WASHINGTON — It was one of the most agonizing crises of Ronald Reagan's time in the White House: 39 Americans, seized aboard a hijacked TWA jetliner in June, 1985, were being held captive by Shia Muslim terrorists in Beirut.
For help, Reagan and his top aides turned to an unlikely quarter--Iran. It was Hashemi Rafsanjani, the Speaker of Iran's Parliament and a top lieutenant of the Ayatollah Ruhollah Khomeini, who finally engineered the release of the hostages.
Rafsanjani's success marked a turning point in a still more astonishing twist of U.S. policy: a decision by Reagan to violate his own strict policies against shipping arms to Iran, which was on his own list of countries that supported terrorism. From then on, U.S. sources said, the National Security Council in the White House maintained a clandestine operation for supplying military equipment to Khomeini's radical Islamic regime, which needed it for its war with neighboring Iraq.
Three Americans Freed
That extraordinary operation, in turn, apparently led to the release over the last 14 months of three of the American hostages who had been held for months by Muslim terrorists in Lebanon.
But if the arms deal resulted in freedom for three Americans, it has also left the Administration's anti-terrorism policy in confusion. And it has infuriated U.S. allies who had agreed to cut back their own arms sales to Iran.
For all its global ramifications, it was an operation developed and conducted in the utmost secrecy. During it all, Reagan never gave so much as a hint of what was going on.
"Let me . . . make it plain," he said at the time of the TWA hostage crisis, "that America will never make concessions to terrorists. To do so would only invite more terrorism. Nor will we ask nor pressure any other government to do so. Once we head down that path, there will be no end to it--no end to the suffering of innocent people, no end to the bloody ransom all civilized nations must pay."
But even then, secret talks were under way with Iran. The resulting arms deal, in which Israel bought spare parts for planes and missiles and covertly shipped them on to Iran, was run directly from the White House because officials wanted to keep the operation secret from Congress and the public, the sources said.
A Murky Network
The deal threw top Reagan aides including Robert C. McFarlane, his national security adviser until late last year, into the middle of a murky network of Iranian and Israeli arms dealers. At one point, Rafsanjani told his countrymen last week, McFarlane himself turned up in Tehran with a false Irish passport, a Bible autographed by Reagan and a cake and a brace of pistols as a gift for Iran's leaders.
But the deal also created deep cleavages within the Administration. Secretary of State George P. Shultz, who had been overruled on the issue, said Friday: "I think the policy of not negotiating for hostages is the right policy."
And, as details became known last week after Rafsanjani himself discussed some aspects on Iranian radio, Congress demanded an explanation of not only this covert operation but the disclosure of any other secret foreign projects being run from the White House as well.
"This is a major disaster for the United States," said a senior Shultz aide who objected to the operation when it was first proposed. "It has left us with no coherent policy on terrorism at all."
In 1985, ironically, Shultz and Secretary of Defense Caspar W. Weinberger had only recently patched up a bruising battle over terrorism policy when the first signals arrived--through a variety of intermediaries--that Iran might be interested in talking to the United States about helping to free hostages in Lebanon.
Ties to Syria, Iran
A secretive terrorist group, Islamic Jihad (Islamic Holy War), had seized five Americans in Beirut and vowed to hold them captive until "all Americans leave Lebanon." U.S. intelligence analysts said the group had links to both Syria and Iran, and the Administration had sent messages to both countries urging them to use what influence they had to free the captives.
Even then, U.S. officials say, Iran had sent vague signals that it might be willing to cooperate with the United States on some issues--if the Administration would allow the Tehran regime to buy U.S.-made weapons and spare parts. The Iranians said they at least wanted the release of arms shipments that they had already paid for but that had been impounded by the Jimmy Carter Administration in 1980 after Khomeini's followers seized the U.S. Embassy in Tehran.
In 1984, however, Shultz was intent on cracking down on international terrorism and its Middle Eastern sponsors. Instead of loosening up on Iran's arms, he ordered the remaining loopholes in the U.S. arms embargo closed.
The ayatollah's needs for the U.S.-made arms were immense.