hr . North? 

A It was in April of 1986. 

2 And where was that neeting? 

A That was also, I an sure It was at the Hay-Adans, 
where we usually stayed, the contributors to the Channell 
organizations, it was called by Channell. 

2 And what was the clrcunstances of your neeting with 
Hr . Korth on that occasion? Was It a group neeting or was 
it an individual neeting you had? 

A There was a group neeting, and then there was also 
an individual neeting that Hr . Channell asked ne to cone to, 
and he said Colonel North would neet us. 

2 How large was the group neeting? 

A The group neeting — well, renenber that the last group 



unclassif;e3 



82-708 0-88-26 



770 



MAHE: 
658 
659 
660 
66 1 
662 
663 
6614 
665 
666 
667 
668 
669 
670 
671 
672 
673 
67U 
675 
676 
677 
678 
679 
680 
681 
682 



HIR077000 



UNCLASSIFIED 



PAGE 29 



meeting whei* we had a bxieiing at tha Whit* Housa I thought 
was aiound 20 paople. Sometmes it would ba that many, as a 
rule it would be less, though, around 12 or something like 
that. 

2 Uhare was the meeting held? 

A I think it was held at the Hay-Adams. 

2 In a private meeting room of some sort? 

A In a luncheon room or something like that. We did 
have a luncheon. I think. 

2 And Hr . Korth attended. Has there any other 
outsider ? 

A Ko . Colonel North did not come to that meeting, as 
I remember, with the other people, but Hr . Channall had told 
me before coming up that I was going to be presented with a 
need for a great deal more money than I had--a much larger 
donation to aid the freedom fighters — than I had been before, 
and so I wasn't surprised when he said, I think it was the 
last day of the meeting, of the group's meeting, that he 
wanted me to meet him after dinner in the cocktail lounge in 
the Hay-Adams, and that Colonel North was going to come over 
and paint a picture of what had happened to the freedom 
fighters. 

e Hon long did the group meeting* go on? 

A I can't really be sure how long they went on. 

fi Has it more than one day? 



UNCLASSIFIED 



771 



NAHE: 

683 

68(4 

685 

686 

687 

688 

689 

690 

691 

692 

693 

69(4 

695 

696 

697 

698 

699 

700 

701 

702 

703 

704 

70S 

706 

707 



HIR077000 



UNCLASSIFIED 



PAGE 30 



A It was more than on« day, y«s. It saahs to ns it 
was . 

2 Was th«t« a s«ra«s of sp«akars at th« group maeting? 

A Somatimas thara would ba a dinnar at tha Hay-Adams, 
and than thara would ba--I know ona maating whara thay had a 
dinnar and Elliot Abrams spoKa. and Hr . Hario Colaro spoke, 
and thara might have bean someone else, but I don't remember 
who it was, but I do know at ona maating, and it could have 
been this time, I am not sura. 

S If the meeting extended more than one day, am I 
correct that there would have bean several speakers at the 
group meeting? 

A There were, at two or three meetings that I 
remember, there were speakers, but usually it was at a 
dinnar meeting or a luncheon meeting, and that was tha way 
that It was done. 

2 And at this meeting in April 1986 that the group 
attended, could you describe the central substance oi the 
meeting? I don't want to go over this, repeat myself. let 
me ask another specific question. 

Has there any emphasis on particular needs of the 
contras at that point? 

A No. I don't remember, unless, you know, it was 
emphasis on the fact that they ware still in need of the aid 
that the President was trying to get Congress to vote. This 



UNCUSSIFIEO 



772 



HAME : 
708 
709 
710 
7) 1 
712 
713 

7m 

71S 
716 
717 
718 
719 
720 
721 
722 
723 
72U 
725 
726 
727 
728 
729 
730 
731 
732 



HIR077000 



UNCLASSIFIED 



PAGE 31 



is th* Apiil maftting you ar« talking about. 

fi Yas> I aa talking about th* April 1986 maating. How 
would you ganasally dascriba than tha subjact itattar oi this 
group naating? 

A Uall, tha subjact was just axactly what I hava said, 
you know. It was tha aid that was naadad for tha 
rasistanca, tha damocratic rasistanca in Nicaragua. It was 
tha dascription oi how wa could parsuada Congrass that- thaia 
was any way to parsuada Congrass to vota it, and thara nust 
hava baan dascriptions oi ads that would ba put in 
nawspapars in tha Districts oi tha Congrassaan. things lika 
that, what nathods would thara ba ? 

Would thara ba any halp in putting an ad in tha 
Washington Timas, which was soaatiaas dona, dascribing tha 
naad ior Congrass to vota tha iunds ior tha iraadoa iightars 
that had baan askad by tha Pxaaldant. that sort oi thing. 

2 And did you undarstand that Mr. Channall's 
organization was to taka staps in thasa araas, ior axampla. 
that thay wara to ba involvad in placing ads in Districts oi 
particular Congrassaan? 

A Oh, yas, yas . 

e And taking out advattlsaatants? 

A Yas. 

fi In tha Washington Tlaas? 

A Yas. 



UNCLASSIFIEP 



773 



NAME : 
733 
734 
735 
736 
737 
738 
739 
740 
741 
742 
743 
744 
745 
746 
747 
748 
749 
7S0 
7S1 
752 
753 
754 
755 
756 
757 



UNCl/ISSIFJED 



HIR077000 UlVlal Al '% ^ I h H t- f 1 PAGE 32 

S And what did you understand to ba tha sourca of 
financing foi th«sa activities? 

A The people who were at the meeting. 

S The contributions to Mr. Channell? 

A Surely. 

S Including National Endownent for the Preservation of 
Liberty? 

A Well, now, that wouldn't have been used for the ads. 
It would have been used only for huaanitarian aid. 

e What would have been used for the ads? 

A The American Conservative Trust would have been 
used, and there is something called ATAC, they called it 
ATAC, Against Terrorism, American Committee, or something 
like that. 

2 Is that anti-terrorism? 

A Anti-terrorist Americans, yes, those two. 

Q Now, you mentioned that Hr . Channell had warned you — 

A Yes . 

2 — that they might seek a particularly large 
contribution? 

* That Is right. 

S And then he arranged a private meeting with Hr . 
North in the cocktail lounge of the hotel? 

A That is right. 

S And was that just you, Hr . North, and Hr . Channell? 



UNCLASSIFIED 



774 



NAME: 
7S8 
7S9 

760 
761 
762 
763 
764 
765 
766 
767 
768 
769 
770 
771 
t C- 772 
773 
774 
775 
776 
777 
778 
779 
780 
781 
782 



HIR077000 



Y«S. 



^ficussim 



PAGE 33 



fi About hoH long did that m*«ting occur? 

A Thosa nAAtings. most oi them> uaza not much longaz 
than a half an houz . I think it was about a hali an hout . 

C About half an houz. Has He. North uaaring his 
uniiorm at that naating? 

A I don't think ha avar wora his uniiorm. No, I don't 
think so. 

S Did ha hava any aatarials ulth his. any papars? 

A I don't ramanbar that. no. As I ramanbar. ha 
didn't. It is possibla ha did, but I don't think so. 

fi What do you racall that Hr . North said at this 
neating ? 

A Wall, ha said that tha fraado* flghtars uara in an 
- -^ situation, that thay could almost baan so aw p a tt that 



they might hava to disband, by tha tima tha Congrass got 
around to voting tha aid for fraadom fightars thara might 
not hava baan any fzaadom fightars. 

Thay uara hungry, thay didn't hava anough aat, thair 
clothing was falling apart. Thay didn't hava anough 
waapons. and so on. Tha situation — wall, raally, taars 
practically cama in his ayas, and ha said thay would ba 
acousad of staaling, bacausa thay would hava to foraga for 
food, and that thay would probably ba accusad also by tha 



1^ t,.> 



leftist prass of drug smuggling, and ha said nona of which. 



UNCUSSIFiEO 



775 



KAHE 
783 
TSM 
78S 
786 
787 
788 
789 
790 
791 
792 
793 
79U 
795 
796 
797 
798 
799 
800 
80 1 
802 
803 
SOU 
80S 
806 
807 



UNCiyiSSIRED 



HIR077000 UllULlfl.'^.^l^lJL* L I PAGE SU 
th« drug snuggling was absolutaly a f alsiiication, that they 
H*z« not doing that, and wouldn't. 

2 Was thsza any discussion of tha types of weapons 
that they needed? 

A You asked ne if there weze any papers or anything. 
There was a piece of paper that I think was produced by 
Channell. I an not sure whether it was Channell or Colonel 
North, a snail piece of paper, with a list of weapons on it, 
and the price of the weapons opposite each category, and Mr. 
North, I nean Hr . Channell and Colonel North spoke in low 
tones about this, particularly low, and I really didn't hear 
what they were saying. 

Q Were they both looking at the list together? 

A Yes, I think so. yes. 

fi Was the list a typewritten list, or was it in 
handwriting ? 

A I think it was printed writing. 

S Printed writing? 

A Printed writing, yes. That is the way I renenber 
It. 

fi 
list? 

A I didn't overhear. I couldn't hear exactly what 
they were saying, and since they were obviously nore or less 
whispering to each other, I didn't, you know, try to hear 



What did you overhear the two of then say about this 



UNCIASSIFJED 



776 



MAnE: 
808 
809 
810 
81 1 
812 
813 
81<4 
815 
816 
817 
818 
819 
820 
821 
822 
823 
82U 
825 
826 
827 
828 
829 
830 
831 
832 



HIR077000 



it. 



^fiCUSSlFIEQ 



PAGE 35 



2 Baioia th«y startad sp«akin9 tog«th«£> did on« oi 
than pull out tha list and show it to you? 

A Hall. Channall finally gava it to na . 

Q Ha finally gava you tha list? 

A Yas. ha gava it to ma . I must hava had two lists. 
This is anothaE thing that I am not quita claaz about, 
becausa ha must hava kapt a list for himsalf and than given 
ona to ma. 

2 Bafoza Me. NoEth and He. Channall staEtad talking 
among tha two of them. howavaE, did you saa tha list bafoza 
this discussion began among tha two oi tham? 

A Really. Z can't tall you whathaE I did oe not. I 
don't know. 

2 Then going back, the tuo of them talked togathez in 
low tones? 

A Yes . 

2 Foe a iaM minutes? 

A Yes . 

2 And than what was said aiteE that? 

A Than I think Colonel KoEth said ha had to go. and 
than we told him good-bye, and He. Channell showed me the 
list, gava ma tha list. 

2 What did ha say about tha list, than? 

A Wall, he said this is what wa need. Can you help? 



«NCl/ISSIFJED 



777 



NAHE : 
833 
83<4 
835 
836 
837 
838 
839 
8>40 

8>41 

8M2 
8(43 
8I4U 
815 
8X6 
847 
8X8 
8X9 
850 
851 
852 
853 
85X 
855 
856 
857 



^ffoussiFm 



HIR077000 '^^nU&lirWI" il page 36 

And I saw that it uas--I said it was a trenendous anount of 
non«y. I said I wasn't sur* whcthftr I could ot not. I 
would hav* to ask my bank, and I would try. 
If I could, I would. 

e Mhat itams do you racall whai* included on tha list? 

A Wall, I do racall hand gianadas, and I think I 
recall anti-aircrait guns and bullats and probably cartridge 
baits . 

S Anything alsa? 

A I can't rananbar. I am sura it was mora than that, 
but I don't ramambar what alsa. 

Q And wara thara-- 

A I think thara was mora. 

fi Wara thara prices on the list also? 

A Yes, there were. 

fi Was there a price per unit or was it a total price 
for a number of units of any particular item? 

A Well, for each category, there was a price, and how 
many, I don't knoM whether it said how many they needed of 
each or not. I don't remember that, but for each category 
there was a price, and they probably did have a quantity 
listed, but I certainly don't remember that. 

And whether it was added up at the end, I do not 
remember either, at the bottom. 

C So, Mr. Channell discusses this list with Hr . Korth? 



UNCLASSIFSED 



778 



NAME ■■ 
858 
859 
860 

86 1 
862 
863 
864 
865 
866 
867 
868 
869 
870 

87 1 
872 
873 
874 
875 
876 
877 
878 
879 
880 
881 
882 



HIR077000 



Yes 



^ftOUSSIFiEQ 



PAGE 37 



S And you obsaivad then discussing it? 

A Yes . 

2 nz . Hoith leaves? 

A Yes. 

2 And then Hr . Channell speaks to you about the list 
and shows it to you? 

A That is tight. 

2 Uhat does he say to you about the list? 

A Well, he said. ''Do you think you can help provide 
these things? Can you give the amount of money needed?'', 
and I said, ''Well, I have no idea whethec I can or not. I 
an zathet shocked, but I will see — at the amount — but I will 
see what can be done, if I can help. I will try to help.'' 

2 And did you take the list with you? 

A Yes. 

2 And you say you believe Hr . Channell had another 
copy of the list? 

A I am sure he did. He must have had. As Z remember, 
there were two lists. What I think he did was he had at 
first one list, and then while I was sitting there, he 
copied it over and gave me a copy of it? 

fi So the copy you received was in Hr . Channell 's 
printed writing? 

A Printed writing, yes. 



UNCIASSIRED 



779 



NAHE 
883 
88(4 
885 
886 
887 
888 
889 
890 

89 1 
892 
893 
89<4 
895 
896 
897 
898 
899 
900 

90 1 
902 
903 
9014 
905 
906 
907 



HIR077000 



^ffOUSSlHEQ 



PAGE 38 



fi And did you s«a tha list ha copiad iiom? 

A Hall, yas, I saw him copying tha list, but I didn't 
notica . 

Q Did you notica if it was typawrittan or handwritten? 

A No. 

2 And tha list ha discussad with Hr . North was tha 
list that ha copiad iron, is that cozract? 

A That is what I assuaa, yas. 

fi You saw It? 

A Yas, I saw tha list, and that was tha list ha spoka 
to Colonal North about, and than ha copiad tha list and gava 
It to na . 

S And what did you do with tha list? 

A I took it hona and gava it to ay bankaz, and asked 
if It wera possible ior na to supply tha needed funds. 

2 How nuch money was requested from you? 

A I noticed that tha bank has put down that it was 
over about 1.5 million to begin with. It ended up more than 
that. 

2 You say you gave it to the bank? 

A Yes. 

2 To what individual did you give this? 

A To Hrs . Anne Glanz. 

2 And what is hei: position? 

A She is a vice president of the bank, and she is the 



UNCl/ISS/fJ£D 



780 



NAME: 
908 
909 

9 10 
9 1 1 
912 
913 

9m 

915 
916 
917 
918 
919 
920 
921 
922 
023 
92>4 
925 
926 
927 
928 
929 
930 
931 
932 



HIR077000 



UNCIASSIRED 



PAGE 39 



managar of my trust at tha bank. 

Q And hou long aitax you raturnad to Taxas did you 
giva this list to Mrs. Glanz? 

A I think tha day aitar I raturnad. 

2 Did you aaka a copy oi tha list? 

A No. I didn't. I lait it with har, and than sinca I 
wouldn't gat it back, sha had givan it, I think, to Hr . 
Osborna, or talkad to hia about it. I couldn't gat it back. 

I triad to raaaabar it and wrota a llttla nota to 
aysalf, but I didn't raaaabar it aNaotly, and Z hava navar 
baan abla to iind ay notas. aithar, whara I had put it. X 
urota it down in a notabook, and I oan't find tha notabook. 
urota down what Z raaaabarad was on tha list. 

fi Did you ask Ifrs. Glanz or Mr. Osborna to raturn tha 
list to you? 

A Yas. 

S And what did thay say? 

A Thay didn't hava it. 

HK. FKynAN> Hr . Osborna, I ballava tha subpoana and 
tha docuaants dasozlbad in tha attaohaant Mould axtand to 
this list. Can you stata ior tha raeord that a saarch has 
baan aada ior that list? 

HI. OSBOKNK' Yas . In ay opinion, tha subpoana 
would claarly apply to tha list, and wa did aaka a saaroh 
for tha list, and wa did not turn it up. 



UNCLASSIFIED 



781 



NAHE 
933 
93M 
935 
936 
937 
938 
939 
9140 

9m 

9M2 
9M3 
9MM 
9145 
9M6 
9147 
9M8 
9U9 
950 
951 
952 
953 
95U 
955 
956 
957 




HIR077000 ■■■«■_■ fl V~^-|L nt ~r~l PAGE UO 

HR. rRYMAK: Mrs. GatH00d~IiI5 said that this list 
was dclivarad to you through Mxs . Glanz. Do you racall this 
list that sha has dascribad at soaa point? 

MR. OSBORNE: Hrs . Glanz brought tha list up to ma 
and I lookad at it and xatutnad it to Hrs. Glanz. 

THE HITNESS: Sha did look ior it. and nona oi us 
was abla to produca tha list. This was — how long aitar was 
it that wa wara asRad about tha list? It aust hava baan 
almost a yaar aitazwards, by that ti«a . 

Hy husband had baan vary ill and othar things had 
baan on ay nind, and I just don't know. I may turn up tha 
list yat. li I do. I will sand it to you. Tha thing that I 
nada irom mamory. which might not ba axact, tha notation 
that I mada. whan I couldn't gat tha list baok. 
BY HR. rRYHAM: 
fi That is tha list you iaal you may still turn up? 
A I might, yas. 

Q Aftar raeaiving this list irom Hr . Channall. did you 
maka any iuzthar eontzlbutlona to his organization? 
A Yas. 

fi And mpproxlmataly what amount? 
A Hall, you hava that amount, don't you? 

HR. OSBORNE= I think this iKhlblt 2, which has baan 
markad, has tha Iniozmatlon, and you aza zaiaranclng April 
15, 1986. 



UNCLASSIFED 



782 



NAME: 
958 
959 
960 
96 1 
962 
963 
96>4 
965 
966 
967 
968 
969 
970 
971 
972 
973 

<- 974 
975 
976 
977 
978 
979 
980 
981 
982 



HIR077000 



UNCLASSIF3ED 



PAGE m 



BY HR. FRYHAH: 

fi Hrs. GaxHood, I uill go into th« details of th* 
contributions in a minut*. but is it corract that aitac his 
discussion, you mad* a multi-million-dollar contribution to 
Mr. Channall's organizations? 

A Aftar tha discussion, I mada a contribution tight 
away that was ovar *^ million, about •1.5 million, and addad 
up in tha and to «2 . 5 million. 

2 Within a parlod oi savaral waaks? 

A That is right. 

fi Aitar this maating? 

A That is right. 

fi And to what organization did you maka thasa 
contributions? 

A I lait that up to Anna Glanz. and sha had 
conversations with Hr . Channall ovar tha phona. and thay 
ilgnxas out togathar whara it should go. 

fi And for what purpose did you undatstand thasa 
contributions wara being made? 

A I knew It was going for the list of ammunition, and 
also, I imagine also ior the food that was needed and some 
of the other what you would call non-lethal requirements. 

fi Old you understand that the contribution you were 
making was an amount larger than the total of the amounts on 
the list that Hr . Channall gave you for weapons? 



UNCLASSIFIED 



783 



NAME : 
983 

98U 

985 

986 

987 

988 

989 

990 

991 

992 

993 

994 

995 

996 

997 

998 

999 

1000 

1001 

1002 

1003 

100<4 

1005 

1006 

t ^. 1007 



HIR077000 



UNCLASSIFIED 



PAGE 142 



A I don't x«B«mb«r what tha total of that list was, 
but I hava a iaaling that it was latgar, yas . 

fi Was tha principal purposa of your contribution to 
provida tha waapons that Hr . Channall raquastad? 

A Tha initial--tha first part of it was, and also tha 
othar things that wara naadad. 

S Did you hava any discussion or communication uith 
tha Prasidant in this pariod of tlma about your 
contributions ? 

A Not actually about my contributions. I had askad 
Hr . Channall from tha baginning, from tha aarly days uhan 
his group was maating his contributors and ha was asking for 
donations for tha damocratic rasistanca in Nicaragua, that I 
fait that tha foraign policy was a dividad and ambivalant 
foraign policy of tha Administration. 

I uas in favor of what Raagan wantad, but it saamad 
that ha was baing stymiad at almost avary stap by tha Stata 
Dapartmant. and Z vary much wantad a maating with tha 
Prasidant to discuss this with him. 

ny fathax had baan in tha Stata Dapartmant in tha 
Truman Administration. Ha had baan Undar Sacratary of Stata 
for Zoonomlo Affairs, whara tha Stata Dapartmant and tha 
Prasidant wara absolutaly in sympathy with aach othar, and 
avarything thay did, and this saams to ma a shama that this 
could happan with Raagan. 



UNCLASSIF3ED 



784 



1008 
1009 
10 10 
10 11 
1012 
1013 
10 m 
10 15 
1016 
1017 
1018 
1019 
1020 
1021 
1022 
1023 
102U 
1025 
1026 
1027 
1028 
1029 
1030 
1031 
1032 



HIR077000 



UNCLASSIFSED 



PAGE U3 



S When was the n«xt tine that you met with Mr. North 
after the April 1986 meeting? 

A There was a meeting in September, early September 
1986 . 

2 And uhere was that meeting? 

A And that uas in his office in the Old Executive 
Office Building. 

2 And who was present? 

A Just Hr . North and Hr . Channell and myself. Mr. 
Channell took me over. 

2 Did Mr. North express any appreciation for your 
earlier contributions? 

A Hell, he had in letters, which I think you have in 
one of these exhibits, and usually he greeted me very 
kindly. You know, as if he were grateful for my help, my 
general help. 

2 At this meeting in September, did he make any 
specific reference to the series of contributions, 
substantial contributions, that you had made after your 
earlier meeting with him and Hr . Channell? 

A No. 

fi Had you had any telephone communications with anyone 
in the Hhlte House after your series of contributions in 
April and Hay of 1986? 

A No. 



liNCLASSIF:£D 



785 



NAME: 
1033 
103U 
1035 
1036 
1037 
1038 
1039 
1040 

L- lom 

10M2 
101(3 
lOUU 
10US 
10>46 
10U7 
10(48 
1049 
1050 
1051 
1052 
1053 
105U 
1055 
1056 
1057 



HIR077000 



UNCLASSIFIED 



PAGE (4U 



Q Turning back to th* September 1986 meeting in Mr. 
North's office, approximately how long did this meeting 
last? 

A It was around a 20-minute meeting again. 

2 And what was the substance of the conversation? 

A The substance there was again the very critical 
condition about transport, transport of humanitarian aid. 
It wasn't getting to the freedom fighters because one of the 
transport I't eiie d had been shot down, and they needed two 
more, and so there were small planes being built by a man in 
the south, either South Carolina or Alabama that they could 
get for cost, and they were very much hoping to get those to 
transport the humanitarian aid that was needed. 

2 Did he use the phase humanitarian aid, he being Hr . 
Horth? 

A Yes--I don't remember. 

2 But he spoke of the needs for this type of plane. 

A Yes. 

2 That could be bought at cost? 

A Yes, the needs for — well, I am sure food, clothing 
and medical supplies. Hedlcal supplies was one of the 
things that he did mention from time to time. 

e And did he ask assistance from you? 

A He never asked ma for assistance. 

2 Who did? 



UNCLASSIREd 



786 



NAME: 
1058 
1059 
1060 
1061 
1062 
1063 
106U 
1065 
1066 
1067 
1068 
1069 
1070 
1071 
1072 
1073 
107M 
1075 
1076 
1077 
1078 
1079 
1080 
1081 
1082 



UNCLASSIFIED 



HIR077000 UIWIsl U.^^IBikiL. Ll PAGE US 

A Hall, aitar u* lait th* oiiica, Mr. Channall did. 

fi And what did Hr . Channall say? 

A Uall> Hr . Channall said that thay naadad monay ior 
thosa two planas, thosa two snail planas . Thay wara UO.OOO, 
I think, a piaca, and that thay would naad 80,000. 

S And did you aaka a iurthar contribution? 

A I mada a contribution for that, yas . 

fi And to what organization, do you racall? 

A Tha NCPI,. 

Q Did you maat with Hr . North aitar his occasion? 

A You maan a latar aaating soaa tiita? 

e Yas . 

A It saans to aa thara was anothar aaatin^ with hla, 
but not to discuss anything about naads ior tha iraadoa 
iightars. Thara was a aaating in Novaabar, and that was 
inmadiataly , vary closa to tha tiaa, mayba just bafora tha 
tina thay wara talking about tha sala of planas, of arns and 
whatavar to Iran and tha Iran-contra thing. 
It was just bafora that. 

fi And whara was this aaating hald? 

A This was in tha Hay-Adaas at braakfast. 

S And who was prasant? 

A Hz. Channall and Colonal North and aysalf. 

fi And approNiaataly how long did this last? Just for 
braakfast? 



UNCLHSSIFStO 



787 



HIR077000 



UNCLASSIFIED 



PAGE 146 



X Just for breakfast, yas. 

Q Hhat do you racall Mr. North saying at this maating? 

A I ranembai mostly what I said to him. 

2 All right. 

A Which was that I thought that it was gatting nowhara 
to halp tha fraadom fightars so long as ua still racognizad 
tha Nicaraguan Sandinista Govarnaant. and that wa ought to 
withdraw recognition, and why didn't wa , and ha said wall, 
that thay hadn't enough territory to be recognized, the 
freedom fighters didn't have enough territory to be 
recognized as a govarnment-in-aKile > which is what I wanted 
for them to be recognized as a governmant-in-axile , and bbm 
• ft ^ h a g g eMe Kn ma i> * ~ to b« r»cog i> *a.ed . ^'-^ ^ u^ -^iH- An . 

After all, wa ware supplying the resistance against 
it, and that seemed to ma a logical step that should be 
taken, but he said it wasn't, and that he didn't think that 
it was possible until they gained some more ground. 

He rather disagreed about that. I remember telling 
him that I remembered Britain in Horld Mar II recognizing a 
Polish govetnment-in-exlle when tha free Poles had no 
territory at all, it was all under the domination of the 
Naals. 

e Did you request this meeting with Hr . Morth to 
express your views? 

A No. 



UNCLASSIFEE3 



788 



H\nz- 

1 108 
1 109 
1 1 10 
1111 
£ C- 1 1 ' 2 
1113 

L - 1 1 m 

1 1 15 
1 1 16 
1 1 17 
1118 
1119 
1 UO 
1 121 
1 122 
1 123 
1 124 
1 125 
1126 
1 127 
1 128 
1 129 
1 130 
1131 
1 132 



UNCLASSIF3E0 



HIX077000 UlVlal UJ^^IIi.Jl. 1 1 PAGE U? 

S What do you undazstand lad up to this maating? 

A Lad up to it? I think afterwards that Channall said 
somathing to aa . you know, about--011ia said is planning to 
taka soma trips, and ha Hill naad soma funding for that. I 
said ajr y aw a a , I am not giving anything alsa until wa do some 
of tha things I hava askad to ba dona, until tha govarnnant 
doas, nothing at allJK. . 

2 Now, Has this convarsation with Hr . Channall bafora 
tha maating nith Hr . Korth? 

A It Has aftarHards, aftar North had lait, aitar 
Colonal North had laft. I didn't knoH, you knoH, ha just 
said Colonal North is going to maat us ovar hara, and ha 
just wants to say hallo to you, or soaathing lika that. 

S Did you coma to Hashington for tha purposa of 
maating with Hr . North? 

A No. 

fi Or for soma othar raaion? 

A I was thara for anothar raason. I was thara bacausa 
of a Haritaga roundatlon banquat that Z had baan Invltad to 
to bacoma a mambar of somathlng thay oallad tha Prasldant's 
Club, and thar* had baan a banquat tha night bafora, and Z 
was staying at anothar hotal, and Hx . Channall callad up and 
said ha wantad to taka ma ovaz to tha Hay-Adam* for 
braakfast, and so wa nant ovaz thaza, and w am ^ a d to maat 
Colonal North ovar thara. 



UNCLASSIFIED 



789 



HIR077000 



UNCLASSIFIED 



PAGE (48 



fi Have you mat Colonal Kozth on any occasion sine* 
that meating in Kovambat at tha Hay-Adans? 

A No. 

e Hava you avaz spokan with Colonal Korth on tha 
telaphone ? 

A I callad hlM aysali and told hla that I was halping, 
had givan a donation to tha Korth lagal assistanca fund, 
lagal dafansa fund, at his hoaa , and his littla daughtac 
answarad tha talaphona. and sha callad haz iathaz to tha 
phona . and ha said. ''Hall. I think it is bast not to call 
ma hara. it is battar for you to call aa at tha oiiica . 
Thank you vary »uch ior what you hava dona.'' 

S And approxiaataly uhan was that oonvarsatlon? 

A That could hava baan in lata Daoaabar. probably was 
in lata Dacambar. 

S Oi 1986? 

A Of 1987-- 

fi Of 1986? 

A Yas. 1986. I am sorry. 1986. 

fi And is that tha only occasion you hava avar spokan 
with him on tha talaphona? 

A Yas. 

ft And tha only occasions you hava avar aat with hla 
faca to faca ara tha. I ballava. savan occasions that you 
hava dascrlbad today? 



UNCLASSIFiED 



790 



UNCLASSIFSED 



NAME: HIR077000 11 IvljLflW V I ■ H ■■ >-' PAGE 149 



1 158 
1 159 
1 160 
1161 
1 162 



A Yes. 

fi Is that correct? 

A That is right. 

HR. FRYHAK: Hhy don't we break for a iew minutes! 

[ Recess . 1 



UNCUSS1FJE9 



791 



NAME : 
1 163 
lUU 
1 165 
1 166 
1 167 
1 168 
1 169 
1 170 
1 171 
1 172 
1 173 
1 17U 
1 175 
1 176 
1 177 
1 178 
1 179 
1 180 
1 181 
1 182 
1 183 
1 18>4 
1 185 
1 186 
r ^ 1 187 



UNCLASSIFIED 



HIR077000 liMIM nWVILnU.l PAGE SO 

RPTS CAHTOR 
DCHK HILTOK 

HR. rRYHAH- Back on th« r*coid. 
BY MR. FRYHAM: 

2 nts. Garwood, how did you originally ma«t Hr . 
Channall? 

A I m«t hin whan ha was working for tha National 
Consarvativa Political Action Coaitittaa. usad to b« callad 
NCPC. _- ^ i^«. _- -^g- ^ 

2 Who introducad you? 

A Wall, ha was an assistant to Tarry Dolan, tha lata 
Tarry Dolan, and this was an organization to halp gat a 
consarvativa Sanata , Rapublican Sanata, to halp tha 
Prasidant, and I was intarastad. 

2 And you hava dascribad this aitarnoon a nunbar of 
maatings that you had, both with Hr . Channal and Mr. North? 

A Yas. 

2 What did you undarstand tha ralationship batwaan 
tha two oi tha» to ba? 

A First oi. all, Z knau Hr . Channall was intarastad in 
halplng Prasidant Raagan. Ha had baan in NCPC, oi coursa, 
and ha had also baan halping at ona tiaa Ganaral Grahaa ior 
High Frontlar, which is tha Pxasidant's baby, aora or lass, 

•5 ,7.>>..(- 



you know, tha 



daiansa, and wa wara intarastad in aora 



UMCUSSIF5E0 



792 



NAME : 
1 188 
1 189 
1 190 
1191 
1 192 
1 193 
1 194 
1 195 
1 196 
1 197 
1 198 
1 199 
1200 
1201 
1202 
1203 
120>4 
1205 
1206 
1207 
1208 
1209 
1210 
121 1 
1212 



HIR077000 



UNCl/ISSIFJED " 



GE 51 



or less tha sama issu«s. 

I Kn«u that, and--Hhat was it that you asked ne nou? 

2 What did you understand the relationship or the 
connection to be? 

A Yes. 

2 Between nr . Channell and Hr . North? 

A I thought it was a general desire, a fervent desire 
actually of Hr . Channell to help President Reagan's foreign 
policy, and Colonel Korth was part of the National Security 
Council, which was certainly concerned with foreign policy. 

S Did you understand any sort of a aore fornal 
coordination between Hr . Channell's activities and Hr . 
North's activities? 

A Nothing except the general desire of both of them 
to help the Reagan Adninistration . 

2 You have described in general this afternoon a 
nunber of contributions that you made to the Channell 
organizations . 

A Yes. 

2 Here you ever asked by anyone to pay any bills or 
to send any money to any supplier of aid of any sort? 

A Never. 

fi To tha contras? 

A Never. 

2 Has any money ever provided to you from any source 



UNCLASSIF9ED 



793 



KAHE: 
1213 
121U 
121S 
1216 
12 17 
12 18 
12 19 
1220 
122 1 
1222 
1223 
122(4 
1225 
1226 
1227 
1228 
1229 
1230 
1231 
1232 
1233 
123H 
1235 
1236 
1237 



HIR077000 



liNCLASSIRED 



PAGE 52 



for deposit into ona of youc accounts which uas than to be 
used to nake a contribution out oi youz account to son* 
organization of Hr . Channall's? 

A Never, except when Mr. Channell called ne and said 
that he had a surplus in the NEPL, the National Endowment 
for Preservation of Liberty, and he needed sone aoney in the 
American Conservative Trust, I believe it was. Would i. if 
he refunded me or sent back some of the money I had given 
him for the NEPL. would I then make a check for an 
equivalent amount and sent it to the American Conservative 
Trust, make it out to the American Conservative Trust. That 
time he did. 

fi And are those refunds reflected in the financial 
summary which is included in Garwood Exhibit 2? 

A I thought they were. yes. 

2 Mould you look? 

A I will look again. 

Q Exhibit 2. 

A There is one for 25.000, one for 30,000 refunds. 
Yes. one for 25.000 and one for 10.000. Thirty thousand up 
here. yes. 

S And those are the only funds that you ever received 
f rom-- 

A That Is right. Mr. Channell. 

Q Or any third party which were to be the source of 



UNCLASSIFSED 



794 



1238 
1239 

1240 
12m 
12142 
12U3 
12UU 
12U5 
12U6 
12147 



^^^lussifhq - 



HAni HIR077000 ^IiJbJ If" Iji. i 1 PAGE S3 



contiibutions in turn by you to ona of tlz . Channall's 
organizations ? 

A That's corract. Thasa ara tha only onas . 

HR. rXYHAM: I would ask tha raportar to nark as 
Garwood Deposition EKhibit 2-A and 2-B for idantiiication 
tha first two pagas of Garwood Exhibit 2. 

I The following docunants wara markad as Garwood 
Deposition Exhibits 2-A and 2-B for idantif ication = ] 

xxxxxxxxxx XMSERT xxxxxxxxx 



Wl^SSIfJED 



795 



HAHE 
12>I8 
12M9 
1250 
1251 
1252 
1253 
125M 
1255 
1256 
1257 
1258 
1259 
1260 
1261 
1262 
1263 
126(4 
1265 
1266 
1267 
1268 
1269 
1270 
1271 
1272 



HIR077000 



WNCUSSIRED 



PAGE 5<4 



BY m. FRYMAK: 



e His. Garwood, I direct your attantion to Garwood 
Exhibits 2-A and 2-B. 

A 2-B it tha on* with tha rafunds, that's tight, yas, 
and 2-A--is thara any spacial raason for that? 

fi Hy quastion. Mrs. Garwood, is, was that shaat 
praparad at your diraction, thosa two pagas, Garwood 
Exhibits 2-A and 2-B? 

A I think nr. Osborna did this for his own 
iniornation and ior aina . 

e Do thosa two shaats raflact tha data and tha aaount 
oi all of tha contributions which you hava aada to any 
organization associatad or that you undarstand to ba 
associatad with Hr . Channall? 

A Thasa two pagas? 

(2 Yas. I aa asking about your own contributions at 
tha moBant. 

A Oh, ay own. 

fi And I am diraeting your attantion to Garwood 
Exhibits — 

A 2-A and 2-B. 

fi 2-A and 2-B. 

A As far as I can raaaabar, thay do, yas. 

HR. FRYHAN: Mr. Osborna, Hrs . Garwood has rafarrad 
to you in connaction with praparation of thasa shaats. 



UNCLASSIFED 



796 



mam: HIR077000 lllli:i flVVItnLn P»G£ 55 



1273 
127U 
1275 
1276 
1277 
1278 
1279 
1280 
1281 
1282 
1283 



UNCLASSIFSED 



Would you conilxm that you did pxapaza thos* two? 

MR. OSBORKE: Y*s, I did ptapaz* thosa. 

HR. FKYHAN: I ask tha zaportar to nark as Gazwood 
Exhibit 2-C for idantif ication a third shaat, containad in 
Garwood Exhibit 2> and to nark as Garwood Exhibit 2-D ioz 
idantiiication tha fourth paga containad in tha Garwood 
Exhibit 2. 

[Tha following documants wara aarkad as Garwood 
Daposition Exhibits 2-C and 2-D for idantif ication: j 

xxxxxxxxxx INSERT xxk'xxxsx 



UNCLASSIF3ED 



797 



KAHE: HIR077000 IfMI'l nV^imm PAGE 56 



128(4 
1285 
1286 
1287 
1288 
1289 
1290 
1291 
1292 
1293 
129U 
1295 
1296 
1297 
1298 
1299 
1300 
1301 
1302 
1303 
13014 
1305 
1306 
1307 
1308 



UNCLASSIFJED 



BY riR. rRYHAK: 

S Mrs. Garwood, I direct your attantion to Garwood 
Exhibit 2-C for idantiiication . Doas that shaat indicata 
tha data and amount oi contributions aada in tha nama of 
your husband to organizations which you understand to ba 
associated with Hr . Channall? 

k Yas, it doas. 

fi And I direct your attention to Garwood Exhibit 2-D. 

A Patrick Henry Foundation, yes. 

e And would you explain what that sheet contains? 

A Yes . That is a contribution to the Kational 
Endowment for the Preservation of Liberty, for humanitarian 
aid to the freedom fighters. 

e Hhat is the Patrick Henry Foundation? 

A A foundation that was sat up upon the advice of 
Hrs . Glana by me to help preserve the freedom of our 
country, to give donations to organizations that would help 
preserve the freedom of our country. 

fi And is tha foundation that was funded by 
contributions from you? 

A That's right. 

B And do you control- tha foundation? 

A I and tha trustees, my two grandchildren. 

fi Is tha contribution raflaotad on Garwood Exhibit 2- 
D for identification the only contribution of which you wer« 



UNCLASSIFIED 



798 



NAHE: 

1309 
1310 
1311 
1312 
1313 
1314 
1315 
1316 
1317 
1318 
1319 
1320 
1321 
1322 
1323 
132U 
1325 
1326 
1327 
1328 
1329 
1330 
1331 
1332 
1333 



^ftoussiFm 



HIR077000 ^""^^hMa^.'^llbOL n PAGE 57 
aware that th« foundation mad* to an oiganization associated 
uith Hr. Channell? 

A It is. 

(2 And aie the contributions reflected on Garwood 
Exhibit 2-C the only contributions of which you are aware 
that were itade in the naae oi your husband? 

A That's right. 

2 To organizations associated with Hr . Channell? 

A Yes, that's right. 
HR. FXYMAK: I ask the reporter to aark as Garwood 
Exhibit 2-E a letter dated April 15, 1986, iron Hrs. Garwood 
to Anne Glanz, which is contained in Garwood Exhibit 2. 
Also, to mark as Garwood Exhibit 2-T a letter dated April 
15. 1986, iron Hrs. Garwood to the Katlonal Endownent for 
the Preservation of Liberty; to mark as Garwood Deposition 
Exhibit 2-G for identification a letter from Mrs. Garwood 
dated May 19, 1986, to the National Endowment for the 
Preservation of Liberty; and to mark as Garwood Deposition 
Exhibit 2-H a letter from Hrs. Garwood dated October 17, 
1986, to the National Endowment for the Preservation of 
Liberty. 

[The following documents were marked as Garwood 
Deposition Exhibits 2-E through 2-R for identification' 1 

»x*»*****M IKSEKT ********* 



unclassif;ed 



799 



HIR077000 



UNCLASSIfJED 



PAGE 58 



BY HR. FRYMAN: 

2 nzs. Gazuood, I dizact youz attantion to Gazwood 
Daposition Exhibit 2-E ioz idantliication. and asK you to 
Idantiiy that lattaz. 

A Yas, that IS ny lattaz. 

fi Is that a copy of a lattaz that you sant to Nzs. 
Glanz? 

A That is a copy of a lattaz. Hzs. Glanz typad it 
and askad ma to sign it. 

C And what was tha puzposa of that lattaz? 

A That was foz shazas to ba sant. That was pazt of 
tha donation that wa hava alzaady discussad that was sant to 
covaz tha donations nacassazy foz tha list. 

e Foz tha waapons list that you dasczlbad? 

A Foz tha waapons list, yas, and pazhaps also foz 
food . 

2 And aftaz that lattaz, waza tha stocks that aza 
zafazzad to in that lattaz tzansiazzad as dizactad in tha 
lattaz? 

A Thay waza, as far as Z Know, yas. 

2 I dlzaot youz attantion to Gazwood EKhibit 2-F foz 
idantlf ication. Is that a lattaz that you sant to tha 
National ZndoMBant foz tha Pzasazvation of Libazty? 

A Yas. 

2 And that was on Apzll IS, 1986? 



UNCLASSIF8ED 



800 



C L 



NAHE : 
1359 
1360 
136 1 
1362 
1363 
13614 
1365 
1366 
1367 
1368 
1369 
1370 
1371 
1372 
1373 
1371* 
1375 
1376 
1377 
1378 
1379 
1380 
1381 
1382 
1383 



HIR077000 



UNCIASSIF3ED 

Yes. 



PAGE 59 



Q And dotts that lattar notify th* Channall 
organization of tha contribution you just dascribad? 
A Yes, xacaipt of this gift. yas. 

2 I diract youz attention to Garwood Exhibit 2-G for 
identification. Is that a latter dated nay 19, 1986? 
A yes . 

From you to the National Endownant? 

Yes . 

And what is the purpose of that letter? 



h'S 



To tell nr. Channell that I had wired «2S0,000 to 



y«4H: account at the Palna National Bank, acknowledge receipt 

A 

of the gift to the National Endowment for the Preservation 
of Liberty. 

2 What is the amount ttansiexxed? 

A The amount was *350,000. 

2 And was that a part of the contribution that you 
described that related to the weapons list that he gave to 
you? 

A The weapons list and the other needs of the freedom 
fighters that had been described at that meeting, mr^»»'\*n. 
Colonel North described the desperate condition of the 
freedom fighters . 

2 But it also related to the weapons list? 

A Yes. -'" " 



UNCLASSIFIED 



801 



MAHE : 
138M 
1385 
1 386 
1387 
1388 
1389 
1390 
139 1 
1392 
1393 
139U 
1395 
1396 
1 397 
1398 
1399 
1U00 
1<401 
lUOZ 
11403 
lUOM 

mos 

1M06 
1U07 
1(408 



HIR077000 



UNCLASSIFIED 



PAGE 60 



2 And I direct youE attention to Garwood Exhibit 2-H 
for Identification. Is that a letter dated October 17, 
1986? 

A Yes . 

Q From you to the National Endounent? 

A That's right. 

Q And what is the purpose of that letter? 

A The purpose of that letter was for further 
humanitarian aid for the freedon fighters, a gift to help. 

2 And does that notify them of a wire transfer? 

A Yes , it does . 

2 And what is the amount of the transfer? 

A »100,000. 

2 Hrs. Garwood. I direct your attention to Garwood 
Exhibit 2-r for identification, which is the April 15, 1986, 
letter . 

A Yes . 

2 From you to the National Endowment. Does that 
letter also notify Hr . Channell of a wire transfer of money 
as well as the transfer of stock? 

A Today I have wired ♦'470,000 to your account--yes , it 
do*a . 

fi And the amount of that transfer is •i470,000? 

A That's right. 

2 And that transfer also relates to the weapons list 



UNCLASSIF9ED 



82-708 0-88-27 



802 



UNCLASSIFSED 



NAME: HIR077000 U llll I U A A I T M iT b I PAGE 61 



mo9 
imo 
mil 

lU 12 
lU 13 
1U1U 

mis 
mu 
mi? 
mis 

1419 
1M20 



that you leceivad iron Mi. ChanneJ.1? 

A The desperate condition of the fxeedon fighters, 
yes . 

C Which included? 

A Which included the weapons, yes. 

NK. FKYHAN: I ask the reporter to nark as Garwood 
Deposition Exhibit 2-1 for identification a letter fron Mrs. 
Garwood to Mr. Channell dated October 3. 1986. 

(The following document was sarked as Garwood 
Deposition Exhibit 2-1 fox identification: 1 

xxxxxxxxxx INSERT ********* 



UNCLASSIHED 



803 



UNCLASSIFIED 



HIR077000 UPl^Lll^^'*'^^'-' '*" " 

BY HR. FRYHAK: 

2 Hrs. Garwood, I direct your attantion to Garwood 
Deposition EKhibit 2-1 for identification. Is that a copy 
of a letter which you sent to Mr. Channell dated October 3, 
1986? 

A Yes. 

fi And does that notify Hr . Channell of a wire 
transfer of funds? 

A Yes, it does. 

2 And what is the amount of the transfer? 

A Ninety thousand. 

fi And is that the transfer fron the Patrick Henry 
Foundation that you referred to earlier? 

A I believe it is. 

2 And what was the purpose of that contribution? 

A That was for humanitarian aid to the freedom 
fighters . 

2 Has that for weapons also? 

A No. 

2 How do you Know that was not for weapons? 

A It wouldn't have been made from the Patrick Henry 
Foundation if It was for weapons. 

HX. FRYHAN: I ask the reporter to mark as Garwood 
Deposition Exhibit 2-J through 2-U 12 pages of documents 
related to Hrs. Garwood or her husband's account at the 



UNCLASSIF3ED 



804 



UNCLASSIFIED 



NAME: HIR077000 -— ' - ■ ^ »n*#*#I | fl t L7 PAGE 63 



m>46 

lUUS 
11*149 
1450 



Intat Fiist Bank in Austin, Taxas. 

[Tha following docunants uara maxkad as Garwood 
Deposition EKhibit 2-J through 2-V for idantiiication = 1 

xxxxxxxxxx XMSERT xxxxxxxxx 



UNCLASSIFSEd 



805 



NAME- 
14S1 
11452 

1453 

msn 

lUSS 
1U56 
1457 
1>458 
1U59 
1U60 
11461 
1>462 
1U63 
1U6>4 
11465 
1>466 
1U67 
11468 
1U69 
11170 
1U71 
11472 
11473 
1M7I4 
1U75 



HIR077000 



UNCLASSIFIED 



PAGE 6>4 



BY HR. FRYHAK: 

S Mis. Garwood, I dizset youz attantion to Gazwood 
Deposition Exhibit 2-J for idantif ication . At tha top of 
tha paga is a copy of a chack nunbarad 90*49, is it not? 

A That's light. 

2 And is that a chack on youz husband's account? 

A Yas . 

fi Tha signatura on that chack. Saint John Garwood? 

A Yas . 

Q Has that signad by you? 

A That IS signad by aa . I had his powaz of attoznay. 

2 And tha sacond chack on that paga, chack nunbaz 
69U8, is that a chack on youz account? 

A That is on my account, that's right. 

S And IS that signad by you in youz nana? 

A That's right. 

fi Will you axaitina aach of tha pagas which raprasant 
Garwood Daposition Exhibits 2-K through 2-U for 
idantif leatlon? 

A Yas. 

Q And look at tha chacks on aach of thosa pagas, and 
tall «a If aach of thosa chacks is signad by you. aithaz in 
youz nama oz youz husband's nama? 

A Yas. 

fi If you would look at aach. 



UNCLASSIFIED 



806 



NAME: 
1476 
1477 
1478 
1479 
1480 
148 1 
1482 
1483 
1484 
1485 
1486 
1487 
1488 
1489 
1490 
1491 
1492 
1493 
1494 
1495 
1496 
1497 
1498 
1499 
1500 



HIR077000 



^f^OUSSIFSEd - 



K Th«y ar*. That's right. That was on« oi th« first 
checks . 

2 You ar« raierring to-- 

K Tha snail chack. 

S Chack nunbar 375? 

A 375, yas. 

S On Garwood Deposition Exhibit 2-P, is that correct? 

A That's right. You saa it is smaller than the 
others . 

fi Right. That is a check from the book that you 
carried in your purse? 

A In my purse, that's right. that is too. 

Q And by that you are referring to check 331? 

A 331 . 

Q On Garwood Deposition Exhibit 2-fi? 

A Yes . 

2 Each of the checks on those exhibits 2-J through 2- 
U uas signed by you either in your name or your husband's 
name ? 

A Yes. 

fi I direct your attention to Garwood Deposition 
Exhibit 2-<I, and the check at the top, number 9049, drawn on 
youz husband's account. 

A Yes . 

S In addition to the signature on that check, did you 



I 



UNCLASSIFSED 



807 



NAME: 
1501 
1502 
1503 
15014 
1505 
1506 
1507 
1508 
1509 
1510 
151 1 
1512 
1513 
151M 
1515 
1516 
1517 
1518 
1519 
1520 
1521 
1522 
1523 
152M 
1525 



HIR077000 



UNCLASSIFED 



PAGE 66 



also uzit* out tha naa* oi th« pay*« and tha aaount of tha 
chack? 

A Yas. I wzota avazything on tha chack. 

fi And did you also wzita undaznaath tha aaount tha 
purposa ioz which tha chack Mas dzaiin? 

A Yas. 

fi And was that puzposa wzlttan at tha sama tiaa you 
signad tha chack? 

A That's zlght. 

fi Would you taad tha puzposa statad thaza? 

A ''To pzoaota coapzahansiva . czaativa eonsazvatisa 
aducatlonally . ' ' 

fi And who gava you that phzasa to includa on tha 
chack? 

A Hall, this was a ganazal idaa I got izom Channall 
about what tha Aaazican Consazvativa Foundation was ioz. and 
I had navaz haazd hia aantion tha Aaazican Consazvativa 
Foundation baioza. 

Uhan ha askad ma ioz a 410.000 contzlbutlon. I 
didn't hava that auch in ay account, so I askad ay husband 
ii ha would halp, and ha said it was all zlght to sand hali 
oi it izoa hia and hali oi It izoa aa . 

fi Did Hz. Channall giva you tha phzasa to wzita on 
tha chack? 

A Z don't think that axaot phzasa ha gava aa, no. but 



UNCLASSIFIED 



808 



NAME: 

1526 
1S27 
1528 
1529 
1S30 
1531 
1532 
1533 
153M 
1535 
1536 
1537 
1538 
1539 
ISUO 
1541 
1542 
1543 
15M4 
1545 
1546 
1547 
1548 
1549 
1550 



UNCLASSIRED 



HIR077000 lirai.l U^XIh JU LI PAGE 67 
that was th« ganaial idea oi what tha Consarvativa 
Foundation was for, so I taally wtota it down ioi my own 
iniozmation, bacausa it was tha first tina I had haazd him 
nantion . 

This was anothaz ona of his organizations, tha 
iizst tina I had haazd hin nantion tha foundation, and ha 
said that this was its ganazal purposa. 

2 Hera you tha oziginatoz of this phzasa youzsalf? 

A yas. 

Q And on tha othaz chack on that paga dzawn on your 
account, 6948, doas tha sana phrasa appaaz? 

A It doas. 

2 As tha zaason? 

A That's zight. 

2 On Garwood Exhibit 2-K for identification, I direct 
your attention to chack 6893. Is the handwriting on that 
check yours? 

A Yas. 

2 And what is tha writing? 

A Not PEC accountable? 

fi Yas. 

A A state donation to tha Anarlcan Consarvativa State 
Election fund Is not accountable to tha TIC, and I raninded 
nyself that It isn't by putting this on tha chack. 

2 Who told you it was not accountable? Old Mr. 



Wt4SS/ff£9 



809 



NAME: 

1551 
1552 
1553 
ISSM 
1555 
1556 
1557 
1558 
1559 
1560 
1561 
1562 
1563 
156U 
1565 
1566 
1567 
1568 
1569 
1570 
1571 
1572 
1573 
1574 
1575 



HIR077000 
Channell tell you that? 



UNCLASSIFSEd 



PAGE 68 



A Wa all know that any stata alaction contributions, 
you look that up and what the FEC eKpacts you to report, and 
they do not eKpect you to report anything given to a state 
election . 

2 And tha organization that was tha recipient oi this 
check was which organization? 

A Was tha Anarican Consarvatlva Trust State Election 
Fund . 

2 On the sane exhibit. Mrs. Garwood. I direct your 
attention to check 9026. Who was tha payee on that check? 

A Conservative Trust, American Conservative Trust. 

2 And after that? 

A State Election Fund. 

2 Is that SEF? Does that represent State Election 
Fund? 

A Yes , it does . 

2 Did you write SEF there? 

A Ko, I didn't. 

2 Do you know who did? 

A I suppose tha parson who received it. Emergency 
Comaittea to Save Reagan Revolution, for TV connarcials for 
SDI deployment. 

2 Let ma just ask whet Is tha writing on tha lower 
portion of tha check underneath tha amount? What does that 



UNCIASSIHED 



810 



NAHE: 

1576 
1S77 
1578 
1579 
1580 
1581 
1582 
1583 
158(4 
1585 
1586 
1587 
1588 
1589 
1590 
1591 
1592 
1593 
159>4 
1595 
1596 
1597 
1598 
1599 
1600 



HIR077000 



State? 



UNCLASSIFSED 



PAGE 69 



A Yas. it was what I just raad. ''Enatgancy 
Comitlttea to Sava Keagan Ravolution . ' ' Than undaznaath 
that, ''for talavision conmatcials for SDI daploymant . ' ' 

S Doas that sound liKa-- 

A Stata Elactlon Fund? 

Q Yas. 

A It could ba , for tha ads for paopla who uara 
running for stata lagislaturas , and soma of than wara for 
tha SOI daploymant and sona of tham wara not, and if thay 
vara not, this was a donation to inform paopla in tha ad 
that thay wara not for SDI daploymant. 

e What was tha sourea of your information that you 
wrota at tha bottom of this chacX? 

A It was undoubtadly Hr . Channall. 

2 I diract your attantion to Garwood Exhibit 2-1 for 
idantif ication, which contains copias of thraa chacks of 
yours . 

A Stata Elaction Fund, yas. 

fi On aach of thosa you hava wzlttan, not — 

A FEC acoountabla. 

fi And you wrota that phrasa on aach chack? 

A I did, yas. 

fi And that was for what purposa? 

A Hhan I was adding up tha amount of donations I had 



UNCLASSIF3ED 



811 



NAME: 
1601 
1602 
1603 
16014 
1605 
1606 
1607 
1608 
1609 
1610 
161 1 
1612 
1613 
161U 
1615 
1616 
1617 
1618 
1619 
1620 
1621 
1622 
1623 
162>4 
1625 



UNCLASSIF!£D 



HIR077000 lirai.l 11 XVIh JU L J PAGE 70 
given to alaction funds. I would not Includ* this bscausa 
stat« alaction funds v»z» not included. 

Q But you wrota that on th« chack at tha tima you 
signad tha chack? 

A I did. 

Q Is that cotract? 

A Yas . 

8 I diiact youE attention to Garwood Deposition 
Exhibit 2-K for identification, and patticulazly check 
number 6675 at the top. 

A State Election Fund. 

Q Would you identify the payee of that cheek? 

A Anti-Terrorism American Committee, yes. State 
Election fund for people running for legislature or governor 
or whatever in a state election. 

2 And who gave you that information? 

A Hr . Cliff Smith, requested by Cliff Smith. 

fi And on the payee line of that check, there are the 
initials SEF. 

A Yes. 

fi Is that your handwriting? 

A That is not, but it is already in my handwriting 
down here. 

fi And the free state election fund you wrote on the 
check at the time you signed the ohecK? 



UNCLASSIFSED 



812 



tCAHE 
1626 

1627 
1628 
1629 
1630 
1631 
1632 
1633 
163M 
1635 
1636 
1637 
1638 
1639 
16M0 
16m 
16M2 
16M3 
16I4U 
16MS 
16<46 
16U7 
16t48 
16>49 
1650 



HIR077000 



,.. UNCIASSIFJED 



PAGE 71 



e Is that coriact? 

A That's right. 

2 I diract your attantion to Garwood Oaposition 
Exhibit 2-0 for idantif ication , and particularly tha chack 
at tha top numbarad 67U6. That is payabla to Santinal, is 
it not? 

A Yas. 

e And what is tha purposa writtan on that check? 

A That says for educational purposes. 50<4(c)(i«) 
organization . 

2 Is that your handwriting? 

A That is in my handwriting. 

2 And what is the source oi your information for 
that? 

A The source of my information was either Hr . 
Channell or Hr . Smith. 

2 And you wrote that on there at the time you signed 
the check? 

A Yes. That would have included ads for people who 
were running for office. It could have included state 
• Isotlon fund people, educational purposes to e4 u o al ' l » n the 
eleotorata aa to the views of the person who was running for 
office. 

2 But it could have been used fox expenditures in 



UNCLASSIFBED 



813 



HIR077000 



UNCIASSIRED 



PAGE 72 



paiticular political canpaigns? 



A It could hava b««n, yas . 

fi As you undazstand it? 

A Yas, in tha stata. 

fi And in Fadazal alactions as wall oz just stata? 

A No, just stata. 

fi On that chack you hava no indication oi a stata 
alaction iund? 

A No. 

fi Do you? 

A NOf I don't, but I hava a iaallng that thosa waza 
ioz stata purposas, yas. 

fi On tha saaa axhibit. Gazwood Daposltlon Kxhlbit 2-0 
ioz idantif ication. li you Mould look at tha othaz two 
chacks on that paga, both datad Dacaabaz 1. 1986. 

A Yas. 

fi Thosa aza also both payabla to Santlnal, is that 
cozzact? 

A That's zlght. 

fi And ona is on youz account and ona is on youz 
husband's account? 

A Hy husband's account. 

fi And Mhat is tha puzpoaa Mzlttan on thosa zaquasts? 

A ''Kaquastad by Channall ioz lagal Mozk ioz a 
consazvatlva . ' ' 



UNCLASSIFIED 



814 



KAHE: 
1676 
1677 
1678 
1679 
1680 
1681 
1682 
1683 
168U 
1685 
1686 
1687 
1688 
1689 
1690 
1691 
1692 
1693 
16914 
1695 
1696 
1697 
1698 
1699 
1700 



UNCLASSIFIED 



HIR077000 linil.l UXXIIiiti kl PAGE 73 

This was for the Hoith L«gal D*fans* Fund, and I 
ask*d hin uh«n he asked me for this, when I heard that there 
was a iund being set up by Colonel North's Havy conradas to 
send this back to me, htt*. he did. He sent back the 10,000. 

2 What uas the conversation that prompted the 
contributions reflected in these two checks? Uas that a 
telephone call? 

A That uas a telephone call, yes. 

e And did that occur on or about Deceaber 1, 1986? 

A Yes. 

fi What did Hr . Channell say in that conversation, as 
you best recall? 

A Hell, he said that he had been eKanined by people 
who were breaking into--well, he had been accused, I think, 
of some participation in the Iran-contra affair unjustly, 
and that people had broken into his office and that they 
were going to examine his records, and so on. 

He also told me that ^he was going to help with the 
Legal Defense Fund for Colonel Horth, and he wanted some 
checks first made out to the American Conservative 
Foundation, which I told you I didn't recognize that name, 
and so he said he would use this to help Colonel Korth with 
the Legal Defense Fund. 

I sent It to him, and then he called me back either 
the same day or the next day, and said that he had talked to 



UNCLASSIF3ED 



815 



NAME: 
1701 
1702 
1703 
17014 
1705 
1706 
1707 
1708 
1709 
1710 
1711 
1712 
1713 
171«» 
1715 
1716 
1717 
1718 
1719 
1720 
1721 
1722 
1723 
172M 
1725 



UNCLASSIFIED 



HIR077000 IIMI-I nWILnLLl PA6Z 7i« 
his lawyer and his lawycz said that sinca it was iox a 
pzivata pazson> it could not ba usad by tha iaazlcan 
Consazvativa foundation, which I undazstand. and ha askad ma 
to naka out tha two ehacks to Santinal instaad. which I did, 
and than Hz. Andy Massing callad aa and askad »a ii I would 
aaka donations to tha Nozth Lagal Daiansa Fund, and I told 
hia that Spitz Channall had alzaady askad aa and I had 
alzaady givan, and ha said. Hall, that is a shama bacausa 
Spitz Channall takas 35 pazcant oi avazything ha gats iroa 
anybody, and also ha said. It is a shaaa bacausa Colonal 
North's Harina buddias ara satting up an oiiicial North 
Lagal Daiansa fund, which appaalad to »a a graat daal mora, 
and I than callad Channall and askad hia to sand back thasa 
two ehacks, sand back tha amount, and that X was going to 
giva it to tha North Lagal Daiansa Fund, which I did. 

S Hrs. Garwood, ii you would look at Garwood 
Deposition Exhibit 2-P ioz idantiiication. tha sacond and 
thizd ehacks on that paga ara both payabla to Mastarn Goals 
Foundation, ara thay not? 

A That's right. 

fi Mould you idantiiy. or would you raad and explain 
tha purpose indicated on each oi these checks? 

A That KAL? 

e That is spelled K-A-L? 

A KAL reiers to the Korean Airliner disaster, that 



UNCLASSIFIED 



816 



MAKE: 
1726 
1727 
1728 
1729 
1730 
1731 
1732 
1733 
173U 
173S 
1736 
1737 
1738 
1739 
17M0 
17U1 
17U2 
17«l3 
17«4«« 
171*5 
17M6 
17<47 
17M8 
17U9 
1750 



HIR077000 



UNCLASSIF3ED 



PAGE 75 



was shot down, on which Larry McDonald was a passenger, and 
th«y Httra doin9--Mttstern Goals, as you knou, was founded in 
the baginning by Larry HcDonald, Congressman Larry rtcOonald, 
and they were trying to do some research and something to 
clarify exactly how this happened. It was called the KAL 
Project, and I sent them 4100 for that. 

8 And the second check? 

A And the second check for *500, I don't remember 
exactly what that was for. I have .''donation'' down there. 

Q The word that appears there is ''donation*'? 

A That's right. 

2 And I direct your attention, mrs . Garwood, to 
Exhibit 2-R for identification, and specifically the check 
number 6600 at the top of the page. Is that a check for 
«130.000? 

A It is. 

fi To the Kational Endowment? 

A Yes. 

e And what is the purpose of that check that you have 
written on the check? 

A ''Requested by nr . Channell for support of freedom 
and demoezacy'* — is that what it says, yes--' 'for support of 
fxeedOB and democracy.'' This was supporting, I am sure, 
the htimanitazian aid to the freedom fighters. 

fi Hhat Is the source of the phrase that you wrote on 



UNCUSSl?"£9 



817 



UNCLASSIFIED 



NAME HIR077000 fj niUl II W I »• .1 b- L 1 PAGE 76 

1751 there? 

1752 A That is ray own phrase. 

'753 HR. TKYHkH- I ask the reporter to aark as Garwood 

175M Deposition Exhibit 3-A through 3-G for identification seven 

1755 letters from Oliver L. Morth to Hrs . Garwood which are a 

1756 part of Exhibit 3. 

'''S'7 [The following docunents were narked as Garwood 

1758 Deposition Exhibit 3-A through 3-G for identification: ] 

1759 

1760 xxxxxxxxxx INSERT «xx»««««» 



UNCLASSIFIED 



818 



KAHE: 
1761 
1762 
1763 
1764 
1765 
1766 
1767 
1768 
1769 
1770 
1771 
1772 
1773 
17714 
1775 
1776 
1777 
1778 
1779 
1780 
1781 
1782 
1783 
:- 1781 
1785 



HIR077000 



UNCIASSIREO 



P»GE 77 



BY HR. FRYHkN: 



fi Hxs . Garwood, I ask you to look at Garwood 
Deposition Exhibit 3-A iox idantiiication. Is that a lattar 
dat«d nay 2H . 1985? 

A Yas. 

S To you iron Colonal Korth? 

A It is. 

fi And would you idantiiy Garwood Daposltlon Exhibit 3- 
B iox idantliication? 

A Yas. that is a lattar from North to ■• . 

Q Is that a lattar datad Saptaabar 20. 19857 

A Yas. 

fi And you racaivad this lattar in tha mail iroa Ifr . 
Koxth? 

A Yas. 

fi And is Exhibit 3-C a lattax datad Octobax 17, 1985, 
to you iroa Hx . Noxth? 

A That's right. 

fi And you raoaivad this in tha mail? 

A Yas. 

fl And Is Exhibit 3-0 a lattar datad Novanbar 5, 1985, 
to you irom Hr . North? 

A Yas. it is. 

fi And -T*n also sant that in tha aail? 

A Yas. 



UNCLASSIFIED 



819 



UNCLASSIFIED 



KXnt- HIR077000 «»■»** fcri*#W I ■ BkL/ page 78 



1786 
1787 
1788 
1789 
1790 
1791 
1792 
1793 
17914 
1795 
1796 
1797 
1798 
1799 
1800 
180 1 
1802 
1803 
ISOU 
1805 
1806 
1807 
1808 



S And Exhibit 3-E, is that a lattar to you dated 
January 24, 1986, froii Hr . North? 

A Yes, it IS. 

S And you racaived that in tha mail? 

A Yes. 

2 And Exhibit 3-F, is that a letter to you from Mr. 
North dated Hay 2, 1986? 

A Yes , it is . 

S And you received that in tha mail? 

A Yes. 

2 And Exhibit 3-G is a latter to you from Hi. North 
dated July 23, 1986, is it not? 

A Yes . 

2 Which you received in the mall? 

A Yes. 

HR. FRYHAK: I uould asK the reporter to mark as 
Garwood Deposition Exhibit 3-H for identification a letter 
contained in Garwood Exhibit 3 dated June 3, 1986, from 
President Reagan to Mrs. Garwood. 

[The following document was marked as Garwood 
Deposition Exhibit 3-H for identification: ) 

xxxxxxxxxx INSERT xxx««x*xx 



UNCLASSIFSED 



820 



HAHE: 
1809 
1810 
181 1 
1812 
1813 
181U 
1815 
1816 
1817 
1818 
1819 
1820 
1821 
1822 
1823 
182M 
1825 
1826 
1827 
1828 
1829 
1830 
1831 
1832 
1833 



HIR077000 



UNCUSSIHED 



PAGE 79 



BY HR. FRYHAH 



fi nzs. Garwood, I show you th* AKhibit that has btt*n 
mazkttd 3-H foz identification. Is that a l«tt«z you 
racaivad iron tha Piasidant? 

A Yes, it is. 

fi And that is sant to you in cara oi tha American 
Study Center? 

A Yes. it is. 

Q Mould you describe the cireuastances under which 
you received this letter? 

A It was a reception being given for my latest book, 
''The Undying Flame.*' about Hariano Horeno of Buenos Aires. 

Q And what is the American Studies Center? 

A It is a center that publishes books and also puts 
on a radio program. Radio America. 

fi And do you know what caused the President send you 
this letter on this occasion? 

A Perhaps Jim Roberts, who Is a friend of the 

y 
Presidents, and Is the chairman and head of the American 

Studies Center, let him know that there was a reception that 

was to be given for me for the book. 

HR. rRYHAN: I ask the reporter to mark as Garwood 

Deposition Exhibit 2-V for Identification a letter contained 

in that exhibit from Hrs. Garwood to Hr . Osborne dated 

January 31, 1987. 



UNCUSSIFIEO 



821 



UNCLASSIFIED 



NAHE: HZR077000 WllWknWWII ■ k k/ pAGE 80 



183U 
1835 
1836 
1837 



[ Th« iollouing document was narkftd as Gaiwood 
DAposition Exhibit 2-V ior idantiiication : 1 

xxxxxxxxxx INSERT xxxxxvxxx 



UNCLASSIHED 



822 



NAME: 
1838 
1839 

18U0 
ISU 1 
18>42 
18U3 
18UU 
18U5 
18lt6 
181*7 
18U8 
1849 
1850 
1851 
1852 
1853 
18514 
1855 
1856 
1857 
1858 
1859 
1860 
1861 
1862 



HIR077000 



UNCLASSiFBED 



PAGE 81 



nR. OSBORNE: What l«ttar wa ara on? 
HR. FRYMAN: Off tha racord. 
(Discussion off tha lacotd. ] 
BY MR. FRYMAN: 
2 His. Gaiuood, would you look at Daposition Exhibit 
2-V for idantiiication . Do you lacogniza that lattai? 
A Yas. 

2 And IS that a lattai you sant to Hi. Osboina? 
A Yas. 

S And doas that daal with tha subjact oi contribution 
foi Hr . Noith's lagal daiansa which you dascribad aarliai 
this aftainoon? 

A It doas, yas. 

fi And doas that dasctiba tha cixcuastancas of tha 
refund that you raquastad fiom Hi. Channall? 
A Yas . 

HR. FRYHAN: Mis. Gaiwood . that concludas ny 
questioning this aftainoon. My collaaguas now hava an 
opportunity to ask questions also. Ha will start with Hz. 
Van Clava who is on tha Housa staff, and than thara may ba 
soma questions following by Hr . Kaplan of tha Senate staff. 

I think as your counsel nay have informed you, this 
is a joint deposition today between the House and the 
Senate. Before Hr . Van Cleve begins, I just want to note 
foi the lecord that in advance of this deposition, I 



UNCLASSIFSE3 



823 



NAME: 
1863 
186U 
1865 
1866 
1867 
1868 
1869 
1870 
1871 
1872 
1873 
187U 
1875 
1876 
1877 
1878 
1879 
1880 
1881 
1882 
1883 
188U 
1885 
1886 
1887 



HIR077000 



UNCLASSIFIED „ 



GE 82 



provided to counsal for Mrs . Garwood copias of the 
resolution establishing the select connittee and a copy of 
the rules governing the investigation oi the select 
committee . 

Shall we take a short break? 

I Recess . ] 

MX. VAN CLEVE: Mrs. Garwood, I have had an 
opportunity to review my notes. I iind I have no questions 
for you and I want to thank you for your appearance today. 
EXAMINATION 

BY HR. KAPLAN: 
2 As you know, because I have spelled it for you for 
your book, my name is James E. Kaplan, and I am associate 
counsel of the Senate Select Committee that is investigating 
the Iranian arms sales and contra matters. 

He are appearing hare today at the request of your 
counsel, and at the Invitation of your counsel, and we were 
glad to accommodate you. We have also provided a copy of 
our rules and regulations, our committee rules, and at the 
request of and to Hr . Loeffler. who also represented to us 
yesterday that he already had a copy of our committee 
regulations pursuant to which we appear here today. 

There are areas of questioning that I am just going 
to follow up on. I will do my best not to duplicate any 
questions that Hr . fryman asked. If you don't understand 



UNCLASSIFSED 



824 



NAME' 
1888 
1889 

1890 

189 1 
1892 
1893 
1-89U 
1895 
1896 
1897 
1898 
1899 
1900 

190 1 
1902 
1903 
1 904 
1905 
1906 
1907 
1908 
1909 
19 10 
19 11 
1912 



HIR077000 



UNCLASSIFSED 



PAGE 83 



any of my questions, pleasa feel ire* to stop me and make ne 
be more clear . 

Do you know Lynda Guell? 

A Yes. 

Q And when did you come to know Lynda Guell? 

A I knew her when my book ««me io t^ , n«gh«n was 
coming out, and she was with the Western Goal Foundation, 
and I called to ask her for a good publicity agent it seems 
to me for the book, because I knew that Western Goals had 
put out several books, and that is how I happened to know 
her and had several conversations with her over the phone. 

C Was she helpful? 

A She was . 

fi Did you have any other contacts with Hs . Guell 
other than with respect to agents and promotion for the 
book? 

A Mo, I didn't. Hell, I did too. She asked me for a 
donation to help her go to 9Brmany to speak to some of the 
people that Larry McDonald had been in contact with. This 
was after his death, and I did give her a donation for that. 

She had been very helpful in making suggestions about my 
book. 

fi Any other contacts with Hs . Guell? 

A That was all. 

S Did Hr . Channell ever explain how he had come to 



UNCLASSIFIED 



825 



NAHE 

1913 

191(4 

1915 

1916 

1917 

1918 

1919 

1920 

192 1 

1922 

1923 

192U 

1925 

1926 

1927 

1928 

1929 

1930 

1931 

1932 

1933 

193>4 

1935 

1936 

1937 



HIR077000 



know Colonal North? 



WNCIASSIRED 



PAGE 8<4 



k No. h* n«v«r did. 

fi Did Colonttl Noxth aver axplain how ha had cona to 
ba involvad with Ht . Channall? 

A No. 

2 Did Ht . Channall avar axplain or raptasant that ha 
had a talationship with tha Raagan Administration of any 
sort? 

A Tha only thing is a lattar from Prasidant Xaagan 
praising Hr . Channall for what ha had dona. That is tha 
only spacific occasion. Ma all knaw that Hr . Channall was 
halping tha Raagan Administration. 

e Did nr . Channall show you that lattar? 

A Ha sant ma tha lattar, yas . 

2 And in what contaxt did ha sand you that lattar? 

A Simply I supposa out of prida that tha Prasidant 
had racognizad what ha was doing. 

2 Has thara any othar raprasantation by Hr . Channall 
about his ralationship with tha Raagan Administration? 

A No. 

2 Did you avar maat tha Prasidant othar than at tha 
ona maating that you dascxibad in your tastimony aaxliai 
today? 

A Z navax had a pxivata maating axeapt that ona 
maating. I had mat tha Pxasidant in his 1976 campaign. I 



UNCLASSIFBED 



826 



1938 
1939 
19>I0 

19>4l 

19U2 
19tl3 
19i«>4 
19t»5 
19i«6 
19<47 
19>t8 
19U9 
1950 
1951 
1952 
1953 
195M 
1955 
1956 
1957 
1958 
1959 
1960 
1961 
1962 



HIR077000 



UNCLASSIFEEO 



PIGC 85 



had b*«n on his caapaign plana. 

B Uhat about Andy Massing? Do you knoM Andy Hassing? 

A Yas . 

fi And how did you coma to know Andy Hasting, and 
whan? 

A Z mat him at a maating oi tha Council iot National 
Policy, ona oi tha aaxly maatings aitax I had bacoma a 
nambaz , and ha was at that tina I think working ioc tha 
Consazvativa Caucus, which was Howazd Phillip's 
organization, and I had known and baan in contact with tha 
Consarvativa Caucus ior soma tima. 

Andy Massing was thara at that maating. Ra Is a 
mambar oi tha Council ioz National Policy. 

fi How would you dascziba your zalatlonship with Hz. 
Massing? Has it a elosa ona? Haza you in zagulaz contact 
with Hz. Massing? 

A Hhanavaz wa mat at tha Council ioz National Policy, 
ha would dascziba to ma soma oi his tzips to Cantzal 
Amazica, whaza ha took Congzassman down to saa what was 
going on in Nioazagua, and to pazsuada tham that thaza 
zaally was a dominant communist iniluanca in tha Sandinista 
Govaznmant. 

fi Has thara avaz any zaason ioz you to baliava that 
thaza was a pzoiassional zalatlonship or connaction batwaan 
Mz . Massing and Hz. Channall? 



UNCLASSIFiED 



827 



NAME : 
1963 
196M 
1965 
1966 
1967 
1968 
1969 
1970 
1971 
1972 
1973 
197H 
197S 
1976 
1977 
1978 
1979 
1980 
1981 
1982 
1983 
198U 
1985 
1986 
1987 



HIR077000 



No 



^ftOUSSlFS£, 



PAGE 86 



2 And what about batween Mr. Messing and Colonal 
North? 

A I Knaw ha was a fallow Mazine and ha introduced me 
to Colonel North. 

2 That's right, you tastliiad about that. 

With respect to your dealings with nr . Channell's 
organizations, you mantionad Cliff Smith aarliaz in your 
testimony today. 

A yes. 

2 Who else in Hr . Channell's organizations did you 
have an opportunity to deal with over the tine? 

A There was a man named tittledala, Chris Littladale, 
and a man named Dan Conrad. 

2 And what were your contacts with Hr . Littladale? 

A Simply I was Introduced to him. Mr. Channell cane 
to Austin with Hr . Littladale to work for Carol Rylander, 
who was running for tha Congress against the democrat 
Pickle, and Hr . Littladale was with him. 

I mat him thara at lunch, and than I had a 
conversation whan ha had asked for a donation for something 
that Hr . Channell, one of Hr . Channell's organizations. 

2 Is that the sum and substance of your contacts with 
Hr. Littladale? 

A That is It. 



UNCLASSIFIED 



828 



NAME: 
1988 
1989 
1990 
1991 
1992 
1993 
199i» 
1995 
1996 
1997 
1998 
1999 

. 2000 
2001 
2002 
2003 
200U 
2005 
2006 
2007 
2008 
2009 
2010 
2011 
2012 



HIR077000 



UNCLASSIREO 



PAGE 87 



fi What about youx contacts with Hx . Conxad? 

A It s««its to ma that He. Conrad was tha man in 
chazga oi--I don't know whathaz ha is tha tzaasurat oz not, 
but I think ha is oi Channall's organizations , and soaathing 
to do with tha donations nayba. soaathing ha aay hava askad 
ma foz soma donation at ona tiaa, oz vazliiad that soaathing 
has coma iroa aa to tha Channall organizations. 

I don't think it was anything vazy paztieular. 
soaathing in ganaral. 

2 Wara you a aaabar of tha Board of Advlsazs oi tha 
National Endouaant for tha Pzasazvatlon oi Llbazty? 

A I don't think I was avaz callad a aaabaz oi tha 
Board oi Advisars. Hayba I was. I aa just not suza. 

2 Hara you a aaabar oi tha Boazd oi Advisars oi tha 
Aaarlcan Consarvatlva Trust? 

A In soaa lattaz it saaas to aa Channall has aa down 
as a mambar, as ona oi tha advisars oi ona oi thosa 
organizations. Hhleh It is, and whathaz ha avan has it down 
I don't know, but I hava a vagua iaallng that ha did call 
ma, but I don't zaaaabaz any. you know, zaally ooeaslon oi 
baing askad whathaz Z would ba on tha board oz anything Ilka 
that. 

fi So than I taka it you didn't hava any spaclal 
dutlas? 

A No. 



UNCLASSIFSED 



829 



UNCLASSIFiEO 



HIR077000 |||«|_| 1IWIL.1L.LI PAGE 88 

As a msnber of eith*c oi thosa boards? 

A Not at ail. 

2 Hava you evar nat a John Holt Hull? 

A Navat hava mat hin, no. 

2 What do you know about Mr. Hull? 

A I know somathing about him through Hr . Varn Chanay, 
who said that ha had had cortaspondanca with him, ha halped 
with i« Doolay Intarmad Corporation or Foundation, and that 
ha livad in ona of thosa countrias. I hava forgottan which 
ona ; I think it is Honduras. 

2 And what alsa did Hr . Chanay tall you about Hr . 
Hull or Intarmad, Inc.? 

A Ha simply told ma that Hr . Hull was halping with 
soma transportation, ambulanca boats that ha was sanding 
down, that I had halpad pay for, and Mr. Hull was halping 
gat tham dalivarad or halping gat tha matarials, mayba an 
angina or somathing for tham. 

2 How and whan did you maat Hr . Chanay? 

A Simply Z hava hava baan giving for many yaars 
donations to tha Doolay Intarmad, which takas cara of 
rafugaas with madical supplias, and in ganaral halps 
rafugaas flaaing from totalitarian countrias. Aftar Dr. 
Doolay diad. Or. Varn Chanay took ovar, so I just continuad 
my contributions. I did tham In tha baglnnlng whan Dr. 
Doolay was thara. 



UNCLASSIFIED 



830 



NAME: 
2038 
2039 
20140 
20U 1 
20<42 
20(43 
20>4U 
20145 
20146 
2047 
20148 
20<49 
2050 
2051 
2052 
2053 
205M 
2055 
2056 
2057 
2058 
2059 
2060 
2061 
2062 



liNCLASSIFuED 



HIR077000 ■■■«■■■ UJ% -^liF uk« L I PAGE 89 

fi In tha docunants that h«z« tuznad over by your 
counsal pursuant to the subpoena that uas issued by the 
House conaittee. there were sone pieces of correspondence by 
Mr. Hull? 

A Yes. 

2 Hou did you cone to receive that correspondence? 

A He said Dr. Cheney had told him about me, and he 
wanted to, he was very interested in what I was doing, and I 
had been helping with the humanitarian aid for the freedom 
fighters, so he wanted to correspond with me, and he was 
living down there, and he thought highly of the freedom 
fighters, and so on. 

fi Did you correspond back to him? 

A I wrote him back, yes. It was a very interesting 
letter, it seems to me, that he wrote me, and I wrote hin 
back . 

You see, I am going to write a book about all of 
this some day . 

Q Earlier today you testified that you never 
understood any funds of yours, any contributions to the 
Channell ozganlzatlona to be used for purposes in Hicaragua 
other than humanitarian aid. 

A Yes. 

fi Then a little later on in your testimony, you 
testified that you made in total a multl-mlllion-dollar 



UNCLASSIFIED 



831 



HIR077000 



UNCIASSIFJED 



PAGE 90 



contribution . 



A Yas. 

Q Pursuant to and in rasponsa to an anmunitions-- 

A Requast. 

2 --arns list and raquast that you had racaivad from 
the Colonal . 

A Wall, whan I aada tha ilrst statamant it nust have 
baan that I was talking about tha tiaa before I nade this 
contribution. 

fi I just wanted to clarify that for the record. 

I an going to take you back in tine to April. 1986. 

A Yes. 

2 When you dasctlbad group maatings that- occurred* at 
Hay Adans Hotel. Do you recall the names of other potential 
contributors that attended those group meetings? 

A I think I named some of them. yes. Hr . and Mrs. 
Ramsey and a Hr . and Hrs. Pentecost, and Hr . and Mrs. Warm. 
and.'^ll»<>'^i^ nrs . Adamklewlcz. A-d-a-m-k-i-e-w-1-c-z . or 
something like that. Dr. fiery Adaaklawlcz. a vary strange 
name. It Is down there somewhere. 

m. KAPLAN: I think we need to mark this. 
BY HR. KAPLAN: 

e I Hill show you a copy of • letter that is part of 
your production, and at the bottom of the letter In the left- 
hand column here, there Is a spelling of Ot. Adamklewicz's 



unci/iss»f:eo 



832 



NAME : 

20881 
2089 
2090 
209 1 
2092 
2093 
20914 
2095 
2096 
2097 
2098 
2099 
2 100 
2 101 
2 102 
2 103 
2 10U 
2 105 
2 106 
2 107 
2 108 
2109 
2110 
2111 
2112 



HIR077000 



name 



^NCUSSIFiEQ 



PAGE 91 



A Yes. 

2 X baliava that cozrasponds with the spelling you 
:ust gave the court zepoztaz? 

A A-d-a-ii-k-i-e-u-i-c-z . 

2 Was a Searcy Ferguson In attendance at the April 
meeting ? 

A Who? 

2 A Searcy Ferguson. 

A No. not that I know of. I don't renenber that 



What about a Ricardo Capote? 

I don't remember that name either. 

When did you neat John Singlaub? 

I net him at a meeting oi the Council for National 
Policy in Arizona, and the exact date, and I am not sura. I 
think it uas 1985. 

2 What did you understand the purpose of donations 
that you made to John Singlaub to be? 

A Those were all to help humanitarian aid for the 
freedom fighters. Boots uas one of them, and then another 
uas the helicopter that uas transformed into a medical 



evacuation helicopter, for uhlch I paid the 4-t anflpaxrt»ti,on 
part . 

fi Did you Intend any of the funds to be used for the 



UNCLASSIF3ED 



833 



NAHE^ 
2113 
21 lU 
2 115 
2116 
2 117 
2 118 
2119 
2 120 
2121 
2 122 
2123 
2 12M 
2125 
2126 
2127 
2 128 
2129 
2130 
2131 
2 132 
2133 
213U 
2135 
2136 
2 137 



HIR077000 



^ffOUSSIFlid 



PAGE 92 



purpose of ains or anmunition: 



A Mot at all. 

S Did nr . Singlaub ev«r ii«et with you with 
adninistration psrsonnal. that is paopla from the White 
House ? 

A Ko . 

e Or the like, or the National Security Council? 

A No . 

S How often did you meet with najor Singlaub? 

A The first meeting, which was in Arizona, the second 
meeting, which was in Dallas at the United States Council 
for Freedom, two-day conference, two- or three-day 
conference, and the third time was just recently, but you 
aren't going into 1987, are you? Another Council for 
National Policy Conference. 

C Did you understand there to be any professional 
relationship or connection between najor General Singlaub 
and Mr. Channell? 

A No. 

2 Did you understand there to be any professional 
relationship between najor General Singlaub and Colonel 
North? 

A I didn't ever consider that there was any 
professional relationship. They certainly knew each other. 

2 How did you know that they Kn«M each other? 



«NCl/ISSinEO 



82-708 0-88-28 



834 



NAME: 
2138 
2139 
2 1140 
21U1 
2 1U2 
2 1>43 

2 mi* 

2 1US 
21U6 
21147 
2 1<48 
2 1l»9 
2150 
2151 
2152 
2153 
215M 
2155 
2156 
2157 
2158 
2159 
2160 
2161 
2162 



HIR077000 UNCLASSIFSED "^^ ^ 

A I don't absolutaly know, but I know thai* u«ta 
timas it seams to ne when Ganeral Singlaub uas talking to 



Q Do you lacall tha contaxt in which ha mantioned 
Colonel Horth? 

A NO. I don't, and Colonal Hozth navac nantioned hin. 
2 Did you know a Major Gil Hacklin in tha United 
States nazina Corps? 
A Ko. 

2 That nana is not faniliar? 
A It doasn't sound iamiliar at all. 

HR. OSBORNE: What was that nana, counselor? 
MR. KAPLAN: Major Gil Hacklin, H-a-c-k-1-i-n. " 
BY MR. KAPLAN: 
e I recall that you appeared briefly on SiKty 



Minutes 
A 
Q 
A 



Oh, really? 

Back in Saptembar oi 1986? 

That is one of tha things I didn't sea, and all ny 
friends evidently did. 

fi Did you consult with anybody before submitting to 
your Sixty Kinutas interview? 
A No. 

MR. OSBORNE: can wa go off tha raoord a minute? 
( Discussion off tha record.! 



UNCLASSIFZED 



835 



HIR077000 



UNCLASSIFIED 



PAGE 9U 



BY HR. KAPLAK: 

S You tastiiied eailiet today that you gava a copy of 
a munitions list that you had recaivad from Hr . Channall to 
Hs . Glanz? 

A Yes. 

2 At Inter-First Bank, and Hrs. Glanz then showed it 
to Mr . Osborne ? 

A Yes. 

2 And I believe Mr. Osborne volunteered that a search 
had been conducted for that list, and that list had not been 
turned up . 

A Yes. 

2 I take it that it is fair to say that the list that 
you are thipking of and described earlier today is the same 
list that Mr. Osborne is thinking of and was referring to 
when he stated that a search had been made for it? 

A Yes. 

2 And so we can assuae that the two of you discussed 



that? 



Yes 



2 Specifically in teras of conducting your search 
pursuant to the House subpoena? 

A That's right. 

MR. KAPLAN: If I can have a moaent to consult uith 
my colleagues. 



UNCLASSIFED 



836 



UNCUSSIFJE0 



HXnt- HIR077000 '^'^■■WMII BLfj ?lGt 95 



2188 
2189 
2 190 
2191 
2192 
2193 
219M 
2195 



(Discussion off th* record. ) 

HR. KAPLAN: If m* can hav* tha rapottar mark as 
Garwood EMhibit 3-1 a docunant that appaars in Garwood 
Exhibit 3. 

( Tha following docuaant was markad as Garwood 
Daposition Exhibit 3-1 for idantif ication^ 1 

xxxxxxxxxx INSERT >xksw>k 



UNCLASSIFED 



837 



NAME: 
2196 
2197 
2 198 
2 199 
2200 
2201 
2202 
2203 
22014 
220S 
2206 
2207 
2208 
2209 
22 10 
221 1 
22 12 
22 13 
221U 
2215 
2216 
2217 
2218 
2219 
2220 



HIR077000 






PAGE 96 



BY MR. KAPLAN 



2 With ra£«ianca to tha docuncnt that has just been 
narked as Garwood Exhibit 3-1, are you able to identify that 
docunent. and/or to explain to us what it is all about? 

A It is very difficult to figure it out, but nou I 
see what it is. Mrs. Glanz asked Hr . Channell to give her 
the amounts that he in general had raised, said it seeres to 
me you are asking Hrs . Garwood for too much, and he said. 
But he had raised a lot from other people too. She said. 
Well, then, will you let us know how much you raised from 
other people . 

So then he sent this list, and that was it, what he 
had raised from other people. 

Now, the names that went with this I destroyed, I 
took out, because he was not supposed to send me the names 
and I :ust cut them off, so I don't know who gave what, but 
that is what you see; if you want to count how many other 
people there were, you can count those. 

2 So I take it then the column on the left is a 
portion of a list that was provided to Hs . Glanz by Hr . 
Channell? 

A Yes. 

Q And what is the column on the right? 

A I really don't know. I can't imagine what it is. 

fi Is that just a continuation of the list? Is it a 



UNCLASSlfSEO 



838 



NAME : 
2221 
2222 
2223 
222>4 
2225 
2226 
2227 
2228 
2229 
2230 
2231 
2232 
2233 
223U 
2235 
2236 
2237 
2238 
2239 
22(40 
22U1 
22M2 
22*43 
22<414 
22145 



HIR077000 



«WCl/ISS/ffEO 



PAGE 97 



running total mayba? 



A Can you tall what that Is? 

MR. OSBORNE: Can wa go off tha racoid a ninuta? 
[Discussion oif tha racotd. ] 
MR. KAPLAN: Back on tha cecoid. 
Uhila wa wara off tha lacozd all of us put our 
heads togathaz and uaza parspicacious anough to zacogniza 
that the colunn on tha right of this Garwood EKhibit 3-1 is 
identical to tha colunn on tha left. 

Based on that> I withdraw ay previous question of 
the witness. 

If I can just clarify ay earlier statement, tha 
total at the bottom of tha list constitutes the total of' 
each column plus what Hrs. Garwood and her counsel 
identified off the record as the total of her contribution 
to the various Channell organizations. 
BY MR. KAPLAN: 
2 Isn't that correct. Hrs. Garwood? 
A That's right. 

fi Whan Hr . Massing told you back in Decaabar of 1986 
that Hr . Channell took 35 percent of contributions made to 
his organizations, what was your reaction to that statement? 

A I thought it was aore than I had realized that he 
was taking. I was surprised and rather disappointed. 
2 Did you believe Hr . Messing? 



^ffOUssiFSED 



839 



MAKE 

22U6 
2247 
22148 
22U9 
2250 
2251 
2252 
2253 
225U 
2255 
2256 
2257 
2258 
2259 
2260 
226 1 
2262 
2263 
226U 
2265 
2266 
2267 
2268 
2269 
2270 



(UNCLASSIFIED 



HIR077000 WI«UI-*«.^_^ir Mr II PAGE 98 

A I lathAi did. Ha askad ii« to call soncon* alsa and 
vaiiiy it, but I didn't. 

2 Who did he ask you to call? 

A Ha askad na to call Hr . Paul Uayrich. 

Q And io£ tha lecoid, who is Mr. Uayrich? 

A Mr. Hayrich is tha head of sonething called the 
Free Congress Foundation, and ha has various pursuits along 
that line oi helping tha Heritage Foundation. 

In nany ways he nay have helped start the Heritage 
Foundation. As a matter oi fact, ha did. 

2 Did you aver discuss with Mr. Channell Hr . 
Hessing's statement? 

A Yes, I did. 

S Uhen was that? 

A I think it was in the conversation we had in 
December, uhen he called me, and he talked about how he was 
being accused of being a part of the Iran-contra affair, and 
I told him either then or when I asked him to send the 
donations for Colonel Korth for tha Legal Defense Fund of 
Colonel North, and I think it was that same conversation, 
yes, to Andy Hessing's organization, which was tha Marinas' 
Official North Legal Defense Fund, is what it was called, 
and then I said. But how is it that you are taking 35 
percent of everything we give you or something like that, 
and I think hajT laughed it off or something. 



^fioussiFm 



840 



NAME: 
2271 
2272 
2273 
227<4 
2275 
2276 
2277 
2278 
2279 
2280 
2281 
2282 
2283 
22814 
2285 
2286 
2287 
2288 
2289 
2290 
2291 
2292 
2293 
229U 
2295 



HIR077000 



UNCLASSIFIED 



PAGE 99 



fi Did you prass hi« on it at all? 

A I bag your pardon? 

2 Did you prass him on that? 

A Prass him on it? 

C Yas . 

A I doubt it. 

C Hava you mada any contributions to Hr . Channall's 
organization sinca tha tima you raquastad tha contribution 
back for tha Korth Lagal Dafansa Fund? 

A No, I hava not. 

S Why is that? 

A Bacausa I don't intand to. I am disappointad and 
disillusionad by tha 35 paroant taka that ha is purportad to 
taka, which ha actually didn't dany. I don't baliava ha 
daniad it. And also bacausa I am vary disappointad in tha 
continual obstaclas thrown up to tha Raagan foraign policy 
by tha Stata Dapartmant, and I hava mantionad that befora, 
today . 

fi Has Hr . Channall solicitad funds from you ovar tha 
coursa of tha last coupla of months? 

A No, but ona of his man did, Chris Littladala callad 
and askad ma for somathing and I told him. No, that I wasn't 
going to giva it. 

fi Hhan did ha call? 

A It was I think somatlaa mayba in January this yaar. 



I 



UNCLASSIFSED 



841 



NAME : 
2296 
2297 
2298 
2299 
2300 

230 t 
2302 
2303 
230M 
2305 
2306 
2307 

6. 2308 
2309 
2310 

231 1 
2312 
2313 
231(« 
2315 
2316 
2317 
2318 
2319 
2320 



HIR077000 



UNCLASSIFIED 



PAGE 100 



i And what did you t«ll Ht . littl«dal«? 

A I said. No, I wasn't going to giva anything mora. 

2 Did you giva him a raason why you wazan't going to 
be giving any mora monay? 

A I don't know that I did. I said. You know, I am 
not giving any noza tight now. 

S Did you hava any raason to suspact that Hr . 
Channall was taking a cut as big as 35 parcant, prior to 
your convarsation with Hr . Massing in 1986? 

A Tha only thing that mada aa a littla suspicious was 
whan ha told ma ha had a surplus in NEPL, and if ha sant 
back that rafund, would I sand that on to tha Amarlcan 
Consarvativa. '"''ii'' 

I must say that that saamad a littla odd to ma, 
that ha was taking too much, mora than ha naadad avidantly, 
and I didn't lika it. 

2 Did you tall him baiora Dacambaz, 1986, that you 
didn't lika it? 

A Ko. 

2 So I taka it you kapt thasa suspicions to yoursalf? 

A Yas. I just kapt tham to mysali. 

2 Has thara anything about Hr . Channall that causad 
you not to quastlon? 

A yas. I think ha had a graat daalra to halp tha 
country, and ha was a patziotio parson. I raally think, and 



UNCLASSIFSED 



842 



NAHE' 
2321 
2322 
2323 
23214 
232S 
2326 
2327 
2328 
2329 
2330 
2331 
2332 
2333 
233<4 
2335 
2336 
2337 
2338 
2339 
23140 
231*1 
23>42 
23>43 
23U14 
23<45 



HIR077000 



WWCIASSIRED 



PAGE 101 

I Still thinX this, and that ha was doing a job that was 
naeded by th« adninisttation , and nobody als* was doing it 
as well as h« was. 

You could tall that by th« pcopl* who can* to all 
of his meetings, a great iiany people, and you can see by the 
donations they gave hiii. 

Q You will notice Ht . Woodcock, my colleague, is 
offering me questions, and I am going to feel a little bit 
like Jerry Hahoney, a knucklehead . But I will ask this 
question in any event. 

Was there anything about Hr . Channell's 
relationship with Colonel Morth that led you not to question 
Mr. Channell's integrity or provision of funds to the places 
that you intended your money to go? 

A Hell, certainly the fact that he brought me to talk 
to Colonel North, and what he asked me for later was related 
to what Colonel Morth had said, although Colonel North 
didn't ask me, and this seemed to me a guarantee that this 
was the executive department of the Government that was 
asking for this help, and that it was essential and that it 
was going to the right plaea. 

S And was it Hr . Channell who co.nvayed that feeling 
to you? 

A The fact that Hr . Channell took me to see Colonel 
North, who was part of the National Security Council, and 



UNCUSSIffEO 



843 



HknZ HIR077000 IfMI'l H V iT I CT f? ."^ ''»GE 102 



23<46 
23U7 
23148 
23U9 
2350 
2351 
2352 
2353 
235U 
2355 



UNCLASSIF3ED 



who was part of th« administration, of the •xecutiv* 
dspartmant of th« administration, was a kind of reliable 
gesture on his part, I would think. 

a So I take it it is fair to say that Hr . Channell 
and Colonel North conveyed that impression to you? 

A They did, yes. 

MR. KAPLAN: I have no further questions. 

Thank you very much. You have been very patient. 

[Whereupon, at 5=10 p.m., the taking of the deposition was 
concluded . 1 



2 a., l'-^v^"- i^^'w.v^.^- 



ONCUSSIfiED 



844 



BOYUM/mas 



1 
2 
3 

4 

5 

6 

7 

6 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 





sonno. 



xonu 



H^vl5-^<pl5s'^ 



DEPOSITION OF LT. GENERAL PHILIP C. CAST 



Thursday, June 18, 1987 



U.S. House of Representatives, 
Select Committee to Investigate 

Covert Arms Transactions with Iran, 
Washington, D. C. 



The Committee met, pursuant to call, at 3:10 p.m., 
in Room H-328, the Capitol, Joseph Saba presiding. 

Present: Joseph Saba, Roger Kreuzer, Bob Genzman, 
on behalf of the House Select Committee. 

Johi\ Saxon, on behalf of the Senate Select Committee. 

Also Present: Jerome H. Silber, General Counsel, 
Defense Security Assistance Agency, Department of Defense. 



^0.3.^ 



Partiany D«l«ssifM/Rele<s«d on h /^'^'S 
under provisions of LO. 12356 
by N. Meiun. Nationai Security Council 



UNCUSSIRED 



2^-^ 



845 



«S8S»r 



Whereupon, 

LT. GENERAL PHILIP C. CAST, was called as a 
witness, and having been first duly sworn, was examined 
and testified as follows: 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

Q Sir, would you please for the record state your 
ncune, rank, organization and present station. 

A I am Philip C. Cast, with one "1", P-h-i-1-i-p, 
C, Cast, Lt. General, Air Force. I am the Director 
of the Defense Security Assistance Agency, and my office is 
in the Pentagon. 

And, sir, can you tell us how long you have 
been at that station and what was your immediate station 
prior to this? 

A I have been the Director of the DSAA since 
I believe it is 11 August, 1982. Prior to that time I 
served a two-year tour as Director for Operations in the 
Joint Chiefs of Staff. 

Q And, sir, to whom do you report in your present 
duty? 

A Dr. Fred Igkle, Under Secretary for Policy in the 
Defense Department. 

Q Would you describe very briefly for us what 
your duties consist of? I 




m^^T\ m-i^*^ 



846 



llNIIERSieE' 



A My principal duty is to implement the approved 
- security assistance programs on a worldwide basis. In 
general, sir. 

Q In general, sir, what information do you 
normally provide to your superiors concerning the 
disposition of arms transferred? 

A Arms that have already been transferred? 

Q Yes, sir. 

MR. SILBER: I am sorry, I don't understand. 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

Q Asked another way, do you keep track of how the 
transferee country uses the arms? 

A Oh. 

Q Or otherwise disposes of them. 

A Yes, yes. 

The first thing is I would say when a country 
does transfer them by our law and by agreement between 
our two governments, they must seek approval from the 
United States before they transfer them. And we are 
generally involved in that although that is principally a 
State Department function to approve them, but we have a 
voice in that depending on the nature of the transfer. 

Q And — 

A And to the level of visibility. So far as 



wmssm. 



847 



25 



uiMSffe^^ 



compliance with the use of them we have security 
assistance organizations in the country who monitor 
generally the usage of the equipment and then we all watch 
for intelligence reports that might indicate that somebody 
is thinking of moving or contemplating moving them. 

Q Could you elaborate a bit on our mechanisms 
for keeping track of the weapons that we have 
transferred? 

A The strongest -- if it is a cash sale or it 
has been subsequent to the new MAP procedures which is the 
sale in itself, the strongest principal here is the 
government to government agreements, that they shall not 
do that; and a clear understanding with them even before 
we begin a security assistance relationship, but throughout 
the whole procedure, that is to say they must sign to 
that and if it is an old MAP program then our people have 
the duties to ask for reports about the location and the 
general condition of the equipment. But that generally 
is prior to '77 or '78. 

MR. SAXON: And MAP stands for what? 
THE WITNESS: Old military assistance program. 
That was the old program where we bought it and gave it 
to them. Now again we provide funds or they have their 
own national funds and they procure. 



MASSIEIEL 



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BY MR. SABA: 

Q This was for equipment, what you referred to 
as the old MAP program is for equipment transferred 
prior to when? 

A Generally prior to '76, '77, '78. 

Q And is monitoring of that equipment continuing? 

A Yes, that continues. The reason is because its 
U.S. title and assets have been transferred to them unless 
we have waived reversionary rights and we have reversionary 
rights to that, and so when they have finished with that 
old equipment under the old programs, then they even have 
to have permission from us before they can destroy it ojr 
put it out of use or, certainly transfer. Under the newer 
procedures since '76, '77, so forth, even though we may 
provide funds for them, appropriated funds from Congress, 
that is, it is a sale and they have title to it and we 
have no reversionary rights so we are not tasked by the 
law to physically monitor its end use because it is their 
equipment. 

MR. SILBER: Can I make one correction. The 
new MAP procedures started in '82, but most of old MAP 
was programmed by '77 or '78, but there was a hiatus where 
old MAP procedures were still used and there was a small 
program that was being delivered out. 

THE WITNESS: That is right, yes. 



849 



ttKttASSiE&' 



BY MR. SABA: 
Q Focusing on the old MAP program or weapons 
transferred under that system in which the United States 
had reversionary rights. Focusing specifically on Israel, 
how do we keep track of those arms? 

A Well, I don't really — I doubt if we have 
very much MAP equipment under the old system in Israel. 

MR. SILBER: No, Israel never got any MAP. 

THE WITNESS: I just don't think we have any 
under that system. 

BY MR. SABA: 
Q Jerry, I do appreciate your help but I must have 
the testimony from the sworn witness. 

MR. SILBER: I am sorry. 

MR. SABA: I need the information from his 
knowledge . 

THE WITNESS: As I recall, I just don't believe 
there is any MAP equipment under the old program. 

BY MR. SABA: 
Q What about as an example, HAWKs and TOW missiles 
that were transferred to Israel after 1967 but before 1976? 

A To my knowledge -- I don't know about that part 
of history. I really don't. You know, as to whether or 
what kind of program was there. I can only say to my 
knowledge since I have been in my position that we do not 



nMPi AQQinrn 



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have a system where we go around and inspegt or even 
account for items provided to Israel. 

Q So that if there is equipment in Israel transferred 
under the old MAP program, is it your testimony that at 
the present time we have no way of monitoring their use or 
disposition of that equipment. 

A Except by agreements that we have with them. 

Q But I understand -- just so I understand, I 
understand that for that old MAP program we retained 
reversionary rights. 

A That IS right. 

Q And we monitor those. 

A We monitor them in the sense that -- the first 
thing is I don't believe we have any old MAP equipment 
there. We have not had a security assistance office m that 
country since I can recall, and I doubt if we ever had one. 

There is a defense attache there who does some 
work in security assistance, but it is very, very, very 
minimal, usually arranging conference rooms, hotel 
rooms for people who come in whenever there are 
conferences in Tel Aviv. 

Many of us go to Israel frequently on visits 
to conduct business but the most of the security assistance 
or arms transfers is a direct relationship between their 
government and Washington or even the New York procurement 



851 



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office and ourselves. 

Q Would most of this equipment have been 
transferred by means of an agreement called "United States 
Department of Defense Offer and Acceptance"? 

A A lot of it would. But there is quite a bit of 
equipment that is provided under a commercial sale to 
Israel as well but I don't think any of the things that 
you are concerned about if you are concerned about HAWKs 
or other things would have been sold commercially. 

Q I would be concerned about HAWKs and TOWs. 
A I doubt if they would have been sold 
commercially, I don't think they would have been. They- 
would have been under the 1513, LOA. DD Form 1513. 
MR. SAXON: LOA is what? 

THE WITNESS: Letter of Offer and Acceptance. 
It is a standard form that has been developed over the 
years. And has all the matters of law in it and 
some policy. 

BY MR. SABA: 
Q You have before you now, sir, a form entitled 
at the lower left "DD Form 1513". 
A That is the one. 

Q And is this the document which would constitute 
an agreement between the United States and a transferee? 
A Yes, that is right. 



MClJifiSIflFJL 



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Q And, sir, I would call your attention specifically 
to page 3 of that agreement and with apologies for the 
small print, I would draw your attention to the underlying 

4 



sentence -- 

A Under 9? 

Q Underlined sentence in paragraph 9 and ask 
whether your understanding is that that paragraph, in 
particular that sentence controls the further disposition 
of the weapons by a transferee country? 
A Let me read it, please. 

MR. SILBER: You mean paragraph B-9? 
MR. SABA: Yes. 
(Exhibit No. PCG-1 was marked for identification.) 

THE WITNESS: This is a, virtually a lift-out of 
the law and it is the agreement for the transfer of 
equipment. 

BY MR. SABA: 
Q Thank you. 

With respect to transfers, sir, pursuant to this 
agreement to Israel, and specifically focusing on HAWK 
and TOW transfers, what steps if any has your agency 
undertaken to keep track of or to police if you will, this 
clause in our agreement with Israel? 
A Specifically with Israel? 
Q Yes, sir. 



UNCLASSIFIED 



853 



|)N£M^^^ 



10 



A I don't think that I would be accurate by saying 
any more so for Israel than for other countries 
in the sense of how we track these things, except on 
occasion we have had some concern about some of the items 
they were procuring in my business as to whether they were 
quantities or not that should be procured. 

Q But my question is how do we keep track of the 
equipment? 

A Well, I only — only through discussions with 
them. You know, I don't ever recall them or seldom recall 
hearing them suggesting they want to transfer things but 
there have been discussions about them transferring eit^her 
the articles or portions of it that have U.S. content in 
it. You may remember the Kafir sale discussed for 
Honduras, for exeunple. 

It is usually through intelligence sources 
that we look for anyone who might be in the arms transferring 
business or who might be contemplating a sale or movement 
of that. We watch for that, we and the State Department 
who has the lead but we support them in that. 

MR. SAXON: We should say for the record for 
clarity purposes for subsequent readers of the deposition 
that the language in B-9 actually says that with regard to 
whatever defense articles, components and associated 
support material is purchased it says, the recipient "shall 



IHASSIfe. 



854 



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not use or permit their use for purposes other than those 
authorized by B-8 above unless the written consent of the 
USG"-- meaning the United States Government -- 'has first 
been obtained." 

BY MR. SABA: 

Q Further to that, B-8 above states, that the 
items sold shall only be used for the purpose specified in 
bilateral or regional defense treaty to which the U.S. 
Government and purchaser are both parties, if subparagraph A 
of this paragraph is inapplicable. 

A Yes. 

Q Returning, sir, to the question I had as to 
monitoring, does the defense attache in Israel undertake 
any activities to monitor the disposition of weapons 
transferred pursuant to this agreement? 

A I don't know that he has a -- I do not believe 
that he is tasked on drawing on law or policy except that 
all of us who are involved in this are going to be looking 
for any illegal transfers, of course. 

Q So it is correct to say that there is no 
formal requirement whether a matter of law or policy to 
task specific individuals with monitoring this equipment? 

A To either count or observe, but in certain 
conditions there may be a policy, for example, and this 
does not refer to Israel because they didn't refer to 




^^ ^»*^^ ■ II ■ I 



855 



imSSFIK^ 



12 



them but to man pads, and Stingers of course as 
you know we have a requirement to go out and inspect them, 
but that is because of congressional and administrative 
concerns because they may be used for terrorists, we want 
to be sure they are closely controlled. 

MR. KREUZER: What is a man pad, sir? 

THE WITNESS: It is a man packed air defense 
weapon, the Stinger for example. And there are policy 
directions for example on certain sensitive equipment 
and the Stinger is one of them where there has been great 
concern that one might fall into terrorist hands and 
therefore we do go around about once a year and insist 
upon a check to be sure that all of those are accounted 
for. 

The concern here being that they would fall into 
terrorist hands. 

MR. KREUZER: Could I ask just one more question, 
in relation to what Mr. Saba was discussing, in the history" 
of the Security Assistance Agency, has there ever been an 
occasion where the Security Assistance Agency has cited 
anyone or fined anyone or prohibited further sales to 
anyone or taking any censure or action against any country 
who, say, transferred weapons to a third country where 
sales had been prohibited where you have taken action, 
you have fined or have taken punitive action against anyone 



illl£LAS£lCim.- 



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at all because of you, through monitoring you discovered 
that someone had violated the provisions of this agreement 
that we are talking about here, Exhibit 1? 

THE WITNESS: I am sure I have, but I don't 
remember any of them personally, on my watch. 

I know that we have worked with State and others 
to show concern about some that, that countries have not 
shown high regard for that and to try to track them down 
to see whether in fact people were violating the agreement 
or not. 

I know that State Department has taken some 
actions, and one or two have been classified and 
reported to Congress on countries that did transfer some 
arms. Our agency continues to routinely express concern 
in dealing with countries about the transfer. It is just 
a matter of course in our relationship with them, particu- 
larly when we are forming a new relationship with a country 
to be sure that they understand fully the agreement 
that we are going to require that they sign before we 
initiate any program so that they will understand it. 

Some countries take a long time before they 
decide they want to do business with the United States 
because they don't like to do, to sign this. They think 
their sovereignty is being -- by signing this agreement. 
It is a one-sided agreement, very one-sided they would 



IIMTJ ACTlf J 



857 



UNtBtSSREF^ 



14 



argue. But all of them to my knowledge comply with it. 
It is a very, very fast document. There is no other 
document in the world insofar as arms transferring. 

MR. KREUZER: Wasn't there an occurrence or 
occurrences in the recent past involving for example 
parts from F-14 TOMCAT Navy fighters that got -- that 
were suspected of having gone from Israel to Iran, for 
example? 

A If there was, I was not part of that. Not that 
action. I was not party to that action. 
BY MR. SABA: 

Q Sir, do we, to your knowledge is there a 
program, active solicitation of jnte^^genceinforma^^n 




A I would say there is, yes. 

Q And how does that work? 

A Generally, the way it generally workS| 
^^^^^^^^^^^^^^^^^^^^^^^^^^^H that anyone 
an intelligence report, it is evaluated or we try to 
evaluate it, sometimes we track it down but our members in 
other countries where it is rumored to have been transferred 
or people are talking about it to see if they know anything 
about it. This is all generally reported through the 
intelligence people to the ISA or ISB who becomes very 



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15 

concerned about it. From a political level as well as 
compliance with the law and also the State Department. It 
would be the State Department that would generally take 
the action or would enter into a dialogue with the country 
when there is a serious concern. 

Q Would you routinely see all such intelligence 
reports? 

A No, I wouldn't routinely see it. I get stacks 
every day but many of us are looking for that. 

Q My question is not that you necessarily would 
personally read everything but my question is whether that 
material would routinely come to your attention? 

A Yes , I would say it would routinely come to my 
attention. Of course the people in DIA who provide this 
material to me obviously screen it itself to see if there 
is any value in it. 

Q Would you also see intelligence information from 
the CIA? 

A Some, quite a bit, CIA reports probably more 
than they should. Some of it is hardly believable frankly. 
They report to much that it is very hard to determine, 
to know what is behind some of it. They listen to any 
source and put out a report and it becomes a little 
frustrating, but — 

Q 



IK^Itif'V«4ldffi 



859 



jj^ra 



iET 



16 



And would you also receive information from the 
State Department? 

A Some, yes. 

Q So it would be correct that intelligence 
information from various agencies 




generally routinely come to your attention for review? 

A It comes to me for review, there is only one or 
two of us that see it because of the^^m^^H^H^^^V 
^^^B It is very highly classified. A lot of it is 
very highly classified. 

Q Since the time you have been director of the 
office, 11 August, 1982, have you had occa sion, to., see,, 
reports concerning^ 




A I have seen allegations to that effect. 



have tracked that. I have expressed 
concern about it just because of the number of reports 
that we see. Those are reported on up but to my knowledge 
no one has ever been able to really determine that there 
had been an illegal transfer. 

Q Are these reports frequent in this period 



over the five years: 



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mmm 



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. A Oh, I would say, oh, every 3 or 4 months, 

something like that. But if you have been around for 
a while you would focus on them. 

Q In the entire five-year period do you recall 
having seen reports of detailing allegations of Israeli 
transfers of HAWKs or TOWs to Iran? 
A No. None whatsoever. 

MR. SAXON: General, let me follow up on something 
you said with regard to seeing allegations but no — 

THE WITNESS: Or information, yes. 

MR. SAXON: But no hard evidence to confirm 
these allegations. I don't want my cpuestion to be 
misunderstood because I am not alleging any insincerity 
on the part of the Pentagon or lack of effort because I 
understand our relations with our allies are delicate and 
there are lots of considerations and so forth, but has 
there been a concerted effort to investigate these 
allegations or is it more a gentlemanly asking ahead of 
State or Defense Minister of another country, are you doing 
this, and they say, well, of course not, and we accept 
it and drop it? 

THE WITNESS: I want to put something in context 
and then try to answer your question. 

The principal concern that we have had for 
country to include Israel is not whether they are 



JlNCIiSilflfD 



861 



WKkftSSHIEfiET 



18 



transferring the end item itself because that is very 
difficult to do, one can see that this agreement is 
violated, but the principal concern — one of the principal 
concerns we have is whether technology that they procure 
is used in another weapons system or not, and sold abroad 
which is a violation of our agreement as well. 

That is harder to determine as to whether the 
technology has been put in. It not only applies to Israel 
but other countries. You know, are they reverse engineering 
or are they using the material which can be used to upgrade 
a system that they are designing and providing themselves? 

That is the principal concern that we have had 
with Israel and with other countries. 

There has been a great deal of discussion with 
Israel and with other countries as to whether or not 
this is ongoing and we express this concern quite often 
to countries. To my knowledge there has not been a formal 
investigation. We have talked about it, we have sat down 
and reviewed the data and I have talked to our representa- 
tives in some other countries which would lead you to 
think that maybe this is occurring, and we have not been 
able to determine whether it is or not. But on the 
other hand, I must hasten to add that I have received 
no guidance to cool it, either. We have all been looking 
because we view it as a very serious thing. But one doesn't 



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go to a country based on allegations either until you have 
something in hand that you feel comfortable with. I mean 
on a specific case. 

BY MR. SABA: 

Q Focusing on the 1985 year, do you recall receiving 
any reports from whatever source that Israel had been 
involved in a transfer of TOWs or HAWKs to Iran? 

A No, not that I can recall. 

Q No information fron 

A No. I do not recall any. If I did, I em sure 
it would have sparked my interest but I don't recall seeing 
any . 

Q All right, sir. 

MR. SILBER: Is that transfers to Iran or to 
anybody? 

MR. SABA: To anybody. 

THE WITNESS: Right, HAWK or TOWs. 

BY MR. SABA: 

Q HAWK or TOWs. I did not ask Iran. I asked 
to anyone. 

A Right . 

Q Had Israel made any requests that you are aware 
of to transfer HAWKs or TOWs to any third party in 1985? 

A Not that I am aware of . 

Q Had any paperwork been presented to you in 



llftl/:u.?5/ciaL_ 



863 



UNfiftOTIPT 



20 



anticipation of a possible request for a transfer of HAWK 
or TOWs to anybody in 1985 by Israel? 

A Under the Arms Export Control Act? 

Q My question is — 

A Not in that regard. 

Q My question is general. 

A All right, well so far as transferring of 
equipment through the FAA, Foreign Assistance Act, or 
Arms Export Control Act, no, however as I mentioned to 
you in our informal discussions in early May, there was 
this issue of TOWs and/or HAWKs that were being discussed. 

Q And this was when, sir? 

A Early -- May was when I think I was interviewed. 
MR. SAXON: May 7. 
MR. SILBER: Of this year. 
BY MR. SABA: 

Q I see. You are referring to an interview that 
took place this year 1987, May. 

A Yes, and I think I replied. 

Q In which John Saxon was present. 

A Yes. 

Q I see. Your reference to May is not May of 
1985? 

A No, it is not. No. 

Q Just so I have it clear, so I have a clear record, 



JINDUMIED 



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I understand your testimony that in 1985 you had no 
information concerning transfer by Israel of HAWKs or TOWs 
to any third party and -- is that correct? 

A That is right. I was totally surprised when I 
read about the revelations that any had been. 

Q Second, is it correct to say that your testimony 
is that in 1985 you had no paperwork or inquiries that 
might have been preliminary in some way to a request for a 
transfer of HAWKs or TOWs by Israel to some third party 
country? 

A That is right, yes. 

Q All right, sir. 

I would like to turn specifically to the events 
of November 1985 and is it correct, sir, that in the week 
of November 19, 1985 you were not at your office at the 
Pentagon? 

A I am going to refer to a piece of paper if you 
will, because I anticipated this might come up and I 
asked my secretary to search our records as to the period 
I was away . 

Q Yes, sir. 

A I have that here. 

MR. SABA: Can we go off the record for a 
moment then. 

(Discussion off the record.) 



iuussira 



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BY MR. SABA: 
Q Back on the record. 

General Cast, I understand that you are going 
to refer to a document prepared by your secretary. It 
would be Exhibit 2 for this deposition. I would ask you 
to explain the document which will become Exhibit 2. 

(Exhibit No. PGC-2 was marked for identification.) 
THE WITNESS: I would be glad do. I asked my 
secretary I believe on the 17th -- 
MR. SILBER: Yesterday. 
MR. SABA: 17 June of this year. 
THE WITNESS: Yes. Because of anticipation . 
in this deposition that questions might arise as to when I 
was in Washington for duty, and she has typed for me from 
her records that indicate when I was away on temporary 
duty out of Washington. 
BY MR. SABA: 
Q And this record is from your secretary's 
memorandum or calendar? 
A Files, yes. 

Q Is it prepared from your own calendar? 
A I don't know. I failed to ask her where. I 
presume it is from the actual record of temporary duty 
that you have to file travel voucher for and all that. It 
is probably an accurate record though, she is very precise. 



IINi:M.Winrn 



82-708 0-88-29 



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Q This document will be Exhibit 2. 

Sir, can you tell us where you were on the week 
of 19 November, 1985? 

A From, her information indicates that I was 
absent from Washington 15 November '85 through the 23rd. 
Presumably I was in my office on the 14th and I am not 
sure whether the 24th is a weekend or not but I returned 
to Washington on the 23rd. 

The principal purpose of the trip was to go to 
Pakistan where we have consultative group meetings that 
usually last several days. When we are traveling we 
normally take advantage of the time distance and we went 
by Bahrain, a few of us did and I had business in Germany 
on the way home as well. 

Q Do you recall that her record of this period is 
correct? 

A I would think that it is correct, yes. I would 
say that it is. 

Q And you recall being in Pakistan approximately 
at that time? 

A Yes, I do, yes. 

Q Fine. Sir, on return to Washington, to your 
office in Washington did you have occasion to be briefed 
by your staff? 

A Yes. As is my practice when I am gone away for 



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them to brief me on all happenings of any significance 
while I am gone. 

Q Would it have been in the normal course of 
business that Dr. Henry Gaffney would have provided you 
with such a briefing on your return? 

A Yes. 

Q And — 

A Normal course in the sense of that he would come 
to see me or Mr. Rudd or anyone, you know, with anything 
of significance. 

MR. SILBER: If Rudd was there — 

THE WITNESS: I am not sure whether Rudd was - 

there or not. 

MR. SAXON: That would be Mr. Glenn Rudd, the 

Deputy Director. 

THE WITNESS: Mr. Glenn Rudd would have been the Acting 
Director and I presume he was there because we had tried 
to avoid both of us being gone at the same time. 
It is not always possible but — 
BY MR. SABA: 
Q Do you recall if on that particular week 
Mr. Rudd was in Washington or not? And would it help if 
I indicated that Mr. Rudd has in another deposition 
indicated that he was at a conference that week in Hawaii. 
A It is very likely he might have been because 



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that — oh, yes, I remember that. I think I remember 

that because -- he probably was at — if he was gone at 

that time he would have been at the Pacific Commander's 

Security Assistance Conference, and that is traditionally 

in November and that was one of the occasions where we 

just simply had to have representation there. I normally 
6 

go to them. It is seldom I do not go to them, but due to 
the importance of this meeting in Pakistan it was felt 
one of us needed to go to them, and I chose to go to the 
one in Pakistan. 

Q In the absence, you and Mr. Rudd's absence, who 
would be the acting director of — 

A It is normally Dr. Gaffney. 

Q Is it your recollection of that week that 
Dr. Gaffney was the acting director? 

A I would say so, yes. I would say so. 

Q And upon your return to the office, did 
Dr. Gaffney have an occasion to brief you as to the 
activities in the office while you were gone? 

A 1 am sure he did. If there were some 
activities conducted during that time period he would 
have told me about it. I have no reason to think that 
he would not have. Although I don't remember the precise 
discussion or the matters discussed. 

Q I am going to show you a document and I will 



wmmt 



869 



ItNSBlSSIflSFi' 



26 



give you a few moments to take a look at it, and we will 
have it marked Exhibit 3 for this deposition. 

(Exhibit No. PCG-3 was marked for identification.) 

MR. SILBER: Can we just go off the record for 
a second. 

MR. SABA: If you wish, we can go off the record. 

(Discussion off the record.) 

BY MR. SABA: 
Q Back on the record. 

Let the record show that General Cast has had a 
few moments to review Exhibit 3. 

Sir, do you recall Dr. Gaffney providing you a 
copy of this paper upon your return to the office? 

A I do not recall the paper per se when I returned 
to the office. I just simply do not recall. 

Q Can you -- can you tell us what you do recall in 
your own words? 

A I recall this while I was gone there were some 
discussions about HAWK. I remember being surprised that 
there were even discussions about the HAWK to be transferred 
to anyone, particularly Iran. 

MR. SAXON: Why do you say that? 

THE WITNESS: Well, I say it because to my 
knowledge we did not have a relationship with Iran. I saw 
that that would be, in my view, quite illogical from the 



UNCLASSIEIEL 



870 



mmw 



27 



. point of view of foreign policy implications to 

_ transfer something to Iran and given the stance we have 
taken on the Gulf War. 
BY MR. SABA: 

Q Was it your understanding that there had been 
a well-known and open public policy against transferring 
weapons to Iran? 

A Oh , yes . 

Q Whether directly or consenting to a third party 
transfer. 

A Unquestionably, yes, because of the 
Administrations position on neutrality, particularly nol: 
wishing to provide aid to either side. 

Q So you were surprised when the discussion came 
up concerning HAWKs. 

A Yes, very much so. 

Q And what do you recall of that discussion with 
Dr. Gaffney? 

A I don't recall specifics but I am sure that I 
was quite aghast at even that it had come up. I asked him 
if — I am sure I must have asked him if we provided them, 
but I just don't recall the details. I more or less had 
forgotten about it, you know, in fact the first time I 
remember seeing this paper was when the call came to look 
for records. That is the first time I recall seeing the 



UtlDLASSIDEIL 



871 



uwussteft^ 



28 



paper although I acknowledge I must have seen it before. 

Q Did Dr. Gaffney tell you that he was providing 
this information to either Noel Koch or General Powell or 
both of them? 

A Noel Koch stands in my mind, that that would 
have been the person he was providing it to. 

Q Would it have been customary to have Noel Koch 
to come to someone in your office to request such information 

A It would not be unusual. I expect at that time 
he might have been the acting ASD as well, but I doubt it. 
I am not sure that he was. But he may have been. Assuming 
that he was, if somebody was contemplating doing something 
like this or asking for information under those 
circumstances, it would not have been unusual for Mr. Koch 
to have asked us for the information. 

Q Was it your understanding from Dr. Gaffney 
that there were discussions and inquiries as to the possible 
provision of HAWK missiles to Iran? 

A I am sure there were, but the way I recall it 
there were additional missiles to go to Israel — come to 
think about it I expect there was identification that they 
would go to Iran. I am sure there were. 

Q But you understood that Israel was the inter- 
mediary? 

A Yes. 



mmmi. 



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imsifiEr 



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Q And did Dr. Gaffney indicate what the outcome of 
this exercise was or would be? 

A No, he did not. No. In fact both of us rather 
assumed it would go away, I think. 

Q Upon receipt of this information from Dr. Gaffney 
did you make further inquiry of anyone, including Dr. 
Gaffney? 

A I would expect that normally that he and Glenn 
Rudd and I discussed it together. We probably did. You 
know, to say we did not would be wrong because that is 
not our way of operations, you know, one was had we 
provided the information that was requested and we 
sufficiently caveated what we provided, the legality of 
someone doing something with the information or to pursue 
something, yes. Because that is my principal, one of 
my principal duties is to advise people of compliance with 
the law and I am — it is my organization that finally 
signs the documents that permits the transfer after it has 
been approved by the State Department. 

Q So your recollection is that at the time you 
would have been concerned about the legality of a transfer? 

A Yes. 

Q A transfer of HAWK missiles by Israel? 

A Yes. 

Q Do you recall -- 



ilfiU!fi<£SlJ3Cfl- 



873 



wmsm 



30 



A Under the Arms Export Control Act, yes. 

Q Do you recall if you were satisfied that 
Dr. Gaffney had sufficiently addressed the issue? 

A I am sure that if I had I would have followed it 
through, yes. 

Q Do you recall making further inquiry on this 
matter, whether at that time or at any time subsequent 
to people other than Dr. Gaffney or Mr. Rudd? 

A No, I do not. 

Q Specifically I would be interested in whether 
you had reason to make an inquiry or have a discussion 
on this matter with Noel Koch? 

A No, I don't believe that I did. 

Q Richard Armitage? 

A No, I don't believe I did. 

Q General Colin Powell? 

A No. 

Q Under Secretary Taft? 

A No. 

Q Secretary Weinberger? 

A No. 

Q Dr. Igkle? 

A No. 

MR. SAXON: Did you inform Dr. Igkle about this? 
THE WITNESS: No. 



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MR. SAXON: Given that you reported to him is 
there any reason in particular why you didn't? 

THE WITNESS: Well, I reported to him. I also 
wear another hat there as Assistant Secretary to ISA 
and ISP for security systems policy and working with them 
to develop policy. It isn't something that I would 
intentionally keep from him. I am sure I must have felt 
that the people had been informed of the legalities of it 
satisfactorily without bringing it to his attention. 
• BY MR. SABO: 
Q Do you recall at this time or any time subsequent 
any discussions with any other person concerning HAWK 
missiles and a transfer by Israel. 
A No. 

Q So that your recollection is that your 
discussions were limited to Dr. Gaffney and perhaps 
Glenn Rudd? 

A Yes. 

Q Do you recall in this period — and I will begin 
the period with July 1, '85 and end the period with 
approximately January 18, 1986 — 

MR. SILBER: This is when? 
THE WITNESS: July '85 to January '86. 
BY MR. SABA: 
Q July 1, 1985 to January 18, 1986. My question 



IdUSSIfO. 



I 



875 



vmmw 



32 



for that period — l have a few questions for this period. 

A Okay. 

MR. SAXON: If you are ready to go to the 
broader period and leave the point paper I have a couple 
follow-ups on that. 

MR. SABA: I want to come back to the point 
paper. 

MR. SAXON: That is right. I want to go a little 
further here at the moment. 

EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 
BY MR. SAXON: 

Q Were there any inquiries that you know of by - 
anyone acting on behalf of the Israeli government as to 
the price of HAWK missiles? 

A No, I don't recall any, no. 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

Q As to requirements, possibilities, modalities, 
of possible transfer of HAWK missiles? 

A I don't recall that. 

Q I have the same questions as to TOW missiles. 

A No. Same answer. 

Q Any communications from the Israeli purchasing 
office in New York that you know of in this period 
concerning, in any way concerning HAWKs or TOWs? 



UNCLASSIFIFR 



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wmsifliiT 



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end mas 



A I don't recall them. There may have been but 

I don't recall any. 

Q Were there any inquiries to you from anyone on 

the National Security Council? 

A No. 

Q Concerning HAWKs or TOWs in that period? 

A No, not that I cun -- not that I can recall. 

Q Returning back to Dr. Gaffney's point paper for 
the sake of these questions which I have and perhaps 
Mr. John Saxon has, again I would ask you if you recall 
having received a copy of this paper, either upon your 
return from your trip or at any period subsequent to th^n 
in 1985 or 1986? 

A Well, I believe I have already said that the only 
other time that I can recall seeing the paper specifically 
was when it was on the records search as a result of this. 

Q All right. 

A I also recall when I saw it, of having some 
familiarity with it, at least the discussions or the 
items in it. But I don't remember just when I saw it and 
it probably was right after I returned. 

Q All right. 

A I had all but forgotten the subject, in fact 
had forgotten about it. 

Q Could you please turn to what is page 2 of this 
exhibit. 



(INCUMlfD- 



877 



UMtttSSfflBET 



34 



Sir, I would like to go through this paper briefly 
asking you to look at the various statements and determine 
whether the facts stated seem accurate for the period 
involved, which was November 1985. Beginning at the very 
top of the paper, the point saying, "missiles are available." 
Do you recall if the facts are generally correct? 
A If it is — I accept the general characterization 
that missiles would be available, that is probably true. 
I don't know about the numbers or the country, but certainly 
when asked for information we can definitely inform as to 
other procurement or other purchases; so this is not an 
unreasonable entry here at all. 

Q Do you recall if at the time you were aware of 
a shipment then in progress of approximately 100 HAWK 
missiles to Israel? 

A No, I don't recall that. 
Q All right. 

MR. SAXON: They would have on order since, I 
believe, 1982? 

THE WITNESS: I would not have known necessarily 
that they were in transit. 
BY MR. SABA: 
Q That was not a fact that you were then acquainted 



with immediately'; 



UNCLASSIFIED 



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Q Moving to the next point, there are two numbers, 
one, indicating approximate cost of $300,000, and an estimate 
as to replacement cost of approximately $437,000 per piece. 

Does that sound generally accurate for HAWKs at that 
time? 

A I really can't comment on that. I really — I 
could say that it is ballpark, but if someone were to ask 
how much a HAWK missile costs, I would have to say I don't 
know. I really don't. 

Q Moving down the page to the point commencing with 
the words "the modalities for sale to Iran present formible 
difficulties" colon, and there are three points. I would ask 
you to comment generally as to the accurate at the time of 
each of those three points. 

A I would say, "1" is accurate. 

Q So you believe it is accurate to state that Iran 
is not certified for sales? 

A Yes. 

Q Directly as a third country, per section 3 of the 
Arms Export Control Act? 

A Yes. 

Q And the next point sir? 

A Yes, I would agree with Point 2 and 3. 

Q Moving to the next paragraph, 'that it is conceivable 
this sale could be broken into three or four packages"; would 



UNdJI^IHfll. 



879 



OBEaSBWT 



36 



A Let me go back and make one small comment. 

Q Yes, sir. 

A He points out that the 30 days can be waived for 
direct sales, but the third country transfer is on such 
provision and notice must still be given. I agree with 
the last part, but I think even a direct sale, it has to go 
under another provision of the law that the Congress has to 
be notified. 

So it is not quite accurate, that particular 
statement. They would have to be notified of a cash sale 
or direct sale under another provision of the law. 

Q All right. 

Moving on to the next main paragraph commencing 
with "It is conceivable that the sale could be broken into 
three or four packages in order to evade congressional 
notice," could you please look at that statement and the 
next two points under that? 

A I agree with both of those. 

Q Do you know of any circumstance in which a sale 
to a country under FMS or MAP was so broken into packages 
to evade or avoid congressional notification? 



No, I do not. 



Is it correct — 



Not on my watch. 



SHmmm 



Q Is it correct that during the period you were 
director that it had been the spirit and the practice that 



880 



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administrations had 

A Right, had lumped them together. 

Q Had observed the notification requirement? 

A Yes, sir. 

Q Moving to the next page of the point paper, I 
would ask you to look at each of the five sub-points there 
and indicate whether you would generally agree with those 
points in the context of the period, November 1985? 

A I certainly agree with Number 1. 
EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 
BY MR. SAXON: 

Q That being? 

A If Iraq ever found out -- it begins that way -- 
there are five points here, and I will start at the top. 

General, it would probably help for the record, 
you don't have to read each of them, but just state 
the essence of what the point is you agreed to. 

A I would agree with the comment here that if Iraq 
ever found out they would be greatly irritated. 

I also agree with the point that Saudi Arabia 
and other Gulf states would also be irritated and alarmed. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

Q Sir, as to those two points, would your agreement 
be based on your own knowledge of our relations at that time 



impiAfi^inrn- 



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uttCH^m^T 



38 



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with those countries? 

A Yes. 

So that you would be willing to adopt those 
comments as your own at that time? 

A Certainly, yes. No question. 

Q Please continue. 

A As to the one, 'If Israel were used as the laundering 
country, they would be greatly encouraged to continue to 
sell to Iran and to expand their sales" — I can't quite 
agree to the "bontinuing," because I have no knowledge that 
they were continuing. 

I don't know whether Hank Gaffney had felt that 
he had that information or not, but I did not. 

EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 
BY MR. SAXON: 

Q But would it be safe to say that they would feel 
like any constraint on them would be removed? 

A If they were so inclined, say, that that would 
be the case. If Israel was so inclined to sell arms to 
another country and we obliged, or agreed, or somehow or 
another said yes, go ahead once, why, yes, people would 
be inclinied to pursue that. Whether they would do it, 
illegally or not, I am not in a position to say. But I 
am not saying, nor am I suggesting that Israel was, in fact, 
selling to them, because I have no knowledge of it, that in 

iiuri ACQiripn 



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fact they were, if they were. If it were to become known, 
all bars would be removed from sales to other countries 
that are listed here, I would agree with that. 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

O What would be the bars that might have been 
referred to; could this be our own policy? 

A This is U.S. policy in working with our allies 
and friends in order to try to end the war, to bring their 
to some sort of reconciliation, that we would not provide 
assistance to either country — and we have been working very 
hard with other countries, particularly if it involved any 
of our technology obviously; but secondly, as a matter of 
policy for them not to sell. 

Q Would you say it was correct at that time that we 
had had a policy of actively discouraging our allies and 
friends? 

A Oh, I would say so. I can't recall the precise 
time, but I am sure that it was, because it has been a long- 
standing policy. Probably as I recall from the very begin- 
ning of the outbreak of the war, which was when, 19 

Q 1980. 

A 1980. But I can't speak to the first two years, 
but certainly by then it was very clear policy. 

Q Sir, referring to your travel schedule in the 



UMCLAMIFJL 



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period, November 1985 to approximately May of 1986, in which 
you have visited a large number of countries including 
Germany, Bahrain, Pakistan, Greece, Tunisia, Italy, Kenya, 
Saudi Arabia, Jordan, Israel, Egypt, Turkey, Korea, Japan, 
Philippines, Australia, Spain, Portugal, France and the 
United Kingdom, would it be correct that on those visits, 
or in connection with those visits, the issue of transfer of 
arms to Iran would have arisen or that you would have 
expressed your, the United States' policy against transfer 
of arms? 

A I doubt that ever carae up, quite frankly, in 
Pany of those discussions. I doubt if it did, because it 
was such a well-known statement by senior Administration 
officials. My work has to do with implementation of the 
current programs or things they are thinking about procuring 
and 

Q Would it be accuratetben that it was understood 
in those countries? 

A Oh, yes, no question about that. 

Q That we would oppose the transfer? 

A Yes, but I don't recall there being an agenda 
item of — in any of my conversations. 

Q All right. 

Continuing, sir, to the last point. I would 
ask you to comment on the general accuracy? 



llAICliC^nrd 



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A On the last point? 

Q Yes, sir. 

A Yes, I would agree with that. 

Q Thank you, sir. 

I would ask you to take a look at the four pages 
of handwritten notes, which follow the typewritten pages in 
this exhibit? 

A Right. 

Q And I would ask you whether you had ever seen 
any one or all of them? 

A On about the 12th of December of 1986, when the 
records search produced them. 

Q So you did not in November of 1985 or in or at the 
present time prior to December 1986 

A I don't recall seeing these, any of these 
attachments, no. I presume that these are Dr. Gaffney's 
personal notles, tasking notes or something of that nature. 
That is what they look like. 

Q I want to move to another area, unless John 
has some questions? 

MR. SAXON: Let me ask a couple follow-up 
questions on the Gaffney point paper, and your discussions 
or any discussions you would have had with Dr. Gaffney. 

Did you ask him when you returned from this trip 
and he briefed you in someway, and you did recall something 



lUims&m. 



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along those lines 

THE WITNESS: Yes. 
EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 
BY MR. SAXON: 

Q Did you ask him who had given him this mission or 
who tasked him to provide this? 

A I don't recall any specific questions. I am 
sure that I did, though, because 

Q And could you recall what he might have told you? 

A No, I don't. But I concluded that it was Noel 
Koch, from the time period and all, but that is only a 
conclusion on my part. I do not recall the specific 
question. 

Q Do you recall if he mentioned the name of General 
Colin Powell? 

A Well, 1 know that at the time when we, you know, 
on the records search that came out, I really would be 
speculating to say that he mentioned Colin Powell at that 
time. 

Q Do you recall if he mentioned the National Security 
Council or that this was done 

A No, I don't recall that at all. 

Q Do you recall if he mentioned this was being done 
in order to prepare Secretary Weinberger for a meeting at 



the white House? 



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A No, I do not. 

Q Do you recall if he said or if you asked whether 
this was done with the knowledge or approval of the Secretary 
of Defense? 

A No, I don't recall that. 

Q Finally, do you recall asking him why he was 
tasked with working up this information? Or do you recall 
him saying why? 

A Hear again, because he is very thorough and I 
think I am, too, I eim sure I asked those kinds of questions 
as to the motivation of the background of what was behind 
it. I think when I — I remember when this document was^ 
through the records search, I think I remember it, being 
surprised to recall that Iran was involved, because I just 
simply forgot it, but it was there. But after reflection, I 
am sure that I understood that Iran was involved, because 
I am sure I saw this piece of paper. 

As I said to you earlier, it was a complete 
surprise to me, these revelations. 

Q I want to ask one other question. 

A I do believe I don't think I, at the time, thought 
it was a serious undertaking though. 

Q If I understand your last statement, you thought 
this was being looked at, explored, but perhaps not a 



serious 



IIMI^iil^lfJfA 



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A Right. I saw no evidence from there on that 
would have cli6)sed me to rethink of it. 

Q Would that, perhaps, explain why you saw no need 
to go on to Dr. I0kle about it? 

A I am going to presume that Noel Koch would again, 
as I recall was the acting deputy for Mr. Armitage at the 

e 

time, Mr. Amritage would have been in that same confrence 

A 

I was in because of the nature of the conference, that he 
would have reported it through Dr. Hkle. 

Q All right. 

A But I certainly, I do not recall, nor do I believe 
that I mentioned it to Dr. Igkle. 

That is all I have on this. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

Q Sir, just one more question on the HAWKs for a 
moment. 

Do you recall if at .any time after 19 November 
1985, you might have seen some information to the effect 
that roughly between the period 19 November 1985 and the 
end of the month, there was, in fact, a transfer of HAWK 
missiles from Israel to Iran? 

A I do not recall seeing anything that would lead 
me to think there was. 

Q All right, sir, just after this briefing by Dr. 



IMUSMD. 



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Gaffney, do you have any knowledge concerning any inquiries 
made to your office concerning price and availability of 
TOW missiles? 

A I seem to recall that there was a similar 
exercise, on reflection about it. But I can't recall 
any details or the nature of that. 

Q Do you recall -- when was this? Very shortly 
after Dr. Gaffney spoke to you about the HAWK paper? 

A It was probably — no, I do not recall, but 
it certainly has been more than a year. It is so far back 
there that I can't really recall. 

Q Do you recall being inquired of as to any specific 
facts, price, availability? 

A No. 

Q Destination? 

A No. 

Q Do you recall seeing any paper from anyone, 
draft or otherwise, being prepared in respect of TOW 
missiles? 

A I think I recall seeing a piece of paper with 
numbers and prices. I think I recall seeing that, but 
I can't put it into perspective or just where it was. 

Q Do you recall who would have discussed that with 
you? 

A I think it was probably Mr. Glen Rudd. That is the 
best that I can recall. 



lUMiiSsm 



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Q Do you recall the context of that conversation, 
for whom he was preparing the paper, for example? 

A I think it was for Mr. Armitage. 

Q Am I correct, is it a paper you had requested? 

A I don't know. I am trying to give you as honest 
an answer as I can, and I would not say that it wasn't, but 
I don't recall that I tasked someone to do that. I remember 
the incident or something about it, buu I do not recall any-- 

Q Do you remember being involved in the drafting of 
such a paper? 

A No, I do not. 
EXAMINATION ON BEHALF OF THE SENATE SELECT CO.MMITTEE , 
BY MR. SAXON: 

Q I was just going to see if I could help you pin- 
point this in terms of time. 

A Sure. 

Q I know we are asking you to do something difficult 
because it was a year or year and a half ago. 

A I understand, it is very important though. 

Q And someone doesn't necessarily know at the time 
there is any reason to remember it? 

A No. 

Q One of the things we found helpful in our many 
interviews and depositions is people can peg things to, it was 
before Christmas; it was after Thanksgiving; I got a call on 



iimA Ssmcm 



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Superbowl weekend; my kids were going back to college, or 
whatever; can you think of any other interests going on at 
that time of people who were on leave, people who were 
in the office, anything that helps you date this? 

EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 

Q Notice, for example, that on the 6th of December 
1985, you had a trip to Hanscom Air Force Base in Massachusett; 
Perhaps that might help. 

A No, it doesn't. No. I remember the trip, but 
I don't remember it being linked to anything that would 
spring my recollection on that. 

Q In regards to this paper which you recall Mr. Rudd 
was somehow involved in preparing, is it -- it was your 
understanding that the paper was being prepared for Mr. 
Amritage? 

A Yes, I think so. It would have been someone 
in ISA, either he or Mr. Koch, I an sure. 

Q Do you recall ever being shown a final version of 
that paper? 

A No, I do not. 

Q Do you have in your possession a final or a draft 
version of that paper? 

A No, no, we provided all that we had. I hope we 
provided all we had. We conducted a very thorough search 



in December. 



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jm 14 ^ 

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Q I amnot necessarily questioning that, sir, but 

A No , we do not . 

Q But I must ask the questions. 

A No , no . 

Q Any notes that might have related to that paper? 

A No , no . 

Q Do you recall making any inquiry as to Mr. Armitage 
about that paper? 

A No, I do not. 

Q Do you recall Mr, Armitage discussing it with you 
on any occasion? 

A I do not remember, no. I do not recall. 

Q When I ask about any occasion, I mean not only 
contemporaneously at that time, but at any time subsequent 
up until today? 

A No, but if I — if I had had a conversation I 
would not be surprised. I do not remember at all. It would 
not be unusual. 

MR. SILBER: What was the last date, up until 

what time? You said any Armitage discussions 

MR. SABA: I was going to clarify that. 
I am interested in any conversations you had with 
Secretary Armitage after the 19th of November 1985, on the 
subject of these TOW missiles. 

THE WITNESS: I don't recall any conversations we had. We 



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may have had some. I just don't recall. 

EXAMINATIN ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 
Q Has the Secretary discussed this with you? 
A No. 

Q Has Secretary Armitage in 1987? 

A No. The only discussion that he and I have had 
on this whole matter was in -- was where we were 
asked by the general counsel to provide any records 
or any information we had. 

Q Is this General Counsel Silber? 
A Yes — well -- or in the IX)D. 
EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 
BY MR. SAXON: 
Q Mr. Garrett? 

A Mr. Garrett. And we all agreed we would search 
and provide anything we had and we would be very cooperative 
with it. 

MR. SILBER: With Secretary Armitage present? 
THE WITNESS: Yes. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. SABA: 
Q Did you have any discussions concerning the inquiry 
about TOW missiles with anyone other than Mr. Rudd? 

A No that I can remember. And I am sure I talked 



IINCU(^QU;i»D 



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f Is jm 
take 2a 
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with Mr. Rudd about it, because I think he was involved in 
gettiiig us some data, as I recall. 

Q And I must ask the question — Mr. Koch? 
A No, I don't think I ever saw Mr. Koch on any of 
this. I don't recall that. 
Q General Powell? 
A No. 
Q Mr. Taft? 
A No. 

Q Secretary Weinberger? 
A NO. 

Q Do you recall if Mr. Rudd reported to you that he 
had in fact delivered a paper providing information about 
Tows to anyone? 

A Well, I am going to say that, yes, I do remember 
generally about providing a paper on Tows. 

Q To whom did he indicate they were to be provided? 
A Here again, I would say that it is either Mr. Koch 
or Mr. Armitage. 



Iran? 



Do you recall if the discussion about Tows involvec 

A No, I don't recall that. 

Q Did it involve Israel? 

A I suspect that it did. You know, it all puts 

together that that would be the natural thing — not natural 



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but that there would be a connection between the two in 
retrospect, but I don't recall specifically. 

Q So it is your recollection now that you don't 
recall whether this inquiry about Tows and this discussion 
about Tows concerned Iran? 

A No, I cannot say that it did. 

Q General, let me ask you a broad question at this 
point. We know that contemporaneously. Dr. Gaffney had 
prepared a point paper on Iran and he had at least discussed 
this with you in terms of Hawks. 
A Yes. 

Q We know that a few days, or sometime later, Mr. 
Rudd is preparing information about Tows. Didn't it occur 
to you that something was going on involving Israel and 
perhaps Iran? 

A Well, I am sure th»t it did. To say that my 
interest was not piqued would be wrong, because we are very 
concerned about transfer items and in view of our policies 
out there. 

All I am saying to you is I cannot recall 
specifically, to answer your question as to whether it was 
or not. But yes, I am sure that I was very inquisitive to 
the extent that at least there had been a principal concern 
of mine, one is whether people were contemplating using the 
existing authorities for the transfer of articles or services 



T 




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under the Arms Export Control Act or the FAA. That I hold 
» the responsibility to be sure that people do not violate the 
law. 

MR. SILBER: Excuse me, did we establish that 
General Gast remembers that the Tow exercise was shortly 
after the Hawk thing? Was that your question? 

MR. SABA: I will ask the question again if it 
remains unclear. 

BY MR. SABA: 
Q General Gast, do you recall the time span roughly 
between the discussion of the Hawk matter and the discussion 
with Mr. Rudd about the Tows? 

A I would say that there was a space involved in 
there of time. I don't recall them being at the sam time. 
I recall that — I am sure that the Tow followed the Hawk in 
time. 

Q In general terms, — and it is important to us — 
do you recall if that discussion was before or after 
Christmas? 

A After, I would say. I would say it was probably 
after. 

Q All right. 
A But I don't know. 

Q Do you recall if it was before or after the New 
Year? 



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4 A No, no. I would say after 

2 Q How about the Super Bowl period? 

3 A No, no, that doesn't help me. 
. Q You left for a long trip to Greece and Tunisia 

and other places on January 14, 1986, returning the 17th of 
February? 

A Right. Yes 

Q Do you recall if it could have occurred before or 
after that long trip? 

A No, nor do I — Would 1 even say that it did not 
occur while I was on that trip. I am just unable to be pre 
cise on this 

Q We know now, sir, today, that in 1985, specificalli 
August and September, Israel transferred a large number of 
Tow missiles to iran and we know that in November of 1985 
a number of Hawk missiles left Israel and found their way to 
Iran, and we know that these weapons were of United States 
origin and were transferred to Israel presumably pursuant 
to the agreement which is Exhibit 1. 

MR. SILBER: Exhibit 1 is the LOA? 
MR. SABA: Exhibit 1 is the LOA. 
THE WITNESS: Oh. 
BY MR. SABA: 
Q To develop my question, we know that Tow missiles 
were delivered in September '85, we know that certain 



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quanitities of Hawk missiles were delivered in November of 
1985. That being the case, sir, what is being done about it 
in terms of a violation of the United States/Israeli agreement 
in respect of those weapons? 

A Well, the first thing is you may know, I did not 
know that missiles had been transferred at that time period. 
That is your statement. I cannot verify that. I did not knov 
in fact that — I don't recall knowing that there were any 
missile transferred to Iran during that time period. 

Making the assumption that your information is 
correct, I do not know whether the Administration has taken 
any action in that regard or not. If the State Department 
knows about it, I presume that — I don't know what the State 
Department did about it. If the State Department knows there 
were transfers made under the provisions of the 1515, that is, 
to transfer them, then it is a matter of policy for them to 
wrestle with that, but I am not aware of that. 

Q Sir, we do have, if nothing else, public testimony 
now from these hearings from Mr. McFarlane and Mr. Secord, 
and there is a fair amount of paper that has been generated 
which is publicly available, indicating that those weapons 
had moved. 

My question is what is the United States Government 
response to this, and specifically, your office, which is in 
charge of transferring these weapons in the first instance. 



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3 A Look, the -- let me say -- let me give you two 

2 responses, one which is totally divorced from this case. 

3 If a similar incident like this occurred, I am sure that the 

4 Department of Defense and State would be consulting as to the 

5 reports required to Congress, one, and the action to be taken 
g with the country. I have no question about that. 

f Given the circumstances here — and I don't know 

S whether what you are saying is hearsay or whether it in fact 
g occurred, I just do not know. In fact, I am surprised to 
^Q hear you say that people testified — largely because I have 
1^ been traveling somuch again this year. But I am going to havi 
^2 to assume that the Department of State, if in fact it 
^2 transferred, will be wrestling with what action should be 
taken. 

Q Am I correct, sir, that it would — that no action 
would initiate in your office? 

A Well, no sir, it is the State Department matter 
in deciding to, one, inform Congress W^t nWe law has been 
broken, or there is a requirement to go to Congress, and 
certainly it is a foreign policy matter as to whether they 
will go to the country or not and take whatever action they 
are going to taUce. They are the lead. They are delegated 
as the lead on these matters. 

Q My second question though — and this is not meant 
to be personal - 



umASSHH 



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61 



A S 

Q — is that isn't it unusual that you would not hav« 
your own intelligence information quite apart from anything 
I tell you in these proceedings, as to those transfers now, 
a year and a half later? 

A Well, let me put it this way. If in fact — I 
would think in most cases, due to the intelligence informatioi 
provided, one would know about something like this, okay? 

If, on the other hand, a party really worked hard 
to conceal it, conceal something, it is going to be harder 
to find out. 

Now, I cim not implying that there was a devipus 
method here, or any of that, to transfer these, because I 
cannot even be sure that it was done. I cam say on the other 
hand, though that as a result of the hearings that have been 
going on, and the testimony PHif-ng on, there is so much of it 
that I find it very difficult for me to conclude what in fact 
occurred, amd has not occurred, and I have not spent a lot of 
time trying to digest that information. 

Q If I were to tell you that much of the basis for 
the hearings and the testimony is intelligence information 
generated in certain cases by State, CIA,^^^H and DIA, I 
cim fremkly surprised that you are not aware of the transfers 
that were made. 

A No, I am not. I am not aware of them. I don't 



IINCUS»L_ 



900 



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ummwF 



62 



^ recall being made aware of them, nor seeing anything that 
2 would lead me to believe that there were transfers. 

Q I want to move to another area. 
^ MR. SAXON: I take it you are through with the Tow 

c paper? 

MR. SABA: Yes. 
- MR. SAXON: I have one or two questions on that. 

THE WITNESS: Yes. 



BY MR. SAXON: 

Q Do you recall any statement by Mr. Rudd that he 
was told by Secretary Armitage that he was not to keep a 
copy of the Tow paper emd in fact was to turn any over to 
Mr. Armitage where they would be locked in his safe? 

A I do not recall that statement. 

Q Do you recall any statement by Mr. Rudd, or for 
that matter, by Dr. Gaffney, that they were told to destroy 
any drafts, final copies, working notes, et cetera, with 
regard to the Tow paper? Contemporaneously told that? 

A No, I do not recall that, but I would not have 
been surprised if even I had said to them that all informatioi 
has been provided, that people provided what they were asked 
for and there need not be any record for it because it would 
not be under our purview at all, and that would make clear to 
the people in our discussion that I even reinforced it, I aim 
sure a couple of times, to people under Dr. Gaffney 's point 
paper that there was no way that this should be transferred 



901 



wsumw 



63 



under the AECA. 

Q I want to ask a question that I don't want to be 
misunderstood as either accusatory or as being one (hraat is 
easy for us to ask as the investigative bodies with the 
benefit of hindsight, but with regard to the Hawks and 
probably with regard — possibly with regard to the Tows 
in terms of Iran, but specifically the Hawks, you knew that 
Iran was being discussed there? 

A Yes. 

Q You morelonless were walked through by Mr. Saba the 
point paper and essentially agreed with what Dr. Gaffney 
had laid out, which is that Iran was not certificated ts 
receive these under the Arms Export Control Act. 

Let me put it this way. There were at least 
possible questions which could be raised? 

A Surely. 

Q When you were made aware of these matters, at any 
point did youlconsult with Mr. Silber as the General Counsel 
of the DSAA, or with Mr. Garrett, the General Coiinsel of 
DOD, or anyone else? 

A I do not recall that. 

Q To raise a legal flag? 

A No, I don't recall that. I remember — I do 
remember it being very clear, I remember it being clear in 
my mind that people were adequately informed that it was not 



1IMI:US&IH£&. 



902 



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10 iiiiuffiv3aL>c^i:ii 64 



^ possible to do this under the AECA. Not legally possible. 

2 Let's go off the record for a second. 
(Discussion off the record. ) 
MR. KREUZER: Back on the record. 
BY MR. KREUZER: 
Q Sir, a few moments ago, Mr. Saba was discussing 



with you about the revelation of Tow and Hawk transfers from 


Israel to Iran and expiring whether or not you had your 

intelligence information and had found any violations, and I 

believe you responded that it would be something — revelationk 

that initiation of action would occur in the State Department? 

A Yes. 

Q Could you expand on that emd tell us essentially 
who in the State Department would take cognizance of these 
illegal tr2msfers and how would that work? 

A The general situation is — and I am going to not 
speak specifically to this, because I am not familiar with 
the details as I indicated — but the general situation is, 
we all get this^^^^^^^Hinformation, okay? 

A lot of speculation, unevaluated. One keeps that 
and you know, in one's mind as you read it through. If, as 
I on occasion would ask some of my people to check further 
into it, okay, and not infrequently, I will go to the DIA, 
who developed or provided thes materials to me. 

Q Who in DIA? 



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A Mr. Al Berger, who is our liaison with DIA. 

Q All right. 

A I think he lives in other shops, but he happens to 
be the point of contact for us. 

I would, one, say to him, you know, has this been 
provided to the policy people? And on occasion I will mention 
it to one of the policy people that I am concerned about a 
particular area that we have not been able to pursue further. 
Maybe once every six months we hear of it. 

That would be a policy person > in^^^H 

A In^^^Hyes. Each of the regions within ISA I 
think have a working relationship also with the bureaus in 
the State Department, who get a lot of information, the same 
kind of information. I think now, and I am not sure how long 
it has been quite that way, it is in the PM office of the 
State Department. I think they have a security organization 
in there which I am sure they get a lot of information from 
all the Services to include INK over there. 

Q What is PM? 

A Political Military Affairs. 

Q INR? 

A Intelligence Research, which is the intelligence 
arm of the State Department. They have quite an intelligence 
operation there. All of them feed into these people and you 
will see messages occasionally beginning out, check whether 



lUiicussMa,. 



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UNtHS^EBiET 



•J something has happened, and the Embassy will come back maybe 

2 every six months that happens. It graduates up to the State 

3 Department to evaluate all this information. 

^ Do I give a written report? I do not. I just 

r 
5 watch it and I bring it to the attention of othes and I sort 

g of have an informal arrangement where we watch all of this 

information. 

Q But no such information came to you from the period 
'85 to the present concerning possible transfers to Israel? 

A No. 

Q Did you perhaps in that time period provide any 
similar information regarding suspicions about, say, transfers 
to, another illegal transfer to another country — not Israel, 
but any other violations involving any other countries? 

A Oh, I expect that I did. I think we expressed — 
we have always been concerned about ^^^^H-- and I 2un not 
sure that should be on the record — in fact, I am not sure 
that I should be speculating about other countries which could 
be sensitive that are not related. 

Q We don't have to get specific, but there were other 
countries? 

A Oh yes, yes. 

Q But not Israel? 

A Yes, I do not recall Israel,, yes. 
MR. SAXOH: Thank you. 



UI4CU!LmL. 



905 



mmm' 



67 

BY MR. SABA: 

Q Sir, focusing on the period mid-November 1985, 
through February '86, were you aware of discussions between 
Glenn Rudd of your office and anyone else concerning the Tow 
missiles? 

A I think I have already indicated that I seem to 
recall Tow missiles were a factor during that time period and 
I don't remember specific dates or specific nature of the 
paper. I seem to recall that somehow or another he was asked, 
and I presume it was either Mr. Armitage or Mr. Koch, to 
develop some what we would call rough order of magnitude of 
pricing, and I am sure that if he did that, he had to go to 
the Army to get that information. 

Q Do you recall who he would have gone to? 

A No, I don't know, no. 

Q Do you recall the name William Jackson? 

A Yes. That is probably where he would have gone. 
It would not be unusual for him to have gone there. 

Q Why do you think Mr. Jackson would be the logical 
one? 

A Because he is his counterpart in the Army 
assistance business on the Army staff. 

Would Mr. Jackson have access to pricing data? 

A Yes, yes. 

Q Do you recall Mr. Rudd determining specific prices 



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for various types of weapons? 

"A I seem to recall that. I am not sure. I think I 
indicated earlier I think I had seen a paper, and if he was 
asked to do something he did a very thorough job of it. 

Q Did he report to you as to his activities, what he 
was doing and for whom on Tow pricing? 

A I think it was — I am sure he did report to me. 
I have no idea that he reported to me. What he was doing 
and who had requested, and what he provided, I have no ques- 
tion that he reported that. 

Q Did he rnentiori mfeetings between himself and Noel 
Koch? November and January, concerning Tow missiles? 



I remember him talking to Mr. Armitage or Mr. 



Koch. 



MR. SILBER: This is December '85 to January '86. 

A But I don't recall the date. 

Q Yes. 

A I cannot confirm December, January* February, 
March or April. 

Q Did he discuss the substance of those conversation 
with you? 

A I am sure he did, yes. 

Q Do the numbers 4,000 Tows and $12 million help 
you in any way? 

A No, it doesn't ring a bell. 

Q Sir, are you yourself familiar generally with the 



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A No, I am not. 
Q Okay. 

A I would be wrong if I had to take a quiz* right nov 
I am sure. 

BY MR. SAXON: 
Q Would you find reassurance in the fact that you 
are not the only one in the Pentagon, sir? 

A Well, one of the reasons why we seldom asK that 
question of friends or allies, thinking of a procurement, is 
because the prices change. I never give an answer unless it 
comes from the guy that is going to sell them. 
BY MR. SABA: 
Q Do you have any recollection of information about 
Mr. Ledeen being involved in the — this is Mr. Michael 
Ledeen, Ledeen, being involved in the pricing of Tows or 
Hawks? 

A No, I don't. I have trouble remembering Mr. 
Ledeen. The name is familiar, but I can't put a face with 
the name. 

Q Would it help if I suggested that at some point 
he was a consultant to Noel Koch, later a consultant at 
the NSC, and the State Department? 

A I have heard the name but I don't know him. I 
can't recall his face. 

Q Do you recall if a Mr. Ledeen ever made an inquiry 



missm. 



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of you as to Tow pricing? 

A No, I don't hink he did. 

Q Do you recall Mr. Rudd indicating that the Israeli 
purchasing office in New York was involved in this Tow 
pricing? 

A I do not recall that. 

Q Do you recall the name Abraham Ben Yussef? 

A I know Mr. Yussef. I know him personally. We 
deal a lot — 

MR. SILBER: Is that — 

THE WITNESS: In a business association, in regard 
to security assistance, but I don't remember his n£une coming 
up in the context of Tows. 
BY MR. SABA: 

Q I see. Do you recall having any information or 
knowledge of a meeting between Mr. Ben Yussef and Mr. Koch? 

A NO. 

Q In December or January in the period we are 
concerned with concerning Tows? 

A No. 

Q If Mr. Ben Yussef weuited to know the price of Tow 
missiles, how would he have found out? What would be the 
normal procedure? 

A Well, assuming that they had not procured any, 
you know in recent history, and had an idea of themselves. 



iiMimssife 



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2 

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IS 

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the only way mat he could really go about that would be to 
go to the U.S. Army. 

Q Did he do that directly? 

A Well, they normally would not provide it unless 
they had an authority to provide it. They would normally 
come through us, if one is talking about prospective arms 
transfer sales. The way this comes through is through us to 
even decide whether we will respond to them from a policy 
point of view. Many times we do not because we are not 
authorized to sell it as a matter of policy. 

Q If the Is-raelis wished to acquire a certain number 
of a particular kind of Tow missile, who would be authorized 
to negotiate -- if that is the correct word, correct me if 
I am wrong — or quote a price to them? 

A The way that a system normally works — I mean, 
the system is that a country will, through our embassy there, 
through our security assistance organization, to them, will 
indicate that they have an interest in a sale, and they want 
some data — pricing, rough order of magnitude, whatever. 

And we, in conjunction with the State Department, 
decide whether we will even provide the data or not, whether 
they are cleared to receive it, whether it has technology 
problems, or many other reasons why we might not wish to 
proceed to provide it. 

Assuming we decide to, we will turn to the 



mami 



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2 

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ttSSSsSsrap 



procuring Service that has it in their inventory and they 
will provide the information. 

Q In the case of Tows it would be the Army? 

A Yes. 

Q And correct me if I am wrong, you being DSAA, 
would turn to the Army and ask the Army to quote the specific 
price for a specification of a specific Tow missile? 

A Yes. 

Q And who would provide that price to the Israelis 
then? 

A It could very well be the Army if it was approved 
in principal and there is not question that it might be 
rejected somehow or another, we would just task the Army to 
provide the information directly to them, and information to 
ourselves and the State Department, and to keep them informed 
that pricing information had been provided. 

Q Would it have been the normal course of business 
for Mr. Koch to have been involved in that pricing? 

A Normal? No, no. 

Q Would it have been the normal course of business 
for Mr. Koch to have quoted or negotiated a price with the 
Israelis for Tow missiles? 

A We are setting aside the instance concern or the 
case or the revelations? 

Q I am asking the question in general. 

A In general. No he would not normally be involved. 



911 



UNCaSSFtEF'^ 



73 



< Q Do you know of any circumstances in which 

2 A He might be aware of it, but he would not be 

2 involved in it. 

^ Q Do you know of any circumstances during the period 

c you have been in charge of DSAA in which Mr. Koch has been 

- authorized to quote or negotiate prices on weapons for Israel: 
o 

A No, I do not. 

Q Turning to the matters which we are immediately 
concerned, did you have any information that Mr. Koch was 
authorized to negotiate a price for Tow missiles with Israel 
in December '85, January '86? 

A No. No. 

Q If Mr. Koch were to have negotiated a price, to 
whome would that pricing be provided in the United States 
Government? 

A I presume that your line of questioning or your 
interest is if it is going to be sold on the 1513? 

Q yes 

A On the 1513? 

Q Assume that. 

A No one has authority to negotiate a price for that 
I mean, it costs so much and we recover the costs. There 
are pricing boards that meet to determine the price of 
something that is sold or about to become excess, because 
the law says how you will charge. But if it is an item from 



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procurement or replacement item, there is a cost and that is 
it. 

Q Second question. If the transfer is intended to 
be an Economy Act transfer to another agency would Mr. Koch 
be able to negotiate a price on that? 

A I don't know about that system. 

Q It is correct that that would not be a matter of 
your knowledge or authority? 

A No, it is not within my area of responsibility. 

Q In the period I am concerned with — November 19, 
1985 through February 1986 — in this case, do you recall 
yourself receiving any inquiry from Colonel North concerning 
Hawks and Tows? 

A No, absolutely not. 

Q From Admiral Poindexter? 

A No. 

Q From Mr. McFarlane? 

A No. 

Q From anyone at the staff of the NSC? 

A No. 

Q Do you recall any of your staff being -- Mr. 
Gaffney, yourself, or Mr. Rudd, or anyone else with whom 
you have dealings in the normal course? 

A I do not recall. 



Of reporting such inquiries? 



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A NO. 
Q No. 

A Specifically, did Mr. Rudd ever indicate that 
this Tow pricing information might be provided to the NSC? 
A I do not recall that. 

Q Do you recall if he indicated it was being 
developed at the request of someone from the NSC? 
A No. I do not recall that. 

MR. SABA: Do you have any other questions? 
MR. SAXON: Yes. I want to go a little more in 
particular into what Mr. Rudd may have conveyed to you from 
his discussions with Mr. Koch. 
THE WITNESS: Yes. 
BY MR. SAXON: 
Q Mr. Saba has already asked YO^ °^^ question -- did 
you recall the numbers 4,000 Tows for $12 million. You said 
you did not. 

Do you recall Mr. Rudd saying that the inquiry put 
to him by Mr. Koch involved a price of $3,000 per Tow? 

A No, I cannot remember any specific numbers. I 
think I recall seeing a piece of paper and I couldn't even 
describe it, that had prices and numbers on it. It was a 
typewritten piece of paper as I recall. 

Q Do you recall Mr. Rudd telling you that he searche 
the data and reported back to Mr. Koch that the cheapest 



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we had ever sold a basic Tow missile was 56800 and that was 
to Israel some years ago. Any portion of that that you 
recall? 

A There is a faint memory of a range there but I 
cannot recall specifically enough to answer your question. 



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MR. SABA: Back on the record. 
BY MR. SABA: 
Q In regards to your conversation with Mr. Rudd on 

Tow missiles, what was your concern about the information 
being developed? 

A Well, my concern was that it was being asked for 
out of channels. It was an un — rather unroutine thing going 
on, and that the information was going to be used in some way 
that would violate the law and our relationship, and whatever 
under the Arms Export Control Act. 

Q This was your state of mind? 
A Yes. 
Q At that time? 
A Yes. 

Q Did you express that to Mr. Rudd? 

A Well, we both were concerned about it as I recall. 
He, Dr. Gaf fney and I, were all very concerned as to what was 

going on. 

Q Did you express that concern to anyone else apart 

from Dr. Gaffney? 

A I think it was in a conversation — this may be 
different from what I said earlier - I believe I was in a 
conversation with Mr. Armitage once where this came up. 

Q Do you recall when? 

A NO, I don't. I don't know. I don't remember 
whether it was a Hawk or whether it was a Tow, but 1 remember 



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say-ing very clearly — this may have been Mr. Rudd who had a 
conversation with Mr. Armitage — but the position of Armitage 
comes to my recollection to where we wanted to make it 
between us or somehow or other had it been made abundantly 
clear that if a transfer was going to occur that it was not 
possible, legally possible, or policy-wise, to do it 
under the Arms Export Control Act. 

I remember that impression being made very clearly. 
Whether I made it to Mr. Armitage or whether Mr. Rudd did -- I 
would be surprised if I made it to Mr. Armitage. I don't 
recall having a discussion about that with him. I just simply 
don't remember. 

BY MR. SAXON: 

Q Your distinct impression is that -- 

A It was made clear. 

Q You or Mr. Rudd made that position clear to Mr. 
Armitage? 

A That is right. 

Q Let me go back to one or two final questions on 
emything Mr. Rudd may have told you about his discussion with 
Noel Koch. Do you recall him telling you that as he looked at 
the numbers of missiles requested — 4,000 basic Tows and the 
pricing data he had — that the total package would come 
not to some $12 million that Koch mentioned, but more like $25 
or $30 million? Z)o recall those kinds of figures? 



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A No, I do not. 

Q Do you recall any discussion -- 

A But not that you mentioned it, I seem to recall tha 
there was some discussion as to what the price ought to be for 
the things, and Mr. Rudd would be very thorough in that. 

Q Do you recall any discussion in which Mr. Rudd 
said he had informed Mr. Koch essentially that you want that 
number of missiles, it is going to cost more than $14 million, 
$14 million being the threshold for congressional notif icationj* 

A Yes. No, I don't remember that. 

Q You don't recall that. You don't recall any 
discussion which Mr. Rudd told Mr. Koch that if you want this 
number of basic Tow missiles — 4,000 — if Congress is 
notified the knowledgeeUale people on the Hill are going to 
realize that Israel is no longer buying basic Tows? 

A No. 

Q They are buying Tows II or I-Tows and therefore, 
this transaction would be tranparent and the Congress would 
immediately know that Israel will transfer them elsewhere? 

A I don't recall that. 

Q Finally, do you recall any discussion in which 
Mr. Rudd may have relayed to you that he informed Mr. Koch 
that if the United States Government wanted to transfer these 
arms to Israel, or specifically for Iran, that the way to do 
it would be to go black — that is, to maJce it a covert 



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transfer to the CIA and let the CIA — 

A I remember talking with Glenn Rudd about that and 
my saying so. 

Q What do you recall about that, sir? 

A I remember a conversation and I believe it was 
between Mr. Rudd and I and it might have been even possible 
with Mr. Armitage, I am not sure, but I remember being 
satisfied that Mr. Armitage, if not Koch, understood clearly 
-that, in my view, that if anyone were going to transfer arms 
or equipment of this nature, of this size, that it could not 
be done through the Arms Export Control Act. 

If someone wished to pursue it, it would havQ to 

be through some other channel. I probably used the word black 

in the sense that there are other laws and provisions that hav 

to do with equipment other than the Arms Control Act. 

Q Do you recall yourself saying that to Mr. Armitage? 

A I expect that I did. I can't recall precisely, but 
I remember being satisfied that he understood our position tha^ 
this was not, should not be pursued under this law. 

Q Just to make sure that our two committees under- 
stand and I can sort of summarize, while you can't precisely 
date these discussions and there tare lots of particulars 
you don't recall, it is very clear that if there had been an 
opinion put forward by DSAA, institutionally or you as its 
Director, that there was an opinion communicated either by you 






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or by Mr. Rudd to Mr. Armitage, that these transfers could 
not be made under the Arms Export Control Act, that if the 
government wanted to do it, the way to do it was through 
black channels, is that correct? 

A That is correct. 

I did not say that that was the way to do it, I 
said it could not be done through this way, it could be 
possibly done through the black channels because I don't know 
those regulations or the procedures within them. I have a 
general knowledge that through congressional oversight and 
other programs there are items transferred to a country under 
another provision of the law. But I did not know that law, 
have not read it, I don't know how it works. 

I know that there is a Presidential finding 
involved and that is all I know. 

Q Did you ever have occasion to ask Mr. Armitage 
subsequently sort of a — oh, by the way, did anything ever 
happen on that? Did we ever ship them? Did it ever go 
forward? 

A No, I don't recall asking about that. I presumed 
that it didn't, but I did not — I don't recall asking about 
that. 

BY MR. SABA: ' 

Q Do you recall having any information about a 
Presidential finding in 1986? 



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A No. No. Not until the revelations came about. I 
have heard that testimony. I have read about it in the 
newspapers . 

Q ■ Did you have any conversations with Secretary 
Armitage since November 1, 1986 about these matters? 

MR. SILBER: 1986 he says. 

THE WITNESS: The only conversation was where it 
was agreed that — in fact we were all encouraged to search 
the files to provide information, and I believe that I 
mentioned to him that this paper here had surfaced, and that 
we were provided with it and we would provide any information 
we had. That is the only context I remember. 

MR. SILBER: This paper is the exhibit — 

MR. KREUZER: Exhibit 3. 

MR. SAXON: You are referring to Exhibit 3 — the 
Gaffney point paper on Hawks? 

THE WITNESS: Yes. I remember mentioning it, and 
when the chaps brought it up, I said turn it over, and the 
only thing we found in our files was this. 

BY MR. SABA: 
Q Did he discuss any other papers? 
A No, he did not. 

Q Did you have any other conversation with Secretary 
Armitage in connection with either the interview you had 
earlier with Mr. Saxon or on this deposition? 



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A No. Nor with Mr. Rudd, nor Dr. Gaffney as a 
matter of fact. 

Q Those were my next two questions. 




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BY MR. SABA: 
Turning to another topic, sir, in general I take 
it that military security assistance is generally provided 
for a variety of policy reasons. Could you tell us very 
briefly why the United States would provide to any particular 



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country security assistance? 

A It is all written into the law. This country has 
— I mean, the basis for making the decision is written into 
law. It is very specific as to why one would sell. The 
interpretation of that and application of it is another matter 
for policy people to deal with. 

Q Would you say it is generally to further the United 
States interests. United States security interests? 

A Two areas: One, the foreign policy interest. 
It should be of direct interest to the United States. And 
then for also a defense strategy, foreign policy, and defense 

Q Would it be accurate to state that in various 
circumstances security assistance is often provided as an 
overall trade-off, which is to say that there are expectations 
that a nation might assist us in some related way in return 
for security assistance? 

A Well, I don't know what you are driving at. One 
of the foreign policy goals throughout all administrations is 
to have the close relationship with friends who think like we 
do and security assistance has always been reviewed as a way 
to prove our foreign policy, and our own defense strategy for 
people to be able to defend themselves so we don't have |o^), 
or join in a coalition if we have to fight, and we do that 
largely by deterrence. 

If your question is, is there a quid expected or 



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90 
some sort of quid pro quo -- 

Q Yes, that is the question. 

A The quid is that people will -- I can't answer that 
there is a quid expected. That would be something that I 
don't think you can very well improve your foreign policy when 
you ask for a quid, when you provide security assistance. 
You expect that there will be a closening of relationships 
throughout the years as a result of that, military to military 
relationship, foreign policy relationship, and overall 
enhanced position of the United States and what our interests 
are. I do not have a — a direct quid, I don't know. 

Q I will get more specific. Focusing on Guatemala. 

A Oh, okay. 

Q The year is 1985. Do you realjajl the commencement 

of military assistance programs to Guatemala? 

A In '85? 

Q Yes sir. 

A No, I don't recall commencement in '85. 

Q What do you recall? 

A Was it in ' 85 or not? 

MR. SILBER: It was a small item in the procurement 
THE WITNESS: I remember debating on the Hill that 
we should get on with Guatemala and trying to convince some 
of my colleagues, or members of the staff, and the Congressmer 
that I felt that our policy towards Guatemala was not as 



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effective as it might otherwise be, because they were taking 
a position that they had to improve in performance, according 
to what the Congress expected of them, before they received 
any military assistance. 

My position or argument was that we had an armed 
forces who wanted to get on with the business of ruling and 
governing and the way we could encourage them to do that was 
to form military relationships. But I don't remember a 
particular event in regard to that. 

Q Do you recall any suggestions from anyone on the 
NSC staff that we might be favorably disposed to military 
assistance to Guafemala specifically, perhaps at a training 
program? 

A No, I don't recall that specifically. I know that 
we worked with ISA, the American region in ISA, to try to 
develop a program , try to convince Congress that we should 
proceed, thatwe wanted to get into training and have a 
military relationship. I remember but I don't recall just 
when we requested the first sale. 

Q Do you recall any coordination with Mr. McFarlane 
on the issue of military assistance to Guatemala? 

A No. 

Q Do you recall any inquiries about military 
assistance to Guatemala from Mr. McFarlane? 

A No, I don't. I didn't say there wasn't, but I 



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can't recall any. 

Q From Colonel North? 

A No, I don't think so, no. 

Q Do you recall any discussion from whatever source? 

A I met with Mr. North occasionally, or two when we 
were working on a package, to try to get through Congress, 
but it was on a counter-terrorism bill we wanted to get 
through. By the way, we were not successful in getting it 
through the Senate, because the House didn't buy on to it. 

Q Did it have anything to do with — 

A I know we wanted it for El Salvador, Honduras, 
Costa Rica, Pan2una, and I believe Guatemala — no, I remember 
Congress rejected Guatemala early on, so it got pared down 
to the four, but this was specifically a program in '84-85 
time period when we were very concerned ±>out the terrorism 
that was creeping in down there. 




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Q What is your current recollection of our aid 
program to Guatemala? 

A Well, we worked hard to convince the Congress and 
to justify to them that we needed to begin to have this 
military relationship. We were very concerned cbout their 
medical capabilities, helicopters couldn't run, they were 
unsafe, poor transportation on the ground. 

I think the final, as I understand, as I recall, 
the final agreement was we would provide assistance but it 
had to be in non-lethal aid. I think that is the case. 

Q Did anyone ever suggest to you that one of the 
reasons — not necessarily the prime reason — we would be 
abiding assistance to Guatemala was for or in connection 
with their provision of assistance in connection with a 
resupply effort to the forces opposed to the Government of 
Nicaragua? 

A None whatsoever. 

Q I would like to move to Honduras for a moment, 
unless someone has a Guatemalan question. 

Moving to Honduras, my question is really along th« 



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the same lines, but I am particularly interested in the 
provision of F-5 aircraft. 

For the record I would like to introduce a document 
which will be Exhibit 4 and I will show it to you and give you 
a bit of time to read it through. 

(Exhibit No. 4 was marked for identification.) 

I should state for the record that this document 
wsa an attachment to a memorandum for John Poindexter written 
by Oliver North on March 24, 1986, the subject of which was 
a Presidential determination to authorize the furnishing of 
immediate military assistance to Honduras. 

The exhibit is a document generated from your 
agency by Mr. Royer, Colonel and Chief of the Latin American 
Division of Defense Security Assistance Agency. It is dated 
24 March, 1986. 

MR. SABA: I just want to note for the record that 
the second page of the exhibit indicates a distribution to 
the Director, DSAA, Lt. General Cast, ASD, ISA Mr. Armitage, 
and DASD, ISA/IA, Mr. Sanchez. 

I believe, sir, the memo speaks for itself, but 
I would ask you if you are familiar with it, and do you 
recall it? 

THE WITNESS: Yes, I do. 

BY MR. SABA: 
Q And do you recall the meeting between President of 



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Honduras euid Assistant Secretary of State Abrants and the 
circumstances preceding the writing of this memo? 

A Very vaguely. But I do recall, I do recall when 
he went down there, yes. 

Q Directing — 

A Was Colonel Royer with him on that trip? He may 
have been but I am not sure about that. 

All right. 

Directing your attention to the bottom of the page, 
the bottomC of the first page, the last paragraph on that page 
read 




Can you provide us some information about that 
paragraph and the circumstances involved? 

A Let me go back to the first paragraph and read 
this. 

There had been prior to this period a request from 
the Hondurans for a replacement for them on the Super Mystere, 
We had been working that a long time. There was the issue 
on their part and ours as to how long we could keep the Super 
Mysteres going and when we were going to have to finally 



replace them. 



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Prior to this action, this meeting, or this MFR 
that he records here, there had been a long dialogue between 
me and the Hondurans , the Air Force, and the chief of staff, 
back and forth, as to what efforts we could go to to manage to 
find the spare parts and to repair the Super Mysters to keep 
them going. There was a parallel action working to try 
to find a replacement aircraft, because to be sure there was 
only a period that we could keep these airplanes going. It 
was rather amazing that they were still flying at all in my 
mind. 

So that there had been discussions about a replace- 
ment fighter airplane before this meeting with the Hondurans 
where they continually requested — I am sure it was before 
this — this is just a year ago, and we had been going 
through discussions very much so with the State Department, 
ourselves 2md the Air Force, in trying to find an airplane 
that was affordable, that seemed plausible considering the 
threat, and the balance within the region, to find an 
airplane. 

So at this stage, March, would not have been by any 
means the first time we would have talked about this fighter 
This thing was an old case. We had worked on it very long. 
To be sure subsequent to this date but not attached to this 
date or this visit, in my view -- I have no recollection about 
our continuing to work the problem, we finally ceime to the 



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conclusion we could keep the Super Mysteres going two or three 
more years but we had to find a replacement airplane, and the 
DFIV seemed to be the only logical replacement for it. 




Q But you recall that it was certainly a factor 
which the Hondurans raised -- 

A I don't recall that, no. No, I don't recall that 
being a connection at all. I think we were concerned that -- 
we and the Administration were concerned that if we were 
unable to meet a legitimate requirement that they would see 
it as a terribly negative signal and so testified before 
Congress. 

Q Who testified before Congress? 

to during the hearings in order to 



As we had to during the hearings 



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justify the sale. 



Q We is yourself? 

A We and several other people in the hearings that 
had just been completed on the F-5E sales. There have been 
hearings recently on this sale. 

(Witness confers with his attorney) 
MR. SABA: Back on the record. 
BY MR. SABA: 

A Clarification on the conunent on the concern that 
the Administration had and what was going on in Nicaragua — 
I am speaking of the threat that was being developed, 
supported by the Soviets and the Cubans in that regard, in 
the general sense. 

Q Did Secretary Abrams or anyone from his staff 
communicate to you or anyone on your staff, to your knowledge, 
any concern about the Honduran view or atttitude towards the 
contras during this period? 

A No. Well, I don't recall that specifically as 
being a motivating factor in anything that we were involved 
in. Sure, there was concern about the contras throughout the 
whole period. You know, one would read about it and hear 
about it, and you know, the issue was before Congress and the 
dialogue. 



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Q But I take it we were resisting requests from the 
Nicaraguans at this time -- 

MR. SILBER: Not Nicaraguans. 

MR. SABA: Sorry, from the Hondurans even at that 
time for F-5Es and at this time being March 24, 1986, there 
had been a Nicaraguan incursion into Honduras. 

THE WITNESS: I don't recall. Somewhere about 
March or ahead of time, or after that, which I saw as 
unrleated to the contras, there was a final decision to 
support the F-5E, or to offer it anyway. 
BY MR. SABA: 
Q When would you date that, sir? 
A I don't remember, I don't recall. 
Q But focusing on — 
A May I see my list a moment? 

MR. SABAj For the record, the witness is looking 
at Exhibit 2, which is the calendar of travel. 

THE WITNESS: No, just looking at this, I recall 
going to Honduras to, along with the Israelis, to make the 
presentation on the Kafir or the -- 

MR. SILBER: Last November was it not? 
THE WITNESS: No, it was July, I think. 
MR. SILBER: Was it? 



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THE WITNESS: July of — 7 to 11 July. 



100 



BY MR. SABA: 

Q Of what year? 

A Of '86. 

Q Pardon? 

A 1986. 

Q That trip was in connection with -- 

A With the F-5. By way of background, though, we had 
decided that we could make some airplanes available beginning 
in '88 or '89 -- I have forgotten just when -- there was 
another equation that came up where the Israelis showed an 
interest and they and the Hondurans had had discussions about 
them buying one of their fighter airplanes, and it was in 
July that we went down to make the presentation on the U.S. 
offer and the Israelies made a presentation on their offer. 

Q I take it that even in March of ' 86 there seemed -- 
let's go off the record a moment. 

(Discussion off the record. ) 
BY MR. SABA: 

Q I take it that even in March of '86, even in view 
of the Nicaraguan incursion into Honduras, that there was a 
reluctance on our part to provide the F-5? 

A The reluctance -- 

Q And I point specifically to this paragraph. 

A The State Department had always wanted to provide 



HMA^tftftfA. 



936 



24 



m 



:uMii:iiH 



luoniLU 



101 



1 

2 

3 

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9 

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the F-5 earlier than we thought we could do it. I mean, it wa 
an issue within the Administration, and the only issue within 
the Administration was when and where could we find the source 
of the airplane. That had been ongoing for at least six month 
or a year prior to this date, as I recall. 

Q Would you say that the drive of the State Departmen 
was -- 

A The State Department felt that the Super Mysteres 
might or might not be supportable for long periods of time. 
They were very much aware that the Hondurans , knowing, that 
wanted to have a replacement airplane, and they were support- 
ing it on foreign policy and defense reasons in an earli^er 
period when we were having difficulty coining up with deliver, 
it having major impacts on our prograun. 

We finally worked it out. I went to the Air Force 
and we came up with work-arounds in order to have a lessening 
impact on other foreign training by providing these airplanes. 

Q Did Secretary Abrams express to you at any time 
his desire that we move forward rapidly on the F-5? 

A He and I had several meetings on it. I had at 
least one meeting probably in — I don't know when it was. 
It would have been in March or April where my concern was, 
and I want to be sure that I — it was sometime in spring we 
had a conversation and my concern was whether in fact the 
pricing that we would have to charge on these, if we went 



UtlfiU^SiaEL. 



937 



\immF 



102 



dovm and briefed them on this, as to whether they could find 
it affordable or not and we had to charge so much money for 
12 airplanes -- $70 million — and support and training, and 
my concern was as to whether they could accept this and I 
wanted to get his advice, diplomatically, and other State 
Department members were in the meeting on how to do this 
presentation. That was probably in February or March. 

Then the Israelis made the offer and that slowed 
the whole process down. 

Q Okay. 

A It wasn't until July we went down to make the 
presentation. 




concerned that the Hondurans were becoming quite nervous in 
their position down there, you know, given the buildup in 



liwKljttQCTHDir'"p 



938 



26 



uReot»F 



103 



1 J 4.1,6 things happening in Congress — up and 

' Nicaragua, and tn= ^ i-i- -3 ^ t- 



down votes — and there was no doubt about it in our minds tha 
o the Hondurans really wanted to have some sort of a 
^ reaffirmation that we were with them and that played an 
g important role. When somebody says you need an airplane and 
you agree, but you refuse to sell it, he is going to take it 
_ as a pretty negative signal. 

Q Did you yourself have any discussions with the 
Hondurans that touched on the contras? 
A Never. 
Q Sorry? 
A Never, no. 

Q I do have just a couple other questions, but hot 
related to Honduras. 

MR. SAXON: I have one or two broader security 
assistance questions along the lines of the quid for -- 
THE WITNESS: Could I take a short break and 
stretch a little? 

MR. SABA; Off the record. 
(Off the record discussion) 
MR. SABA: Back on the record. 
John has some questions, 
BY MR. SAXON: 
Q General, I just want to take the questions that 
Mr. AbrsOTS has put to you about Honduras and broaden them 



uncus. 




939 



iHffiassflffT 



104 



and ask you in more generic terms. I think I know your 
answer, I believe you answered it, but just for the record, 
are you aware of any instances in which, since you have been 
Director of DSAA, that the United States has expressly sought 
to link or make contingent our security assistance to another 
country to link that to or provide it as a reward for that 
country's aiding the contras, particularly during the period 
covered by the Boland Amendment, particular Boland II, when 
all U.S. Government funds for the contras were cut off? 

A No. 

Q Are you aware of any effort by an recipient 
country or a would be recipient country of security assistance 
to use their support of the contras, particularly when we 
could not aid the contras ourselves, as leverage to extract 
from us security assistance? 

A No. 

Q And I use "expressly" or "directly" because we do 
understand that we don't just give assistance devoid of the 
whole context, so it may be that in the big picture things 
ceui be related. 

A Sure, but no, none whatsoever. 

Q Let me than go to one specific beyond this, and 
a sk you whether you ever gave any guidance to American men 
in uniform in Central America who most likely would have been 
part of the military groups — they could have been from the 



iiM/;u.^Bcn.a. 



940 



28 

1 
2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



mmm 



105 



Defense Attache, they could have been in the Embassy — in 
Central America, to tell them along these lines not to do 
anything with the contras in terms of the administration of 
our security assistance programs? 

A May — yes, but my concern was not that I had any 

reason to believe that jmything was going on, but simply 
because there had been interest expressed by Congress in 
normal testimony, routine testimony — I will put it that way 
-- in defense of the President's request or to justify it, of 
que-tions as to whether any of the aid provided under the 
two Acts could be or were being used to support the contras 
or anyone else. 

And the response to that, and as a matter of 
casual conversation whenever I saw people, to apprise them 
of congressional concerns and mine, too, in that we not even 
have the appearance that something like that was going on. 

Q Particularly in terms 

A Yes. 

Q When Mr. Kruezer and I interviewed you on May 7 I <Jo 
recall talking to our military group commander and saying 
I want to be sure that none of what we are providing in^H 
meJces it across the border. Is that moreorless a 
correct statement? 

A Yes, that is reasonably accurate. That is the 
intent of my statement in any event. 



mmssiHEiL 



941 





106 



Q Do you recall making that statement to Jim Steele? 

A Among others, yes. 

Q To your knowledge, did Colonel Steele in any way 
violate that guidance? 

A No, not to my knowledge, 

Q Or abuse it? 

A In fact, he assured me that the best he understood 
it was not being done. It was not an idle question or 
comment. 

Q I believe I have no further questions. 
MR. SABA: I have just one left. 
BY MR. SABA: 

Q General, in your various discussions with Glenn 
Rudd, Mr. Gaffney, Secretary Armitage concerning Tows, Hawks, 
do you recall any one of those men ever mentioning to you the 
fact that these matters have been brought to the attention 
of the Secretary? 

A No. 

Q Or that the facts that were being gathered would 
be provided to the Secretary? 

A No. I did not ask. I must say though, that I 
think I was aware or subsequently at least, aware that 
General Powell had received information. I presume that he 
was not acting as a free agent. But no. 

Q Did cinyone inform you that Mr. Koch had met with 



' " VlknwpHbJFin 



942 



30 



14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



UWSIiiP 



107 



1 with the Secretary on these matters? 

2 A No, no, I was not. 

3 Q In 1986, after January 18 were there any inquiries 

4 made by any of these gentlemen or anyone else concerning 

5 transfers? 

g A I don't remember the precise date of January 18, 

7 so I can't respond to the preciseness of a particular date. 
g I do recall that I can say that after the two periods, both 
g the Hawk and the Tow that once the information had been 
1Q provided and we made the statement that it could not be done, 
^^ whatever was being contemplated under the AECA, that that 
^2 subject never bame up again. 

^g I don't recall discussing it with anyone. I don't 

recall any following up or nothing of that nature. 
MR. SABA: Thank you. 

THE WITNESS: I presumed nothing had happened, 
because it didn't go through our system. 
BY MR. SAXON: 
Q I do have one follow-up. 

^ In the time frame we have been looking at of 
November '85 to mid-January '86, do you recall Mr. Armitage, 
Noel Koch, Dr. Gaffney, Mr. Rudd, anyone else for that matter, 
ever telling you that Secretary Weingerger shared your concern 
aibout the fact that these transfers could not be legally made 
under the Arms Export Control Act? 



IMygfiMB.,. 



943 



iWiSW 



108 



A No, I don't. I think I have heard that, but that 
is all been subsequent to the revelations, but that is all 
been subsequent to the revelations, but I cna't remember 
himself saying that. I expect that he agreed. He is a 
pretty wise man. But I do not know of it. 

MR. SAXON: That is all. 

MR. SABA: I have nothing further, sir. 

MR. KREUZER: Sir, I am working in Tel Aviv. I 
want to buy some weapons. I can write a letter to DSAA? 
That would get me into the system? 

THE WITNESS: Normally the way it is done, there a^e 
two ways that sales are made when it is commercially, direct 
commercial, and the other is through the normal military 
sales system. If it is to go through — it normally comes 
out of their New York procurement office -- Mr. Ben Yousef's 
office. He Bnppens to be head of the procurement agency 
up there. 

MR. KRUEZER: He would go to whom? 

THE WITNESS: To us. 

BY MR. KRUEZER: 
Q Could Mr. Ben Yussef or General Mosah Morone , 
could he go to the Army Materiel Command? 

A Well, according to the rules, he could not. 

Q Would there be anybody at the Army Materiel 

Command with whom he could speak to do preliminary checking 



W^fliwttbr 



944 



32 iiiiuinicinoEyci 109 



mmm 



1 on pricing, purchasing of weapons? 

2 A They would not be authorized to provide any data, 

3 you know, that would indicate that we were willing to sell. 
^ They just do not have that policy authority at all to do 

that. 

I am not saying that someone couldn't go to the 
_ Army Materiel Command and others and say look, we are 
_ considering buying what about the price, and in an informal 
conversation someone might say this is what it is, because 
prices are generally known, even if you are not an authority 
on prices. 

Q So if it were informal, it would be okay? 
A No, it isn't okay. 
Q Maybe it happens? 

A I don't think it happens, but I can assure you 
that no formal information, nothing by record, is authorized 
to be given to anyone on pricing data without approval by 
the State Department and our office. I can assure you of 
that. 

MR. KREUZER: Thank you. 

MR. GENZMAN: My questions have been asked. I 
have nothing. Thank you. 

MR. SABA: We made it by noon. 

THE-WITNESSr Very good. 

MR. SAXON: Let me say for the record, on behalf 



JiSmlc&fiuaBEX. 



I 



945 



imesmF 



110 



of the Senate, at least, we appreciate your being with us 
today. 

THE WITNESS: I hope I have been helpful to you. 

MR. SAXONt You have been helpful and very candid 
and we thank you for giving us this much of your time. 

MR. SABA: And the House Committee similarly 
appreciates your efforts. 

(Whereupon, at 11:59 a.m., the deposition of 
General Cast was adjourned. ) 



uwiAsmiu 



946 



JflJtUfflED 



A> ooi^^ 



wniiBU feiMiu UerAHIMtNl W- DEfENK 
OFFEH AND ACCETTANCE 



III P\WCHilH* Wmr aw , M <i « / r2» (Mr; 




00 .ST« 1513 



»MflVtOut IDITIONS MAY •• iMtO 



UNCaSSIHED 



PAGE 1 of W 



947 



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•. TMC ^ACHAStM 

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OOFOMMItU llllt.l U.A.Ainr II PAGE 2 of PAGES 



948 



UNCLASSIFIED 



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0OFOMI1S11 llllll.l UXXIrlrll PAGE 3 of PAGES 



949 



■;r.d5r pm' tx 
^yP Vrc, u-t;on.i' '";C'jrity C 



siicUSSIflED 



GENERAL CAST'S TRAVEL 



/^rj^ 



: DEPOSITION 



TAB TDY POINTS DATES 

1 Wright-Patterson AFB, OH (AFLC & DISAM) U-15 Jan 85 

2 Sal Salvador, El Sal 22-2'* Jan 85 

3 Hanestead AFB, FL (CORONA SOUTH 85) l't-15 Feb 85 

4 London, Eng , Cairo, EG, Amman, JO 26Mar-5Apr 85 

5 Garmisch, Germany (+ leave in Italy), EUCOM S.A.Conf. 19Apr-4Ma"y 

6 Tampa, FL (CENTCOM Sec. Asst . Conf) 13-16 May 

7 Wright-Pat AFB, OH (ILC Dining In) 14-15 Jun 

8 Rome, Italy & Rabat, Morocco/ JMC 26Jun-4Jul 

9 Tel Aviv, Israel (JSAP) 14-19 Jul 

10 Denver, CO & San Antonio, TX 13-15 Aug 

11 Panama (SOUTHCOM SA Conf) 23-28 Sep 

12 Dayton, OH (Chamber of Conmierce Speech) 12 Nov 83 
13. Germany, Bahrain, Pakistan (CG Meetings) - .15-23 Nov 85 
14 Hanscom AFB, MA (Boston) 6 Dec 85 



15 

16 
17 
18 
19 

20 

21 
22 

23 

2U 
25 



Greece, :Tunlsla, Rome, Kenya, Somalia, Saudi, 
Yemen, Saudi, Jordan, Israel, Egypt 

Ankara Turkey (HLDG) 

Hanscom AFB, MA (AFCEA luncheon speaker) 

Islaaabad, Pakistan 

SecDef Trip: Korea (SCM) ; Japan; Philippines; 
Australia; Hawaii (Mrs. Cast went too) 

Germany (EUCOM SA Conf); Spain; Portugal; France; 

UK 

MacDlll AFB (Tampa, Florida) CENTCOM SA Conf. 
Honduras & El Salvador 

Tunisia & Algeria (JMCs) 

Pana-na (SOUTHCOM SecAsst Conf) 

Dayton, OH, Wright-Pat 
Meeting/DISAM) 




24Jan-17 Feb 86 

19-25 Feb 
4 Mar 
19-25 Mar 

31Mar-13Apr 
19 Apr-7 May 



12-15May 

7-11 July 

1-8 Sep 86 

Il*-17 Sep 
30Sep-10ct 




950 



UNCUSSIFIEO 



/2 Or 



.S-i. 



DEFENSE SECURITY ASSISTANCE AGE-CY 

Memo ^-- /\'^'^^^^^'^~-* 



^KY^c^ Oa>n. Col.^ Pi?vo<2JlGkn 
"bcxto 4d Gen . (?cxo<2Jl . 



^ 




DEPOSITION 




liter,' 
■i f:r 



c J » c c : : 



be $36-52.0 - : 1 ". ; 
added ,NR: cc<: . 
charges , plus 



be replaced, so 



idable difficulties 

sales , including, 
ec. ; of tp.e AECA. 

es of SU millic". 
or indirect to a 
nclassif led (excep 
ot take place unt: 
y-5 can be waived f:: 
transfer has no suc^ 
given in any case . 

dered through Israel 



ken into j or J 
t ice . 

a against splittir.; 
, the spirit and the 
and all Administra- 



It is conceivable that, upon satisfactory consultat 



Ch 
th 
packages . 



ion w 
erpar 



The customer countries V^M and Korea) -^^ J./^f, ,5°,',: \l\ 
their deliveries had been rescheduled but vevouian _ 
tell the:- why. Vse vould not want to cha.^f ^'-e 



d tha- 
e to 
ate: 



deliveries 



UW^IFIED 



951 



ONCLASSIFIED 



..".ere 

b L : : ^ 



.0 t ". : ; 

adr.irr.s: 

stcra^e 



are available r;^-: no«, suitable : 
■ ".-- -.issiles a: Red River Arsenal 
; ' : ; r • ; r e a . 5 e ■.• e n o :' these are : ; 
;e5t; ca- be forej:-.e. 






cost :.■?:,: 
re^lace-ient : 



; V e r ^ r 5 e -. 3 . 

co'j.i c 

::0 T.issiles would be S36-52. 
es vsouid iiave to be added \; 
cking and transport charges, 



:nar 



The Tiissiles for Korea and 'JAE would have to be replaced, so 
DS.^-A will need the moncN' to replace them. 

The modalities for sale to Iran present formidable difficulties 



•ran is no' 
mdirectlv 



currentl\- certified for sale; 
IS a t." ird country, per Sec. 



1 n c 1 u d 1 n -, 



-- Congress must be notified of all sales of $ 1 J mil.:-. 
or more, whether it is a direct sale or indirect to a 
third country. The notice must be unc lassified (except 
for some details), and the sale cannot take place until 
30 days after the notice. The 30 days can be waived for 
direct sales, but the third country transfer has no such 
provision, and notice must still be given in any case. 

-- Thus, even if the missiles were laundered through Israel. 
Congress would have to be notified. 

It IS conceivable that the sale could be broken into 3 or J 
packages, in order to evade Congressional notice. 

■- While there is no explicit injunction against s?lit:i-.g 
up such a sale (subject to check...), the spirit and tr.e 
practice of the law is against that, and all Administrat: 
have observed this scrupulously. 

-■ It is conceivable that, upon satisfactory consultation w; 
Chairmen Lugar and Fascell and their minority counterpar' 
they might agree to splitting the sale into smaller 
packages . . "'^ Ji 

The customer countries 'L'AE and Korea) would -have to be=3°^^ '' 
their deli\eries had been rescheduled, but we »croL* not Tray e t : 

charge th' 

m 



tell ther w 
del iveries . 



In e w u 




-.ere tor 



952 



UNCUSSIFIED 



.a'. dr3.>bacK5 ar? 

■a^ ever found o -; 
■ iC'^rzes of 5upr 1 
s , however , so i'.: 



e : J 3 . ■ r : r - : : 3 r . e 

\\ev uojli re great Iv irritated, 
are -ore readil\- accessible thar 
■re would be no effect m tbat 



S a J c : - r a b 1 a and the z^ 
irritated ar.d alar-.ed. 

1 : 1 5 r 3 e 1 we