PROFITS OF WAR -- INSIDE THE SECRET U.S.-ISRAELI ARMS NETWORK
AT 12:30 P.M. on January 16, 1979, four helicopters had lifted off from the grounds of Tehran's Niavaran Palace, their rotors sweeping aside the snow. There was nothing to indicate to a would-be assassin which aircraft carried His Imperial Majesty Mohammad Reza Pahlavi Aryamehr, Shahanshah of Iran, King of Kings, Shadow of the Almighty, Center of the Universe.
The Shah's departure from Iran would bring about a tumultuous upheaval in the Middle East. It would also lead to a new threat to the existence of Israel, and ultimately bring my country into fierce conflict with the United States. As I studied the intelligence reports of the Shah's last minutes in the country he had ruled for nearly 40 years, I could be sure of one thing: When the Shah and his Empress stepped from their helicopter at Mehrabad Airport and two officers of his Royal Guard fell to their knees and tried to kiss his feet, it was the end. He would never return.
"How long will you be away, sir?" a guard had asked.
"It depends on the state of my health," he had replied wistfully as the Empress, her chestnut hair pushed up under a fur hat, linked her arm through his. His body was riddled with cancer. He was a broken man.
"I am sure," said the Empress, "that the independence of this country and the unity of the nation will remain. We have faith in the Iranian nation and in the culture of Iran. I hope and I know God will always be behind the Iranian nation."
But God had been showing His displeasure. Shops, banks, and offices were closed as mobs roamed, chanting, "Death ... death to the Shah." Many of his close friends had simply deserted him. The rich families he knew so well had already traded in millions of rials for dollars, francs, and Deutschmarks, and fled to relatives in the West, leaving behind the crackle of gunfire and the sound of people wailing over freshly dug graves.
Oil production had come to a standstill. Scores of freighters lay idle in the Persian Gulf, waiting for customs officials to return to work. Moscow had sent an aircraft to pick up 70 Soviet oil researchers and their families. Americans and other foreign nationals crammed onto U.S. Air Force planes. Iran was out of control; for each fanatical white-shrouded protester the troops had shot down, another had sprung up to fill the gap.
As their Imperial Majesties walked toward their silver and blue Boeing 707, two officers spontaneously turned to face each other, holding up a copy of the Koran for them to pass under. Then, as the street mobs shouted with joy and smashed the statues erected in his honor, the King of Kings, a small parcel of Iranian soil tucked in his pocket, took the controls of the aircraft and flew off into the sunless sky. The Shah's rule was over.
Israel decided to act fast to protect its interests. On board one of the last flights that El Al made into Tehran before the airport was closed were 48 Israeli aircrews, all wearing civilian clothes.
A few days later, with the full cooperation of the commander of the Iranian Air Force -- who was later executed -- 48 F-14 jets were flown out of Iran to an air force base in northern Sinai. (They were later sold by Israel to the Taiwanese.) As proof of the Carter administration's blindness, the U.S. had delivered these planes to the Shah in September 1978, even before the U.S. Air Force was supplied with its own. The Shah, whose regime was crumbling around him, had paid through the nose for them. The U.S. was relieved that the F-14s had not fallen into the "wrong hands." The Israelis had corrected the situation.
The Regency and the Supreme Military Councils set up for the Shah's absence were unable to function, and Prime Minister Shahpour Bakhtiar, who, as a Mossadegh supporter and a member of the National Front, was the last prime minister appointed by the Shah as a compromise with the opposition, proved equally helpless. On February 1, 1979, Ayatollah Ruhollah Khomeini arrived in Iran from Paris. Amidst wild scenes of rejoicing, ten days later Bakhtiar went into hiding before eventually finding exile in Paris himself. 
The Israeli Embassy in Tehran was handed over to the Palestine Liberation Organization by the new Iranian regime, and it became the PLO Embassy. There was a complete breakdown in relations between Israel and Iran, although the American Embassy in Tehran continued operating.
Meanwhile, the last 17 Israelis who had been left behind in Iran -- officials at the embassy and others, who were in hiding -- were flown out by the U.S. Air Force to Frankfurt and then by El Al to Tel Aviv.
Khomeini won a landslide victory in a national referendum, and on April 1, he declared Iran an Islamic republic, just as my contacts had predicted months before.
The first prime minister appointed by the revolutionary government of Ayatollah Khomeini was Mehdi Bazargan. A member of the National Front and a supporter of Mossadegh, Bazargan represented Khomeini's compromise between the fundamentalists and the middle class. Bazargan believed that the Soviets and the U.S. were both evil, but preferred the U.S. to the godless communists. He did not accept the Ayatollah's thesis that Iran could exist without the backing of any superpower. He made it clear that he would like to see relations with Washington normalized. He allowed the U.S. Embassy in Tehran to operate, and he continued to deal with the Americans.
Bazargan's faction found itself in a tense power struggle with the extremist fundamentalist group that wanted neither Americans in Iran nor any relationship with the U.S., which was seen as "the Great Satan." There seemed to be no hope of an immediate repair of relations between Israel and Iran. Israel was still licking its wounds after the pullout from Iran, but at the same time, Israeli intelligence was keeping a close eye on the fluid situation there.
Contrary to U.S. intelligence reports, our information suggested that things within Iran were breaking down fast, that a showdown was looming among Iran's various religious and political factions, and that, above all else, the clergy was there to stay. We were also convinced that a confrontation between the Arab states and the Iranians was not far off, centering on a clash between Iran and its neighbor Iraq. Israel had many friends in the Iranian military who hated Iraq. Even though Iraq had a big Shi'ite community in the south, there was a long-standing enmity between the Shi'ite Iranians and the Sunni leadership of Iraq. A border conflict had been settled by the Shah in 1975, but the new Iranian regime announced it would not recognize the settlement. It claimed that Shatt al-Arab, Iraq's main outlet to the Persian Gulf, was actually an Iranian waterway and that Bahrain was also its territory.
One of the first signs of a clash between the Iranians and the Arabs came during the visit to Iran of Col. Qaddafi's right- hand man, Maj. Abdul Salam Jalloud, to present the Libyan leader's congratulations to the new regime. While Jalloud was there, his Iranian hosts asked him about the fate of Sheikh Mussa Sadr, a Shi'ite leader from southern Lebanon who had disappeared on a visit to Libya in 1978. The Libyans were believed to have killed him for preaching Shi'ite Islam rather than their brand of the religion. Jalloud was not allowed to leave Iran for three weeks while the Iranians demanded an explanation. He was finally allowed to fly out only after Qaddafi personally intervened and spoke to Khomeini.
Another sign of discord between Iran and the Arabs was the expulsion of Palestine Liberation Organization personnel from Iran. After PLO members were found to be speaking about pan-Arab nationalism and socialism in gatherings of Iranian citizens of Arab descent in the southern part of the country, the Islamic government authorities ordered that all PLO members other than a skeleton staff at the Tehran embassy be expelled from Iran.
Big trouble was looming. As early as September 1979, Israeli intelligence reports from Baghdad had warned that Iraq was preparing for a full-scale invasion of southern Iran. Baghdad's aim was to annex the oil-rich Iranian province of Khuzistan, which runs along the Persian Gulf to Iraq. And Baghdad had reason to be confident -- it saw the Iranian military in a state of complete disintegration. Most of the generals and admirals had either escaped Iran or been executed. For the time being, all the American-trained pilots of the Iranian Air Force were in jail -- every single one of them. The charge: They had not been diligent and had allowed the F-14 jets, commandeered by Israeli pilots, to fly away from the Iranian base.
The only officer of note still alive in the country was the commander of the navy, Adm. Ahmad Madani. In the 1960s, he had been the youngest admiral in the Shah's navy, but in 1970 he had been forced to resign, because of charges of alleged corruption.
In fact, he was becoming too outspoken in his criticism of the Shah's regime, something the Shah did not tolerate, even in muted terms.
Adm. Madani denied the accusations but was nevertheless forced out of the navy. For the next nine years, he taught at various Iranian universities, constantly harassed by agents of the Shah. His popularity with opponents of the Shah grew, and, immediately after the revolution, in February 1979, Khomeini restored him to commander of the navy and appointed him defense minister. In April of that year, he left the post of defense minister to become the governor of the strategic Khuzistan province on the Iraqi border. He remained a close adviser to Khomeini on all defense-related matters.
When reports of Iraqi preparations to invade Iran started arriving in Tel Aviv, we became extremely concerned. We believed the Iranian military could not withstand an Iraqi attack, and the idea of a Greater Iraq with the largest known oil reserves in the world -- bigger than those of the Soviet Union and of Saudi Arabia -- sent shivers through both the Israeli intelligence community and the political leadership.
Prime Minister Begin personally relayed our intelligence reports to President Carter, though he had little faith it would do much good. Begin still loathed Carter for the peace agreement forced upon him at Camp David. As Begin saw it, the agreement took Sinai away from Israel, did not create a comprehensive peace, and left the Palestinian issue hanging on Israel's back. He had signed it only because of Carter's pressure and because Defense Minister Ezer Weizman and Foreign Minister Moshe Dayan, both of whom wanted to ingratiate themselves with the Americans, had urged him to. In addition, while Begin accepted that the downfall of the Shah had been inevitable, he considered the disorderly fall of Iran into the hands of Shi'ite extremists to be a direct result of Carter's ineptitude. Begin had always been convinced that a regime friendly to the West could have been established instead.
As Israeli fears of an imminent Iraqi attack on Iran grew, Begin made it clear to Carter that the U.S. urgently needed to throw its support behind the government of Mehdi Bazargan, who was up against Iran's extremist Shi'ite groups. Bazargan was willing to negotiate with the Americans and was prepared to accept help in reorganizing his military. But Carter and his administration, in particular National Security Adviser Zbigniew Brzezinski, dismissed outright Begin's suggestions that the U.S. support Bazargan. While we were stressing the urgency of the situation, the wrong-headed U.S. view, from the administration down to the CIA and DIA analysts, was that Iran should be allowed to slowly disintegrate from within until a real leader emerged, supported by the Americans.
Israel pushed its concerns further at an Israel-U.S. intelligence exchange conference in late September 1979, which I attended. Present at the meeting in one of Israel's intelligence conference halls were analysts from the CIA and the DIA and, on the Israeli side, from Mossad and Military Intelligence. It was overseen by my department, External Relations.
First there was an opening statement read by the deputy director of Military Intelligence for production (research). Prepared by other analysts and myself, the report emphasized the Iraqi threat to Iran and what it could mean to Israeli and U.S. interests.
The U.S. attitude -- indifference, lack of understanding, call it what you will -- was made perfectly clear. Dr. Jack Vorona, the head of the U.S. delegation, was not a Middle East expert, but the assistant deputy director of DIA for technical affairs. He just didn't want to listen to what we had to say. He was more concerned about getting details, as he and his colleagues had in the past, about Soviet-made military equipment. As I sat at that meeting, I couldn't help thinking that the Americans were just putting their heads in the sand.
The Director of Central Intelligence, Stansfield Turner, wasn't expected to understand the situation, but what about his deputies? What about Robert Gates, who had attended various meetings with senior Israeli intelligence officers about events in the Middle East in the late 1970s, while assigned to the National Security Council? He was quiet, young, officially described as a Soviet expert, and known as a "Bush boy." Surely he had some influence. Surely he realized how explosive the situation had become.
Whatever Gates might have been aware of, it was clear that the U.S. administration either did not understand the dangers or did not want to. According to Israeli intelligence estimates, Saddam Hussein had a master plan to make Iraq a nuclear power, to develop his own atom bomb. After taking over southwestern Iran with conventional weapons, we believed his next plan would be to threaten the oil-rich Arabs of the Gulf and Saudi Arabia and become the regional power, backed up by an arsenal of nuclear weapons.
Hussein's overall plan was not feasible, but it was feasible that he could take over Khuzistan. That he could get hold of an atomic bomb was quite possible too.
The U.S. was simply not heeding Bazargan's precarious situation. The Iranians were frustrated-- and they were scared. They wanted to draw attention to themselves because, if the Iraqis prevailed, Iran would be reduced to nothing. The Islamic revolution would be remembered as nothing more than Iran's vehicle to destruction.
Prime Minister Bazargan desperately needed American arms and help against the Iraqi threat. It was up to President Carter to prop up him and his government. It was up to Carter to maintain the balance in the Middle East and keep Bazargan in power against the enormous opposition inside his country. There was great pressure on Bazargan to move against the Americans. To withstand it, he needed an American military airlift. It never came. Instead, the Americans decided on a hands-off policy toward Iran.
For the Israelis, the Carter administration's shortsighted attitude was a source of great frustration. All Israel could do was continue to press home its concerns, not only to America but also to its European friends, although at this point we could hardly include France among these. Thanks to the French government, the Iraqis had already been provided with technicians, know-how, equipment, and a nuclear reactor, and were working on developing a nuclear bomb.
On November 4, 1979, the axe fell. The US. had not come to Bazargan's aid, and the extremist faction in Iran prevailed. In a desperate attempt to draw attention to themselves, the extremists unleashed a number of radical "students" who took over the US. Embassy and held the staff hostage. In exchange for the release of the hostages, they demanded the immediate return of the Shah to Iran to face trial. The following day, Bazargan resigned.
Instead of trying to play down the issue, Carter personally took responsibility for the negotiations over the captives, leaving the radicals with no question as to the hostages' high value as bargaining chips. It was his greatest mistake. By making the hostages the biggest national and international subject on his agenda, Carter had himself become a captive.
He immediately announced a full embargo on trade with Iran. He froze all money belonging to the Iranian government in US. banks, and he made a very public issue of the crisis. His desperate actions humiliated his own country, fueled the contempt the Iranians already felt for the US., and gave them more ammunition against the Carter administration.
Quietly, the Carter administration was trying to deal with the Iranians on other astonishing levels. Three Iranian brothers living in the West had come forward to offer their services, and Carter played right into their hands. The Hashemi trio -- Cyrus, Jamshid, and Reza -- claimed they had connections in Iran with Ahmed Khomeini, the son of the Ayatollah, and could use their friendship with him to help secure the release of the hostages. The brothers also said they were cousins of the influential Hojjat El-Islam Ali Akbar Hashemi Rafsanjani.
To this day, it is difficult to understand how the Carter administration relied on them. The Hashemis never negotiated successfully with anybody of rank in Iran. But they did make a great deal of money in arms sales. Using their suddenly gained influence with the White House, the brothers started selling small quantities of military equipment to the Iranians, supposedly to get their goodwill to release the hostages.
The Hashemi brothers' Tehran contact, Iran Najd Rankuni, was head of the Dervish movement and a son-in-law of Rafsanjani, who was to become president of Iran. At the time, Rankuni, as opposed to his father-in-law, was connected with the Iranian Revolutionary Guards. He did not have direct access to the Supreme Council, which actually called the shots in Iran, and there was no way that he could set up a serious dialogue between the Americans and the Iranians for the release of the hostages.
Carter's inept handling of the situation enraged some intelligence experts outside the administration. In December 1979, a well-known retired CIA officer, Miles Copeland, gathered a group of CIA-connected officers and their associates who had been purged from the agency by Adm.Turner and were very unhappy with the Carter administration and the CIA leadership. Copeland had helped Kermit Roosevelt and the Iranian military restore the Shah of Iran to power in 1953, after the Shah had been overthrown by Mohammed Mossadegh during the turmoil that followed the nationalization of Iranian oil. After mobilizing the Iranian military against Mossadegh, CIA officers had flown to Iran with bags full of $100 bills. They walked through the bazaar handing out money to whoever shouted: "Long live the Shah."
A good friend of the late Egyptian President Gamal Abdel Nasser, Copeland was known for his anti-Israel stand. Israeli intelligence believed him to be the man responsible for the U.S. pressure put on Israel, Britain, and France in 1956 to pull out of the Suez Canal area. He was also thought to have been the man behind the push for the Israelis to withdraw from the Sinai. While the United States was pressuring the Israelis over the Sinai, the Soviet Union invaded Hungary without U.S. reaction. Copeland was criticized for this. Nevertheless, he was still highly regarded for his analytical abilities.
Besides the purged group gathered around Copeland, William Casey, a former intelligence officer and close associate of Republican presidential candidate Ronald Reagan, came into the fold. The group also included Robert McFarlane, a former Marine colonel who had served in Vietnam, and a number of others with CIA connections. They decided that the U.S. administration under Carter was incapable of dealing with the Iran issue. They also saw eye to eye with Israel on the strategic situation in Iran. The Copeland group and the Israeli government both wanted to make sure the Iranians were not defeated in the Khuzistan if and when Iraq attacked, and to make sure that President Carter's blunders were not repeated.
A meeting between Miles Copeland and Israeli intelligence officers was held at a Georgetown house in Washington, D. C. The Israelis were happy to deal with any initiative but Carter's. David Kimche, chief of Tevel, the foreign relations unit of Mossad, was the senior Israeli at the meeting. He had a secret operation, which had begun in September 1979, to supply Iran with small arms and some spare parts. These arms were routed through South Africa, and their transport was handled by South African intelligence logistics teams. This operation was unknown at the time to the Mossad chief, to the director of Military Intelligence, or to the prime minister. Kimche, who needed a well-informed Iranian affairs briefer, asked Col. Meir, head of ERD, to send me to Washington with him on the Mossad budget. Meir agreed, so I went.
The Israelis and the Copeland group came up with a two-pronged plan to use quiet diplomacy with the Iranians and to draw up a scheme for military action against Iran that would not jeopardize the lives of the hostages, who, following the release of 14, now numbered 52.
As part of that plan, Earl Brian, an acquaintance of former Iranian Prime Minister Bazargan, arranged an urgent meeting in late January 1980 in Tehran to discuss the hostage situation. Those present would be Brian, McFarlane, and Bazargan. Bazargan arranged for laissez-passer through the Iranian Embassy in Ottawa. Even though his faction had lost control in November 1979, Bazargan was still thought to be very close to Ayatollah Khomeini, as well as to Hojjat El-Islam Mehdi Karrubi, the powerful member of the ruling Supreme Council of Iran who was in charge of foreign relations. 
Brian spoke some Farsi. While California state secretary of health and welfare during Ronald Reagan's governorship, he dealt with the Iranian government in trying to put together an Iranian medicare plan, which never came to fruition. During frequent visits to Tehran in the mid-1970s, he became acquainted with Bazargan. McFarlane was chosen to go with Brian because he was an aide to the powerful Republican Sen. John Tower, chairman of the Armed Services Committee, who was also connected to CIA circles through Gates and close to one of the Republican candidates for the presidency, George Bush. The Israelis also pushed for these two to travel to Iran because they both had special relationships with the Israeli intelligence community.
Those relationships went back to 1978, when Rafi Eitan, newly appointed counterterrorism adviser to Prime Minister Begin, visited the United States. Eitan believed that the U.S. had amassed a great deal of information about Palestinian terrorists around the world that it was not sharing with Israel. The purpose of his 1978 trip to Washington was to build a network within the United States that would provide Israel with this information. Eitan's operation was being funded from the budget of the small Ministry of Defense intelligence agency, LAKAM, the scientific liaison bureau set up to gather and exchange technology and intelligence with foreign military industries.
During the Washington visit, Eitan was introduced to Sen. John Tower and his senior aide, Robert McFarlane. Eitan went out of his way to befriend McFarlane, whom he viewed as potentially a very useful contact. He invited McFarlane to Israel. After one or two meetings, the two developed a close relationship. McFarlane proceeded to introduce Eitan to a number of his friends, among them Earl Brian, who had significant intelligence connections.
All these people had access to some of the information Eitan was after. They also had Republican connections, and the Republicans were prepared to do almost anything to get back into the White House. They got on very well with the diminutive Israeli, and by the end of 1978, much that reached the Senate Armed Services Committee also found its way to Eitan's desk.
So it was no surprise that the Israelis were in favor of McFarlane and Brian taking a commercial flight from Europe to Tehran to meet Bazargan. That initial meeting in January 1980 set in motion a series of top-secret conferences that remained hidden from the American people but were to have a dramatic effect on events in the Middle East in the coming months. Having agreed that there was room to discuss the hostage situation, Brian, McFarlane, and Bazargan arranged a meeting for early March 1980 in Madrid. Those attending would be Mehdi Karrubi and a close associate of Ronald Reagan's, yet to be decided on.
After leaving Iran, Brian and McFarlane visited Rafi Eitan in Israel and told him all about their meeting in Tehran. Little was going to happen in Iran that the Israelis would not know about.
Several weeks after that first meeting in Tehran in January 1980, I got a phone call at my home in Israel from my old friend from Tehran university days, Sayeed Mehdi Kashani, one of the contacts who had warned me of the threat to the Shah. Kashani's father, Ayatollah Abol Qassem Kashani, was now a member of the ruling Supreme Council. He pulled no punches. Iran, he said, wanted equipment for its military forces.
"I don't know if I can help," I said. "You know it's not up to me."
''But you have connections, Ari. And whether you like it or not, I'm coming to see you. I'm already in Europe. I've booked an Air France flight."
"Hold it. What kind of passport do you have? You know you can't get in with ... "
"Don't worry about it. I'm on my way."
He gave me a flight number. I reported to my superiors, and they told me to meet him at the airport.
In late February, Kashani sailed through immigration at Tel Aviv's Ben-Gurion International Airport with a Philippine passport. His father had been a close friend of Ferdinand Marcos, and the younger Kashani had managed to become an honorary Filipino. It had been a couple of years since I'd seen him, but he was much as I remembered: a jovial, handsome man in his 30s, impeccably dressed in a double-breasted blue suit, carrying only a suit-hanger, a small bag, and a briefcase. I welcomed him, we kissed three times in the Iranian tradition, and I drove him to the Hilton Hotel in Tel Aviv.
He came for breakfast the next morning at my parents' apartment in Ramat Gan. Our conversation was in Farsi.
"I came here as a friend," he said, "but I'm also on a mission for my father. We need spare parts for our aircraft. And we will pay."
I repeated what I had already told him, that I had no authority. But of course I promised to see what I could do.
I was well aware of the importance of helping the Iranians because of our mutual antipathy toward Iraq, and, not wanting to waste any time, I bypassed my immediate superiors and telephoned the office of the director of Military Intelligence, Maj. Gen. Yehoshua Sagi.  I spoke to his chief of staff, Maj. Moshe Hebroni. When I explained Kashani's request and the circumstances under which he was in Israel, Hebroni told me to bring him straight to the general headquarters of IDF/MI.
In his meeting with Gen. Sagi, Kashani began by repeating the already known facts about McFarlane's and Brian's visit to Tehran. But he revealed something new -- that the senior American who was to meet Hojjat El-Islam Karrubi in Madrid concerning the hostages was the director-designate of Reagan's presidential campaign, William J. Casey.
Kashani said that the secret ex-CIA-Miles Copeland group was aware that any deal cut with the Iranians would have to include the Israelis, because they would have to be used as a third party to sell military equipment to Iran. He also said something that McFarlane and Brian had not mentioned to their Israeli contact, Rafi Eitan: that Casey was going to invite the Israeli Labor Party leader Shimon Peres, who was looking like the man who would succeed Likud's Begin, to participate in the ongoing meetings and coordinate the sales of weapons to Iran from Israel.
This news alarmed Sagi, who immediately called in Rafi Eitan. Kashani repeated what he had already told us, and Eitan was disturbed. Clearly it would be a problem to have the opposition leader sitting in on these secret meetings.
Sagi told Kashani that his request for military aid from Israel would be put to the prime minister himself. Kashani was asked to remain in Israel for a few days to await an answer.
The following morning I was summoned to the director's office and told that Prime Minister Begin had given the green light for the sale to Iran of non-American military equipment, preferably non-lethal. The Iranians wanted spare parts for their F-4s, but it was decided instead to sell them tires, a gesture toward our Iranian friend which, if discovered by the Carter administration, would cause less of a rupture than had we sold technical parts. As it was, we realized the Americans would be upset should the deal be uncovered. There was a strict embargo on trade to Iran, particularly military equipment.
Later I worked out a deal with Kashani in the hotel. We would sell Iran 300 tires for the planes for $900 each, an exorbitant price -- we were making $400 on each tire. We wanted the money in advance, in cash. Kashani asked, "You don't trust us?"
I told him I would be held responsible for the money by the producer of the tires. I held out my hands. "Where am I going to get the money to pay in advance?"
Kashani left a few days later. He hadn't succeeded in getting any weapons, but he had tires -- and that was better than nothing. Within three days he had opened a numbered account at Banque Worms in Geneva, where he deposited $270,000. He phoned me. "The money is there. I'd like a date from you when the tires are going to be delivered." He left me a phone number in Paris where I could call him.
After making our arrangements with the Alliance Tire Factory in Israel, including a guarantee for payment, we went to SIBAT, the Ministry of Defense's office for foreign defense exports, to get an export license. Obtaining such export licenses is a complicated bureaucratic matter. The process was expedited through the intervention of Maj. Hebroni.
I was given a blank export license for 300 tires without markings. I took it and went to the factory. I was told there would be a problem if we wanted the tires right away, because markings couldn't be removed that quickly. I told them to blot them out. It could be done with heat.
Three days later two crates of tires marked "Diplomatic Cargo" were flown out of Israel to Vienna via El Al. After the Israeli diplomatic marks were removed, Israeli Embassy personnel transferred the tires from El Al's cargo area to the appropriate people at Iran Air. Meanwhile, I flew to Geneva and drew a bank check for $150,000 in favor of Alliance, Israel. I drew another for $14,000, payable to El Al, for the freight and insurance. A third bank check was made out to cash for $106,000.
I took the check back to Israel and dropped it on the director's desk.
"Our profit from the tires," I said.
"Hey," Sagi laughed, "this is good business."
Thus was born the new extra-budgetary Likud/intelligence community slush fund. It was the seed which grew into hundreds of millions of dollars, kept secret by one of the biggest cover-ups the world has known.
Somehow the Carter administration found out about the sale right away. On April 27, President Carter called Menachem Begin and chewed his ear off.
"You're selling military equipment to Iran while American citizens and diplomats are being held hostage by the Iranians," was the gist of Carter's complaint.
Begin didn't say anything to upset the president. Carter would have thrown a fit had he known that there were negotiations between Iranians, Israelis, and Americans about the hostages. President Carter at this point must have been rather sensitive to anything that had to do with the hostages and Iran. It was only three days after the American military rescue mission, codenamed Operation Eagle Claw, had disastrously failed.
On the night of April 24, 1980, four air force C-130s had flown a team of more than 100 men under the command of Col. Charles Beckwith to a desert spot in Iran they dubbed Desert One, where they were to transfer to eight navy helicopters coming in on a different route. The helicopters were to refuel and take commandos to another spot, 50 miles from Tehran, called Desert Two. From there, they were to travel by truck into downtown Tehran to rescue the hostages.
The plan fell apart at Desert One. One of the helicopters never made it, two others clogged with desert sand. One crashed into a C-130. The mission was doomed to fail before it began. The question remains who inside the Carter administration wanted to sabotage the president. Interestingly, Oliver North and John Singlaub, who later were to be involved in the Iran-Contra scandal under the Reagan administration, were part of this failed operation.
There were two other attempts in April 1980 to negotiate with the Iranians to get the hostages out. The PLO's Yasser Arafat, who was aligned with Syria at that moment, went to Iran to meet with Ayatollah Khomeini on the hostage subject. Arafat was trying to score points with Carter but was rebuffed by the Iranians. Around the same time, Algerian Foreign Minister Abdelaziz Bouteflika, a well-respected diplomat, met with various Iranian leaders, including Khomeini, on the subject of the hostages. The Algerian failed to broker an accord because he was not able to guarantee arms sales to Iran.
Meanwhile, in March, the first meeting between the Iranian Supreme Council's Mehdi Karrubi and Reagan associate William Casey had taken place in Madrid's Ritz Hotel. Also attending on the Iranian side were my friend Kashani and an aide from the Iranian Ministry of Defense, Dr. Ahmed Omshei. No Israelis were present. On the U.S. side, Casey was accompanied by McFarlane and a surprising character, Donald Gregg, a member of Carter's National Security Council under Brzezinski. I was fascinated and puzzled to hear that Casey was there with a Carter man, but the account Kashani gave me cross-checked with McFarlane's information passed to Rafi Eitan.
McFarlane also reported that Casey had met separately with opposition leader Shimon Peres to discuss his willingness to provide military equipment to Iran. Kashani said that Peres also met separately with Karrubi. The reason the Americans insisted that Peres meet with Karrubi was what we'd already heard -- they thought the Likud coalition was going to crumble, and expected elections in Israel at any time. Peres had tried to explain his visit to Spain as a call on Prime Minister Adolfo Suarez.
That first Madrid meeting, as reported by Robert McFarlane to Rafi Eitan, was arranged to explore future relations between the United States and Iran and to discuss supplying arms to Iran against the imminent Iraqi threat. Also discussed was the release of all Iranian monies frozen in U.S. banks and the influence the Iranian government would exert over the radical students to release the hostages. Iran, it was made clear, would make moves to normalize its relations with the United States. Karrubi emphasized how impossible it was to deal with the Carter administration and indicated that he and the Supreme Council were more than happy to deal quietly with the Republicans.
Another rendezvous in Madrid was arranged for May. As the meeting wound up, the Iranians repeated that they did not have much time. The military needed an instant boost because of the threat from Iraq. They were willing to reach an agreement with any officials who could assure them that the Carter administration would carry out any deals struck.
When word reached Begin that Peres had met secretly with a senior Iranian in Madrid, the infuriated prime minister called Peres into his office and gave him a warning: If he ever did such a thing again without the knowledge of the government, it would be seen as treason and he would have to pay the price -- whatever that meant.
So the scene was set. All concerned knew their parts. Secret meetings were to be held between the CIA "renegades" and the Republicans on one side and the Iranians on the other. Although the Israelis would not be present, they would be kept informed. The president of the United States-- and, of course, the American people -- would be kept in the dark.
1. Bakhtiar was assassinated in Paris in 1991.
2. Bazargan still lives in Tehran, is very influential with members of the clergy, and is an accepted negotiator between the West and the Iranian clergy.
3. Maj. Gen. Sagi's name is spelled Saguy in most English books. Sagi, however, is how he himself spells it when signing his name in English.
Librarian's Comment: For another view of this situation, see Obama, the Postmodern Coup -- Making of a Manchurian Candidate, by Webster Griffin Tarpley:
CARTER AND BRZEZINSKI INSTALL KHOMEINI IN IRAN
By August 1978, there were clear signs of impending revolution in Iran. This was of course a CIA people power coup orchestrated by British intelligence, the BBC, and the CIA in order to overthrow the Shah and to install in power the Ayatollah Khomeini, whom Brzezinski supported in the context of his notorious policy that Islamic fundamentalism was the strongest bulwark against the danger of Soviet communism. Carter and Brzezinski betrayed the trust of their nominal ally, the Shah, with the help of U.S. Ambassador William Sullivan. Their objections to the Shah did not revolve around his monstrous human rights abuses, but rather focused on the Shah's attempts to make independent deals with Italy, other European countries, and the Soviets, for the purpose of accelerating the scientific, technological and industrial development of his country. This was a matter of naked power politics based on the Trilateral program of blocking Third World economic development at all costs -- it was not a matter of human rights.
After the Shah had departed from Iran in January 1979, Carter, Brzezinski and NATO commander Al Haig sent Haig's deputy General Huyser to Tehran with the mission of overthrowing the moderate Bakhtiar government, blocking the possibility of a military coup or any other non-theocratic solution, and installing none other than Khomeini and his benighted supporters. In Brzezinski's view, Iran was destined to become a point from which Khomeini's doctrines of Islamic fundamentalism would radiate out into the considerable Islamic population of the Soviet Union, preparing the final downfall of communist rule. One immediate result of Khomeini's seizure of power in Iran was a new fake oil crisis, with a 200% increase in energy prices. This constituted the second great oil hoax perpetrated on the world economy by the Anglo-American oil cartel and its Wall Street and City of London owners. Carter tended to attribute rising oil prices to an actual scarcity, rather than to the reality of oligopolistic machinations and price gouging.
BRZEZINSKI ORCHESTRATES THE IRAN HOSTAGE CRISIS
On November 4, 1979, a group of Iranian militants seized the United States Embassy in Tehran Iran and took 60 American diplomatic personnel as hostages. This incident was cynically exploited by Brzezinski as a proto-September 11 pretext to create a strategic crisis in the Persian Gulf region. The pretext cited for the seizure of the embassy in the taking of the U.S. diplomatic hostages was the fact that the Shah of Iran had been admitted to the U.S. on October 22, 1979 in order to receive medical treatment. The Shah had been living in Mexico, and there was no reason why he could not have received top-flight medical care in that country. But Henry Kissinger and David Rockefeller had demanded that the Shah be admitted to the United States. Since David Rockefeller was Brzezinski's boss on the Trilateral Commission, the orchestration of the seizure of the hostages becomes evident. Carter was dimly aware of the implications of admitting the Shah to this country and he did reportedly ask at a meeting, "when the Iranians take our people in Tehran hostage, what would you advise me then?"
At this very same time the Iranian Foreign Minister Ibrahim Yazdi was in New York to attend the United Nations General Assembly, where he inveighed against the United States as "the great Satan." But this posturing did not prevent Yazdi from holding a closed-door meeting with Secretary of State Cyrus Vance. The London Financial Times reported on October 5, 1979 that, as a result of these meetings, the Carter regime had ordered the "resumption of large-scale airlifts of arms to Iran" and was considering dispatching a "limited number of technicians" to that country. Simultaneously, the U.S. military began a buildup in the Persian Gulf and the Indian Ocean. The Carter regime was in contact with Yazdi through former U.S. Attorney General Ramsey Clark of the left wing of the U.S. intelligence community. Clark wrote to Yazdi: "it is critically important to show that despots cannot escape and live in wealth while the nations they ravaged continued to suffer." When this letter later became public, it was "taken as evidence that special envoy Clark had incited the Iranians to take over the embassy and demand the return of the Shah to Iran."
BRZEZINSKI AND YAZDI; BRZEZINSKI AND SADDAM HUSSEIN
On November 1, 1979 Zbigniew Brzezinski held a secret meeting with Iranian Foreign Minister Yazdi in Algeria. "According to intelligence sources, it was during this last tete-a-tete that final details concerning the embassy takeover were hammered out." Further details of the embassy seizure and hostage-taking were discussed by Yazdi upon his return to Teheran with the U.S. charge d'affaires Bruce Laingen, who was a key operative in the political charade that was about to begin." (Robert Dreyfus, Hostage to Khomeini [New York: RTR 1981]. pp. 59-60)
Because U.S. hostages had been taken, Brzezinski circles were able to argue behind the scenes that it was imperative to keep up arms shipments to the Iranians, because this appeasement of the Khomeini regime was the only way to keep the hostages alive. At no point during the entire Carter administration were arms shipments by the United States to Iran ever halted. They were seamlessly maintained, and this is the beginning of the weapons trafficking which came into public view years later in the form of the Iran-Contra scandal of 1986. Another reason why Brzezinski wanted to arm Iran was that he was already planning to play Iran off against Iraq in the genocidal Gulf War, which went far towards destroying both of these countries.
The characteristic feature of Brzezinski's method is to avoid direct U.S. military intervention as long as possible, while attempting to destroy emerging Third World powers and other possible rivals of the United States by playing them off one against the other. (The Iran-Iraq war began in September 1980, as a result of the gullibility of the U.S. asset Saddam Hussein. Brzezinski's emissaries convinced Saddam that it would be easy to invade Iran and grab the oil province of Khuzestan or Arabistan, where the Abadan refineries and the Karg island tanker terminal are located. In reality, Brzezinski was seeking to consolidate and perpetuate the Khomeini regime, which by that point was in the process of internal collapse. The attack by a foreign enemy gave the Khomeini regime a second wind, and led to a bloody stalemate which lasted for eight full years, until September 1988. Iranian casualties in this war approached one million dead, with those of Iraq being estimated at about 400,000 fatalities. This is the characteristic handiwork of Brzezinski.)
SEIZING IRANIAN ASSETS TO ABORT EUROPEAN MONETARY REFORM
A key feature of the crisis was Carter's seizure of more than $6 billion in Iranian assets inside the United States. The new Federal Emergency Management Agency or FEMA, just founded by Brzezinski and Huntington, was a key part of the planning of this illegal move. The resulting turmoil in the international financial markets was useful to Brzezinski in that it blocked the development of the emerging French-German European Monetary System as a global alternative to the International Monetary Fund and World Bank, both controlled by the Anglo-Americans. Only one month before the Iranian crisis erupted, French Foreign Minister Jean Francois-Poncet had told reporters at the United Nations in New York of the European "vision" that the EMS would come to replace the IMF and World Bank at the center of the world financial architecture. (Dreyfus 63)
As a result of the hostage crisis, Brzezinski was perfectly positioned to blackmail Western Europe and Japan on a series of points that were of interest to the Wall Street banking community. Brzezinski demanded that the Europeans and Japanese scrupulously observe the U.S. economic sanctions and economic blockade against Iran. The only alternative to economic sanctions and economic warfare, he argued, was a direct military attack by the U.S. on Iran. It was in this context that Brzezinski told the Frankfurter Rundschau: "It is now up to Europe to prevent World War III." (Dreyfus 66)
This was helped along by a pattern of U.S. military threats to bomb Iranian oilfields or tanker terminals as part of an alleged retaliation for the seizure of the hostages. It was clear that the main victims who would suffer from any U.S. attack on Iran were more the Europeans and Japanese than the Iranians themselves, since oil deliveries out of the Persian Gulf would be severely restricted.
Brzezinski's blackmail was clearly understood by European leaders, who had long despised him. A November 28, 1979 column published in the Figaro of Paris by Paul Marie de la Gorce is indicative in this regard. The author was widely regarded as speaking for French President Giscard d'Estaing. This column stated that any U.S. military attack on Iran would cause "more damage for Europe and Japan than for Iran." Those who propose such a strategy, the French observer noted, were quite possibly courting a new world war, and were "consciously or not inspired by the lessons given by Henry Kissinger." (Dreyfus 65) All quite correct, except for the fact that the crisis was being orchestrated by Brzezinski, an even greater madman and lunatic adventurer than Kissinger.
THE CARTER DOCTRINE OF JANUARY 1980: SOURCE OF THE IRAQ WAR
Brzezinski used the hostage crisis to promulgate the so-called Carter Doctrine on the Persian Gulf, which was included in the January 1980 State of the Union address. Brzezinski insisted against all objections on the inclusion of this critical passage: "Let our position be absolutely clear. An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force." Columnist Joseph Kraft called this lunacy "a breathtaking progression from the dream world to the world of reality." (Rozell 161) This was a piece of incalculable folly, since it threw down the gauntlet to the Soviet Union in the most provocative possible way. This Carter doctrine has also provided the basis for every U.S. fiasco in the Persian Gulf region over the last several decades, including the first Gulf War to eject Iraq from Kuwait and the current Iraq war itself. If you don't like the Iraq war, you need to reserve a significant part of the blame for Brzezinski, who is so to speak the founder of the policy carried out by Bush the Elder and Bush the younger. The fact that Brzezinski today tries to acquire left cover by posing as a principled enemy of the Iraq war simply underlines his hypocrisy and guile, and the gullibility of the left liberals who believe him.
BRZEZINSKI'S DESERT ONE DEBACLE
By the spring of 1980, it was clear to the world that the Carter regime was preparing a desperate military launch into Iran under the pretext of freeing the hostages. In an article that hit the streets on April 22, 1980, the Executive Intelligence Review reported that the Carter regime "has begun a headlong drive towards a Cuban missile crisis-style nuclear confrontation with the Soviet Union over Iran, timed to occur between late April and May 11, for the purpose of blackmailing Western Europe and Japan into submitting to Anglo-American political dictates." (Dreyfus 65) The Soviet Communist Party newspaper Pravda editorialized on April 11, 1980: "Washington is not only aiming at aggravating its conflict with Teheran. Judging from everything, it is venturing a risky bluff: blackmailing Iran, as well as America's allies who depend on oil deliveries from the Persian Gulf with the threat of direct military intervention." The Soviet commentary saw that "this strategy puts Western Europe and Japan in the position of being forced participants in a game designed to strengthen the shaken position of U.S. imperialism in the near and Middle East." This Moscow observer concluded that "the prospect of being deprived of Iranian oil does not provoke any enthusiasm, especially not in Tokyo, Bonn, or Paris." (Dreyfus 66)
VANCE FEARED WORLD WAR III WITH MOSCOW
The tragic failure of the hostage rescue mission at Desert One, a rendezvous point inside Iran, was on the surface yet another proof of the incompetence and chaos of the Carter administration. There was some question as to whether the rescue mission had been sabotaged by CIA forces loyal to the Bush political machine to abort a pre-October surprise by Carter, since George H. W. Bush was now on his way to becoming Reagan's vice presidential running mate. This may have been what Iraqi state radio was driving at when it alleged that the failed U.S. attack was "playacting carried out in orchestration between Washington and Tehran." Secretary of State Cyrus Vance resigned in protest at the rescue mission, although this fact was not made public until after the mission had failed. "We haven't begun just an attack on Iran," Vance reportedly commented, "We may have started World War III." Rumors swirled around Washington to the effect that the failure of the hostage mission had been caused by a direct Soviet military intervention including MIG-21 aircraft, and according to some unconfirmed accounts the Soviet bombardment of the Desert One site. But this may have been an obvious enough cover story to hide the actions of the Bush crowd, or of deliberate sabotage by Brzezinski networks. (Dreyfus 67-68) With the failure of the hostage rescue mission at Desert One, some key Wall Street backers of the Carter administration such as George Ball and Averell Harriman bolted for the exits, abandoning the peanut farmer to his fate. Brzezinski, by contrast, constituted a stay-behind operation to run the Carter administration to its bitter end, which he personally had done so much to hasten.
At about the same time that the Soviet Union was moving into Afghanistan, fundamentalist fanatics attacked the grand Mosque in Mecca, the holiest shrine of Islam, holding hundreds of pilgrims as hostages. In Pakistan, a mob of 20,000 Muslim rioters attacked and destroyed the American embassy in Islamabad, killing two Americans. The rioters had been told that the U.S. had orchestrated the attack on the grand Mosque in Mecca. Another serious incident was an attack on the U.S. Embassy in Kabul, Afghanistan, which resulted in the murder of the U.S. ambassador. Given Brzezinski's commitment to crisis and confrontation, it is not difficult to establish him as a prime suspect in the orchestration of all these attacks.