The CIA/Likud Sinking of Jimmy Carter

By Robert Parry (A Special Report)
June 24, 2010

As the Official Story of the 1980 October Surprise case crumbles – with new revelations that key evidence was hidden from investigators of a congressional task force and that internal doubts were suppressed – history must finally confront the troubling impression that remains: that disgruntled elements of the CIA and Israel’s Likud hardliners teamed up to remove a U.S. president from office.

Indeed, it is this disturbing conclusion – perhaps even more than the idea of a Republican dirty trick – that may explain the longstanding and determined cover-up of this political scandal.

Too many powerful interests do not want the American people to accept even the possibility that U.S. intelligence operatives and a longtime ally could intervene to oust a president who had impinged on what those two groups considered their vital interests.

To accept that scenario would mean that two of the great fears of American democracy had come true – George Washington’s warning against the dangers of “entangling alliances” and Harry Truman’s concern that the clandestine operations of the CIA had the makings of an “American Gestapo.”

It is far easier to assure the American people that no such thing could occur, that Israel’s Likud – whatever its differences with Washington over Middle East peace policies – would never seek to subvert a U.S. president, and that CIA dissidents – no matter how frustrated by political constraints – would never sabotage their own government.

But the evidence points in that direction, and there are some points that are not in dispute. For instance, there is no doubt that CIA Old Boys and Likudniks had strong motives for seeking President Jimmy Carter’s defeat in 1980.

Inside the CIA, Carter and his CIA Director Stansfield Turner were blamed for firing many of the free-wheeling covert operatives from the Vietnam era, for ousting legendary spymaster Ted Shackley, and for failing to protect longtime U.S. allies (and friends of the CIA), such as Iran’s Shah and Nicaragua’s dictator Anastasio Somoza.

As for Israel, Likud Prime Minister Menachem Begin was furious over Carter’s high-handed actions at Camp David in 1978 forcing Israel to trade the occupied Sinai to Egypt for a peace deal. Begin feared that Carter would use his second term to bully Israel into accepting a Palestinian state on West Bank lands that Likud considered part of Israel’s divinely granted territory.

Former Mossad and Foreign Ministry official David Kimche described Begin’s attitude in his 1991 book, The Last Option, saying that Israeli officials had gotten wind of “collusion” between Carter and Egyptian President Anwar Sadat “to force Israel to abandon her refusal to withdraw from territories occupied in 1967, including Jerusalem, and to agree to the establishment of a Palestinian state.”

Kimche continued, “This plan – prepared behind Israel’s back and without her knowledge – must rank as a unique attempt in United States’s diplomatic history of short-changing a friend and ally by deceit and manipulation.”

However, Begin recognized that the scheme required Carter winning a second term in 1980 when, Kimche wrote, “he would be free to compel Israel to accept a settlement of the Palestinian problem on his and Egyptian terms, without having to fear the backlash of the American Jewish lobby.”

In his 1992 memoir, Profits of War, Ari Ben-Menashe, an Israeli military intelligence officer who worked with Likud, agreed that Begin and other Likud leaders held Carter in contempt.

“Begin loathed Carter for the peace agreement forced upon him at Camp David,” Ben-Menashe wrote. “As Begin saw it, the agreement took away Sinai from Israel, did not create a comprehensive peace, and left the Palestinian issue hanging on Israel’s back.”

So, in order to buy time for Israel to “change the facts on the ground” by moving Jewish settlers into the West Bank, Begin felt Carter’s reelection had to be prevented. A different president also presumably would give Israel a freer hand to deal with problems on its northern border with Lebanon.

CIA Within the CIA

As for the CIA Old Boys, legendary CIA officer Miles Copeland told me that “the CIA within the CIA” – the inner-most circle of powerful intelligence figures who felt they understood best the strategic needs of the United States – believed Carter and his naïve faith in American democratic ideals represented a grave threat to the nation.

“Carter really believed in all the principles that we talk about in the West,” Copeland said, shaking his mane of white hair. “As smart as Carter is, he did believe in Mom, apple pie and the corner drug store. And those things that are good in America are good everywhere else. …

“Carter, I say, was not a stupid man,” Copeland said, adding that Carter had an even worse flaw: “He was a principled man.”

These attitudes of “the CIA within the CIA” and the Likudniks appear to stem from their genuine beliefs that they needed to protect what they regarded as vital interests of their respective countries. The CIA Old Boys thought they understood the true strategic needs of the United States and Likud believed fervently in a “Greater Israel.”

However, the lingering October Surprise mystery is whether these two groups followed their strongly held feelings into a treacherous bid, in league with Republicans, to prevent Carter from gaining the release of 52 hostages then held in Iran and thus torpedoing his reelection hopes.

Carter’s inability to resolve that hostage crisis did set the stage for Ronald Reagan’s landslide victory in November 1980 as American voters reacted to the long-running hostage humiliation by turning to a candidate they believed would be a tougher player on the international stage.

Reagan’s macho image was reinforced when the Iranians released the hostages immediately after he was inaugurated on Jan. 20, 1981, ending the 444-day standoff.

The coincidence of timing, which Reagan’s supporters cited as proof that foreign enemies feared the new president, gave momentum to Reagan’s larger agenda, including sweeping tax cuts tilted toward the wealthy, reduced government regulation of corporations, and renewed reliance on fossil fuels. (Carter’s solar panels were pointedly dismantled from the White House roof.)

Reagan’s victory also was great news for CIA cold-warriors who were rewarded with the choice of World War II spymaster (and dedicated cold-warrior) William Casey to be CIA director. Casey then purged CIA analysts who were detecting a declining Soviet Union that desired détente and replaced them with people like the young and ambitious Robert Gates, who agreed that the Soviets were on the march and that the United States needed a massive military expansion to counter them.

Further, Casey again embraced old-time CIA swashbuckling in Third World countries and took pleasure in misleading or bullying members of Congress when they insisted on the CIA oversight that had been forced on President Gerald Ford and had been accepted by President Carter. To Casey, CIA oversight became a game of hide and seek.  

As for Israel, Begin was pleased to find the Reagan administration far less demanding about peace deals with the Arabs, giving Israel time to expand its West Bank settlements. Reagan and his team also acquiesced to Israel’s invasion of Lebanon in 1982, a drive north that expelled the Palestine Liberation Organization but also led to the slaughters at the Sabra and Shatila refugee camps.

And, behind the scenes, Reagan gave a green light to Israeli weapons shipments to Iran (which was fighting a war with Israel’s greater enemy, Iraq). The weapons sales helped Israel rebuild its contacts inside Iran and to turn large profits, which were then used to help finance West Bank settlements.

In another important move, Reagan credentialed a new generation of pro-Israeli American ideologues known as the neoconservatives, a move that would pay big dividends for Israel in the future as these bright and articulate operatives fought for Israeli interests both inside the U.S. government and through their opinion-leading roles in the major American news media.

In other words, if the disgruntled CIA Old Boys and the determined Likudniks did participate in an October Surprise scheme to unseat Jimmy Carter, they surely got much of what they were after.

Yet, while motive is an important element in solving a mystery, it does not constitute proof by itself. What must be examined is whether there is evidence that the motive was acted upon, whether Menachem Begin’s government and disgruntled CIA officers covertly assisted the Reagan-Bush campaign in contacting Iranian officials to thwart Carter’s hostage negotiations.

On that point the evidence is strong though perhaps not ironclad. Still, a well-supported narrative does exist describing how the October Surprise scheme may have gone down with the help of CIA personnel, Begin’s government, some right-wing intelligence figures in Europe, and a handful of other powerbrokers in the United States.

Angry Old Boys

Even before Iran took the American hostages on Nov. 4, 1979, disgruntled CIA veterans had been lining up behind the presidential candidacy of their former boss, George H.W. Bush. Casting off their traditional cloak of non-partisanship and anonymity, they were volunteering as foot soldiers in Bush’s campaign.

One joke about Bush’s announcement of his candidacy on May 1, 1979, was that “half the audience was wearing raincoats.”

Bill Colby, Bush’s predecessor as CIA director, said Bush “had a flood of people from the CIA who joined his supporters. They were retirees devoted to him for what he had done” in defending the spy agency in 1976 when the CIA came under heavy criticism for spying on Americans, assassination plots and other abuses.

Reagan’s foreign policy adviser Richard Allen described the group working on the Bush campaign as a “plane load of disgruntled former CIA” officers who were “playing cops and robbers.”

All told, at least two dozen former CIA officials went to work for Bush. Among them was the CIA’s director of security, Robert Gambino, who joined the Bush campaign immediately after leaving the CIA where he oversaw security investigations of senior Carter officials and thus knew about potentially damaging personal information.

Besides the ex-CIA personnel who joined the Bush campaign, other pro-Bush intelligence officers remained inside the CIA while making clear their political preference. “The seventh floor of Langley was plastered with ‘Bush for President’ signs,” said senior CIA analyst George Carver, referring to the floor that housed senior CIA officials.

Carter administration officials also grew concerned about the deep personal ties between the former CIA officers in Bush’s campaign and active-duty CIA personnel who continued to hold sensitive jobs under Carter.

For instance, Gambino, the 25-year CIA veteran who oversaw personnel security checks, and CIA officer Donald Gregg, who served as a CIA representative on Carter’s National Security Council, “are good friends who knew each other from the CIA,” according to an unpublished part of a report by a House task force that investigated the October Surprise issue in 1992. [I found this deleted section – still marked “secret” – in unpublished task force files in 1994.]

‘Blond Ghost’

Perhaps most significantly, Bush quietly enlisted Theodore Shackley, the legendary CIA covert operations specialist known as the “blond ghost.” During the Cold War, Shackley had run many of the CIA’s most controversial paramilitary operations, from Vietnam and Laos to the JMWAVE operations against Fidel Castro’s Cuba.

In those operations, Shackley had supervised the work of hundreds of CIA officers and developed powerful bonds of loyalty with many of his subordinates. For instance, Donald Gregg had served under Shackley’s command in Vietnam.

When Bush was CIA director in 1976, he appointed Shackley to a top clandestine job, associate deputy director for operations, laying the foundation for Shackley’s possible rise to director and cementing Shackley’s loyalty to Bush. When Shackley had a falling out with Carter’s CIA Director Turner in 1979, Shackley quit the agency.

Privately, Shackley believed that Turner had devastated the agency by pushing out hundreds of covert officers, many of them Shackley’s former subordinates.

By early 1980, the Republicans also were complaining that they were being kept in the dark about progress on the Iran hostage negotiations. George Cave, then a top CIA specialist on Iran, told me that the “Democrats never briefed the Republicans” on sensitive developments, creating suspicions among the Republicans.

So, the Republicans sought out their own sources of information regarding the hostage crisis. Shackley began monitoring Carter’s progress on negotiations through his contacts with Iranians in Europe, Cave said.

“Ted, I know, had a couple of contacts in Germany,” said Cave. “I know he talked to them. I don’t know how far it went. … Ted was very active on that thing in the winter/spring of 1980.”

Author David Corn also got wind of the Shackley-Bush connection when he was researching his biography of Shackley, Blond Ghost.

“Within the spook world the belief spread that Shackley was close to Bush,” Corn wrote. “Rafael Quintero [an anti-Castro Cuban with close ties to the CIA] was saying that Shackley met with Bush every week. He told one associate that should Reagan and Bush triumph, Shackley was considered a potential DCI,” the abbreviation for CIA director.

Some of the legendary CIA officers from an even earlier generation, those who had helped overthrow Iran’s elected government in 1953 and put the Shah on the Peacock Throne, also injected themselves into the hostage crisis.

Carter, a ‘Utopian’

Miles Copeland, one of the agency’s old Middle East hands, claimed in his memoir, The Game Player, that he and his CIA chums pondered their own hostage rescue plan while organizing an informal support group for the Bush campaign, called “Spooks for Bush.”

In a 1990 interview, Copeland told me that “the way we saw Washington at that time was that the struggle was really not between the Left and the Right, the liberals and the conservatives, as between the Utopians and the realists, the pragmatists.

“Carter was a Utopian. He believed, honestly, that you must do the right thing and take your chance on the consequences. He told me that. He literally believed that.” Copeland’s deep Southern accent spit out the words with a mixture of amazement and disgust.

Copeland’s contacts at the time included CIA veteran Archibald Roosevelt and former Secretary of State Henry Kissinger – both of whom were close to David Rockefeller whose Chase Manhattan Bank handled billions of dollars in the Shah’s accounts, a fortune that the Iranian mullahs wanted to lay their hands on.

“There were many of us – myself along with Henry Kissinger, David Rockefeller, Archie Roosevelt in the CIA at the time – we believed very strongly that we were showing a kind of weakness, which people in Iran and elsewhere in the world hold in great contempt,” Copeland said.

As Copeland and his friends contemplated what to do regarding the hostage crisis, he reached out to other of his old CIA buddies.

According to The Game Player, Copeland turned to ex-CIA counter-intelligence chief James Angleton. The famed spy hunter “brought to lunch a Mossad chap who confided that his service had identified at least half of the ‘students,’ even to the extent of having their home addresses in Tehran,” Copeland wrote. “He gave me a rundown on what sort of kids they were. Most of them, he said, were just that, kids.”

One of the young Israeli intelligence agents assigned to the task of figuring out who was who in the new Iranian power structure was Ari Ben-Menashe, who was born in Iran but emigrated to Israel as a teen-ager. Not only did he speak fluent Farsi, but he had school friends who were rising within the new revolutionary bureaucracy.

In his memoir, Profits of War, Ben-Menashe offered his own depiction of Copeland’s initiative. Though Copeland was generally regarded as a CIA “Arabist” who had opposed Israeli interests in the past, he was admired for his analytical skills, Ben-Menashe wrote.

“A meeting between Miles Copeland and Israeli intelligence officers was held at a Georgetown house in Washington, D.C.,” Ben-Menashe wrote. “The Israelis were happy to deal with any initiative but Carter’s.

“David Kimche, chief of Tevel, the foreign relations unit of Mossad, was the senior Israeli at the meeting. … The Israelis and the Copeland group came up with a two-pronged plan to use quiet diplomacy with the Iranians and to draw up a scheme for military action against Iran that would not jeopardize the lives of the hostages.”

Arms Dealing

In late February 1980, Seyeed Mehdi Kashani, an Iranian emissary, arrived in Israel to discuss Iran’s growing desperation for spare parts for its U.S.-supplied air force, Ben-Menashe wrote.

Kashani, whom Ben-Menashe had known from their school days in Tehran, also revealed that the Copeland initiative was making inroads inside Iran and that approaches from some Republican emissaries had already been received, Ben-Menashe wrote.

“Kashani said that the secret ex-CIA-Miles-Copeland group was aware that any deal cut with the Iranians would have to include the Israelis because they would have to be used as a third party to sell military equipment to Iran,” according to Ben-Menashe.

In March 1980, the following month, the Israelis made their first direct military shipment to Iran, 300 tires for Iran’s F-4 fighter jets, Ben-Menashe wrote.

Ben-Menashe’s account of these early Israeli arms shipments was corroborated by Carter’s press secretary Jody Powell and Israeli arms dealer William Northrop.

In an interview for a 1991 PBS “Frontline” documentary, Jody Powell told me that “there had been a rather tense discussion between President Carter and Prime Minister Begin in the spring of 1980 in which the President made clear that the Israelis had to stop that [arms dealing], and that we knew that they were doing it, and that we would not allow it to continue, at least not allow it to continue privately and without the knowledge of the American people.”

“And it stopped,” Powell said. At least, it stopped temporarily.

Meanwhile, Carter also was learning that Begin was siding with the Republicans.

Questioned by congressional investigators in 1992, Carter said he realized by April 1980 that “Israel cast their lot with Reagan,” according to notes I found among the unpublished documents in the files of a House task force that had looked into the October Surprise case.

Carter traced the Israeli opposition to his reelection to a “lingering concern [among] Jewish leaders that I was too friendly with Arabs.”

Closer Enemies

The President also may have had political enemies close to his inner circle.

Jamshid Hashemi, an Iranian businessman who was recruited by the CIA in January 1980 along with his brother Cyrus, said that in spring 1980, he encountered Donald Gregg, the CIA officer serving on Carter’s National Security Council staff, at Cyrus’s Manhattan office.

Jamshid Hashemi said his brother Cyrus was playing a double game, officially helping the Carter administration on the hostage crisis but privately collaborating with the Republicans. [For details, see Robert Parry’s Secrecy & Privilege.]

The alleged involvement of Gregg is another highly controversial part of the October Surprise mystery. A tall man with an easy-going manner, Gregg had known George H.W. Bush since 1967 when Bush was a first-term U.S. congressman.

Gregg also briefed Bush when he was U.S. envoy to China. Gregg served, too, as the CIA’s liaison to the Pike Committee investigation when Bush was CIA director.

“Although Gregg was uniformly regarded as a competent professional, there was a dimension to his background that was entirely unknown to his colleagues at the White House, and that was his acquaintance with one of the Republican frontrunners, George Bush,” former Carter NSC official Gary Sick wrote in his book October Surprise.

As the Iran crisis dragged on, Copeland and his group of CIA Old Boys forwarded their own plan for freeing the hostages. However, to Copeland’s chagrin, his plan fell on deaf ears inside the Carter administration, which was developing its own rescue operation.

So, Copeland told me that he distributed his plan outside the administration, to leading Republicans, giving sharper focus to their contempt for Carter’s bungled Iranian strategy.

“Officially, the plan went only to people in the government and was top secret and all that,” Copeland said. “But as so often happens in government, one wants support, and when it was not being handled by the Carter administration as though it was top secret, it was handled as though it was nothing. … Yes, I sent copies to everybody who I thought would be a good ally. …

“Now I’m not at liberty to say what reaction, if any, ex-President [Richard] Nixon took, but he certainly had a copy of this. We sent one to Henry Kissinger. … So we had these informal relationships where the little closed circle of people who were, a, looking forward to a Republican President within a short while and, b, who were absolutely trustworthy and who understood all these inner workings of the international game board.”

Desert One

Encircled by a growing legion of enemies, the Carter administration put the finishing touches on its hostage-rescue operation in April. Code-named “Eagle Claw,” the assault involved a force of U.S. helicopters that would swoop down on Tehran, coordinate with some agents on the ground and extract the hostages.

Carter ordered the operation to proceed on April 24, but mechanical problems forced the helicopters to turn back. At a staging area called Desert One, one of the helicopters collided with a refueling plane, causing an explosion that killed eight American crewmen.

Their charred bodies were then displayed by the Iranian government, adding to the fury and humiliation of the United States. After the Desert One fiasco, the Iranians dispersed the hostages to a variety of locations, effectively shutting the door on another rescue attempt.

By summer 1980, Copeland told me, the Republicans in his circle considered a second hostage-rescue attempt not only unfeasible, but unnecessary. They were talking confidently about the hostages being freed after a Republican victory in November, the old CIA man said.

“Nixon, like everybody else, knew that all we had to do was wait until the election came, and they were going to get out,” Copeland said. “That was sort of an open secret among people in the intelligence community, that that would happen. … The intelligence community certainly had some understanding with somebody in Iran in authority, in a way that they would hardly confide in me.”

Copeland said his CIA friends had been told by contacts in Iran that the mullahs would do nothing to help Carter or his reelection.

“At that time, we had word back, because you always have informed relations with the devil,” Copeland said. “But we had word that, ‘Don’t worry.’ As long as Carter wouldn’t get credit for getting these people out, as soon as Reagan came in, the Iranians would be happy enough to wash their hands of this and move into a new era of Iranian-American relations, whatever that turned out to be.”

In the interview, Copeland declined to give more details, beyond his assurance that “the CIA within the CIA,” his term for the true protectors of U.S. national security, had an understanding with the Iranians about the hostages. (Copeland died on Jan. 14, 1991.)

A Unified Campaign

In summer 1980, Ronald Reagan wrapped up the Republican nomination and offered the vice presidential slot to his former rival, George H.W. Bush. As Bush’s team merged with Reagan’s campaign, so too did Bush’s contingent of CIA veterans.

Reagan’s campaign director William Casey – a spymaster for the World War II-era Office of Strategic Services – also blended in well with the ex-intelligence officers.

Many of the October Surprise allegations have Casey and his longtime business associate John Shaheen, another OSS veteran, meeting with Iranians and other foreigners overseas.

Casey also had secret meetings with Kissinger, according to Casey’s chauffeur, and with banker David Rockefeller and ex-CIA officer Archibald Roosevelt, who had gone to work for Rockefeller, according to the Sept. 11, 1980, visitor log at the Reagan-Bush headquarters in Arlington, Virginia.

On Sept. 16, 1980, five days after the Rockefeller group’s visit to Casey’s office, Iran’s acting foreign minister Sadegh Ghotbzadeh spoke publicly about Republican interference.

“Reagan, supported by Kissinger and others, has no intention of resolving the problem” with the hostages, Ghotbzadeh said. “They will do everything in their power to block it.”

Iranian President Abolhassan Bani-Sadr held a similar opinion from his position in Tehran. In a 1992 letter to the House task force on the October Surprise case, Bani-Sadr wrote that he learned of the Republican back-channel initiative in summer 1980 and received a message from an emissary of Ayatollah Ruhollah Khomeini: The Reagan campaign was in league with pro-Republican elements of the CIA in an effort to undermine Carter and wanted Iran’s help.

Bani-Sadr said the emissary “told me that if I do not accept this proposal they [the Republicans] would make the same offer to my rivals.”

The emissary added that the Republicans “have enormous influence in the CIA,” Bani-Sadr wrote. “Lastly, he told me my refusal of their offer would result in my elimination.”

Bani-Sadr said he resisted the GOP scheme, but the plan ultimately was accepted by Ayatollah Khomeini, who appeared to have made up his mind around the time of Iraq’s invasion of Iran in mid-September 1980.

However, still sensing a political danger if Carter got the Iranians to change their minds, the Republicans opened the final full month of the campaign by trying to make Carter’s hostage talks look like a cynical ploy to influence the election’s outcome.

On Oct. 2, Republican vice-presidential candidate Bush brought up the issue with a group of reporters: “One thing that’s at the back of everybody’s mind is, ‘What can Carter do that is so sensational and so flamboyant, if you will, on his side to pull off an October Surprise?’ And everybody kind of speculates about it, but there’s not a darn thing we can do about it, nor is there any strategy we can do except possibly have it discounted.”

Multiple Channels

One congressional investigator who was involved in the Iran-Contra and the October Surprise inquiries told me recently that his conclusion was that the Republicans were pursuing every avenue possible to reach the Iranian leadership to make sure Carter’s hostage negotiations failed.

Former Israeli intelligence officer Ben-Menashe, in his book and in sworn testimony, said the ultimately successful channel was one involving both former and current CIA officers, working with French intelligence for the security of a final meeting in Paris and with Israelis who were given the task of delivering the payoff in weapons shipments and money to Iran.

The key meeting allegedly occurred on the weekend of Oct. 18-19, 1980, between high-level representatives of the Republican team and the Iranians. Ben-Menashe said he was part of a six-member Israeli support delegation for the meeting at the Ritz Hotel in Paris.

In his memoir, Ben-Menashe said he recognized several Americans, including Republican congressional aide Robert McFarlane and CIA officers Robert Gates (who had served on Carter’s NSC staff and was then CIA Director Turner’s executive assistant), Donald Gregg (another CIA designee to Carter’s NSC) and George Cave (the agency’s Iran expert).

Ben-Menashe said Iranian cleric Mehdi Karrubi, then a top foreign policy aide to Ayatollah Khomeini, arrived and walked into a conference room.

“A few minutes later George Bush, with the wispy-haired William Casey in front of him, stepped out of the elevator. He smiled, said hello to everyone, and, like Karrubi, hurried into the conference room,” Ben-Menashe wrote.

Ben-Menashe said the Paris meetings served to finalize a previously outlined agreement calling for release of the 52 hostages in exchange for $52 million, guarantees of arms sales for Iran, and unfreezing of Iranian monies in U.S. banks. The timing, however, was changed, he said, to coincide with Reagan’s expected Inauguration on Jan. 20, 1981.

Though the alleged participants have denied taking part in such a meeting, the alibis cited by the Americans have proved porous. For instance, Gregg produced a photograph of himself in a bathing suit on a beach with the processing date stamped on the back, “October 1980.”

There have been others reasons to doubt their innocence. An FBI polygrapher working for Iran-Contra special prosecutor Lawrence Walsh’s investigation asked Gregg in 1990, “were you ever involved in a plan to delay the release of the hostages in Iran until after the 1980 Presidential election?” Gregg’s negative answer was deemed deceptive. [See the Final Report of the Independent Counsel for Iran/Contra Matters, Vol. I, 501]

Corroboration

Meanwhile, other evidence has surfaced supporting Ben-Menashe’s testimony.

For instance, Chicago Tribune reporter John Maclean, son of author Norman Maclean who wrote A River Runs Through It, confirmed that he was told by a well-placed Republican source on that weekend in October 1980 that Bush was flying to Paris for a clandestine meeting with a delegation of Iranians about the American hostages.

David Andelman, the biographer for Count Alexandre deMarenches, then head of France’s Service de Documentation Exterieure et de Contre-Espionage (SDECE), testified to the House task force that deMarenches told him that he had helped the Reagan-Bush campaign arrange meetings with Iranians on the hostage issue in summer and fall of 1980, with one meeting in Paris in October.

Andelman said deMarenches insisted that the secret meetings be kept out of his memoir because the story could otherwise damage the reputations of his friends, William Casey and George H.W. Bush.

The allegations of a Paris meeting also received support from several other sources, including pilot Heinrich Rupp, who said he flew Casey from Washington’s National Airport to Paris on a flight that left very late on a rainy night in mid-October 1980.

Rupp said that after arriving at LeBourget airport outside Paris, he saw a man resembling Bush on the tarmac. The night of Oct. 18 indeed was rainy in the Washington area. Also, sign-in sheets at the Reagan-Bush headquarters in Arlington, Virginia, placed Casey within a five-minute drive of National Airport late that evening.

There were other bits and pieces of corroboration about the Paris meetings.

A French arms dealer, Nicholas Ignatiew, told me in 1990 that he had checked with his government contacts and was told that Republicans did meet with Iranians in Paris in mid-October 1980.

A well-connected French investigative reporter Claude Angeli said his sources inside the French secret service confirmed that the service provided “cover” for a meeting between Republicans and Iranians in France on the weekend of October 18-19. German journalist Martin Kilian had received a similar account from a top aide to intelligence chief deMarenches.

As early as 1987, Iran’s ex-President Bani-Sadr had made similar claims about a Paris meeting.

Finally, a classified report from the Russian government regarding what its intelligence files showed about the October Surprise issue stated matter-of-factly that Republicans held a series of meetings with Iranians in Europe, including one in Paris in October 1980.

“William Casey, in 1980, met three times with representatives of the Iranian leadership,” the Russian report said. “The meetings took place in Madrid and Paris.”

At the Paris meeting in October 1980, “R[obert] Gates, at that time a staffer of the National Security Council in the administration of Jimmy Carter, and former CIA Director George Bush also took part,” the report said.

“In Madrid and Paris, the representatives of Ronald Reagan and the Iranian leadership discussed the question of possibly delaying the release of 52 hostages from the staff of the U.S. Embassy in Teheran.”

(The Russian report had been requested by Rep. Lee Hamilton, D-Indiana, as part of the 1992 task force investigation of the October Surprise case. It arrived on Jan. 11, 1993, just two days before the task force was to release its own report rejecting the October Surprise suspicions.

(According to Hamilton and task force chief counsel Lawrence Barcella, the startling Russian report may never have been shown to Hamilton, until I sent him a copy this spring. In recent interviews, Hamilton told me, “I don’t recall seeing it,” and Barcella said in an e-mail that he didn’t “recall whether I showed [Hamilton] the Russian report or not.”[See Consortiumnews.com’s “Key October Surprise Evidence Hidden.”])

Last-Minute Nerves

Despite the alleged Paris agreement, the Reagan-Bush campaign remained nervous about the possibility that Carter might still arrange a pre-election hostage release.

The Reagan-Bush campaign maintained a 24-hour Operations Center, which monitored press wires and reports, gave daily press briefings and maintained telephone and telefax contact with the candidate’s plane, according to a secret draft report of the House task force, which added:

“Many of the staff members were former CIA employees who had previously worked on the Bush campaign or were otherwise loyal to George Bush.”

Bush and Shackley took personal responsibility for making sure the Republican campaign was not caught off guard.

According to Richard Allen’s handwritten notes for Oct. 27, 1980, Bush called Allen at 2:12 p.m. as Bush was heading off to campaign in Pittsburgh. Bush had gotten an unsettling message from former Texas Gov. John Connally, the ex-Democrat who had switched to the Republican Party during the Nixon administration. Connally said his oil contacts in the Middle East were buzzing with rumors that Carter had achieved the long-elusive breakthrough on the hostages.

Bush ordered Allen to find out what he could about Connally’s tip. Allen was to pass on any new details to two of Bush’s aides. According to the notes, Allen was to relay the information to “Ted Shacklee [sic] via Jennifer.”

In a “secret” 1992 deposition to the House October Surprise task force, Allen said the Jennifer was Jennifer Fitzgerald, Bush’s longtime assistant including during his year as director of the CIA. Allen testified that “Shacklee” was Theodore Shackley, the famous CIA covert operations specialist, the “blond ghost.” [To see Allen’s notes, click here.]

Yet, despite the last-minute GOP worries, Carter failed to get the hostages out. The coincidence that the anniversary of the hostage-taking fell on Election Day 1980 further damaged Carter’s hopes as Americans were forced to relive the humiliations of the previous year.

Reagan romped to victory in a landslide, winning 44 states and bringing with him a Republican Senate. Among the Democrat casualties were key figures in efforts to rein in the powers of the imperial presidency – and of the CIA – including Frank Church of Idaho, Birch Bayh of Indiana and George McGovern of South Dakota.

In retrospect, some of Carter’s negotiators felt they should have been much more attentive to the possibility of Republican sabotage. “Looking back, the Carter administration appears to have been far too trusting and particularly blind to the intrigue swirling around it,” said former NSC official Gary Sick.

Tough Talk

As the Inauguration neared, Republicans talked tough, making clear that Ronald Reagan wouldn’t stand for the humiliation that the nation endured under Jimmy Carter. The Reagan-Bush team intimated that Reagan would deal harshly with Iran if it didn’t surrender the hostages.

A joke making the rounds of Washington went: “What’s three feet deep and glows in the dark? Teheran ten minutes after Ronald Reagan becomes President.”

On Inauguration Day, Jan. 20, 1981, just as Reagan was beginning his inaugural address, word came from Iran that the hostages were freed. The American people were overjoyed.

Privately, some Reagan insiders laughed about their October Surprise success. For instance, Charles Cogan, a high-ranking CIA officer, told the House task force in 1992 that he attended a 1981 meeting at CIA headquarters between Casey and one of David Rockefeller’s top aides, Joseph V. Reed, who had been appointed to be Ambassador to Morocco.

Cogan testified that Reed joked about having blocked Carter’s hostage release. A task force investigator, who spoke with Cogan in a less formal setting, said Reed’s wording was, “We fucked Carter’s October Surprise.”

In the months and the years that followed, many of the key figures in the October Surprise mystery saw their career paths veer steeply upward.

Besides Casey’s appointment to head the CIA, Gregg became Vice President Bush’s national security adviser. Robert McFarlane later became Reagan’s NSC adviser. Though relatively young, Robert Gates vaulted up the CIA’s career ladder, becoming head of the analytical division and then deputy director. (He is now Barack Obama’s Secretary of Defense.)

As for Israel and Iran, the arms network flowed with weapons to Iran and millions of dollars in profits back to Israel, with some of the money going build new settlements in the West Bank. In summer 1981, this hidden Israeli-Iranian pipeline slipped briefly into public view.

On July 18, 1981, an Israeli-chartered plane was shot down after straying over the Soviet Union. In a PBS interview nearly a decade later, Nicholas Veliotes, Reagan’s assistant secretary of state for the Middle East, said he looked into the incident by talking to top administration officials who insisted that the State Department issue misleading guidance to the press.

“It was clear to me after my conversations with people on high that indeed we had agreed that the Israelis could transship to Iran some American-origin military equipment,” Veliotes said.

In checking out the Israeli flight, Veliotes came to believe that the Reagan camp’s dealings with Iran dated back to before the 1980 election.

“It seems to have started in earnest in the period probably prior to the election of 1980, as the Israelis had identified who would become the new players in the national security area in the Reagan administration,” Veliotes said. “And I understand some contacts were made at that time.”

In the mid-1980s, many of the same October Surprise actors became figures in the Iran-Contra scandal, another secret arms-for-hostages scheme with Iran that was revealed in late 1986, despite White House denials.

According to official Iran-Contra investigations, the plot to sell U.S. weapons to Iran for its help in freeing American hostages then held in Lebanon involved Cyrus Hashemi, John Shaheen, Theodore Shackley, William Casey, Donald Gregg, Robert Gates, Robert McFarlane, George Cave, Ronald Reagan and George H.W. Bush.

Loony Bin

Yet, even as the cover-up of the Iran-Contra operations crumbled, key figures in Washington battled to keep the even more explosive October Surprise suspicions relegated to the loony bin of conspiracy theories, not to be taken seriously by the American people.

By the time the October Surprise case was gaining traction in 1991, neoconservatives had established themselves as important gatekeepers in the U.S. news media. Controversies that threatened to put Israel and Likud in a negative light were hotly contested.

So, in fall 1991, as Congress was deliberating whether to conduct full investigations of the October Surprise issue, Steven Emerson, a journalist with close ties to Likud, produced a cover story for the neoconservative New Republic claiming to prove the allegations were a “myth.”

Almost simultaneously, Newsweek published its own cover story also attacking the October Surprise allegations. The article, I was told, had been ordered up by executive editor Maynard Parker who was a close associate of Henry Kissinger and was known inside Newsweek as a big admirer of prominent neocon Elliott Abrams.

The two articles were influential in shaping Washington’s conventional wisdom, but they were both based on a misreading of attendance documents at a London historical conference which William Casey had gone to in July 1980.

The two publications put Casey at the conference on one key date – thus supposedly proving he could not have attended one of the Madrid meetings with Iranian emissaries. However, after the two stories appeared, follow-up interviews with conference participants, including historian Robert Dallek, conclusively showed that Casey wasn’t there.

Veteran journalist Craig Unger, who had worked on the Newsweek cover story, said the magazine knew the Casey alibi was bogus but still used it. “It was the most dishonest thing that I’ve been through in my life in journalism,” Unger later told me.

However, even though the Newsweek and New Republic stories had themselves been debunked, that didn’t stop other neoconservative-dominated publications, like the Wall Street Journal, from ladling out ridicule on anyone who dared take the October Surprise case seriously.

Emerson also was a close friend of Michael Zeldin, the deputy chief counsel for the House investigative task force. Though the task force jettisoned Emerson’s bogus Casey alibi, House investigators told me that Emerson frequently visited the task force’s offices and advised Zeldin and others how to read the October Surprise evidence.

Subsequent examinations of Emerson’s peculiar brand of journalism (which invariably toed the Likud line and often demonized Muslims) revealed that Emerson had financial ties to right-wing funders such as Richard Mellon Scaife and had hosted right-wing Israeli intelligence commander Yigal Carmon when Carmon came to Washington to lobby against Middle East peace talks.

In 1999, a study of Emerson’s history by John F. Sugg for Fairness and Accuracy in Reporting’s magazine “Extra!” quoted an Associated Press reporter who had worked with Emerson on a project as saying of Emerson and Carmon: “I have no doubt these guys are working together.”

The Jerusalem Post reported that Emerson has “close ties to Israeli intelligence.” And “Victor Ostrovsky, who defected from Israel’s Mossad intelligence agency and has written books disclosing its secrets, calls Emerson ‘the horn’ — because he trumpets Mossad claims,” Sugg reported.

Besides Emerson’s cozy relationship with task force deputy counsel Zeldin, Zeldin’s boss, chief counsel Lawrence Barcella, was a close personal friend of another influential neocon, Michael Ledeen, who was linked to the October Surprise mystery in the secret draft report prepared by Barcella’s staff.

However, after speaking with Ledeen, Barcella deleted references to his friend from the final report, the one that was issued publicly. [See Consortiumnews.com’s “October Surprise Crystal Ball.”]

Barcella also was the person inside the task force who apparently decided to withhold the damning Russian report from task force chairman Lee Hamilton.

Conflicts

In other words, a key “journalist” who supposedly debunked the October Surprise investigation is now recognized as something of a Likud propagandist, and the two lead investigators for the task force allowed neoconservative friends to influence the course of the inquiry.

However, even as Likud operatives and allies worked to derail any serious investigation, one top Likud official was more forthcoming.

In 1993, I took part in an interview with former Israeli Prime Minister Yitzhak Shamir in Tel Aviv during which he said he had read Gary Sick’s 1991 book, October Surprise, which made the case for believing that the Republicans had intervened in the 1980  hostage negotiations to disrupt Carter’s reelection.

With the topic raised, one interviewer asked, “What do you think? Was there an October Surprise?”

“Of course, it was,” Shamir responded without hesitation. “It was.” Later in the interview, Shamir, who succeeded Begin as prime minister in the 1980s, seemed to regret his frankness and tried to backpedal on his answer, but his confirmation remained a startling moment.

The current knock on the October Surprise story is that it’s now ancient history and that it’s wrong to dig up unpleasant facts about the late President Ronald Reagan, who has become something of an icon on the Right and someone that MSNBC’s Chris Matthews recently deemed “one of the all-time greats” among presidents.

Further, Jimmy Carter is held in disdain by many Washington insiders, considered a “failed president.” In other words, the prevailing view is that things worked out just fine in replacing Carter with Reagan no matter how it was done and it makes no sense to rehash any of this unpleasantness.

However, there is another way to read the history: If Carter had freed the hostages and won a second term, the United States might have continued on a path toward alternative energy, the federal deficit would not have soared, and deregulation of corporations would not have opened the environment and the financial sector to such dangers.

Further, the United States might not have embarked on a massive military buildup or engaged in the aggressive intelligence operations that went with it. And, Israel might have been pushed into an equitable peace with its Palestinian neighbors three decades ago, rather than pursuing a settlement policy that now makes such an agreement close to impossible.

Possibly even more important, if the sabotaging of Carter’s reelection in 1980 had failed or at least if it had been exposed in the 1990s, the United States might now enjoy a much healthier democracy – based on hard truths, not comforting illusions.

[For the most detailed account of the October Surprise case, see Robert Parry’s Secrecy & Privilege. It’s also available as part of a three-book set for only $29, click here.]

Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & ‘Project Truth’ are also available there. Or go to Amazon.com.