After six years of magic, President Reagan broke the spell. By deceiving the nation, he and those around him badly damaged his presidency. This traumatic tale is still unfolding, with no end in sight. This is how it developed.
Behind his back, some of his Israeli friends called him "The Wig." As he sat in the office of President Reagan's national security adviser early in July of 1985--at about the time arms merchants Khashoggi, Hashemi and Ghorbanifar were meeting in Hamburg--his old friend Bud McFarlane could see why. David Kimche's copper-colored toupee was perched a few inches above his glasses.
Kimche, a career government official who was serving the government of Shimon Peres as director general of the Foreign Ministry, had just flown from Jerusalem to Washington. A former Mossad agent who made no secret of his ambition to become director of that intelligence agency, he had come to see McFarlane on orders of the Israeli prime minister.
In a proper British accent, Israeli sources said, Kimche spelled out Peres' concern: Israel wanted to know whether American consultant Michael Ledeen had borne the weight of the White House behind him when he had come to Jerusalem earlier in the spring to broach the idea of renewing ties with Iran. If so, Kimche had been told to deliver to McFarlane a document and a message--both, he thought, of great importance to Israel and to its ally.
The message was the one that Israeli arms merchant Nimrodi had gotten a few weeks before from a leader in the Iranian government, who would go unnamed: Unless the United States could reach some sort of rapprochement with Tehran before the death of Ayatollah Khomeini, Iran was doomed. And the Ayatollah was becoming frail.
"It (Iran) will become a second Lebanon, in larger and more dangerous dimensions" once Khomeini is gone, Nimrodi later wrote that the Iranian had told him. "Or in a few months--two years at most--Iran will become part of communist Russia."
That was the stick.
Having waved it, Israeli sources said, Kimche offered McFarlane a carrot--a list supplied by another arms merchant, Ghorbanifar, of moderate-minded Iranian leaders. These "moderates," Kimche said, longed for closer ties to the United States--and could move the Iranian government toward their view.
Moreover, McFarlane later testified, there was the prospect of another prize: To earn America's trust, the moderates "would use their influence with radical elements within Lebanon" to free the American hostages who weighed so heavily on the President's mind.
Ghorbanifar, Kimche said, was the key: He knew the "moderate" mullahs on this list; he could speak for them. He had Israel's trust, too.
McFarlane shipped the list to Casey at the CIA for checking. Ghorbanifar, however, merited some additional steps.
The CIA knew Ghorbanifar by reputation--and perhaps by personal dealings, as well. And what dispassionate analysts saw was an Iranian Barnum who hardly fit the call for an honest middleman in a sensitive arrangement. CIA agents tracked Ghorbanifar down and asked him to submit to a lie-detector test.
Certainly, he replied.
The CIA wired Ghorbanifar to a polygraph--not once, but several times. The results were astonishing. On one of these tests, investigators later were told, Ghorbanifar was asked 15 questions--and was rated truthful on just one: his name.
"He broke the box," one official said later. Added another, "The agency considered him a chronic liar."
This news left Casey undeterred. The Israelis, after all, said Ghorbanifar was a miracle man. Moreover, Casey's analysts tore apart and reassembled the rest of Kimche's arguments, ran down the names on the list of moderates, and apparently found them solid.
The CIA chief, according to his subsequent testimony to congressional committees, ordered Ghorbanifar placed under surveillance and told the National Security Agency to send to his desk any intercepts involving Ghorbanifar and Iranian leaders. And Casey directed that the State Department, which usually received all National Security Agency intercepts, be cut out.
In late July, McFarlane took the matter of renewing ties with Iran to the President. The Israelis, he said, were ready to move ahead, if the President agreed.
There was more work to be done. Kimche met with the Iranians and returned to Washington in early August.
The "moderates," Kimche told McFarlane at that meeting, now needed a beachhead with their radical brethren. Supplying "modest quantities of military hardware," McFarlane later said he was told, might bolster the moderates' case. How, Kimche asked, would the White House feel about that?
Diplomatic romancing was one matter; this suggestion was altogether different. Iran was a terrorist nation--legally, morally, and most of all, politically. The President's signature was on a White House order barring the shipment of any U.S.-made arms to Iran. Congress had outlawed most military sales to the Ayatollah. To most Americans, Iran was the incarnation of ruthless evil.