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The Iran Deception : REAGAN'S GREATEST CRISIS : CHAPTER 10 : Looking for the 'Smoking Gun'

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.

The dirt arena at the rodeo grounds in Twin Falls, Ida., was decked out with old wagon wheels, fence posts and pumpkins. More than 5,000 people were on their feet cheering. At least 2,000 more stood outside, listening to loudspeakers. "We love Ronnie!" they chanted. "We love Ronnie!"

The President rode to the platform on a buckboard: part Gary Cooper; part John Wayne.

"You know," Ronald Reagan told the campaign rally, one of more than a dozen on a national pre-election swing aimed vainly at retaining Republican control of the Senate, "America used to wear a 'Kick Me' sign around its neck. . . . (But) today every nickel-and-dime dictator around the world knows that if he tangles with the United States of America he will have a price to pay."

It was early November, 1986. Reagan was trying one more time to do what needed to be done: sell the Reagan Revolution.

Half a world away, two foot soldiers of Khomeini's Islamic revolution had slipped into Beirut from Syria and were quietly making the rounds of local newspapers peddling something of their own. They had a story that could blow the cover off America's secret arms-for-hostages deals and destroy the U.S. effort to open a dialogue with "moderate" Iranians.

The story also would demolish Reagan's claims that a "strong and proud and free" America did not bargain with terrorists.

The two men made their way through the narrow, war-scarred streets of the old Museitbeh quarter, just west of the Green Line that divides Beirut into its Muslim and Christian sectors. They arrived at the office of Hassan Sabra, 38-year-old editor of the pro-Syrian magazine Al Shiraa.

They closeted themselves with Sabra and discussed the story for three hours.

In a way, the account seemed to verge on fantasy. It was about Robert McFarlane's trip to Tehran.

A devout Shia Muslim and disciple of Iran's revolution, Sabra knew his sources from the days of the Shah, when he had visited Khomeini in his Paris exile. He trusted them and called them "my friends" in comments to reporters later.

A decision to publish the story would be dangerous, particularly after the kidnap threat Sabra had received only a week before. But to him, the news had to be told. Weeks later, Reagan would call Sabra's little newsmagazine "that rag in Beirut." But Sabra would point to his scoop as "the greatest achievement of my life."

Reporters in Beirut picked up the Al Shiraa report on Nov. 2, the day David Jacobsen was released. The State Department, which did not know of McFarlane's trip, insisted that Sabra's story was not true. But then, in Tehran, Parliament Speaker Rafsanjani said it was.

On Nov. 4, the day the Republicans would lose their hold on the Senate, John Poindexter was flying back to Washington with Reagan on Air Force One. It was his job to draft the Administration's official response to the rising chorus of questions about the Al Shiraa story and Rafsanjani's speech. "As long as Iran advocates the use of terrorism," Poindexter wrote in longhand, "the U.S. arms embargo will continue." Technically, at least, that might be true, but it was far from the whole truth.

American newspapers began reporting more of the story two days later.

What followed, said Sen. Paul Laxalt, the Nevada Republican who is Reagan's closest friend on Capitol Hill, amounted to "Chinese water torture." And it came from all sides.

There was an uproar on Capitol Hill and a barrage of demands for a full-blown investigation. At the Pentagon, the Joint Chiefs of Staff complained they had "zero knowledge" of the secret shipments to Iran. On national television, Secretary of State Shultz made no secret of his feelings about the plan. He was reported to be considering resigning.

The White House thought it could contain the uproar, just as it had deftly changed the public's perception of the President's performance at the arms control summit with the Soviets in Iceland only a few weeks before. The idea was to draw upon a beloved President's huge store of personal credibility, the same warm relationship with the country that had generated the emotional outpouring in Twin Falls before the election.

Reagan took to television twice in four days. He acknowledged an 18-month "secret diplomatic initiative," but insisted, "We did not, repeat, did not, trade weapons or anything else for hostages, nor will we."

But the damage-control effort faltered, in part because the accounts of what had happened from various quarters of the Administration were loaded with inconsistencies. In one particularly embarrassing instance, the White House had to issue a "clarification" moments after the end of a press conference in which Reagan insisted that no third country was involved in the shipments.

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