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From the start, Reagan has insisted he did not know of any diversion plans, making it the litmus test of his credibility in separating himself from the scandal. The White House was unmoved by North's claim that he wrote five diversion memos; only the one found on Nov. 22 has turned up among the 250,000 documents the White House released to the congressional committees. Even if other versions exist, says one aide, so what? "There's nothing that says the President saw them."
North supported that position, testifying that on the day he was fired, the President called to console him and said, "I just didn't know." North denied having told an aide shortly after the call that the President had said, "It's important that I not know." If accurate, that subtle remark could suggest a cover-up by Reagan. But North insisted, "I don't recall the conversation that way."
North's persistence in declaring that "I was authorized to do everything that I did" creates obvious questions for Poindexter, who will follow him to the witness table. Did Poindexter just spike all diversion memos and let North proceed on his own? Poindexter's public testimony, predicts a congressional source who has heard his private interviews, will be "explosive."
Whatever the President's role in the diversion, North's sweeping testimony left the firm impression that the late CIA director William Casey had masterminded the covert operations that were designed to achieve two of Reagan's most cherished policy goals: to win the release of U.S. hostages in Lebanon, and to keep the contras fighting in Nicaragua, even if Congress would not provide U.S. funds for that purpose. When Congress passed the Boland amendment in 1984, specifically banning all agencies "involved in intelligence activities" from providing military support to the Nicaraguan rebels, Casey simply shifted his previous contra support operation to the NSC staff on the dubious grounds that the council was not covered by the proscription.
North described Casey, who died May 6, as his "personal friend and adviser" who "never once disagreed with any of the things that I was doing." Instead, Casey told him "how they might be done better." The two "communed" regularly, North explained, in a relationship that he understood was not to be "something that was publicly bandied about." North did not, it was apparent, even tell his chain-of-command bosses, Poindexter and former National Security Adviser Robert McFarlane, how much influence Casey had over the activities they ostensibly supervised.
It was Casey, North said, who had suggested as early as 1984 that retired Air Force Major General Richard Secord be enlisted as a commercial "cutout" to direct the airlift of military supplies to the contras. It was Casey who encouraged using Secord to handle accounts into which the millions of dollars in profits from the Iran arms sales were deposited. It was also Casey who enthusiastically embraced the idea of using those "residuals" to help the contras. "He referred to it as the ultimate irony," said North. "The ultimate covert operation."
North testified that Casey had given him a ledger in which to record the flow of money to the contras and other secret operations. At times this account contained as much as $175,000 in cash and traveler's checks, kept in North's office.