Yet there is no question that it happened. Initially in the perhaps illusory hope of gaining influence with a post-Khomeini government in Iran, but eventually also as an inducement for Iranian help in winning freedom for U.S. hostages held by Muslim zealots in Lebanon, the Reagan Administration approved clandestine shipments of military equipment -- ammunition, spare parts for tanks and jet fighters -- to Iran through Israel.
As long as the deep secret was kept -- even from most of the U.S. intelligence community -- the maneuver in one sense worked. Iran apparently leaned on Lebanese terrorists to set free three American hostages, the latest of whom, David Jacobsen, flew home to the U.S. last week for a Rose Garden meeting with Ronald Reagan. But once the broad outlines of the incredible story became known, the consequences were dire. The Administration appeared to have violated at least the spirit, and possibly the letter, of a long succession of U.S. laws that are intended to stop any arms transfers, direct ( or indirect, to Iran. Washington looked to be sabotaging its own efforts to organize a worldwide embargo against arms sales to Iran, and hypocritically flouting its incessant admonitions to friends and allies not to negotiate with terrorists for the release of their captives.
America's European allies, the recipients of much of that nagging, were outraged. Moreover, the U.S. was likely to forfeit the trust of moderate Arab nations that live in terror of Iranian-fomented Islamic fundamentalist revolutions and fear anything that might build up Tehran's military machine. Finally, the Administration seemed to have lost at least temporarily any chance of gaining the release of the missing six U.S. hostages in Lebanon, or of cultivating the Iranian politicians who might sooner or later take over from Khomeini. The 86-year-old Ayatullah is reported to be bedridden following a recent heart attack, but for at least as long as he lives, Iranian officials, including those who have been in quiet contact with the White House, cannot afford to be caught dealing any further with the Great Satan.
The story of how this came about leaked out in bits and pieces all last week from bewilderingly varied sources: an account published by a pro-Syrian weekly magazine in Beirut, a public speech by the speaker of the Iranian parliament, guarded private comments by government officials in Washington and Jerusalem, even a Danish sailor's revelations about a voyage through the Persian Gulf. Some of the more mind-boggling versions of the tale had touches of melodrama that might have come from the most lurid spy fiction: a presidential envoy slipping into Tehran bearing (so the Iranians claimed) presents of pistols, a Bible and a key-shaped cake; an American cargo plane disappearing from radar screens over Turkey; a Danish ship changing the name painted on its hull prior to reaching an Israeli port.
The Administration's distress at being caught out in such an improbable and embarrassing situation was evident in the scramble of the White House to put a lid on the rapidly expanding story. Whereas only a few weeks ago the Administration had rallied its forces to defend the President's actions at the Iceland summit, virtually blitzing the media with press conferences, interviews and briefings, now there was a chorus of no comments, off-the- record observations, obfuscations and pointed suggestions of self- restraint, even repression of the emerging facts. President Reagan declared that the | disclosures "are making it more difficult for us" to win the release of the Americans still held captive in Lebanon. The just-released Jacobsen, in a moving appeal at his welcoming ceremony at the White House, warned reporters that "unreasonable speculation on your part can endanger their lives." Cried Jacobsen: "In the name of God, would you please just be responsible and back off!"
The pleas raised once more the perennial question of the responsibility of the press, as well as the undisputed need of the Government to carry on sensitive negotiations in secret. In this instance, the story of the clandestine negotiations with Iran was broken not by the American press but by a Lebanese magazine and the speaker of the Iranian parliament. Together they provided the major outlines of the secret dealings. Even as President Reagan pleaded for a halt to speculation, sources within his own Government confirmed much of the speculation and added important details. While some congressional leaders questioned the wisdom of making such a deal in the first place, other critics blamed the disclosure on the Administration's failure to take into account the danger of leakage and on its tendency toward improvisation and swashbuckling. Moreover, none of the information that emerged last week included potentially dangerous details about the whereabouts of the hostages, their movements or their captors.
Many of the details are still either murky or disputed, and some may never be known. But this much seems clear: sometime around August 1985, the White House got word that at least one of the many quarreling factions in the Iranian government was interested in re-establishing contact with the U.S. The first message apparently came to American officials in Beirut. In addition, Iranians who meet regularly with U.S. representatives at the Hague, where Iran is pursuing a case against the U.S. before the International Court of Justice, indicated that some Tehran leaders wanted to talk.
With President Reagan's approval, a few top American officials began a series of hush-hush meetings with Iranians that as of last week had gone on for 14 months. The American representatives apparently were guided, if not led, by Robert McFarlane, then National Security Adviser. Just which officials participated on the Iranian side is not known, but they are believed to be allies of Ali Akbar Hashemi Rafsanjani, the speaker of the Iranian parliament, who is less bitterly anti-American than many of his colleagues. The sessions were initially conducted in European cities, but they eventually included three secret American missions to Tehran. One in August that included McFarlane, who left the Administration last December and is now on the staff of Georgetown University's Center for Strategic and International Studies, and Oliver North, a Marine colonel on the staff of the National Security Council, was reported around the world last week. There was an earlier meeting of U.S. and Iranian officials in Geneva in October 1985. That mission was headed by John Poindexter, then McFarlane's deputy and now his successor as National Security Adviser.
The Administration claims that its primary motives were to open some kind of back channel into the fierce factional struggles now raging in Tehran and to gain the attention of some of the politicians jockeying for position in the post-Khomeini era. In itself that motive was shrewd, even laudable. The U.S. has little hope of moderating Iran's behavior while Khomeini rules. The aged Ayatullah may be too weak to provide much direct leadership anymore, but no one dares do anything of which he disapproves. Yet not all the men around him are as dedicated as he is to pursuing the seven-year-old war with Iraq until that country is crushed, or to exporting anti-Western revolution throughout the Muslim world. If politicians in contact with the U.S. were to gain major influence in a successor regime, Washington might be in a position to urge them to wind down the war with Iraq, call off troublemaking in neighboring states and ease support of terrorism.
The U.S. cannot afford to ignore Iran, because the country is a glittering geopolitical prize. One of the world's biggest oil producers, it is strategically situated on the Persian Gulf, through which most Middle East oil flows into world markets. The U.S. dares not take a chance that Iran might fall into the Soviet orbit. Moscow has been maneuvering for influence in a post-Khomeini Iran; it resumed buying Iranian oil and gas. If Soviet blandishments do not work, bullying might. Over the past year and a half, the U.S.S.R. has nearly doubled, to more than 50 divisions, the military forces stationed near its border with Iran.
The U.S.-Iranian talks proceeded on two tracks, one concerning general political questions, the other the hostages in Lebanon. The Americans did their best to keep the two tracks separate, but inevitably they tended to merge, if only because the same people, notably North, were involved in both sets of talks. American officials insist that their prime purpose in agreeing to arms transfers was to cultivate influence with potential future leaders of Iran. Apparently, the Administration thought these men might feel gratitude to the U.S. for supplying arms that Iran critically needs to fight its war with Iraq. But a senior Administration official concedes that the subjects of arms and the release of hostages became "linked."
In some minds the linkage began very early. In July 1985, Israeli businessmen who had been in contact with Iranian officials told Shimon Peres, then Israel's Prime Minister, that they thought a swap of arms for U.S. hostages could be arranged. Peres presumably communicated that information promptly to Ronald Reagan. The story in Jerusalem is that the White House designated Poindexter to look into the idea, and he named North as liaison with Israel. In any case, the Israeli businessmen were authorized by Peres to resume contacts and strike a deal with the Iranians. The executives turned to Adnan Khashoggi, a famed Saudi Arabian wheeler-dealer and an extremely wealthy businessman. He got a long shopping list from Tehran that included Hawk antiaircraft missiles and radar-guidance equipment for them, antitank missiles, and spare parts for jet fighters.
Lebanese terrorists influenced by Iran released one of their American captives, the Rev. Benjamin Weir, on Sept. 14, 1985. According to Israeli reports, President Reagan telephoned Peres to thank him for Israel's help in securing Weir's freedom. Five days later Iran got some of the Hawk missiles and guidance equipment that had been on the shopping list relayed through Businessman Khashoggi. They are said to have been delivered by a DC-8 cargo plane that was once owned by a Miami-based air-transport company. The aircraft took off from Tabriz, Iran, disappeared from radar screens over Turkey, made what was supposed to be a "forced landing" in Israel and later returned to Iran by a circuitous route.
More arms transfers followed. Israel so far this year has shipped roughly $40 million worth of military equipment to Iran, largely artillery and tank ammunition, and spare parts for fighter planes. In itself, this is unremarkable. Israel has been selling arms to Iran on and off since the Khomeini government took power in 1979, originally in a successful effort to win permission for Iranian Jews to emigrate to Israel. The Ayatullah is a sworn enemy of the Jewish state, but Israel too hopes to gain influence with ( Khomeini's potential successors. In addition, Israel believes that its self- interest lies in helping Iran at least to stalemate Iraq in the gulf war.
The U.S. has sometimes protested the Israeli sales, sometimes grudgingly winked at them. In the latest round, it did much more than wink: some of the arms and parts were bought by private Israeli businessmen and then forwarded to Iran, which wound up paying the bill. The delivery of such items had been blocked by the Carter Administration, however, after the Khomeini-led revolution toppled the Shah and acquiesced in the seizure of the U.S. embassy by Iranian militants in 1979. The Reagan Administration, in line with its outspoken neutrality in the gulf war, has a long-standing and strongly advocated policy against arms sales to Iran.
Some details about how the transfers were arranged came last week from a seemingly unlikely source: the Union of Seamen in Denmark. It said that Danish ships, which have acquired a reputation for being able to deliver quietly any questionable cargo anywhere, had carried at least five loads of arms and ammunition from Israel to Iran. Said Union Deputy Chairman Henrik Berlau: "It appears that the shipments this year have been carried out on the orders of the U.S. to win the release of hostages in Lebanon."
The union related the story of an October voyage as told by a sailor who asked not to be identified. He said that around Oct. 17 the coaster Morso picked up 26 containers full of ammunition in the Israeli port of Eilat and delivered them to the Iranian port of Bandar Abbas. "We all knew there was ammunition on board," said the sailor, but Israeli authorities in Eilat took care to let no one else know. "The Israeli harbor authorities," the sailor added, "told us to take off all markings that could show we had been in Israel, including the markings on the food we had taken aboard and on the weapons containers. We even had to remove the JAFFA markings on the oranges." Further, said the seaman, uniformed Israelis had already demanded that the name Morso be removed from the ship before its arrival in Eilat and replaced temporarily by Solar; the name was changed back to Morso as the vessel approached the Persian Gulf, reaching Iran around Oct. 21.
In the U.S., the arms-shipping operations and some of the negotiations with Iran about hostages were arranged by a tiny group of NSC staffers led by Oliver North and known as the "cowboys." Says a Government source who was ) clued in on their operations very late: "This thing was run out of the West Wing (of the White House). It was a vest-pocket, high-risk business." Whether the motive for the arms-shipments policy was to gain U.S. influence in Iran's power struggles or to win freedom for hostages in Lebanon, officials could hope for success. Last month Mehdi Hashemi, a hard-line Iranian official, was arrested in Tehran and charged by the Iranian government with treason, allegedly because he had masterminded the kidnaping of a Syrian diplomat, who was then promptly set free. Khomeini personally approved an investigation into Hashemi's activities. Hashemi's pending downfall is good news for the U.S. because he is among the most extreme of Khomeini's followers in urging Islamic revolution outside Iran. He is thought to have suggested to Lebanese extremists that they kidnap and hold American hostages.
Meanwhile, the Lebanese groups holding the hostages released a second clergyman, Father Lawrence Jenco, in July and David Jacobsen last week. Their freedom was obtained without any yielding on the captors' principal demand: release of 17 terrorists being held in Kuwait on charges of dynamiting the U.S. and French embassies. In a statement announcing that they were letting Jacobsen go, his captors, Islamic Jihad, mysteriously urged the U.S. to "proceed with current approaches that could lead, if continued, to a solution of the hostages issue." Washington at the time vehemently denied that it had made any "approaches," to Iran or anyone else.
Jacobsen's release was credited by some observers in the Middle East to Syria, which occupies the portion of Lebanon where Islamic Jihad and its companion group, Hizballah (the Party of God), operate. It is now clear that Syria played next to no role. In fact, it appears to have lost nearly all sway with the extremists, who are now heavily influenced by Iran.
The patient and untiring negotiating efforts of Terry Waite, the personal envoy of the Archbishop of Canterbury, also appear in a different light. Waite's activities were important, but not wholly in the way they appeared at the time. Since neither the U.S. nor Iran could let it be known that they were in contact, let alone that the U.S. was supplying Iran with arms, some cover for Jacobsen's release had to be found. Waite and his mission provided the necessary public appearance, and it is doubtful that anyone else could have done so, since Waite, as a nonpolitical man of religion, has the trust of all parties involved, including the kidnapers. One Israeli official refers to Waite as the "cellophane wrapping" around hostage releases. Says he: "You cannot deliver a gift package unwrapped. That is why there will be no more hostage releases until he returns to the region."
It should have been obvious, though, that the U.S. dealings with Iran would continue to bear fruit only so long as they were kept secret -- and that no maneuvers so momentous could be held under cover very long. In retrospect it is astonishing that so few people knew anything for a period as long as 14 months. But an essential part of the planning of intelligence operations is, or should be, what will be done and said when their covers are blown. And nobody in either Washington or Tehran seems to have given that much thought.
The cover began coming off first in Iran, when supporters of Khomeini's chosen successor, Ayatullah Hussein Ali Montazeri, started clandestinely distributing pamphlets accusing the regime of surreptitious contacts with the U.S. Specifically, they claimed that Rafsanjani had met with nameless American emissaries in Iran. Last week several members of the group were reportedly arrested in Iran, charged with distributing leaflets that were "in line with the vicious attempts of the counterrevolutionaries."
The first the world learned of the unraveling scheme was just before Jacobsen's release, when Al Shiraa (The Sailboat Mast), a weekly magazine published in Muslim West Beirut, ran a sensational article reporting that the U.S. had been sending spare parts and ammunition for jet fighters to Iran. The magazine further said that McFarlane and four companions had visited Tehran in early September, stayed at the Independence (formerly Hilton) Hotel and met with a variety of officials from the Iranian Foreign Ministry, parliament and army, who supposedly asked for more military equipment. Shortly after the visit, said Al Shiraa, the U.S. airlifted the arms to Iran in four C-130 cargo planes flying out of a base in the Philippines. No independent evidence of any such flight has come to light, but the rest of the story contains elements of truth.
Where did the magazine get its information? The publication is known to have close ties to Syria. That country and Iran are formally allies, but their relationship has come under increasing strain. One reason is their rivalry for influence over Islamic Jihad and Hizballah, which Iran is clearly winning. The assumption in the Middle East as well as in the U.S. is that the Syrians somehow got wind of both the U.S.-arranged arms shipments to Iran and McFarlane's mission. They may have leaked the story in order to torpedo the potential relationship between the U.S. and moderate elements in the Iranian government, with a view to enhancing Syria's influence in the power struggle in Tehran. Syria may have also been piqued over losing a role in hostage bargaining, which gave it a useful gambit in countering adverse publicity about Syrian links to terrorism.
In any case, the secret was out. Rafsanjani was evidently alarmed enough to take strong action to counter Al Shiraa's story and perhaps to cover up his own dealings with the Great Satan. In a speech to the Iranian parliament last Tuesday, Rafsanjani confirmed McFarlane's visit but added some wildly improbable embellishments. According to Rafsanjani, McFarlane and four unnamed American companions arrived in Tehran with Irish passports and posing as the flight crew of a plane carrying military equipment that Iran had purchased from international arms dealers. They brought with them, said Rafsanjani, gifts of a Bible autographed by President Reagan, a cake shaped like a key intended to symbolize an opening to better relations between the U.S. and Iran, and an unspecified number of Colt pistols to be distributed to Iranian officials. Rafsanjani insisted that he ordered the Americans kept under virtual house arrest in their hotel rooms, refused to let them see anyone and expelled them from Iran after five days. They were furious, Rafsanjani reported. He quoted McFarlane as saying, "You are nuts. We have come to solve your problems, but this is how you treat us. If I went to Russia to buy furs, Gorbachev would come to see me three times a day."
American officials in the know insist that much of this story is sheer invention intended to make the U.S. look ludicrous. What really happened, they say, was this: McFarlane, North and two bodyguards did visit Tehran, but their passports were neither U.S. nor Irish. Also, they carried no Bible, cake or guns. They stayed in Tehran four or five days and managed to meet a number of Iranian officials, possibly including Rafsanjani, although accounts differ on that subject. Stories vary too on what, if anything, the mission accomplished. Some say that McFarlane's contacts with the Iranians were amicable, others that they were rudely aborted.
Fanciful though it was, Rafsanjani's tale ended any U.S. hope of preserving secrecy. Together, he and Al Shiraa had introduced all the main elements of the story: the secret meetings between U.S. and Iranian officials, the arms transfers and the negotiations about the hostages in Lebanon. Al Shiraa did not mention the hostages, but Rafsanjani did. He said that if the U.S. and France met certain conditions, among them the return of frozen Iranian assets and freedom for so-called political prisoners held "in Israel and other parts of the world," then "as a humanitarian gesture we will let our friends in Lebanon know our views" about the release of American and French hostages.
But freedom for Journalist Terry Anderson and Thomas Sutherland, the acting dean of agriculture at Beirut's American University, now looks far away. The White House had once hoped that both would be released, along with Jacobsen, on the eve of last week's congressional elections, giving the Republicans a big plus. As it turned out, Jacobsen was let go a day early and Anderson and Sutherland not at all. Says a senior Administration official: "This ended the possibility, at least for now, of two more releases. That possibility has dried up."
Terry Waite voices more or less the same view. The Anglican envoy returned to Britain last week grumbling angrily that international power games were complicating his efforts to win freedom for Anderson and Sutherland. Waite said he intends to disappear into the English countryside for a while and wait for some indication that a return to Beirut would be productive. He may have to wait quite a while. And it does not seem likely that the U.S. can soon resume contacts with Iranian officials of any rank concerning geopolitical questions. Iranian Prime Minister Mir Hussein Mousavi sneered last week that renewed contacts between the U.S. and Iran would be like "relations between the wolf and the lamb." Later Rafsanjani said the U.S. was "using every channel to beg Iran to accept establishing a dialogue with it."
The revelations of the secret talks with Iran put Secretary of State George Shultz in a particularly uncomfortable spot. What he knew about them is uncertain. He was surely aware of the meetings between National Security Council officials and Iranian representatives. As a member of the NSC, he was privy to a presidential memorandum in February summarizing the meetings to that date and directing that they continue. According to some reports, he heard about the arms shipments and protested vainly against them to the President. Some of Shultz's subordinates, however, think the Secretary did not learn about the arms transactions until the rest of the world did.
On one point everyone who knows Shultz is in agreement: whatever and whenever he discovered about the arms transfers, the information dismayed him -- for good reason. Shultz has been the most vehement promoter of the Administration's official no-deals-with-terrorists policy. He has been in charge of Operation Staunch, an Administration effort to persuade both friends and adversaries not to sell arms to Iran. He has pushed that effort with deep personal conviction, going so far as to urge Soviet Foreign Minister Eduard Shevardnadze during their frequent meetings to try to reduce arms sales to Iran by countries allied to Moscow. He had little effect, however. North Korea, a Soviet ally, has been among Iran's biggest sources of weapons. In addition, whether Shultz tried and failed to stop the U.S.-sanctioned shipment of arms to Iran or was kept in the dark about it, his stature as the chief architect of American foreign policy under President Reagan has been undermined.
Ever the loyal Administration soldier, Shultz last week permitted himself no public criticism of the dealings with Iran, but made little attempt to defend them either. He said that in his view the "policy of not negotiating for hostages is the right policy," carefully expressing no opinion on whether it is any longer the policy actually in effect. Like everyone else in his department, the Secretary referred all questions about Iran to the White House, but unlike others, he openly expressed dissatisfaction with the White House order that he do so. Said Shultz bluntly: "I don't particularly enjoy it. I like to say what I think about something."
Whatever he thinks, it will be largely up to Shultz to explain and defend the dealings with Iran to American allies. He had to start last week in, oddly enough, Paris, where he had gone after a meeting with Shevardnadze in Vienna. Shultz was in France to discuss arms-control problems and other policy matters with French leaders, including Premier Jacques Chirac. The U.S. has been critical of France for not joining a British attempt to boycott Syria diplomatically as a terrorist nation and for its haste in negotiating a deal to return to Tehran Iranian funds that had been frozen in France. The night before their Friday meeting, Chirac, who was visiting Spain, made clear French resentment of what it regards as hypocritical American nagging. Said Chirac, with heavy sarcasm: "France has not negotiated and will not negotiate with terrorist groups and takers of hostages. I don't know what others do, including those who want to teach lessons to everybody else."
His comments were a touch disingenuous, since France has in fact been negotiating with Syria about French hostages held in Lebanon, but it was a sample of what the Administration can expect to hear in growing volume from its allies. British Prime Minister Margaret Thatcher frostily instructed her subordinates to refrain from inquiring about what the U.S. was up to in its dealings with Iran. She does not want to know. As if that did not indicate enough displeasure, a top British official called foreign reporters to a briefing at which he repeated that British policy is not to negotiate with terrorists.
Arab nations fearful of Iran mostly maintained a puzzled silence last week while scrambling behind the scenes to find out just what the U.S. was doing. But while Shultz was traveling last week, Iraqi Ambassador Nizar Hamdoon dropped in at the Washington office of Assistant Secretary of State Richard Murphy to pose outraged questions about the arms sales. Murphy, who is the prime manager of U.S. Middle East policy but who seems to have known nothing about the dealings with Iran, was apparently stumped for any answers. The Administration, however, had better come up with some answers quickly. It can expect anguished inquiries from Arab nations friendlier -- and less self- interested -- than Iraq as to whether the U.S. is now tilting to the Iranian side in the gulf war.
Officially, Washington's policy is to proclaim strict neutrality in the bloody conflict and urge both sides to negotiate a settlement that would in effect be a stalemate. That would leave borders about where they are now. U.S. officials claim that one of their goals in setting up the secret meetings with Iran was to gain some influence that might enable the U.S. to persuade a post- Khomeini government to settle for something short of the Ayatullah's often proclaimed aims: total defeat of Iraq and the toppling of its President, Saddam Hussein. During the meetings U.S. officials urged Iranians not to launch Tehran's long-touted "final offensive" to crush Iraq. Whether for that reason or because Iran lacks sufficient military strength, the all-out Iranian offensive is rapidly on its way to becoming a non-event.
But how can conniving at arms transfers that would presumably strengthen Iran in its war against Iraq promote the stalemate that the Administration desires? It would seem more likely to do the exact opposite: help Iran to win. In fact, the Administration claims that Iraq has such an overwhelming firepower superiority that the new weapons will not alter the strategic balance. The White House also maintains that the arms shipments could influence political infighting that may go on inside Iran.
The Secretary of Defense, Caspar Weinberger, voiced no opinion about U.S. dealings with Iran; like everybody else, he referred all questions to the White House, and it is uncertain how much he knew about the maneuverings. But Weinberger last week made a point of observing that an Iranian victory in the gulf war would be against U.S. interests. If anything, he was understating the case: an Iranian triumph would be a disaster for the U.S. It would drastically upset the Middle Eastern balance of power and give a victorious Iran new opportunities to threaten or subvert moderate Arab nations that are friendly to the U.S., such as Kuwait and above all Saudi Arabia.
Domestically, the Administration is already hearing some scorching criticism. Former Secretary of Defense James Schlesinger charged that the Administration appeared to have paid "ransom" for release of the U.S. hostages. He added bitterly that the Carter Administration, which he served as Secretary of Energy, "did its groveling in public. This Administration prefers to do its groveling in private."
Vermont Democrat Patrick Leahy, the vice chairman of the Senate Select Committee on Intelligence, was only slightly less caustic. Said he: "I can see why the Administration won't tell Congress about it. If they had, they would certainly have heard from both Republicans and Democrats, 'Don't do anything so stupid.' "
Eventually, the Administration will have to tell Congress a good deal about the Iranian operation. It made a start last week by holding a briefing for selected Senators on the intelligence committee and convinced at least some that it had not been engaged in a crude arms-for-hostages swap. Already, though, House members are clamoring for information too. Democrats Dante Fascell of Florida, chairman of the Foreign Affairs Committee, and Lee Hamilton of Indiana, chairman of the Permanent Select Committee on Intelligence, on Wednesday addressed a letter to Reagan asking "your immediate cooperation in fully briefing the Congress." Briefings aside, there is talk on Capitol Hill of holding full-scale hearings on Iranian policy when the newly elected 100th Congress convenes in January.
One question su