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The Iran Deception : REAGAN'S GREATEST CRISIS : CHAPTER 8 : 'America Cannot Do a Damn Thing'

December 28, 1986

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.

Shah Mohammed Reza Pahlavi and all his billions could not erase Tehran's 800-year history as one of the earth's ugliest cities. Set on a sloping plain that was prone to flooding, it had been plagued through centuries of shifting seasons by mud and dust, its architecture even in ancient times as sere as the landscape. And now, as their unmarked Israeli jet plowed through the brown smog on approach to Mehrabad International Airport, Bud McFarlane and Ollie North could easily have observed with satisfaction that the Ayatollah had done nothing to improve the situation.

The airport was ringed by faceless concrete apartment buildings. Many, left half-finished since the fall of the Shah, teemed with squatters. The narrow streets, hopelessly choked with jitneys, were lined on both sides by drainage ditches.

June was but two days away, and Tehran was crawling toward a torrid summer. Those of the city's 5 million residents who could afford it were moving north for the season to the cooler foothills of the Elburz Mountains, where the Ayatollah Khomeini lives in a villa ringed by anti-aircraft guns.

The airport itself is modern, bustling, even a little festive, right down to the gigantic, permanent banner strung outside the terminal in view of arriving passengers. Those on the jet did not have to rely on retired CIA agent George Cave, a fluent Farsi speaker who had come along as a translator, to see that the greeting was anything but hearty.

"America Cannot Do a Damn Thing," the banner said--in English and Farsi both.

McFarlane did not need that. By his own later account, he had early misgivings about this trip. They arose when he boarded the jet in Israel and discovered--to what he has said was his surprise--that the aircraft was crammed with 208 boxes of Hawk missile repair kits and other items.

Days before, according to Transportation Department records, two Southern Air Transport Boeing 707s had ferried these items to Tel Aviv in the second American airlift of the year from Kelly Air Force Base; in Tel Aviv they had been unloaded and transshipped by the Israelis. McFarlane and North had joined up there.

McFarlane had been told in April that the Iranian "moderates" were buying U.S. weapons, according to government sources. He simply had not expected to deliver them personally. If everyone followed the script North outlined en route to Tehran, however, the ignominy of doing duty as an arms huckster instead of a global strategist just might be worth it.

By North's scenario, this time--unlike the others--Islamic Jihad would free the five hostages it still held. There was a schedule for the release, North told McFarlane; the moderates had pledged to it. And if the arms deal did not seal the matter, North had another trump in his deck: H. Ross Perot, the Texas billionaire who had rescued his company's employees from Tehran after the Shah's 1979 downfall. Five days before, Perot had dispatched a boat and $2 million in cash to Cyprus to ransom the Americans if necessary.

It was not the first time Perot had offered to write checks for the freedom of U.S. hostages. At North's request, officials said, he had earlier agreed to put up money to ransom Buckley from captivity, if that could be arranged, and he had worked to free other captives in Lebanon, Africa and Italy as well. North met Perot when the Texas businessman served on a White House intelligence advisory board, and the two had become friends--as well as collaborators on hostage matters.

The White House later would deny it knew of the ransom plans, which appeared incompatible with the President's adamantly stated refusal to "cave in to terrorist demands." But Perot would differ about what senior White House officials knew: "My sense has always been," he told ABC News, "that the people who do these kinds of things in the government are very meticulous in getting approval for their activities."

McFarlane, North and Cave were joined by Teicher, the National Security Council's man for Middle East affairs.

Also on the flight, disguised as a crew member, was Nir, the Israeli counterterrorism adviser.

Those who went to Tehran were to meet people McFarlane would call "officials of high influence" and whom Iranian leaders would subsequently describe as low-level lackeys. To break the ice, the Americans bore gifts: a Bible, two pistols and a now-notorious cake--reportedly baked in Israel before takeoff--that was either topped with a decorative key or unadorned but offered as a symbolic key to friendship, depending on the conflicting accounts about such embarrassing details that filtered out later.

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