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The Iran Deception : REAGAN'S GREATEST CRISIS : CHAPTER 3 : Enough to Make a Middleman Smile

December 28, 1986

The third man was Manucher Ghorbanifar, a Paris-based Iranian businessman who was probably regarded by each of the other two secretly struggling partners as his own angel of opportunity. Khashoggi and Hashemi may already have been silently plotting how to deal directly with Ghorbanifar while cutting each other out. With close ties to high-ranking officials in the Iranian government, including Prime Minister Hussein Moussavi and the Iranian purchasing agents headquartered in Hamburg, Ghorbanifar seemed able to move easily in and out of Iran. And he had shown a surprising knack for playing on both sides of the revolution.

Before 1979, sources say, he was an agent of Savak, the Shah's secret police, and a partner in Starline Iran, a joint Israeli-Iranian shipping firm that moved oil from Iran to Israel. After Khomeini came to power, Ghorbanifar was linked to an unsuccessful military coup against the Ayatollah and fled the country in 1980. But somehow Ghorbanifar's relations with the Khomeini regime later became good--so good that some Iranian Air Force officers who plotted the coup now say they are suspicious of his previous loyalty.

At the time of the Hamburg meetings, Ghorbanifar claimed to be head of Iranian intelligence operations in Europe. He had been introduced to Khashoggi and Hashemi by Furmark, Casey's friend.

The arms dealers, Ghorbanifar later told an interviewer, talked at length about U.S.-Iranian relations. Ghorbanifar said Iran might be willing to warm up relations in return for access to American weapons. Khashoggi had already heard from Israeli arms merchant Nimrodi that the United States was interested in finding an intermediary--Iran seemed a likely candidate--to help free the American hostages in Lebanon.

Anyone could see the opportunity: Two hostile and desperate nations were groping for a way to do business discreetly together. It was enough to make a middleman smile.

At the waterfront warehouse, the men selling the late Shah's rugs smiled, too--and waited patiently for these wealthy men to make an offer. Finally, only Khashoggi made a purchase--buying two pieces the size of bath mats. It was a disappointing day at the rug sale, but the arms bazaar was still open.

Not long after the Hamburg meeting, Khashoggi and Hashemi flew to Israel. Outside of the United States, Israel controlled the largest stockpile of American-made weapons and spare parts in the world. The arms merchants met with Peres, though details of what was said are unknown.

That was as far as it all went for Hashemi; soon afterward Khashoggi somehow maneuvered him aside. But by the end of August, 1985, Khashoggi and Ghorbanifar had brokered an initial Israeli shipment of U.S. anti-tank missiles, called TOWs, for Iran.

Fateful as that August shipment would become for the leaders of the United States and Israel, it did not get in Khashoggi's way when it came to throwing a party in late July: He marked his 50th birthday with a weeklong soiree at an estate in Marbella, Spain. According to people who attended, more than 500 guests were flown in from around the world and the costs--as high as $5 million by some estimates--were applied to Khashoggi's charge accounts with airlines, hotels and restaurants. Actress Brooke Shields was there with her mother. And Maxwell Rabb, the U.S. ambassador to Rome. And Saudi sheiks. German industrialists.

The final dinner included a troupe of British actors--horse-mounted knights in full armor, big-bosomed wenches and "King Henry VIII" himself. At the appointed hour, "King Henry" announced that he was abdicating; Khashoggi was escorted to a throne amid great pomp.

More important to the man on his way to the throne was his still-secret blessing from the White House. For, unlike any business rival in the arms bazaar, Khashoggi had sewn up an official U.S. arms account with Iran.

It was enough to make "King Adnan" grin.

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