PROFITS OF WAR -- INSIDE THE SECRET U.S.-ISRAELI ARMS NETWORK
6. The Man with the Suitcase
THE DELAY UNTIL after January 20, 1981, in getting U.S.-approved military aid to Iran worried a great many people at the highest levels of the Israeli government. If Iran was going to defend itself against Iraq's invasion, it needed weapons immediately. Saddam Hussein loomed as an expansionist presence in the Arab world -- the single most dangerous threat to Israel's existence. From Israel's point of view, he had to be stopped.
In the fall of 1980, Prime Minister Begin ordered Director of Israel Defense Forces/Military Intelligence Yehoshua Sagi and acting Director of Mossad Nachum Admoni to appoint an IDF/MI-Mossad Joint Committee for Iran-Israel Relations. Coordinating the efforts of both intelligence services, the Joint Committee was assigned the task of supplying Iran with arms in its war with Saddam Hussein.
The rationale for helping the Khomeini government was straightforward. If the Iranians fought the Iraqis, their soldiers would be killed instead of ours. Moreover, the war not only diverted Arab attention away from Israel, but also drained the Arab countries of money. From Likud's point of view, since Camp David, Israel had lost its edge as a strategic asset to the U.S. in the Middle East. The "moderate" Arab countries-- Egypt, Saudi Arabia, Jordan -- were still anti-Israel, but they were accepted by the United States. Israel was becoming increasingly isolated. So as we now saw it, the rise of Khomeini was one of the best things that had happened to us in years. He was radical, anti-American, and anti-Arab. He was doing our job, and we believed it was in our national security interest to support him.
The five initial members of the Joint Committee, who with one exception were present at the historic Paris meeting of October 1980, were hardly gun-toting James Bond types. Rather, they were unimposing, weathered men who collectively possessed a wide range of experience in and understanding of international politics, history, business, banking, law, and weaponry:
All of these men shared two attributes: They had brilliant minds, and they had no qualms about using deadly force to achieve their goals. In addition, they had access to all information in Israeli intelligence, and they were authorized to spend a great deal of money. That combination spelled enormous power.
I was appointed on November 28, 1980, to join this select group. At 29, I was by far the youngest member, but I was fluent in Farsi and had the most personal experience and contacts in Iran. Clearly, I was to be the legs to carry out the Joint Committee's initiatives; the others were to be the brains.
The job excited me. I had no problem with the political goal of containing Iraq, and I took the pragmatic view that arming Iran was as good a way as we could hope for. Of course, over the entire eight years of the Iran-Iraq war that were to follow, during which hundreds of thousands of people died and as many were wounded, I was never once to set foot on a battlefield to witness the grim results of our work.
In December 1980, I received an important assignment. Sagi called me into his office. 1 guessed that the urgent summons would have something to do with Israel's covert dealings with Iran. But his first words surprised me: "Ari, I'm giving you the enviable task of picking up $52 million."
Before I could say anything, he added: "What I'm going to ask of you is not part of the committee work -- it's part of a deal we've arranged with the Americans over the release of the hostages. In simple terms, $52 million has to be delivered to the Iranians before the new president's inauguration on January 20."
"That's fine," I said. "And which bank do I collect it from?"
Sagi paused and paced up and down the office for a while. "It's actually not that simple. You're going to have to take a trip to Guatemala. There, the Saudi ambassador will hand over to you $56 million ..."
"No, $56 million. An extra payment has to be made."
The extra $4 million, I was instructed, was to be deposited in the Valley National Bank of Arizona at its main branch in Phoenix on Camelback Road. I was given a bank account number. The name of the account holder was Earl Brian. The remainder of the money, $52 million, was to be handed over to Kashani in Europe.
I couldn't help wondering: Why Guatemala? ... Why the Saudis? ... Why Earl Brian?
The director looked hard at me. "I don't have to spell out for you how most of the payment has been worked out," he answered. "You were present when the Iranians made it clear that their radical leadership had to be paid $52 million. Ayatollah Khomeini is not totally in control, and they don't want a political confrontation in Iran. The Americans cannot arrange the money from the U.S. budget because the Americans we're dealing with are not in the government -- yet. So they've asked their Saudi friends to help them."
"Is this Saudi money?"
"No, it's CIA-connected. But the Saudis helped arrange for the banking of it."
Pieces of the jigsaw began to fall into place. I, like many others, was aware of a band of former Israeli intelligence officers who were running a drug-and arms-smuggling operation in Central America, backed by the CIA.
"Is this drug profit money from Central America?"
"Don't ask too many questions, my friend."
Sagi was being very cautious, even with me. Although he refused to confirm my suspicion, I had been working with Israeli intelligence long enough to conclude that the money had come from narcotics deals arranged in Central America by some Israelis for the CIA, and that it had been laundered by the Saudis. My assessment was to prove correct.
"Shit, they're asking me to carry their dirty drug money," I thought with a false indignation. If my sense of morality was so offended, I could have resigned right then. But I didn't. I hate to admit, it was too hot a job, too exciting to turn down.
I told Sagi I would not go into the U.S. with so much money without a customs declaration, and I insisted that someone in authority receive the money from me. I also insisted on getting a customs receipt because I was going to deposit part of the money in an American bank.
"Someone in authority will be at Miami airport waiting for you," said Sagi. "We are going to ask Robert Gates himself to meet you." That was fine with me. If Gates was going to be my safe ticket into the U.S. with millions upon millions of illicit dollars, I'd be more than happy to meet up with him once again.
Then Sagi gave me a second task: to deposit in Europe two checks, our profits from the Iranians for the secret sale of tires and wheelbases for F-4 jets. The profit from the tires had been $105,000 and from the wheelbases another $850,000. So before the Joint Committee had even started its work of selling equipment to the Iranians, we had a profit of $956,000 to initiate the slush fund. This would be "operations money" for the committee. Sagi also instructed that there should be three signatories -- myself and two others -- for this special account. And the comptroller of Mossad, he said, was to be kept informed of deposits and withdrawals. Both payments -- to the Iranians and to our slush fund -- were to be deposited initially at Banque Worms in Geneva.
Late in December I phoned my Iranian contact, Sayeed Mehdi Kashani. I told him payment of the $52 million was imminent. Kashani promised to make arrangements for me at Banque Worms, which the Iranians would also be using. He would leave the key to his safe deposit box with the bank manager along with instructions that I be allowed to open the box and deposit the money on presentation of my passport. I gave Kashani my passport number.
At the beginning of January I flew through Miami to Guatemala City. I checked into the Fiesta Hotel and the following morning called the number given me for the Saudi ambassador for Central America, who was usually resident in Costa Rica, but was in town for our meeting.
"I believe we have to meet," I said.
"Yes," he said. "I think that is necessary before any transactions take place."
That evening I drove a rental car to Antigua, the old Spanish capital of Guatemala, at present a playground of the wealthy. Bright lights pinpointed restaurants and night spots that had sprung up against a backdrop of old monasteries and convents, many of them severely damaged by earthquakes over the centuries.
I found the Italian restaurant I had been told to go to and made myself comfortable at a table -- I was some 15 minutes early for the 7:00 P.M. rendezvous. At exactly seven there was a commotion. Diners peered out through the windows as a waiter hurried to the door. A black Mercedes stretch limousine had pulled up in the cobblestone street. I didn't have any trouble recognizing my contact, an immaculately dressed man in his early 40s with a little goatee. He spotted me, too, as soon as he entered the restaurant. We dined on pasta, he drank wine, and we chatted about the Iraqi-Iranian situation for a while. Then he turned to business.
An assistant to the chief of Saudi Security and Intelligence would come to my hotel in the morning and deliver $56 million to me. Of this, $40 million would be in the form of 40 $1 million bank checks, drawn to cash on Banque Worms.
"The remainder, Mr. Ben-Menashe, will be in cash."
"But that's $16 million."
"Don't worry," he said. "Although $4 million will be in $100 bills, the rest will be in $1,000 bills."
"It sounds like an awful lot of paper," I said. "I'm going to need a huge suitcase!"
He exploded in a roar of laughter and assured me they would supply the suitcase. I laughed with him, but I knew that $16 million in cash spelled trouble. I asked that he give me bank receipts on the amount I'd be carrying in cash to show I'd collected it legally.
The phone in my room rang on the dot of nine the following morning. The caller from the lobby identified himself as Faissal Ghows from Saudi Arabia.
"Why don't you come up?" I said. I walked to the window and stared out over the largest city in Central America with its curious mix of crumbling old red-roofed houses and modern multistory office and apartment blocks. Faissal Ghows was a name I knew ... from somewhere.
He was well built, a man about my age, and he came into the room lugging a huge black Samsonite suitcase with a fat brown leather attache case under his arm. I had a glimpse of a muscular security guard in the hall before the door closed. I stared at the newcomer. I definitely knew him.
He was inspecting me closely, too. "Did you grow up in Tehran?" he asked.
He slapped me on the shoulder. "But yes, yes, we have met! I should have recognized you. We were classmates. I was the son of the Saudi ambassador in Tehran. We were in the same class in the American Community School."
It all came flooding back. I still had an old school yearbook photo of him at home in Israel.
Ghows dumped the suitcase on the bed and handed me a key.
"Why don't you open it?" he said.
I turned the key and lifted the lid. I'd never seen so much money. The suitcase was jammed with $1,000 and $100 bills.
"Sixteen million dollars," he said. Then from the attache case he brought out a large white envelope. "And here's $40 million in $1 million checks." I stared at them. The checks were drawn on the very bank that I would be paying the money back into. But of course money always has to travel in order to be well laundered.
"Why don't you count them?" he asked.
I counted out the checks. Exactly 40. Not one less, not one more. People didn't make mistakes with that kind of money.
My eyes went back to the cash in the suitcase.
"Want to count it?" asked Ghows. And before I could say anything, he took a money-counting machine from his attache case. We spent the next hour or so checking the money. It was all there, all right. I set aside $4 million, Earl Brian's money, and stuffed it into plastic laundry bags I'd found in one of the cupboards. Then I put the plastic bags on top of the other money and closed the lid. Ghows handed me the withdrawal papers from Banque Worms.
"This will prove you didn't knock someone on the head and steal their money," he said.
"How did you get the money here?"
"That's our business," he said, deadly serious.
I called Israel later that morning -- it was evening there -- and explained I would be leaving for the United States early the following morning. I gave the number of the Eastern flight I would be taking to Miami, and reminded my office that I expected to be received in the customs area, as promised, by Robert Gates.
"Don't worry," I was told. "It will all be arranged."
I also asked that the banker in Phoenix be told I would be paying in $4 million and to expect me at his branch.
That night I slept fitfully. Occasionally I sat up in bed and checked the suitcase and the briefcase containing the checks Ghows had left me.
The Eastern flight was to leave for Miami at 8:00 A.M. At 5:00 A.M. I put the suitcase, the briefcase, and a garment bag, which also held the money-counting machine, in the back seat of the rented car and drove to the airport. I returned the car, paid the airport tax, and then went to check in at the Eastern Airlines counter.
"Do you have any luggage?" I was asked.
"No, I'm carrying all my luggage on the plane."
The check-in clerk, a Japanese woman, stared at the suitcase. "You can't take that on board," she said.
"I'm flying first class, and I have the right to take the luggage with me. There'll be enough room in first class."
"No, it's not possible. It must go into the hold. You will get your luggage back at the other end."
I was not to be moved. She called the supervisor, who saw the determined look on my face, checked that first class was virtually empty, and told the woman: "Passenger privilege -- let him take it on board."
Guatemala City Airport had no x-ray machine at the time, but as I approached the customs area, everyone stared at me. I was weighed down with baggage. Security guards were waiting to go to town on me. But I showed them my diplomatic passport, and they had to stand aside. My passport was stamped, and I went through.
Shortly before the flight, I and another person flying first class were called on board. The flight crew questioned my right to bring the suitcase with me, but I explained that permission had been granted, and after a little commotion I was allowed to take my seat.
Thirty-two thousand feet over the Caribbean, I felt a tinge of apprehension as the enormity of my mission swept over me. For months, the world had watched and waited as efforts were made at the diplomatic level to secure the freedom of the 52 Americans being held hostage in the U.S. Embassy in Tehran. No one knew anything of the deceit that had been played out in Madrid, Barcelona, Amsterdam, and Paris. The hostages themselves certainly knew nothing about the way they had been used for political gain. Now the stalemate between the Iranians and the United States was about to be broken. All I had to do was make sure the contents of the suitcase and the leather briefcase that rested on my lap were safely delivered.
As the plane began its descent over Florida, I wondered what lay ahead. Would Robert Gates really be there to meet me? Or was I going to be pounced upon by a team of customs officials and FBI agents who'd been tipped off about a big-time money launderer? Who knew what convoluted plot had been hatched? In this game too many heads roll, there is much double-dealing. Even the position I held in Israeli intelligence would not protect me from being used if it were expedient.
A sense of relief overwhelmed me as I saw Gates's familiar figure standing right by the exit to the tunnel running from the aircraft. He was accompanied by another man, and both were chuckling as they watched me approach with my load. Gates shook my hand warmly, said how good it was to see me again, and introduced his companion as a special customs agent.
The customs man said, "I'll carry this for you," and picked up the suitcase. He seemed surprised at how heavy it was. It weighed, according to the scale in the Fiesta Hotel in Guatemala City, about 110 pounds.
Gates took my garment bag. I carried the briefcase.
I had already filled in my customs card, but had not declared the money on it. I gave the card to the agent, who said he would take care of it and asked me to follow him through passport control into a small private office. There, with Gates looking on, he asked how much money I had.
"I would like a customs slip for $56 million," I said. The two men smiled at each other.
At my request, I was given two receipts, one for $52 million, the other for $4 million. Theoretically, I could have gone through without a declaration because of diplomatic immunity. But I wasn't taking any chances. I wanted this money to go through legal channels to cover me in case any awkward questions were asked later.
I picked up the garment bag and the briefcase. Gates immediately offered to carry the suitcase. He, too, seemed surprised by its weight. Dropping it onto its wheels, he followed me out into the main terminal. It was an extraordinary scene, this high official of the Central Intelligence Agency  shoving a suitcase jammed with $16 million through the bustling crowds of businesspeople, tourists, and locals. No one recognized him. No one had a clue about the fortune that was passing by under their noses. In retrospect, I wonder how he would have reacted had the suitcase suddenly burst open and the money spilled out across the floor.
We flew to Phoenix on Eastern, first class, with a changeover in Atlanta. I had the same difficulty convincing the airline staff to let me on the plane with the suitcase. Gates certainly wasn't going to expose his identity by trying to pull rank. I finally managed to get the go-ahead to take it on board.
On the flight to Phoenix, Gates made no reference to the money, or even to the fact that it had gotten through safely. It was almost as if he expected nothing to go wrong. Instead, he briefed me on how Israel should handle American arms sales to Iran. This was clearly the reason he accompanied me to Phoenix.
"When the Iranians give you their requirements," he said, "a decision will have to be made whether the equipment is going to come from your stocks, from the U.S., or from other quarters. You and your people are to contact my office and talk only to me or my assistant, Clair George."
Reagan was about to take office, but the embargo on sales to Iran was obviously going to stand for a long time to come. The official embargo, that is. Gates, of course, was talking about something different.
"If the U.S. government agrees that the requested equipment can be supplied, we'll go to the companies that make it, buy it, and put it together at an air base," said Gates. "It will then be Israel's responsibility to pick it up from there. You're also going to need Israeli end-user certificates."
These were documents in which Israel would promise that arms obtained from the United States would not be sold to any other country. Gates's request was, of course, just a formality. The end-user certificates in this case were pointless -- except to cover the U.S. end in case the arms deals became public. Then it could simply blame Israel for illegally reselling U.S. arms.
Payments from the Iranians for the weapons they were to receive were discussed. The Iranians would pay the Israelis, and the Israelis would in turn pay the Americans through numbered accounts in Europe, according to issued instructions.
"I don't have to impress on you the necessity to keep this quiet," said my traveling companion. ''And, of course, if any of this is made public, in either the near or distant future, we will deny all knowledge." Because I was a representative of the Israeli government, he trusted that every word he'd spoken would be reported back to my superiors.
On arrival in Phoenix, Gates helped me lift the suitcase into a rental car. His job, to instruct me on the procedures of the arms sales, was over for the time being. As I bade him goodbye and prepared to drive to the hotel, he said, "Good luck. I won't say goodbye-- I guess we'll be seeing each other."
"By the way," I said, "what's the extra $4 million for?"
"Oh ... just operating funds." He smiled and walked away.
At the hotel I called an Israeli friend living in Phoenix and asked if I could leave a suitcase in a safe place for the night. He offered me his house and came to pick me up. Back at his home we shoved the suitcase under his bed. "What the hell have you got in here, Ari -- bricks?" he asked.
"Just a few prized possessions," I replied.
We went out for the evening, after I'd made sure that his family was remaining in the house. However, I carried with me the briefcase containing the $40 million in checks.
In the morning, my friend brought the suitcase back to the hotel. While he waited, I quickly opened it in the bathroom and took out the $4 million I had placed in the plastic laundry bags in Guatemala. Then, with the money covered with sweaters, I persuaded my friend to take me and the suitcase back to his house. He was puzzled by my movements, but we were good enough friends that I knew he wouldn't ask questions.
Later that morning I made my way to the Valley National Bank. I gave the banker who had been told to expect me the $4 million and asked him to put it in Earl Brian's account, as arranged. The customs slip to show that I'd declared this money and that it was "legitimate" was essential for the deposit.
"That's a lot of money to be walking around with," the banker said.
I shrugged, thanked him for his assistance, and left.
The following morning I picked up the suitcase from my friend's house, threw it in the back of my rented car -- it was now $4 million lighter, of course -- and checked in for a TWA flight to New York with an ongoing connection to London, and on to Geneva by British Airways. I had to go through the same taxing routines as before, persuading airline staff to let me take the suitcase on board the aircraft. It was only because I was traveling first class and had a diplomatic passport that I was able to pull it off.
I arrived in Geneva late in the morning on a cold January day and took a taxi directly to Banque Worms. At the safe deposit area, I asked for the manager and told him that Kashani had left a key for me. I produced my passport; he checked the number, then asked me to follow him downstairs, through a steel-barred door, to a large safe deposit box. He turned one of the box's locks with his own key, and then I used the key that Kashani had left for me. When the manager had gone, I opened the box, picked up bundles of money, and just threw them in, along with the envelope containing the $40 million in checks. I closed the box and left the bank, carrying the empty suitcase, my briefcase, and the garment bag. I felt considerably lighter.
I took a taxi to the Geneva Hilton and made a call to Israel. Everything, I reported to Sagi's chief of staff, had been delivered. But I still had to open the special account with the profits from the sales of the tires and the wheelbases to Iran. A "friend" -- a Mossad agent -- would be calling on me, I was told.
The agent said little when he arrived at the hotel. He gave me an envelope containing two checks totaling $955,000. It seemed such small change. He also gave me the documentation for the company in whose name I later opened an account, at Banque Worms. Business was booming at Worms.
I phoned Kashani, who was in Geneva and had left his number with Sagi's office. "The money for the students is in the bank," I told him. "And I think that soon we'll all be ready to start business. You get your money and release the Americans, and the weapons can start flowing."
Later Kashani visited me at the hotel and gave me a new list of equipment the Iranians wanted. I promised to do what I could. I checked out of the hotel and made my way to the airport. Behind in the hotel room I'd left an empty suitcase. The hotel might send it back to me, they might not. As far as I was concerned, I didn't want to see it again.
On January 20, 1981, the world turned on its TV sets to watch the inauguration of Ronald Reagan and George Bush as president and vice president of the United States. Just as Reagan was being sworn in, there was a flash announcement from Associated Press. I was one of the few who felt no emotion or surprise at the news that the hostages in Tehran had been released.
1. At the time, Gates was officially the national intelligence officer for U.S.S.R./Eastern Europe, a post he held from October 1980 till March 1981, when he became director of the DCI's executive staff.