PROFITS OF WAR -- INSIDE THE SECRET U.S.-ISRAELI ARMS NETWORK

12.  Coverup

THE SUMMONS TO Mossad Director Nachum Admoni's office was urgent. There had been a flurry of activity in Israel at the end of July 1986 with the visit of Vice President George Bush, and I knew that the call from the director's chief of staff had to have some connection with that.

Nachum Admoni was a very intelligent, soft-spoken man who could have passed more easily for an accountant than for the head of a vast killing machine. Politically, he did not identify with either of the two factions in the government. He was the first Mossad chief to be appointed from the bureaucracy, as opposed to the military. He got the job because the man in line to take over the post, Gen. Yekutiel Adam, was assassinated by his own people.

After being selected by Prime Minister Menachem Begin in 1981, Adam lost a number of top-secret documents when he left his briefcase behind in a Los Angeles gas station. Fortunately, it was handed over to the Los Angeles police, but there was a huge internal row about the affair. The Mossad people tried unsuccessfully to use it to stop his appointment.

On his return to Israel from the U.S., Gen. Adam went on an inspection tour of Lebanon, where he was taken to an empty building that commanded a good view of southern Lebanon. As he stood on the terrace peering through his binoculars, the building received a direct hit from Israeli artillery, instantly killing him and several Israeli officers with him. While some believed it was a mistake, according to Rafi Eitan it was an inside job. The old guard in Mossad were afraid of him because he had already told people in the Prime Minister's Office that he would make a clean sweep of the intelligence network.

With him gone, Begin appointed a professional Mossad man, a bureaucrat, who would slowly take away much of Mossad's power and move it to Military Intelligence. Begin had been inspired to do this following the intelligence failures of the October 1973 war against the Egyptians and the Syrians. Admoni turned out to be all that was expected of him. He ran a tight ship, even though his powers were less than those of my boss, the director of the Israel Defense Forces/Military Intelligence. However, on the subject of arms to Iran, the IDF/MI director and the Mossad chief had equal power.

Now, as I sat before Admoni, the seriousness in his face confirmed my hunch that this was important.

"Ari, what I'm about to tell you is of the highest secrecy," he said. "In short, Vice President George Bush wants a full briefing on the intelligence network's arms sales. He has asked to meet the people involved in these sales."

"So he wants to see me." It was a statement rather than a question.

"During his visit here," continued Admoni, "Vice President Bush has received a direct plea from Deputy Prime Minister Shamir to stop the second arms channel to Iran. You and the others who have been involved with the original channel have it running smoothly. Mr. Shamir doesn't like the idea of another group getting involved and possibly exposing the whole thing and he's told Mr. Bush this.

"Mr. Bush has also been asked to try to stop the so-called peace initiative and has been informed of our concern about the U.S. relationship with Iraq. Robert Gates has already been told of our grave concerns about chemical sales to Iraq from Chile. Mr. Bush now wants to hear everything. As this is your field and you are able to answer any questions he might raise, I want you to brief him in detail on the arms sales to date."

"If he's going to listen to what I have to say about the original arms channel, he should also be told in detail about the Nir-North channel," I said.

Admoni nodded. "Mr. Nir will also be briefing Vice President Bush. As I said, he wants to be fully appraised of everything." I was aware that whatever I had to present to Vice President Bush was likely to fall on deaf ears. Shamir, who was poised to take over as prime minister under the coalition government, had already told the vice president that the Likud Party would not accept a U.S. peace initiative and that it would come up with a peace plan of its own.

As I listened to Admoni's briefing, it became clear that Yitzhak Shamir himself had given instructions to the Mossad chief. We talked for three hours, at the end of which, recalling our unsuccessful efforts to expose the Nir-North channel to the media, Admoni laughed and said, "One day Bush is going to hang me by the balls because of what we are doing."

George Bush was staying at the King David Hotel in Jerusalem. Being located in the center of the old city, the King David presented enormous security problems. Even logistically it proved a nightmare getting the convoy of limousines surrounding the vice president of the United States in and out of the hotel every day. So the Hilton was chosen for his briefings because it was on the edge of the city just off Highway One from Tel Aviv.

David Kimche, now director general of the Foreign Ministry and Bush's escort, was waiting for me when I arrived at the Hilton. Kimche, the former chief of Tevel, the Mossad's counterpart of the External Relations Department of the IDF/MI, and one of the original members of the Joint Israel-Iran Committee, had been informed by Admoni about my presentation to Bush. He took me up to one of the higher floors, to a suite that had been converted into a conference room.

Greeting the Secret Service men in the corridor, we went into the room. George Bush, sitting at an oblong table, was being briefed on other subjects. At his invitation, I sat at the table with my briefcase. Kimche remained. Also present was an Israeli stenographer from Mossad, while Bush was accompanied by two aides who were also supported by a stenographer.

Bush may or may not have guessed that the Israelis had also decided to videotape the briefing secretly.

Kimche explained that I was the "man on Iran" and that I would be giving a full briefing about the joint activity of the Israeli intelligence community and the Robert Gates team.

As Vice President Bush listened in complete silence, I started briefing him in detail from 1981. I told him how we had arranged for weapons to flow to Iran from various parts of the world, including from the U.S. and Israel, and I gave him a history of the war between Iran and Iraq, giving an opinion on who was winning. I also told him about the changes that had taken place within Iran.

Much of what I told the vice president I knew he was already familiar with. He was simply hearing it again from the Israeli side. He made no comment as I talked on. But there was to be a sting in my briefing. I had been fully instructed by Admoni on what to raise. My words were along these lines: "Mr. Vice President, the United States is holding an Israeli general in one of its jails on an arms charge. We believe he and his colleagues should be released."

Bush lifted his eyes and stared at me for a moment. I assumed he was fully aware of the arrest of Gen. Bar Am in the Bermuda sting. Whatever the case, he made no comment.

"There is also the question of Iraq," I continued. "The CIA is behind a program to supply Iraq with weapons. Israel is not happy about this."

The vice president shifted uncomfortably, but again said nothing. It was obvious that he had not expected this from an official who had been sent merely to brief him, not to make veiled demands.

"Finally, Mr. Vice President," I went on, "there is the peace conference. The intelligence community is not happy about influence being given to Saddam Hussein, nor about the current proposal to have a Palestinian entity in the West Bank and Gaza Strip."

Bush was looking irritated. I knew my time was up. If I pushed further, he would actually ask me to leave, which would have meant I had exceeded my instructions. I had been told to drop in those points and then back off.

I put my papers back into my briefcase and rose when he did. Two hours had passed. He remained extremely polite and thanked me for the briefing. But I could see he was not happy.

I went directly back to Admoni's office in Tel Aviv.

"How did it go?" he asked.

A picture flashed into my mind of the stern-faced, rigid vice president with whom I had been sitting earlier.

"If you had stuck him with a knife," I said, "he wouldn't have bled."

***

After the deaths of Freddie and Herut, my personal life was in shambles. Lonely and confused, I turned to Ora Ben-Shalom, a woman I'd known since we'd worked together at ERD in 1979. And of course, hers was the name I'd thought of when we decided to call our slush fund holding company the Ora Group.

Ora, a very attractive, tall brunette, had been born in the United States. Her mother, a Canadian Jew, had met Ora's father, an Austrian Jew, when he was working as a cantor in a synagogue in Ontario. Her mother later won a position in the Israeli Government Tourist Office in Chicago, where Ora was born, but her father had problems finding a job there. The family moved to Texas, where Ora's father briefly worked as a cantor, but they then decided to start life anew in Israel when Ora was 12. They changed their family name from Friedman to Ben-Shalom.

The whole family was religiously observant and also ultra-rightwing politically. Ora's older sister joined the army and married, and when Ora finished high school, she too went into the army. She was fluent in English, Spanish, and Hebrew, so she joined the External Relations Department as a first lieutenant. And that's when we met. She was 19.

We had a special friendship and even went out once or twice, but I had met Freddie by then, so nothing came of it. Ora left the ERD in 1980 to work for Mossad and was eventually appointed to a prestigious position in public relations at the Hilton International in Jerusalem. But she remained a Mossad "operative," which meant she could be called in for special jobs.

Although we'd kept in touch over the years, it wasn't until after Freddie's death that I walked into her waiting arms. In late 1986 she started traveling with me on various business trips to Europe, and soon thereafter we began living together in Jerusalem.

***

Even after Cyrus Hashemi's death, the Oliver North story did not surface in Time magazine. And the Bermuda sting prisoners, with the exception of lawyer Sam Evans, remained in New York's Metropolitan Correctional Center.

During one of my trips to Tehran to arrange more arms sales, I told Hojjat El-Islam Rafsanjani about our efforts to expose the Nir-North network. He told me, "We will do all we can to help you. But first, you try again. If you don't succeed, we'll help."

But nothing appeared in the pages of Time, despite further contact with Raji Samghabadi. Finally, after a direct telephone call to Rafsanjani in Iran, he told me, "We'll get it moving for you."

On November 3, 1986, a small Lebanese paper, Al Shiraa, published an article detailing Oliver North's secret deals with Iran. After the story appeared, Gen. Bar Am and the Israeli arms dealers were released from the Metropolitan Correctional Center on bail.

"I will not hold anybody in jail for doing what U.S. government officials are doing," declared Judge Leonard Sand, the federal judge sitting on the case. In time, the charges were dropped.

The Oliver North story fell on fertile ground in the U.S. On October 5, 1986, a plane carrying equipment to the contras had been shot down over Nicaragua, and Eugene Hasenfus had been captured alive. Documents found in the wreckage implicated the CIA. Embarrassing questions were being asked. After the Lebanese article appeared, the U.S. press could hardly avoid the issue. As a result of the publicity, the Iran-contra scandal exploded. President Reagan, who may or may not have known anything about what was going on in his own White House National Security Council, ordered a presidential commission of inquiry, to be headed by none other than former Sen. John Tower, whose then aide, Robert McFarlane, had played such an important role in the arms-for-hostages negotiations in 1980. Unknown to the American public, Tower had a great deal of inside knowledge about the weapons trade with Iran.

The commission of inquiry was to investigate only the years 1984 to 1986. The conclusions Tower reached were nothing but a coverup. He declared that some people in the National Security Council, interested in the release of hostages in Lebanon, had tried to make a deal with the Iranians, selling them 97 TOW missiles and some Hawk missiles -- and that was it. Granted, the second channel had not succeeded, so there wasn't much to discover about it. But Tower knew perfectly well that there was an ongoing original arms channel. Yet the Tower Commission made no mention of it. George Bush later rewarded Tower for his loyalty by nominating him for defense secretary, but he was never confirmed by Congress.

Understandably, the Democrats were not satisfied with the Tower inquiry and pressed for hearings in Congress. And well they should have. In February 1987, while Tower was investigating a minor part of the sales to Iran, the Joint Israel-Iran Committee, together with Robert Gates, ran the biggest-ever arms supply operation to Iran. The official inquiry was better than any smokescreen we, with all our skills at such things, could have dreamed up.

Under the noses of the American people, 4,000 TOW missiles were flown out of Marana Base in Arizona to Guatemala and were shipped through Australia, where they were temporarily parked in the western part of that country. But there was a great deal more on the move. Apart from the TOWs, radar and electronic materiel, and Hawk surface-to-air missiles from the U.S., this is what was sent to Iran -- while Congress and the rest of the world remained ignorant:

• From Israel: 128 U.S. tanks; 200,000 Israeli-made Katusha rockets said to have been "captured" from the PLO in Lebanon; 122mm artillery shells; 105mm artillery shells; 61mm rockets; 51mm rockets; air-to-air missiles; small arms; tens of millions of rounds of ammunition.

• Poland and Bulgaria: 8,000 SAM-7 surface-to-air missiles; 100,000 AK-47s; millions of rounds of ammunition.

• China: Silkworm sea-to-sea missiles; armored cars; amphibious personnel carriers. China helped Iran because the Iraqis weren't happy with Chinese light tanks -- which suited Beijing because Saddam Hussein had developed a reputation as an unreliable business partner.

• North Korea and Vietnam: artillery shells; self-propelled rockets.

• Sweden: 105mm artillery barrels.

• Belgium: Air-to-air missiles.

Israel became very good at copying weapons and alleging that they had been captured in Lebanon, while the reality was they had come out of Tel Aviv factories. As for the Silkworm sea-to-sea missiles from China, they were brokered for Israel by Saul Eisenberg, who is not related to the Eisenbergs arrested in the Bermuda sting.

One of the richest men in the world, Eisenberg at present runs his private arms-dealing operation from an office building at 4 Weizman Street, Tel Aviv -- the same block on which the CIA "cutout" company, GeoMiliTech, was housed. Eisenberg was able to sell Chinese weapons because he was married to a South Korean woman who had connections with Mao Zedong and Zhou Enlai back in the 1950s. Because of his strong links, all Israel's business relations with China have to be conducted through him. When a member of the Joint Committee asked him to broker weapons for Iran, he readily agreed and even helped arrange for "parking" temporarily in a third country -- Australia. Once again, although certain government officials in Western Australia and members of the Australian Security Intelligence Organization knew about the operation, the general public was kept in the dark.

***

On July 3 and 4, 1987, I participated in two highly secret meetings with Iran's defense minister, Col. Mohammed Jalali, and Robert Gates. The colonel had first flown to Guatemala to settle payments to the Mejia government, because much of the materiel that had been moved out of Arizona had been flown by cargo plane for parking there.

Then Col. Jalali flew to Kansas City and made his way to the Americana Hotel where Gates was staying discreetly. Ora and I were booked into the Vista International, just across the street. On the evening of July 3, I made my way to the lobby of my hotel and met with Gates and Jalali. Away from rooms that might be bugged, hotel lobbies were safe for private discussion, providing nobody recognized the participants.

"What I would like," said Col. Jalali, "is an assurance that despite the Iran-contra scandal, the sales to my country will continue. "

"As far as Israel is concerned, they will continue," I said.

We both looked toward Gates. He smiled. "I see no problem with that."

We talked about logistics and the scandal that had put Oliver North in the hot seat. Then we agreed to meet again the following morning.

This time I visited the others in the lobby of the Americana. Once again, on this day that celebrates American independence, Col. Jalali sought and received assurances that the U.S. would continue to supply Iran with weapons.

"But I must ask you, Mr. Gates," he said, "why the United States supports the supply of chemical weapons to Iraq. We know Saddam Hussein is getting them from Chile. Why do you help us, but also help our enemy?"

Gates made no admissions or denials. Nor, as we said our goodbyes, did he make any promises.

Following my meetings with Gates and Jalali, Ora and I flew from Kansas City to Phoenix, rented a car and went on a ten- day driving holiday to California. For Ora, it wasn't much of a holiday; she had trouble ungluing me from the fascinating scenes on TV as the congressional hearings into the Iran-contra affair unfolded. Everyone was riveted to their screens. For me, it was highly entertaining to watch official after official lying through his teeth or pleading complete ignorance.

All America was gripped by a confusing spectacle that never seemed to go anywhere or result in anything substantive. Several years later, in 1991, I discussed the events of 1987 with Spencer Oliver, the chief counsel for the House Foreign Relations Committee, who had been involved in the Iran-contra hearings.

"Didn't you know they were all lying?" I asked.

"Yes," he said, "we knew it was a coverup. But at the time the Democratic congressmen and senators were very weak, and also 'for the good of the nation' we did not want to start a scandal that would bring down the president. We did not want to hear the 'I-word' -- impeachment."

"To lie to the nation is for the good of the nation?"

"No. But the Democrats did not have the backbone to do what they had to do. They all knew that the witnesses were lying or telling half-truths. Everybody knew it was a cover-up, but not many knew the real truth. Casey was sick and dying. Gates and Bush were untouchable. To get them, we had to bring down the whole administration. We weren't ready for it. The Democrats didn't have any strong leadership. The only thing we did manage later, when Casey died and Robert Gates's nomination was put forward in 1987, was to force the nomination to be withdrawn."

There was a clue to the future, perhaps, in Robert McFarlane's suicide attempt during the congressional hearings. He overdosed on pills, I suspect, because he was afraid his role with the Israelis would surface. But no one was able to connect his attempt to kill himself with a national scandal that went far beyond the wildest imagination. All that happened, of course, was the decision by an independent prosecutor, Judge Lawrence Walsh, to put North, McFarlane, and Poindexter on trial. They were convicted of lying to Congress, but none of them went to jail. Later, North's conviction was thrown out. So, for the time being, the truth was buried. America was to continue living under the Big Lie.

***

One day in August 1987, a month after Ora and I had returned to Jerusalem from our trip to the U.S., I was replaying the messages on our answering machine. Ora was out, and I was puzzled to hear the familiar voice of the CIA station chief in Tel Aviv asking her why she hadn't "made the interview on time."

Despite our alliance, it was, of course, not unusual for Israel and the U.S. to spy on each other. And these were particularly sensitive times. What was Ora up to?

I said nothing to her, but I was determined to get to the bottom of the matter. She was put under surveillance, and it was discovered she was meeting various CIA people based in Tel Aviv.

Ora was ordered by SHABAK, Israel's internal security agency, to go to an apartment in Jerusalem for interrogation. There she admitted she was friendly with the Americans. They were talking to her about me, what I knew about Iran-contra, how I fit into the overall picture, and who had leaked the Iran-contra story to the press. Whatever her motives, she wasn't getting paid.

Later, when I confronted her, she told me the same story, emphasizing that she didn't tell the Americans much. I was stunned. I didn't know what to make of it. But I knew I could no longer trust Ora. And the Americans? What were they up to? When the Joint Committee discussed the situation, we concluded the only way the Americans could apply effective damage control was to use someone like Ora, who was close to one of the principals in the affair, to find out exactly what our role in the Iran-contra leak was and what we might do next.

When Ora's liaisons with the Americans were exposed, all her ties with Mossad were terminated. Beyond that, the SHABAK wanted to throw the book at her. It was an opportunity to prosecute and make a show out of how the U.S. was spying on Israel. And of course they had every legitimate reason to do so. She had met with another country's intelligence unit, and even though America was officially an ally of Israel, secrets were secrets.

Despite the top brass's anger, I didn't want to see Ora going down for it. I no longer trusted her, but I'd always liked her and didn't want her hurt -- and, more pragmatically, she knew too much.

I came up with a scheme. I told my superiors that I would personally take charge of the situation and that she would no longer pose a threat to Israeli security. As proof of my intentions, I told them she was pregnant and that we planned to marry. As the weeks went by, we were able to show that she really was pregnant.

Ora was eager to marry me, and now that she was expecting our child, I believed it was time I committed myself. It would certainly keep Ora out of trouble with the government. We fixed a wedding date -- March 13, 1988.

While Ora was out of trouble, I found myself up to my neck in it. The reverberations from the leaking of the Iran-contra story had rocked the Israeli government. Determined to cause some damage to those involved in the long-standing original arms operation to Iran, the Labor Party, which remained in the coalition, was demanding heads. In September 1987, mine rolled, along with those of three other members of the Joint IDF/MI-Mossad Committee for Iran-Israel Relations. We were told: "You no longer have a job."

But we had expected this. The signs had all been there. As I had been in the thick of the arms trade, I realized that, with the pressure on Shamir, I would be one of the first to go.

So Mossad head Nachum Admoni and I had decided before the crunch came to set some of the funds aside for our futures. We had given the government our best, shoring up the State of Israel during the terms of three prime ministers, but we believed we needed insurance against whatever might lie ahead. We weren't sure what our job prospects would be after doing work that both the Americans and the Israelis now wanted to forget ever happened. There was also a genuine risk of arrest or death -- we had the examples of Gen. Bar Am, the Eisenbergs, and Cyrus Hashemi to ponder. The slush fund money had been made illegally, against all international conventions, and, as it would in time be shown in a U.S. court, neither the Israelis nor the Americans wanted to admit to owning it. So it was agreed that we would take out our insurance and let the arguments come later. We made a number of payoffs and then transferred a very large sum to South America.

What Shamir thought about our actions, I don't know. But he would have understood that, despite what had happened to me, I would not leak details about my work -- at least, at that time.

Now the burden was off my shoulders. I flew to London to spend a few days enjoying myself. I had a feeling of relief -- even more than that, of euphoria. I felt all-powerful. God only knew what lay ahead. I decided the best thing was to blow with the wind. It's the way I'd played it from the very beginning.

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