Profits of War: Inside the Secret U.S.-Israeli Arms Network

"Science," the Greek word for knowledge, when appended to the word "political," creates what seems like an oxymoron. For who could claim to know politics? More complicated than any game, most people who play it become addicts and die without understanding what they were addicted to. The rest of us suffer under their malpractice as our "leaders." A truer case of the blind leading the blind could not be found. Plumb the depths of confusion here.

Profits of War: Inside the Secret U.S.-Israeli Arms Network

Postby admin » Tue Jun 09, 2015 3:31 am

Profits of War: Inside the Secret U.S.-Israeli Arms Network
by Ari Ben-Menashe, © 1992 by Aris Ben-Menashe
Jacket design © by One Plus One Studio
Photo of the author by Dolores Neuman



This book is dedicated to Ellen Ray, who changed my life

"While our slush funds grew steadily, unusual overhead costs diminished the profits. True, we were selling weapons to the Iranians with a 50 percent to 400 percent mark-up on the ex-factory price, but the actual cost of procuring and delivering them was high, too. There was a huge network of arms brokers to be paid, money to be handed over to those involved in "smokescreen" deals, bribes to be paid to politicians and civil servants, campaign "donations" to be made around the world, and other expenses. The "donations" sometimes cost more than the weapons themselves.

Contributions were even made from the slush fund, albeit indirectly, to U.S. politicians, including Democrats on the Iran-contra panel. This may be one reason that the full story behind the Iran-contra scandal never materialized. Even though Israel leaked details about some of Oliver North's activities, the Democrats, many of whom were well aware of what was going on, kept quiet about the huge flood of arms that had been running to Iran through Israel. Tel Aviv, not wanting its own arms deals with Tehran to be exposed, had paid them off through various, often convoluted, contributions to the American Israel Public Affairs Committee (AIPAC). I don't know who at AIPAC knew the ultimate source of these contributions, but it was clear someone did.

In Britain our committee passed money in the same fashion to the Jewish Reform Movement, confident that this money would be channeled to the Conservative Party. Because of the friendship with Britain, the Mossad European operations headquarters was moved in 1982 from Paris to London and set up in a building on Bayswater Road.

A further example of the very special friendship that Israel established with Britain came when the Falklands war erupted. Israel froze the sale of weapons to Argentina, despite existing contracts for Kfir aircraft. As a result, the British government, covertly but officially, reimbursed Israel for its losses on the contracts. Of course it was known throughout the intelligence community that Israel was also keeping British politicians happy through the Jewish Reform Movement's Torah Fund. The friendship soured, however, in 1988, when Margaret Thatcher supported the sale of military equipment for unconventional warfare to Iraq. It was particularly abhorrent for Israel that her son was involved in it.

Aside from the contributions being made in the United States and Britain, payments were being made all around the world, and those who received them kept their mouths shut -- even in faraway Australia. Australia was often used by the Joint Committee for "parking purposes," aircraft refurbishment, and stationing of slush-fund monies. In 1982 I first visited Australia to hire an accounting firm and open accounts in four major banks. Eventually monies deposited in Australian banks reached the amount of approximately $82 million U.S.

Starting in early 1986, 12 C-130 aircraft we had purchased from Vietnam were shipped to Western Australia for repairs and refurbishment. In 1987, while the Iran-contra hearings were going on in the U.S. Congress, some of the arms going to Iran were temporarily parked in Western Australia. Approximately 60 containers of artillery shells from North Korea were parked in Fremantle Port. Four thousand TOW missiles that went from the U.S. to Guatemala were shipped to Western Australia and held for approximately two months at a naval base on Stirling Island. Silkworm missiles purchased from China for Iran were also parked at Stirling Island for approximately two months.

In February 1987 a "contribution" was made to the West Australian Labor Party by our U.S. counterparts in the CIA. In gratitude for the use of Australian soil for the transfer of arms to Iran, Richard Babayan, a contract operative for the CIA, received a check for $6 million U.S. from Earl Brian, who was acting on behalf of Hadron, a CIA "cut-out." Babayan traveled to Perth and stayed at the home of Yosef Goldberg, an Australian businessman of Israeli origin who was well connected to Israeli intelligence and to the local Labor Party headed by Brian Burke, then premier of Western Australia. Babayan handed the check to Goldberg, who in turn gave it to Alan Bond in his role as the guardian of the John Curtin Foundation funds. This money was passed on by one of Robert Maxwell's companies in Australia to be held by the Pergamon Press Trust Fund in Moscow. Babayan later corroborated the details of this operation in a sworn affidavit.

Despite the high costs involved, profits were still made on the sales to Iran. At various times the fund reached peaks of more than $1 billion. At its height it stood at $1.8 billion, with money constantly coming in and going out -- a huge turnover that would have made a successful conventional enterprise very envious. The Likud leaders running the government intended to use the money for three main purposes.

The first was to finance activities of Yitzhak Shamir's faction of the Likud Party. Between 1984 and 1989 no less than $160 million was funneled to Shamir's faction, handled by the deputy minister in the Prime Minister's Office, Ehud Ulmart, who was very close to the prime minister. Other funds were contributed to the whole Likud Party, especially to its 1984 and 1988 election campaigns. That amount totaled about $90 million.

Second, the slush fund helped finance the intelligence community's "black" operations around the world. These included funding Israeli-controlled "Palestinian terrorists" who would commit crimes in the name of the Palestinian revolution but were actually pulling them off, usually unwittingly, as part of the Israeli propaganda machine.

A key player in some of these operations was the former Jordanian Army Col. Mohammed Radi Abdullah, the man who was with Pearson and Davies when I made our approach to Davies. Today in his early 50s, Radi was decorated by King Hussein of Jordan for his bravery in the 1967 Middle East war. However, his family fell out with the king because they were not willing to participate in the mass slaughter of Palestinians by the Jordanian Army in 1970. The family emigrated to London. The colonel married a woman related to Saddam Hussein and went about setting up a number of companies, including shipping offices in Cyprus and Sicily.

Radi became known as a businessman who championed Arab and Palestinian causes in Europe. But he missed his homeland and the days when he was lauded as a hero. He fell to the ways of the West, started drinking heavily and spent a fortune on gambling and women.

In the mid-1970s, to recoup his losses, Radi went to work for Pearson, who was supplying intelligence information to Israel. With Radi's unwitting help, Pearson began to acquire intelligence about Palestinian organizations in Europe. The way he did it was by selling arms to those organizations. An arms dealer named John Knight, who ran a company called Dynavest Limited, located at 8 Waterloo Place, London SWI, and another dealer who operated out of Sidem International Limited, Appleby House, 40 St. James Place, St. James Street, London SWI, acquired arms from Yugoslavia. They would sell them to Radi, who would in turn sell them to the Palestinian terrorist, Abu Nidal, and other Palestinian groups. Radi was unaware of Pearson's Israeli connection, as were the others involved.

While it may seem curious that Pearson, a man working with Mossad, was encouraging a Jordanian to sell weapons to Israel's enemies, it was actually all part of a very cunning plot. In doing business with these groups, Radi learned what they were going to use their weapons for and unsuspectingly passed the information on to Pearson. Pearson, in turn, passed on to Mossad the intelligence about the movements of the groups and the number of weapons they had.

Based on Radi's unwitting tips, over a two-month period 14 or 15 Palestinians were wiped out. Word went out among the Palestinian groups that Radi was working for Israeli intelligence and, fearing for his life, he took a trip to Baghdad and presented his case to Abu Nidal himself. Abu Nidal believed his story that he had been used -- which he had -- and put the word out that Radi was "clean." The blame was placed on Yasser Arafat's group -- Palestinian factions at that time were warring among themselves.

Radi went back to his drinking and womanizing, and the money he made selling arms for Pearson all drained away. At that very vulnerable point, in 1978, Pearson stepped in again and offered Radi a £200,000 loan. This time, Pearson made it quite clear to him that the money was coming from an Israeli source. The desperate Radi accepted the loan and was recruited to work for an antiterrorist group in Israel run by Rafi Eitan.

The group's methods were rather unconventional, one could say heinous, but it had operated successfully for years. An example is the case of the "Palestinian" attack on the cruise ship Achille Lauro in 1985. That was, in fact, an Israeli "black" propaganda operation to show what a deadly, cutthroat bunch the Palestinians were.

The operation worked like this: Eitan passed instructions to Radi that it was time for the Palestinians to make an attack and do something cruel, though no specifics were laid out. Radi passed orders on to Abu'l Abbas, who, to follow such orders, was receiving millions from Israeli intelligence officers posing as Sicilian dons. Abbas then gathered a team to attack the cruise ship. The team was told to make it bad, to show the world what lay in store for other unsuspecting citizens if Palestinian demands were not met. As the world knows, the group picked on an elderly American Jewish man in a wheelchair, killed him, and threw his body overboard. They made their point. But for Israel it was the best kind of anti-Palestinian propaganda.

In 1986, Radi was involved in another slush-fund black operation -- the well-documented attempt to blow up an El Al plane. Or at least what was publicly perceived to be an attempt. In fact, it was a cold, calculated plan conceived by Rafi Eitan to discredit the Syrians. At a secret meeting in Paris, Eitan told Radi that he wanted to implicate the Syrian Embassy in London in terrorism and have all the Syrian diplomats thrown out of England. Radi had a 35-year-old cousin, Nezar Hindawi, living in London, who had two things going for him -- he was friendly with the Syrian Air Force intelligence attache in London, and he had a problem with an Irish girlfriend who told him she was pregnant.

Radi went to his cousin and offered him $50,000. At the same time he told Hindawi that he wanted him to do some work on behalf of Palestine that would also rid him of his troublesome girlfriend.

"This money I'm offering you," Radi told Hindawi, "is from our Syrian brothers on behalf of the Palestinians. We want to blow up a Zionist plane. All you have to do is make sure the girl gets onto an El Al plane with explosives in her bag."

Radi arranged for his cousin to meet the Syrian intelligence officer, and Hindawi later came away with the clear impression that what he was doing was for the Arab cause. In accordance with his briefing, Hindawi told his 32-year-old girlfriend, Ann-Marie Murphy, a chambermaid at the Hilton Hotel on Park Lane, that he loved her and wanted to marry her. He was eager to introduce her, his future bride, to his old Palestinian parents who lived in an Arab village in Israel. He told her to go and visit them and receive their blessing. Then, when she arrived back in England, they would get married. Overjoyed, she agreed to go, not realizing that the address he gave her in Israel was bogus.

As far as Hindawi knew, the woman was going to be sacrificed. All he had to do was tell her that he wanted her to take a bag of gifts to his parents. But because he didn't want to risk her being stopped for having too much carry-on luggage, he would arrange for a "friend" who worked at the airport to pass her the bag when she entered the El Al departure lounge. She would pass through the regular Heathrow security checks and then be given the package containing the bomb.

Hindawi had been told that a Palestinian cleaner would pass the deadly package to Ann-Marie. In mid-April 1986, he kissed her goodbye and watched her walk through passport control to what he expected would be her death, along with that of all the other 400-plus passengers on board the El Al jumbo jet.

In the El Al departure lounge, an Israeli security man dressed in casual clothes -- the "Palestinian cleaner" -- passed the girl the parcel. She took it. But within seconds she was asked to submit to a search. The security people, who were in on Rafi Eitan's plan, could not afford any accidents. When the bag was opened, plastic explosives were found in a false bottom.

Ann-Marie was rushed off to be interrogated by British security. Sobbing, she told the story of the rat of a boyfriend. Police arrested Hindawi at the London Visitors Hotel, between Notting Hill and Earl's Court, after his brother convinced him to give himself up. He spilled the beans and told them that a Syrian intelligence officer had asked him to carry out the task. But Radi was not implicated. He was under MI-5 protection. As a result, Margaret Thatcher closed down the Syrian Embassy in London. Rafi Eitan had had his way, Hindawi was jailed for 45 years, and Ann-Marie went home to Ireland where she gave birth to a daughter.

The third and last main purpose for the slush-fund money was to finance the housing projects in the West Bank and Gaza Strip for Jewish settlers who had been taking over Palestinian land there. Since many members of the U.S. Congress saw these housing projects as a provocation that would impede peace in the Middle East, a lot of U.S. aid to Israel prohibited the use of the money for building in the West Bank. As part of the coalition, the Labor Party, keen to participate in a peace conference, was also against a government project for West Bank housing.

The answer, as far as Likud was concerned, was to draw on the slush fund. Tens of millions of dollars were used in the West Bank and the Gaza Strip to help build the foundations for new Jewish settlements and to buy the land from the Arabs. Although much land was simply confiscated and more taken through condemnation for government purposes, many Arabs, forbidden by the PLO to sell land to the Jews in the West Bank, nevertheless did so at inflated prices, even though they were putting their lives at risk should they be caught.

What they did was sell to various foreign Jewish front companies that were actually financed by the joint Committee. Many West Bank Arabs became wealthy selling their land, taking the money and emigrating to other countries. As far as Likud was concerned, it was money well spent, because it was encouraging the Arabs to emigrate, while leaving land for the Jews to move onto. Their houses would also be subsidized by the slush fund."

"Profits of War -- Inside the Secret U.S.-Israeli Arms Network," by Ari Ben-Menashe

Table of Contents:

• Inside and Back Cover
• Acknowledgments
o 1 Youth
o 2 Codebreaker
o 3 Love in the Time of Revolution
o 4 Groundwork
o 5 The Agreement
o 6 The Man with the Suitcase
o 7 The First Billio
o 8 The Ora Group
o 9 Promis
o 10 The East Bloc
o 11 The Second Channel
o 12 Coverup
o 13 Nuclear Nation
o 14 The Revolutionary
o 15 The Judge
o 16 Never Again
o 17 "Agricultural Project"
o 18 Coup D'Etat
o 19 Mission to Colombo
20 Means of War
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Re: Profits of War: Inside the Secret U.S.-Israeli Arms Netw

Postby admin » Tue Jun 09, 2015 3:32 am


Inside Cover: This is the book the Israelis tried to stop, written by the man they said didn't exist -- the book that the CIA tried to sabotage.

Ari Ben-Menashe worked for more than a dozen years in the inner circles of Israel's clandestine services. He was privy to the negotiations between the Republicans and the Iranians to hold the American hostages until after the 1980 election -- the "October Surprise" -- and he was there when Bush met a high Iranian official in Paris in October 1980. He also worked directly with Robert Gates -- now the director of the CIA -- to arrange the transfer of $52 million in cash to Iran in early 1981.

Ben-Menashe was one of the six members of Israel's top-secret Joint Committee on Israel-Iran Relations, responsible for the transfer of billions of dollars of arms to Iran during the 1980s. He traveled the world, buying and selling arms, setting up the front companies and conduits necessary for this massive trade, virtually all of it with the connivance of the CIA. In 1986, in Israel, he briefed George Bush.

Ben-Menashe also was involved in Israel's attempt to halt the U.S.'s arming of Iraq. He and his colleagues tried everything to prevent arms dealers -- including Margaret Thatcher's son Mark -- from supplying Saddam Hussein with unconventional weapons.

Ben-Menashe played a role in the growth of the Israel nuclear arsenal, arranging for the acquisition of strategic materials through bizarre and incredibly difficult channels. He saw Israel's links to South Africa flourish; he watched super-secret Israeli committees calmly review their lists of which enemies of Israel would live and which would be assassinated; he saw his masters sponsor monstrous terrorist acts, all for reasons of state.

In the course of his operations, he worked intimately with a network of agents and collaborators that encompassed some of the most famous and powerful men in the world, including British publishing tycoon Robert Maxwell, and high U.S. government officials such as Senator John Tower and National Security Adviser Robert McFarlane.

This his former allies cut him off and set him up. He spent nearly a year in a U.S. jail on trumped-up charges while the Israeli government denied it had ever heard of him. But in October 1990, he was acquitted -- because he proved that both Israel and the United States had, indeed, authorized the decade-long secret sale of arms to Iran.

This book, which reads like a gripping spy novel, is the inside story of the man who was a key source for Gary Sick's October Surprise and for Seymour Hersh's The Samson Option. It dissects the international arms trade as it tells of the accumulation of fortune in CIA and Israeli Intelligence bank accounts, whose ownership is still publicly disavowed by all concerned. Pieces of this puzzle were tantalizingly revealed during the Iran-contra investigations; now the full picture emerges with breathtaking clarity.

Ari Ben-Menashe was born December 4, 1951, in Tehran, Iran, to an Iraqi-Jewish family. In 1966 he emigrated to Israel. From 1974 to 1977 he served in the Israel Defense Forces, in signals intelligence. In the years 1977 to 1987 he was a civilian employee of the External Relations Department of IDF Military Intelligence. From 1987 to 1989, he was a special intelligence adviser to Prime Minister Yitzhak Shamir. He speaks Arabic, Farsi, Hebrew, English, French, and Spanish.

Since 1990, he has been a man without a country, dividing his time among England, the United States, and Australia. He cannot, for obvious reasons, return to Israel.


Back Cover: "The man who knew too much, the spy who came in from the cold, the man without a country -- Ari Ben-Menashe has earned every cliche the literature of espionage has to offer.

"The most closely guarded secrets in the world have passed before his eyes. Ignore him and you'll miss out on the great secrets of the Reagan-Bush era. A dozen or more highly placed intelligence sources have been able to corroborate key stories that were never meant to see the light of day ... adventures and allegations so stunning, so monumental that they go to the heart of whether or not this country is still a constitutional democracy.

"Ari Ben-Menashe is one of the most dangerous renegade agents ever to defect from Israeli intelligence. It is hard to think of anyone who has told us more about the secrets of the intelligence world than he. His charges have been corroborated."

-- Craig Unger, in the Village Voice

"The controus of the Israeli intelligence effort can be discerned through the activities of one man, Ari Ben-Menashe."

-- Gary Sick, in October Surprise

"Ben-Menashe's deeds deal with the most sensitive issues of Israeli existence: nuclear secrets of the State of Israel and an international arms network involving Israel's relationship with the only power left in the world today, the United States.

"In talks with people who worked with Ben-Menashe, the claim that he had access to highly sensitive intelligence information was confirmed again and again."

-- Pazit Ravina, reporter for Davar

"I knew him for more than ten years. I often called upon him to take part in discussions with the head of the intelligence office. Ari Ben-Menashe had access to very, very sensitive material."

-- Moshe Hebroni, former chief of staff, office of the director of Israeli Military Intelligence

"Shamir, Ben-Menashe said, decided 'without any hesitation to open the Soviet Bloc to Israel. He authorized the exchange of intelligence with the Soviets. Suddenly, we're exchanging information.'

"Ben-Menashe's account might seem almost too startling to be believed, had it not been subsequently amplified by a second Israeli, who cannot be named."

-- Seymour Hersh, in The Samson Option

"Ben-Menashe had access not just to the greatest secrets of Israeli intelligence, but also of the countries with whom Israel exchanged intelligence."

-- An Anonymous Former Colleague
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Re: Profits of War: Inside the Secret U.S.-Israeli Arms Netw

Postby admin » Tue Jun 09, 2015 3:32 am


WRITING INTELLIGENCE REPORTS does not make one an author. This book would not have been possible without the heroic efforts of Richard Shears and Isobelle Gidley; who listened to me recount my experiences for months on end, painstakingly turning my recollections into a book. Nor could it have been possible without the meticulous craftsmanship, writing, and editing of Zachary Sklar, who, almost singlehandedly, turned that first version into the book you are about to read.

Twelve years as an intelligence officer also does not prepare one for the Byzantine world of publishing. I am most indebted to John Young, my agent, and Patrick Gallagher and Paul Donovan of Allen & Unwin Australia, who together had faith in this project at its inception. Then, I especially needed the counsel, friendship, and courage of Ellen Ray; Bill Schaap, and Danny Mintz of Sheridan Square Press in New York, who brought this book to fruition.

Of course, had I not been acquitted of the charges leveled against me by the U.S. government, my memoirs would be a futile dream. For this I will always be grateful to Thomas F.X. Dunn, who not only successfully defended me but also continued to encourage my efforts to tell my story.

I must also thank the journalists, researchers, friends, and family who had enough respect for me to listen to what I had to say and maintain my faith that it would, ultimately, be made public. My mother, Khatoun, my brother-in-law Michael, and Marian Gail were extremely supportive. Robert Parry, Gary Sick, and Phil Linsalata heard me out -- and assisted me -- when I needed it most. In Australia, Grant Vandenberg, Jan Roberts, and Mark Corcoran were also very helpful.

Finally, I want to thank those of my former colleagues in Israeli intelligence -- who must remain unnamed -- who have renewed contact with me over these last few years, despite personal dangers to themselves and their careers.

Ari Ben-Menashe
Sundown, New York
July 1992
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Re: Profits of War: Inside the Secret U.S.-Israeli Arms Netw

Postby admin » Tue Jun 09, 2015 3:33 am


EARLY ONE MORNING in the spring of 1990, I lay on my bunk in the Metropolitan Correctional Center in New York, unable to sleep, my mind restless. I stared at the ceiling of my tiny cell, and the fluorescent lights stared back, unblinking. I glanced over at the depressing furnishings -- a sink, a toilet, two metal cabinets.

This was federal prison -- my home for the time being. It wasn't terribly violent -- no murders, no gang rapes. My neighbors on the high-status white tier, as opposed to the black and Hispanic tiers, were mostly white-collar criminals. John Gotti, the Mafia don, had been here for a short time, but had been released on bail. (He won that case, but he was to return later.) Adnan Kashoggi spent a few nights in residence. And Joe Doherty, the Irish revolutionary, was present all the time I was.

The conditions weren't that awful either -- nothing like what I had been subjected to at El Reno in Oklahoma while being transported across the country. No overcrowding, no debilitating noise, no guard brutality as in many state and city jails. MCC was more like a third-class, flea-bag hotel -- with one important exception. You weren't free to leave.

Below me, on the lower bunk, my cellmate, Nick Lante, later convicted of conspiracy to sell heroin in the "pizza connection" case, snored. How in the world had I ended up here? Living with this guy? In this place? What had gone wrong?

The events of the last few months flashed through my mind. In the fall of 1989 I had been on top of the world -- a healthy 37-year-old Israeli citizen, married with a delightful young daughter, a prestigious job in the Prime Minister's Office, a considerable amount of money in the bank, and a two-week vacation in Australia awaiting me. Then one day I was arrested and tossed into jail in Los Angeles on phony charges of illegally trying to sell three C-130 transport planes to Iran.

I'd been expecting something to happen for a while -- in Australia, Israel, the U.S., anywhere, anytime. I didn't know exactly what, but ever since my friend Amiram Nir had died in a mysterious "plane crash" in late November 1988, two years after his involvement in the Iran-contra affair had been revealed, I'd been worried.

So this was it -- an arms-dealing rap. Actually I felt a measure of relief. At least it wasn't death. Nobody was likely to kill me in jail in the custody of the U.S. government.

But then the reality began to sink in, and I felt deeply hurt. I'd been set up, betrayed, by the American and Israeli governments. The Americans I could understand. I knew a lot about the CIA's arms deals with Iran and Iraq; in fact part of my job had been to threaten to go public with that information if the CIA didn't halt chemical weapons sales to Saddam Hussein. Naturally, the Americans were not pleased.

But the Israelis, my own people, my own government that I'd served for all my adult working life -- that was hard to swallow.

I'd started working for the government as a codebreaker on the Iranian desk in Signals Intelligence during my three years of compulsory military service, 1974 to 1977. Then, as a civilian, I'd put in ten years with Israel's military intelligence, in the prestigious External Relations Department; from 1980 I also served on the Joint Committee for Iran-Israel Relations. Finally, I had spent two years as a roving troubleshooter for Prime Minister Yitzhak Shamir, working directly out of his office, with the title of special intelligence consultant.

It was secret missions for Israel that had resulted in my being jailed. When word of Shamir's communications with the PLO leaked out and embarrassed the government, someone had to be sacrificed. I was the one.

That's how I had ended up at Metropolitan Correctional Center, in this metal bunkbed, staring at the fluorescent lights, unable to sleep. I had believed that my work was part of the effort to ensure the survival of the State of Israel and the Jewish people. But here I was in prison, my future in peril, and nobody was coming forward to help me. When I was needed by my employers, I was always there. When I needed them, they turned their backs on me. Shamir, for whom I had felt great respect, and who had known my father since the 1940s, had had a hand in setting me up. And then two lawyers representing the Israeli government had visited me in prison and asked me to make a deal -- plead guilty; keep silent, go live in obscurity somewhere. I'd refused, and now that government was publicly denying that I'd ever worked for it.

I had expected this official government response. But from those I'd worked with and considered my friends I had also expected some support. There were ways it could have been done without their risking their own lives or careers. But no one did anything. No one would even acknowledge they knew me.

My own wife told me on the telephone from Israel that there was nothing she could do for me. She refused to come to New York. My sisters wouldn't talk to me, out of fear. Everyone except my mother had abandoned me -- and she was being hassled and threatened by the Israeli government. I never had felt so alone.

My choices seemed pretty clear:

I could do what the Israeli government lawyers had offered to arrange -- keep silent, plead guilty, get a deal from the judge, be totally discredited, accept a lot of money from the Israeli government, and go off to live in the boonies somewhere.

I could plead not guilty, but not say much about what had really gone on, and see what might develop as my trial approached.

I could go public with my story, talk to journalists, plead not guilty, go to trial and tell the truth as my defense -- that I had sold billions of dollars' worth of weapons to Iran, but that I had been acting on behalf of my government in everything I had done, usually with the full knowledge and cooperation of the U.S. government as well.

I mulled the options. The first seemed the easiest. I could conceivably return to my country, try to save my marriage, at least see my daughter, perhaps get a decent job, and have enough money to live comfortably. But I would be pleading guilty to something I hadn't done, and my reputation would be destroyed forever. Worse still, the memory of what had happened to Amiram Nir stuck in my mind. I, too, would probably be killed a couple of years down the road, just to make sure I'd remain silent.

The second option offered no answers and not much hope. Besides, I was sick of living with uncertainty.

As for the third choice, I had, of course, signed the Official Secrets Act in Israel, which forbade me from revealing anything publicly about my work. But since I'd been set up and left out in the cold, I no longer felt constrained to play by the rules of my former masters. All bets were off. If I did talk, however, it meant that I would never be able to return to Israel. I would lose my wife and daughter forever. My passport might be revoked, and I would have a hard time getting a job. Still, this seemed the most pragmatic choice because it was least likely to lead to my death. It's always more difficult to kill someone who has a high profile. When you're making allegations the government doesn't want anyone to believe, killing you only makes people believe them more.

Equally important, I was furious. I'm not the kind of person who can take betrayal lying down. I prefer to fight back.

Finally, I felt the story I had to tell could be of service, that people needed to know what had actually happened, unbeknownst to them or the press, over the last decade -- how Israel and the U.S. had prevented peace in the Middle East, how the American government was still supplying chemical weapons to Saddam Hussein, how Ronald Reagan and George Bush had swapped arms with the Iranians for a delay in the release of the hostages to win the 1980 election, and much more.

I asked myself, "Is anyone going to believe me? Will the American and Israeli governments deny everything and brand me a nut, totally discrediting me?" That was a distinct possibility. But I remembered Watergate and how there had been denial after denial -- until the truth came pouring out.

On that quiet spring morning, I chose the third option. I did not plead guilty, and I eventually won my case in court. I talked to journalists. And now I have written this book about my career in Israeli intelligence.

It is not a pretty story, and I am no longer proud of my part in it. It is a tale of the 1980s -- of big money, insatiable greed, and unfathomable corruption. It is a tale of government by cabal -- how a handful of people in a few intelligence agencies determined the policies of their governments, secretly ran enormous operations without public accountability, abused power and public trust, lied, manipulated the media, and deceived the public. Last but not least, it is a tale of war -- armies, weapons, hundreds of thousands of deaths -- war run not by generals on the battlefield but by comfortable men in air-conditioned offices who are indifferent to human suffering.

This book is both a memoir and an expose. It is also, in part, an act of atonement. I only hope that my story will in some small way contribute to the difficult process of righting the terrible wrongs of the 1980s and help remove from power those who were responsible.
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Re: Profits of War: Inside the Secret U.S.-Israeli Arms Netw

Postby admin » Tue Jun 09, 2015 3:33 am

1. Youth

PERHAPS IT WAS written that political chaos would follow me through life. I was born into it in Tehran, Iran, in 1951. My parents, affluent Iraqi Jews, had been married in Baghdad in 1945, but settled in Tehran the same year. Briefly, in late 1950 and early 1951, they visited Israel to explore the possibility of moving there. On that trip, in Jerusalem, I was conceived. But my parents, for the time being, decided to return to Iran, a country deeply divided against itself.

Shortly after their return, the Majlis -- the Parliament -- passed an act nationalizing oil. The British Anglo-Iranian Oil Company withdrew; and Prime Minister Mohammed Mossadegh found himself in charge of a nation that was in an uproar, with fierce rows among the country's leaders and rioting in the streets.

Even within the Jewish community in Iran there were divisions. The Iraqi Jews, who had a highly developed sense of Western and European culture and Jewish awareness, would not mix with the Iranian Jews, who regarded themselves as Iranians who happened to have another religion.

Those Iranian Jews who emigrated to Israel were generally financial refugees without emotional connection to their new home. They certainly didn't leave Iran because of oppression. There was little anti-Semitism in Iran, and still isn't, even under the new regime. Historically, it was Cyrus the Great, the Persian king, who granted the Jews freedom, and, later, Islam recognized Judaism and the Prophets of Judaism. Even though Reza Shah Pahlavi, the father of the last Shah, sided with the Nazis during the Second World War, he never adopted Hitler's anti-Semitic ways, and most Iranians harbored none of the hatred of Jews that existed in Europe.

The Iraqi-Jewish community living in Tehran was closely knit, with its own social club, synagogue, and school. Nevertheless, most of the city's Iraqi-Jewish children attended the American Community School, where the first language taught was English, followed by French and Farsi, or Persian. At home, Arabic was spoken because of the parents' background, so I, in keeping with many other sons and daughters of Iraqi Jews, was brought up with four languages. (Later I also learned Hebrew and Spanish. As for my sense of identity, I never felt Iranian even though I was born in Iran. I was Jewish.

Like all the boys in the Iraqi-Jewish community, I was taught to pray in Hebrew toward the bar mitzvah at the age of 13. After finishing high school, most Iraqi-Jewish children would be sent to university in the United States. Although proud to be Jewish, their parents saw no future in sending their sons and daughters to Israel, which they regarded as a nation of poor refugees and Hasidic Jews from Eastern Europe. The U.S. Embassy was well aware of the status of Iraqi Jews and readily granted visas for the teenagers, who often stayed on in America, married, and settled down.

My father Gourdji, though, was something of an oddball in all this. He had received a French education in the Alliance School in Baghdad, and before entrenching himself in Iran, he had traveled the world extensively, spending time in India, France, Palestine, and the Soviet Union.

In Palestine, during 1940, he hooked up with a group of Jewish terrorists who called themselves LEHI -- a Hebrew acronym for Fighters for the Liberation of Israel. Although the organization had a reputation as rightwing, many of its members were formerly part of the communist movement. They were better known as the Stern Gang, after their leader David Stern, who was virulently anti-British.

Stern's successor, Yitzhak Shamir, who later became prime minister of Israel, was equally anti-British and was even willing to negotiate with the Nazis for Jewish lives. He offered to fight alongside German troops against the British if the Germans would allow the Jews who were interned in European concentration camps to emigrate to Palestine. As expected, the British and U.S. governments and the Jewish labor movement, whose leader, David Ben-Gurion, was comfortably ensconced in New York, did everything in their power to thwart such a plan, and the Stern people were persecuted and hunted down, even by other Jews in Palestine.

Shamir and his colleagues from the Stern Gang are anti-American to this day, because they believe that the slaughter of six million Jews in Europe could have been prevented with a bit of American cooperation. Most of the people affiliated with the Stern Gang were not welcome to stay in the State of Israel after it was established because the Labor coalition government that took over looked askance at them. Shamir himself was an exception, becoming a prominent figure in the Mossad, the Israeli intelligence agency. Prime Minister Ben-Gurion said of him, "If a terrorist, let him be my terrorist."

My father, finding Israel less than welcoming, set up shop in Iran. He joined his brother in the import-export business. From the Soviet Union, for example, he imported furs and leather. Later, during the 1950s, he acquired the Mercedes Benz/Bosch car and spare-parts franchise for Iran. But my father always yearned to pull up roots and go to live in Israel whenever the political climate changed.

For my part, I loved to listen to my father talk about his travels and his philosophies. Sometimes we'd go up to the walk-on roof of our three-story house in the northern suburbs of Tehran for long discussions. At other times, we'd find a shady spot in the yard. And while I was taught languages, math, geography, and history at the American School, it was from my father that I really learned about life.

He enjoyed talking about his experiences in the Soviet Union. While my three sisters and I grew up surrounded by the American propaganda that was flooding Iran in the 1950s and 1960s, which portrayed the Soviet Union as an evil place, my father would say: "It's really just another way of life. In the Soviet Union you don't see indigent people in the streets. Everybody has a bare minimum to live, and they get their basic needs from the state. If they don't have any business initiative, they won't find themselves living in dire poverty or close to starvation. Growing up with a bare minimum is better than starving."

This was his way of explaining the differences between East and West to growing children. His was an unusual philosophy then in an affluent, capitalist, American-oriented society. My father expressed his views openly, and there was no doubt why he was never fully accepted by others in the Iraqi-Jewish community.

Despite my father's socialist sympathies, the Labor coalition in power in Israel was not acceptable to him. This was not because of ideology, but because he saw these so-called socialists as "peasants" whose main aim was to enrich themselves -- bringing economic chaos while making it clear that Middle Eastern Jews, regardless of their education, would always be second-class citizens in Israel. Furthermore, the Labor coalition "socialists" were, ironically, intertwined with the capitalist United States.

My father supported the Gahal (today known as the Likud Party), a merger of Menachem Begin's Herut Party and the Israel Liberal Party. Although they saw themselves as a conservative party because of their strong emphasis on Jewish identity, they also supported progressive social programs. Their leaders, Begin and Yitzhak Shamir, became folk heroes to the party loyalists. I would compare the Gahal -- and today's Likud Party -- to the Peronists in Argentina: rightwing populists. The Labor coalition, which later became the Labor Party, was in favor of close relations with South Africa and of cutting relations with the Soviet Union altogether; on the other hand, the Likud tried to open up relations with the Soviet Union and tone down the ties with South Africa.

Because of what I learned from my father, I was fascinated during my school years in Tehran with the concept of world revolution -- not as a violent uprising but as a redistribution of wealth. From my youthful philosophical perspective, centrally controlled economies and ways of life were a necessary first step in educating the masses and preparing them for a more open society.

By July of 1966, when I was 14, I was feeling increasingly foreign in Iran, with my Iraqi-Jewish background and my American schooling. Like most adolescents, I was searching for my identity, a place I could feel at home. Under the influence of my father and sharing the vision of an Israeli state, I decided I wanted to live in Israel. So my mother -- a pragmatic and street-smart woman -- took me and my sisters Claris, Evon, and Stella, to Israel, where Stella and I were enrolled at the American International School in Kfar Smaryahu, north of Tel Aviv. My two oldest sisters went to college. Five years later, my parents moved from Tehran to Israel, lock, stock, and barrel.

I had the best of both worlds. Most of the pupils at the school were white Americans or the children of foreign diplomats stationed in Israel. There weren't too many Jewish resident children attending the school, and while sometimes I felt something of a misfit, we all got along well. When I left at the end of each day, I would mix with Israeli kids in Ramat Gan, the Tel Aviv suburb where we were living. Once in a while I'd go to a party, take a girlfriend to the cinema, or just go for a long walk, some three or four kilometers, to the sea.


After their graduation from high school at the age of 18, my Israeli friends were drafted into the army. My American pals left for the U.S. to attend university. I, meanwhile, found myself in a peculiar situation once again. Because I still had an Iranian passport, I could not be drafted. So I joined a kibbutz. I was a religious Jew at the time, hardly orthodox but at least keeping kosher and observing the sabbath. I was the only one on this socialist kibbutz who wore a yarmulke. Even though I did not identify with their way of life, I wanted to experience the East European ethos, and rub shoulders with the avant garde. Curiously, it was a move that set me on the road to a life enmeshed in political intrigue.

Half of each day at Kibbutz Mishmar Hasharon was spent studying Hebrew, the rest doing volunteer work in the fish ponds, engaged in the extremely difficult task of sorting out male and female trout. Sometimes I would work through the night in the bakery, preparing for the early morning sale of bread.

My roommates that year, 1969, were two non-Jewish volunteers in their 30s. One was an Australian member of the Church of God, Michael Dennis Rohan, the other an American Baptist named Arthur. They were in the kibbutz because they had had visions of Christ ordering them to come to the Holy Land. The kibbutz was an economical way of doing the Lord's work. As long as they went about certain daily tasks, they didn't have to pay anything for their keep.

Rohan, a tall slim man with thinning brown hair, had a vision that he was to be the king of Israel who would prepare the way for the return of Christ. Arthur's vision was slightly different: he saw Christ's return as imminent and knew that the Jews had to be saved from themselves. God had sent them His only son 2,000 years earlier, and they had not accepted Him.

It was a crazy situation. There I was keeping an eye out for any girls I might be able to lure into my bed -- life in a kibbutz is not all work and prayer -- while sharing a room with two Westerners who were following a different kind of heavenly calling. Not that Rohan was not human. He fell for a very attractive Hebrew teacher who came into the kibbutz daily. He sent her his photograph with a note that he would be king of Israel one day and he'd like her to be his queen. She ignored him.

At night Rohan, dressed in his khaki work clothes, talked to me about the Temple Mount in Jerusalem. For Moslems this was the holiest place after Mecca and Medina. On the mount is El Aqsa Mosque which has been built over a rock imprinted with a footstep said to be that of the Prophet Mohammed, who ascended to heaven from that spot.

"To rebuild the temple, this mosque has to be destroyed," Rohan told me. "In order for Jesus to come back, the Third Temple has to be built, but this can only be done by getting rid of the mosque." The Second Temple had been destroyed by the Romans.

Rohan started receiving visits from two men wearing yarmulkes -- who, he explained, were from the Jewish Defense League, a New York-based extreme rightwing organization associated with Rabbi Meir Kahane. Rohan never said how he got involved with them. A month after I met him, Rohan packed his bags to leave for Jerusalem. "I'm going to prepare the way for the second coming of Christ," he said. Then he astonished me by donning a suit and tie. With a wave of his bony hand, he set out on the Lord's work.

Two weeks later I learned that Rohan had meant all he had said. The news was dominated by a report that the El Aqsa Mosque had been burned in an arson attack. Moslems around the world were outraged and were calling for a jihad, a holy war, against Israel. Some Arab newspapers claimed that Israeli military helicopters had firebombed the mosque, but I guessed something far different -- which was soon to be confirmed.

Rohan was waiting for me in my room, again dressed in his smart suit. "I've just got back from Jerusalem," he said. "If you'd permit me, I'd like to stay here for the weekend." His bed was still free.

I made no mention of the news at that stage. "Dennis, I have no problem," I said, "but you realize that if you stay longer than a few days, you'll have to register."

That evening, joined by Arthur, we started talking again, and this time I mentioned the burning of the mosque. "Is this a sign that the Third Temple is going to be built?" I asked.

"Yes," he said.

"Did you have anything to do with it?"

"It was God's work, but through my hands."

"Dennis, you realize the whole world is looking for who did it. What are you going to do about it?"

"I'm going to turn myself in."

I didn't know whether to trust him to do that or not. But I knew that action had to be taken. Israel was being blamed for what he had done.

He asked to be left to have a good sleep that night, promising he wouldn't leave.

Arthur said, "Dennis, I'll be praying all night for your soul."

At breakfast the next morning, I asked Rohan if he had any matches.

"Sure I do," he said. "I used them for a good cause."

After breakfast, with Rohan's permission, I went to a pay phone and called the police emergency 100 number, identified myself to an officer, and told her that the most wanted man in Israel was in my room at the kibbutz. When I said he was an Australian, she told me she had had a lot of crank phone calls and her patience was running out, but she listened to me carefully.

Forty-five minutes after the call, the kibbutz was invaded by heavily armed Israel Police Border Guards, the police paramilitary unit, in their green uniforms. They surrounded the block in which our room was located. Then three officers in civilian clothes knocked on the door. Dennis was treated kindly, handcuffed, and led away to be charged with grand arson of a holy site.

I traveled later to Jerusalem with Arthur, the two of us just scruffy young guys from the kibbutz, and the Israeli police put us up at the King David Hotel, the best in town. We were interrogated about Rohan for hours, and when I mentioned the Jewish Defense League, my interrogators jumped. They said it was vital I not say anything about Rohan, particularly his connections with the JDL.

"There should he no traces of Jewish hands in this," said one of the senior officers.

Rohan never had a trial. He pleaded guilty at a public hearing and was sent for psychiatric observation, and was later declared by the court to be mentally ill. He was committed to a psychiatric hospital south of Haifa.

Three months later Rohan turned up at my flat in Ramat Gan, where I was then living.

"I escaped," he said. "But don't worry. I only came to say hello. I'm going back later."

This time he gave me more details, explaining he had carried out the deed in coordination with the JDL. But he believed his lawyer, Yitzhak Tunic, who was later to be appointed as the state comptroller -- the ombudsman -- had "sold him down the river" because he was afraid Rohan might mention the JDL if he took the witness stand. My own subpoena had been canceled because there were worries that I might also mention the JDL.

"Is it Russia," he asked, "where a man of God is put away and accused of being crazy?"

All this made me think: Is there any justice in the world? In some respects, the Israeli court system was one of the fairest in the world, yet "for reasons of State interests" this case had been suppressed. Rohan had been prepared to admit the crime and was willing to go to jail for ten years or more for what he believed in, but he wanted a platform to talk about his motives. The Israeli legal system was not going to allow that to happen.

Rohan gave himself up to the authorities after chatting with me. Three months later he was deported to Australia.


In 1972 while studying political science and modern history at Bar Han University, along with working toward a teacher's license, I became pals with another student, Adel Mohammad Atamna. An Israeli citizen, he was a Palestinian from an Arab village, Kfar Kara'a, located inside the pre-1967 Israeli border. At the time, I was renting a small apartment in Qiryat Ono, not far from the university, and Adel had been renting a flat close by because his village was two hours' drive from Tel Aviv. One day, he invited me to his home, set in a traditional Arab village, which itself lay within a Westernized society. It amazed me how he was able to live in both worlds.

Our friendship developed further when his Jewish landlady got cold feet about having an Arab on her property and threw him out. When I found out why he was looking so miserable, I decided to give my apartment to him while I stayed at my parents' house. He started calling me his brother. One day in late 1972 he said, "I've found you a job. How would you like to teach English in our village high school?"

I loved the idea. There was an abundance of Jewish English teachers, but none wanted to teach in an Arab village. Although I had not yet obtained my degree or my teaching license, I was able to get a temporary permit. So I started teaching teenage boys and girls three times a week, traveling the two hours each way by bus.

One day, out of the blue, I received a letter from the Prime Minister's Office. In essence, it said: Dear Sir, We have a very interesting position to offer you with a lot of future prospects. We would like you to come for an interview in Tel Aviv.

An address and a date were specified. If I couldn't make it, I was told to phone and ask for Kohava.

At the time I was dating a woman three years my senior who had just finished serving in the army and was working for the SHABAK -- the secret police-style internal security service. When I showed her the letter, she smiled.

"This is from the Mossad or the SHABAK," she said. "This is a SHABAK interview address. They're going to offer you a great job, I'd say."

The address turned out to be a regular apartment building. I walked up to the third floor and knocked on the door. A young man answered. He led me into a room and asked me to sit and wait for ten minutes. I found out later that I was under observation throughout that period.

A man in his early 50s called me into a larger room and, when I was seated, said right away:

"Whatever I'm going to tell you right now is governed by the Official Secrets Act. You are not permitted to divulge this conversation or even that it took place or where we met. Please sign this statement which holds you to secrecy."

He handed me a piece of paper, which I signed.

"We have been looking at your background, your file," he said.

"Who are you? What file?"

"The El Aqsa Mosque affair. We've read about the way you helped."

It was never stated, but I assumed he meant that they were pleased I had cooperated when asked to keep my mouth shut about the possible Jewish Defense League involvement.

"Who are you?" I asked again.

"We're from the Prime Minister's Office, and the internal security of the Jewish state is on our shoulders. You have the privilege of being invited to join our family."

He explained that I was not being invited just yet. I had to go through security clearance, my background would be checked further, and I would have to pass tests. But he said my file left him convinced they would be in a position to make me an offer.

"Even though you are not an Israeli citizen yet, you are going to become one, which will make you subject to the draft." What he said was quite true. At this point I intended to become an Israeli citizen. In 1973 I actually got the final papers.

"We can make you a better offer than going into the army," said my host. "You will sign a contract to work for us for at least five years and you will stay teaching in the Arab village where you are working right now. All you have to do is just answer some questions once in a while to the person in charge of security in that area. You will be getting a salary from the school and a salary from us. And who knows, if you're good, you could be promoted to chief of security in that region and you could eventually be stationed abroad -- the future is open to you."

I looked at him without saying a thing.

"If you are agreeable, we will schedule you for tests right away."

"You want me to be a manyak [Hebrew slang for a snitch]?" I asked.

He was taken aback. This was something he had not expected.

"No, no -- we want you to be an undercover agent for the most prestigious and noble organization in the State of Israel. We want to put some of the burden of the security of the Jewish state, which I personally believe is a great honor, on your shoulders."

He was asking me to spy on my friends, to spy on Adel.

"No, thank you," I said. "I'm not prepared to betray friendships."

"But these are Arabs, our enemies."

"Stop the nonsense. Sure they're Arabs, but they're also Israeli citizens."

He suddenly became very angry. "You know what will happen if you turn this down. They'll take you into the army."

"I don't mind serving my country. I just don't want to be a manyak."

I left with his final words ringing in my ears: "We'll give you a week to change your mind. After that, we're gone."

When I got home, my girlfriend was waiting. I told her what had happened.

"Are you crazy?" she asked. She spent the following week trying to persuade me to accept the offer. But I never called them back.

A year later, in 1973, after I had become an Israeli citizen but while I was still studying and teaching, I received another letter. This time, it was from the Ministry of Defense, inviting me to an interview in Tel Aviv. They had a "very special" position to offer me in connection with my upcoming military service.

It was a different apartment. A young woman who opened the door took me in to meet a chubby, balding man who introduced himself as Lt. Col. Sasson. He brought out a file and said he understood I was about to be drafted by the military. He had an offer, but before it was made, he asked me to sign a secrecy statement. I had a feeling of deja vu.

"You have to serve three years in the military. But if you pass all the tests and if you get a security clearance, we will ask you to sign on for an extra two years for career service, meaning you will serve five years in the military. We will give you a very special position and we'll also send you to officers' school."

"Great," I said. "What am I supposed to do?"

"When will you be ready to join the military?"

"My studies finish some time at the end of this year."

Because of my background, my education, and my fluency in Farsi, Hebrew, and English, I had been selected to work for Military Intelligence. As long as I didn't have to spy on my friends, I had no problem with this. I was committed to Israel and wanted to serve the country -- all the better if it was a good, prestigious job as well. I agreed to undergo security clearance procedures.

They began the following morning. At the offices of Field Security I was asked to fill in tens of pages of questions that covered my background, the names of my family and friends, and others who could provide references. This was followed by three days of psychological and aptitude tests.

I was to be assigned to work at the Iranian desk at the codecracking SigInt-Signals Intelligence-unit. But there were more tests to come, including a physical, in order to be able to join the military in a special unit.

My draft date was set for May 6, 1974. When I asked why this was so far away, I was told I had been scheduled for a pre- military course in codebreaking starting in Jerusalem in mid-November 1973. It turned out that my basic training would be in a special infantry unit known as Golani, in which I would undertake a special high-explosives sabotage course. This would be followed by an officers' course, and then I was to be put into the codebreaking unit.

"Why," I asked, "is all this necessary for a man who's to be working as a codebreaker?" I was told I asked too many questions. Lt. Col. Sasson asked if I was going to sign for the extra two years or not. If I refused, I would be assigned to a regular army unit for three years. I signed.

During my codebreaking course, I was introduced to the Iranian method of cryptography. It was pointed out that all the Iranian embassies around the world used a model of the Swiss Haglin coding machine, and they transmitted in Farsi, but using the Roman alphabet.

We were taught the method of breaking the code sent by the Haglin machine. Using a computer, even without knowing the starting point of the machine, the Israelis had found a method of breaking the code. But a new problem came up. The Iranians started double-coding -- making a code out of a code -- and nobody was able to break it. The only way the Israelis could read communications was by "acquiring" the black book that was sent weekly by diplomatic pouch to the communications officer in the unofficial Iranian embassy in Ramat Gan in Israel.

For "security reasons," Iranian diplomatic pouches had to lay over for 24 hours at Ben-Gurion Airport before the embassy received them. This allowed the SHABAK to get into the pouches. These pouches are sealed, but the SHABAK people were experts at breaking the seals and then repairing them after the black book had been "borrowed" and photocopied. On one occasion a sloppy job was done on the resealing, but that was quickly overcome -- the Iranian communications officer was also the man in charge of picking up the pouch. When he discovered the broken seal, he was paid handsomely, which made life a lot easier thereafter. He simply photocopied the weekly code and passed it to us.

After my course was finished, I was stationed in Unit 8200, in the code-breaking department in the non-Arab branch of SigInt. Unit 8200 was housed in a base consisting of a number of white and grey concrete buildings located near a country club some ten kilometers north of Tel Aviv. Close by, on an elevation, was a grey-white building known as the villa, belonging to Mossad, where top-secret security meetings were held. About a kilometer away were several intelligence corps service bases and the intelligence school.

Each department in Unit 8200 was run on a need-to-know basis. A person from one department could not enter another without special permission. The unit commander was Col. Yoel Ben-Porat, known as Buffy, the Hebrew acronym of his name. The number two person in the code-breaking department, Lt. Col. Sasson Yishaek, was the man who had recruited me, as "Lt. Col. Sasson."

The department's commander, Col. Reuben Yirador, had been involved in a discovery a few years earlier. In 1972 he had decoded a Soviet intercept which had not been encrypted in the regular way. It was one of the same VENONA intercepts that British MI-5 agent Peter Wright mentions in his book Spycatcher, although he doesn't say it was the Israelis who cracked this code in Rome. Col. Yirador found out that the Soviets were bugging the office of the prime minister of Israel, Golda Meir. The bugs had been planted by two technicians, Soviet immigrants to Israel, who were working in the Prime Minister's Office. Someone leaked the fact that the Israelis were on to the bugging by the Soviets. The two technicians disappeared from Israel before they could be arrested.

The discovery of the bugs meant, of course, that the Soviets were privy to many of the goings-on in Golda Meir's office in I972 -- a very significant year. The Soviets had a special interest in Israel that year because it was then that Golda Meir had met Leonid Brezhnev in Finland, and had rejected his proposal for a comprehensive peace settlement in the Middle East. As a result of that meeting and the bugging, Egyptian President Anwar Sadat was well informed by the Soviets about Israel's attitude. The intelligence he had been fed may well have prompted Sadat to launch a war against Israel to force it to sit down at the peace table.


The branch of Unit 8200 I was assigned to was headed by an older civilian woman, Shulamit Ingerman, one of Israel's best cryptographers, who had twice won the highest award for contributions to Israel's security. A likable woman who cared more about her career than her sloppy appearance, she introduced me to the Iranian team of six.

While it was accepted wisdom that -- like Israel's encrypting system -- NATO and Soviet codes could rarely be broken because the coding method was always being randomly changed, my task of reading the Farsi material was not difficult. This was because the "starting point" was being stolen from the Iranian pouch. It was only a matter of translation. However, it was still necessary to try to crack the code because at some point the black book might not be available.

One night, when I was duty officer and working with a young woman in the unit, I decided to try looking for the secret of the code around the word noghteh, which in Farsi means "full stop" or "period." This, of course, appears frequently in telegrams, and the messages to and from Tehran were no exception. The Iranians used the letter W to represent the spaces between words, but our computer had been designed to delete the Ws. I instructed the computer to put the Ws back in and to look for the word noghteh with Ws on each side. I believed that if we could find a certain frequency of these stops and spaces we would crack the code. Sometime in the dead of night we broke through. No longer would we need the little black book.

The young woman on duty and I shrieked with joy. I immediately called Shulamit, Col. Yirador, Col. Buffy, and Lt. Col. Yishaek. They said they'd be around right away.

The only problem I had that night was that, against regulations, I did not have a uniform on. I was wearing shorts, having traveled in for my night shift by bicycle from Ramat Gan -- it was a pleasant ride. On their arrival shortly after 3:00 A.M., the heavy brass of the unit expressed their delight and extended their congratulations. Suddenly Buffy turned to me with a stern face and demanded: "When is your shift over?"

I told him at eight in the morning.

"At 8:05 you will come to my office to stand court martial for being insubordinate and out of order."

Everyone in the room was taken aback.

"Sir?" I asked.

"The next time you break a code," he said, "make sure you are in uniform."

At eight in the morning I made my way in a borrowed uniform to Buffy's office. He told me right away that he was sentencing me to 14 days in jail for disorderly conduct. He ordered me to sit. I sat. Then he broke into a smile and said, "But I'm suspending the sentence. I have a driver outside with a car. Go home, take a shower, have a shave, and be back in an hour."

I did as I was told. Then other members of the Iranian desk and I were taken to see the director of Military Intelligence, Maj. Gen. Shlomo Gazit, where we were all commended.

Life with the military held promise. Or so I thought.
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Re: Profits of War: Inside the Secret U.S.-Israeli Arms Netw

Postby admin » Tue Jun 09, 2015 3:34 am

2. Codebreaker

BETWEEN 1975 AND 1977, the Iranian desk in Unit 8200 was reading coded messages faster than the Iranians. They came in, we threw them into the computer, translated them, and sent them on to various interested intelligence quarters. Breaking the code had opened doors to a wealth of material from around the world.

The monitoring of the Iranians, along with other signals, was carried out through the satellite station in Bet Ella in the foothills of the Judea mountains, half an hour's drive from Jerusalem. There were also various Unit 8200 listening stations in northern Israel, the Sinai, and overseas. Located in innocuous-looking buildings in Japan, Italy, and Ethiopia, these powerful listening posts could intercept, among other signals, all the traffic in and out of the Iranian Foreign Ministry, the Royal Court, the SAVAK, and Iranian military intelligence. The listeners zeroed in on Tehran, the hub, and other Iranian embassies.

Under the Shah, Iran had good relations with what we referred to as the "moderate pro-American Arab countries" -- Egypt, Jordan, and the Emirates, including Kuwait. We were getting no intelligence on these nations from the Americans. With the code broken, however, we were able to find out what various Iranian emissaries were reporting back to Tehran. In addition, the Iranians had good contacts with the Soviet Bloc, and what the Soviets told Tehran they also unwittingly told us.

There was one other vital source of information -- Ardeshir Zahedi, the Iranian ambassador to the U.S. Zahedi reported directly back to the Shah's office in the Royal Court what was being said in the U.S. capital about Middle East policy and the Americans' initiatives with Anwar Sadat's Egypt.

While we "read" a great deal of important material, we also noticed how much junk came through the code system. We found out just how lazy some ambassadors were -- they merely translated newspaper editorials into Farsi and sent them as their well-informed analyses of what was going on in their respective countries. Among the "newspaper clippers" was the Iranian ambassador to Israel, who was obviously an avid reader of the Jerusalem Post, at the time the only English- language daily in Israel. He would translate the editorials and, passing them off as his own assessments, direct them to his foreign minister. This was done with such regularity that finally we saved ourselves a great deal of translation time -- we would cut out the editorial from the paper and clip it to the printout of the coded message, then send it on to our analysts. Often, they had already read the editorials anyway.

It wasn't all office work in Unit 8200.

Friday morning, July 2, 1976, I was ordered to report to Lt. Col. Yishaek's office. I found a number of other officers there, all experts in various languages. We were then asked to accompany him to the office of Col. Yosef Zeira, a very stern department commander in Unit 8200.

The colonel locked his door. Then he turned to us all and said, "From now until Sunday morning you are all going to 'disappear.' No going home, no telephone calls. You have simply vanished."

No one protested. Whatever this was about, it was all part of our work. Our families and friends would simply have to understand.

"You're all going on a trip to Kenya," the colonel said. Then he told us that Israel had decided to mount a commando raid to rescue the Israeli and other passengers on board an Air France jet that had been hijacked June 27 while flying to Paris from Tel Aviv. Members of the Baader-Meinhof Group had boarded the plane on a stopover in Rome, diverted it to Athens, and then finally landed it at Entebbe Airport in Uganda. The non-Israeli passengers had, by Friday, been released.

At that time relations between Israel and Idi Amin were at their lowest. The self-proclaimed president of Uganda had been a close friend of Israel and had been installed in a military coup, planned and led by the former Israeli military attache in Uganda, Col. Baruch Bar Lev. But now, after Col. Muammar Qaddafi of Libya had promised money to black African nations if they cut ties with Israel, relations between Israel and Uganda had deteriorated. Amin, however, still wore the paratrooper's wings bestowed on him by the Israeli military when he had undergone training in Israel.

The details of the Israeli rescue are, of course, well known. What isn't known is the misery that at least one of the backup teams endured. We were told we would be flying to Nairobi in an Air Force Boeing 707, which would be used as a listening post. The plan was to fly there, park on the airfield, and tap into radio frequencies to establish if any messages were being passed, in any language, that the Israelis were on their way. I was told to scan for Farsi.

In addition to being used for our various language skills, we were also ordered to sign for combat gear -- if extra manpower were needed, we would be the first to be airlifted to Entebbe as backup. Now I could see that my training with explosives might come in handy after all.

The Boeing 707 that took off from Israel carried no markings. I had been assigned a seat at the rear with my equipment: earphones and a scanner. This, I was told, would be where I would stay for however long the rescue operation took. During the flight the toilets broke down. My seat was right by the toilet door. By the time we touched down shortly before dawn that morning, the air conditioning had also failed. Sweat poured from all our bodies as the plane taxied to its position in a dark corner of the Nairobi airfield. By the following night the heat and stench were unbearable.

In stark contrast to the commando raid at Entebbe, I had absolutely nothing to do but listen to the crackling earphones and try to overcome waves of nausea. We were self-sufficient for food and water, although I couldn't face eating anything. After who knows how many hours, the technicians on board were able to repair the toilets and the air conditioning, and I then continued listening for Farsi in relative comfort.

Many hours later a shout went up. The raid had been a success. Our job was over -- if it could be called a job.

When we arrived back at the airfield in north-central Israel, the nation was in a jubilant mood. Everyone involved in the operation, no matter what their role, was lauded as a hero. A young woman I was going out with at the time forgave me for disappearing on her and hugged and kissed me. I tried to tell her that all I had done was sit in a sardine can beside a smelly toilet listening to stereophonic crackling, but she didn't care. I was her hero, she said.


One night in 1976 while I was duty officer in Unit 8200, I read a telegram sent from the Iranian Embassy in Ramat Gan to Tehran. I couldn't believe my eyes. The ambassador talked in detail about a meeting he had had with the Lockheed Aircraft Company representative in Israel who had passed on details of Lockheed bribes paid to Defense Minister Shimon Peres. The sum involved was the equivalent of $3.5 million. I remembered the Lockheed bribe scandal that had hit Japan, but no one had heard of Israeli involvement in such things.

The intercepted telegram dealt with the sale of C-130 aircraft to Israel and the possibility of Israel purchasing more C-130s as opposed to other transport. I double-checked the translation. There was no way I could have been mistaken. By now, Lt. Col. Yishaek had become commander of the department, replacing Col. Yirador, who had remained in Military Intelligence. It was the middle of the night, but I knew how explosive this material was. A sleepy voice answered Yishaek's number.

"Sir," I said, "you need to come here right away."

"I hope this is important."

"Sir, I wouldn't have called you for anything less. It's more than important -- it's extremely sensitive."

"Unless this is as big as the Egyptians declaring war on Israel, I'll have your balls cut off for getting me out of bed at this time."

"It's worse," I said.

He arrived 20 minutes later, in uniform, unshaven.

"OK," he said, "what's so important?"

I told him to sit and read the computer. He said he couldn't read Farsi. I told him I deliberately hadn't translated it. I went through it for him word by word, whispering, so a woman soldier working in another part of the office couldn't hear. He asked me to translate it again.

"Are you sure?" he asked.

"Sir, I am absolutely sure."

The telegram also detailed in which of Shimon Peres's brother's business accounts in Europe the bribe money had been deposited. Other than his "analyses" plagiarized from the newspaper, the ambassador was very credible.

Yishaek got on the phone and told Buffy to come right away. By the time he arrived, I had the translation on paper. Buffy read it, his brow furrowed under the fluorescent lighting. Known for his good relations with Peres, Buffy looked up finally and sighed heavily.

"I want the original telegram, the translation, your log, and anything else connected to this erased," he said slowly and deliberately.

I told him it couldn't be done. The monitoring of embassies inside Israel was not carried out by Military Intelligence, but by the SHABAK, and the telegrams in and out of the Iranian building were accounted for by the SHABAK. They sent the telegrams to us every day, we would decode the letters, and early the following morning they would demand every telegram back with its translation. It wasn't a matter of just fixing the local log. The SHABAK had a log, too.

However, the following morning, the SHABAK, for the first time, did not ask for the telegram. Before I went home, I was called into Buffy's office. He told me, "We all know that you are a good officer. You are a patriot. You love your country. And I know that nothing of this matter will leak out."

The young woman who had been working with me immediately received transfer orders to another unit of B200 in northern Israel, and within a short time Col. Ben-Porat was promoted to the rank of brigadier general and later appointed official spokesman of the Israel Defense Forces. I don't know if Peres actually received the bribe. I do know that after I stumbled on the accusation and passed it on to my superiors, it was covered up. No public disclosure or inquiry was ever made.

In April 1977, Lt. Col. Yishaek told me that I was required to travel to Italy, to work in our Rome listening station. Alarm bells rang in my head. Only recently two members of Military Intelligence working in that station had been killed, and although nobody claimed responsibility, suspicion had fallen on the Palestine Liberation Organization.

In the aftermath of the massacre of Israeli athletes at the 1972 Olympic Games in Munich, a battle was raging in Europe between Mossad agents and a Palestinian group called Black September. They were killing each other at every opportunity. We knew there was a leak somewhere at the embassy in Rome; someone was passing on to the Palestinians the names and activities of Israeli military and security personnel. The chances were that I would be a marked man as soon as I arrived. Obviously one's life is put at risk at times in the service of one's country, but I simply didn't want to be one of those who could die in this senseless situation.

"I'm not going," I said. "You can say or do what you like, but I won't go."

Yishaek was furious. "You'll be court-martialed for insubordination," he said.

"So be it," I replied. "At least I'll still be alive." The next morning, I was called to the Administrative Officers' Bureau, where two military policemen were waiting. I was taken before a military tribunal on a charge of serious insubordination. I refused an attorney and was found guilty. The sentence was 14 days in jail and reduction in rank from lieutenant to corporal. I was also told I would no longer have the honor of serving the extra two years in the military. I would be released after I completed my regular military service.

I was taken to a military prison near Haifa to serve my 14 days. Two days later, to my surprise, I was released and sent straight back to my unit. Shulamit Ingerman was waiting to tell me that Lt. Col. Yishaek had overreacted and she had gone over his head to obtain a pardon from the director of Military Intelligence -- only someone with a rank of major general or above can overrule a military tribunal.

"Your rank can be restored right away if you agree to sign again for the extra two years' service," said Shulamit.

My regular military service was due to end in less than a month, and if I were to keep to the contract, I would be doing an extra two years as a career officer. This was my opportunity to scrap the contract and I took it. I told Lt. Col. Yishaek, "Thanks for the pardon. But I'm not going to stay here any longer."

If truth be told, I was bored. We had broken the code. I didn't want to spend another two years there. I was looking in another direction -- I wanted to work in the deepest sanctum of Israeli intelligence: the External Relations Department of the Israel Defense Forces/Military Intelligence. I wanted to serve Israel where I would have the most impact. I was ambitious, and with my unique background and skills, I felt the ERD offered the most challenging future for me.

I obtained an interview with the office of the chief personnel officer of the intelligence corps. I expressed my hopes of joining Military Intelligence as a civilian in the External Relations Department, where almost everyone else was a civilian anyway.

On May 3, 1977, I was released from the military. I was then scheduled for a number of interviews, including one with the chief of External Relations, Col. Meir Meir.

"I think," he said, "we could draw on your Iranian expertise."

At the same time I was offered a job in Mossad operations, to be stationed in Europe. I declined, pinning my hopes on getting assigned to External Relations. The SHABAK also offered me work in their Iranian Unit, and there was a possibility of joining the Foreign Ministry. I still wasn't interested. I knew what I wanted.

Finally the message came back. I had been accepted in External Relations.

Had I known what was in store, I might have considered it safer to go to Rome.
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3. Love in the Time of Revolution

AUGUST 15, 1977. How could 1 ever forget my first day in the External Relations Department of the Israel Defense Forces/Military Intelligence? My right cheek was badly swollen with an abscessed tooth and I could hardly speak because of polyps on my vocal cords. It was three weeks before I felt normal again. Spooks, too, are human.

IDF/MI/ERD was the most prestigious department in the intelligence community. Its status went back to the 1974 Agranat Commission which the prime minister had appointed to investigate the intelligence failures of the 1973 war, when Israel had been surprised on Yom Kippur by the Syrian-Egyptian attack.

Several of the important recommendations in the commission's secret report were implemented immediately by the government. One that I was well aware of converted Military Intelligence into the senior intelligence agency, giving it more powers than Mossad. As a result, the National Assessment, the intelligence term for the immediate security situation in the country and what the security arrangements were to be, would be solely the responsibility of the director of Military Intelligence. It was not to be a pooled responsibility of the various intelligence agencies -- this one was his alone.

A further effect of the recommendations was the creation of the External Relations Department of Military Intelligence. This was built around an existing unit called Foreign Liaison. When I joined External Relations in 1977, it had four branches:

There was the Special Assistance Branch (SIM), through which special military assistance was to be given to other countries and various "liberation movements." The Mossad department that had been in charge of external military assistance now became a liaison department between foreign countries and SIM.

Then there was the branch in which I was initially employed, known as RESH -- the pronunciation in Hebrew of the letter R. R branch was in charge of intelligence exchange with foreign intelligence communities and general relations with foreign intelligence networks. The Mossad, in fact, had a large parallel branch called Tevel, but once R branch gained prominence, Tevel had a problem. It arose because in order to receive intelligence information from foreign countries, it was necessary to give them something in return. And what countries in the West wanted most was technical information about Soviet weapons systems; in other words, military information. The Mossad no longer had access to the analytical departments of the military to gain this information -- they had to go through the R branch. The result was that the once-powerful Tevel now found itself also playing the part of a liaison department with the R branch.

A third branch, known as Foreign Liaison, was charged with taking care of Israeli military attaches outside Israel as well as Israeli military personnel serving in foreign countries. It was also in charge of liaison with foreign military personnel and foreign military attaches in Israel.

The fourth branch, Intelligence 12, was a general liaison branch with the Mossad.

Other than these four branches, the External Relations Department also had an operations officer who was directly subordinate to the chief of ERD and who took care of various logistical matters such as passports, intelligence exchange conferences, diplomatic pouches coming in and out, security, and so on. He also had under his control the ERD conference halls, where secret intelligence meetings were held.

While working in the R branch, I was assigned by the office of the director of Military Intelligence to work with the Iranians. The director's office wanted someone who was knowledgeable about Iran to be a direct liaison with the Iranian intelligence community. The Mossad representative in Tehran at the time was very ineffective, and finally the director and the chief of Tevel agreed to his recall. The deputy military attache in Tehran, Col. Yitzhak Cahani, who acted as the External Relations Department's representative, was also rather unsuccessful with intelligence work, as he didn't speak Farsi and didn't understand the situation on the ground.

Starting in late September 1977, I became a Middle East commuter, traveling back and forth between Tel Aviv and Tehran. Because I was born in Tehran, I was still regarded in Iran as an Iranian citizen and therefore subject to Iranian laws, even though I had by now taken out Israeli citizenship. I wasn't supposed to have a foreign diplomatic passport -- which Israel had issued to me -- because the Iranians deemed dual citizenship illegal. The difficulty was overcome when the Israeli government issued me a diplomatic passport in which the place of birth was conveniently not mentioned. I used it only when I went to Tehran.

As a result of the establishment of diplomatic relations in the late 1960s between Iran and Israel, the Iranians had a full embassy in Ramat Gan with a SAVAK representative, a military attache, a commercial attache, a consul, and an ambassador. But it wasn't officially designated as an embassy and it did not have a sign on the door or a flagpole. Officially, the Iranians had an interests section in the Swiss Embassy in Tel Aviv, but it didn't really exist, and callers to the Swiss Embassy who asked for it would be referred to the unofficial Iranian Embassy in Ramat Gan.

Israel had the same unofficial status in Tehran. The building on Kakh Avenue had no sign on the door, but everyone knew what it was. The reason for this elaborate charade was the Shah's concern that his relationship with Arab nations would be disrupted. They were fully aware of the unofficial arrangement, but this ruse allowed the Arabs to turn a blind eye.

My trips to Tehran were a source of ill will toward me from Col. Cahani and the Mossad, because I had taken over some of their territory. However, they could say nothing: I had been commissioned by the big boss, the director of Military Intelligence.

In Tehran I would often meet the SAVAK representative, as well as officials from Iranian Military Intelligence. Mostly the meetings were held in my room at the Carlton Hotel, not far from the unofficial Israeli Embassy.

Besides sharing information about Iraq and other Arab countries, the Iranian intelligence people and I also exchanged technical information. For example, Israel at the time was developing a tank called Merkava at the Israel Military Industries. The tank developers were interested in knowing the composition of metal sheets, developed by the British and used on their advanced battle tanks, some of which had been supplied to the Iranians. This metal, known as Chobham armor, was thought to be impenetrable by indirect rocket or missile hits. On instructions from my superiors, I asked the Iranian military, through their foreign liaison department, if we could have a sample of the metal.

"The only way you can get a sheet of this metal would mean us cutting up a tank," said my Iranian counterpart.

"Fine," I said. "Why don't you do it?"

And they did. They cut a sheet of Chobham armor off one of their tanks and dispatched it to Israel in a diplomatic crate. It didn't destroy the tank -- but it made it less secure because the hole had to be patched with inferior metal. Later, in the early 1980s, the British realized that the Merkava tanks had features of the British armor.

We were exchanging a great deal of intelligence with the Iranians on Iraq, which we saw as a mutual enemy, even though the Shah had officially settled his disputes with the Iraqi leadership. We were also passing to them information on the activities of anti-Shah Shi'ite Iranians living in Lebanon. It was from there that information about the impending Iranian revolution first started to leak out.

"You must be careful," I told my Iranian colleagues. "We think you're in for big trouble here."

Apart from these intelligence-swap meetings, I had another task in Tehran -- putting together an analysis of the underground Tudeh Party of Iran, a pro-Soviet group. My research visits to Tehran University resulted in my meeting two special friends who were to play major roles in my life and in the complex political scene in the Middle East.

One was a man calling himself Mahmoud Amirian, an alias, who was writing a doctoral dissertation on Marxism. He used an alias because he had been jailed in the late 1960s by the SAVAK for subversive activity. When he was released, he left Iran and lived in Baku, in the Soviet Union, just over the Iranian border, until 1976, when he came back to Tehran using an alias and a French passport. He came in as an Iranian expatriate who was born and lived in Paris. He had effectively "laundered" himself.

After we became friendly and I had found out who he really was, he revealed that he was one of the leading members of the Tudeh Party in charge of foreign liaison. An extremely well-educated man, he believed in "the cause." Even though he knew I was in Israeli intelligence, he told me he trusted me.

The other man I met at Tehran University in 1977 was Sayeed Mehdi Kashani, who was doing a Master's thesis on the Shi'ite community of southern Iraq. A few years older than I, he was the son of Ayatollah Abol Qassem Kashani, who at the time was an opposition Shi'ite leader living in the holy city of Qom. Like Amirian, Kashani had been jailed for subversive activities against the Shah.

My meeting these two men was not entirely accidental. I had been directed to them by the research department of IDF/MI. Israel had an intelligence network within Tehran, using the local Jewish community, and possessed a lot of information about the opposition in the capital. Kashani and Amirian both introduced me to their friends in the Iranian opposition. I heard enough to convince me to write reports for Israel early in 1978 declaring without reservation that the Shah was about to be overthrown. I also pointed out that it was the first time that opposition circles were no longer wishfully thinking; they were talking realistically.

The intellectuals and the middle class in Tehran, I reported, were fed up. There was extreme corruption in higher circles, prices were skyrocketing, and food production in Iran, which had been the bread basket of the Middle East, had come to a halt as a result of the Shah's White Revolution, breaking up the feudal system. He had distributed land to the peasants to keep them happy, but he had destroyed their life-support systems. In times past, the feudal lords had provided villagers with seeds, a marketing system, transportation, water, and so on, but after these lords had been dispossessed and the land divided up, the peasants' infrastructure was destroyed. Who was to take care of their marketing?

The Shah wasn't interested -- his attention was on the military, not food production. As a result, food production in Iran came almost to a standstill, and by 1978 most supplies were being imported. The peasants managed because they found ways of providing for themselves. The rich were all right, too, because they could afford to buy the high-priced imported foodstuffs. The people who suffered were those caught in the middle, the intellectuals and the middle class.

They were battling extremely high food prices, and on top of that the infrastructure of the city of Tehran was not capable of handling the traffic, which came to a standstill. Even my superiors laughed at me when I wrote that the traffic might be one of the reasons the Shah would be overthrown. But it was true. It was quite clear that people were fed up with taking hours to get to work and back.

The middle classes spearheaded the revolution, but the Shi'ite fundamentalists quickly jumped on the bandwagon. My talks with Kashani's Shi'ite friends left me no doubt that they were extremely well-organized through the mosques, the one perfect infrastructure remaining. Discontent spread through the university, intellectual circles, and the mosques. A report I sent back in February 1978 pointing out the "mosque network" was dismissed by Military Intelligence and Mossad analysts, who thought it too theoretical.

I believed that my sources were impeccable and my assessments on the mark. I had gone deeper than any other Israeli intelligence official. I spoke the same language as my contacts, both in tongue and, to a large degree, thought. I was convinced that it would not be long before I was proved correct.

* * *

Despite the volatile situation in Iran, my controllers in the External Relations Department decided they could use me in an entirely different part of the world -- Central and South America. Apart from Iran, Israel's main military exports were going to those two regions. There were direct government sales as well as sales through a private network coordinated by Ariel Sharon, at that time minister of agriculture. With the swing toward leftwing governments, there was a danger that these markets might be closed down. If the Sandinista National Liberation Front (FSLN) took over from President Anastasio Somoza Debayle in Nicaragua, for example, it was likely they would obtain their military equipment from the Soviet Union.

Upon learning of close contacts between the Tudeh Party and the commanders of the Sandinistas, my controllers asked me if I could get my Iranian friends to help arrange a meeting between an Israeli intelligence official and the Sandinistas. Although I wanted to concentrate all my talks with my contacts on the coming changes in Iran, I did what I was asked.

I wasn't sure of the roots of contact between the Tudeh Party and the Sandinistas, but I assumed they arose through connections in Moscow and Havana.

"Can you arrange a meeting?" I asked Amirian.

"I will try," he said, and I knew as soon as he said it that there would be no problems.

It took Amirian just a short time to get back to me. The path had been cleared for a meeting with the Sandinistas. My superiors were delighted and had no hesitation in deciding who should travel to Central America: me. I realized there was a very good reason for my selection. My superiors wanted me out of Iran for a while for my own safety. Although my warnings of an impending uprising against the Shah had not been treated seriously, everything that I had reported had been passed on to the Americans as a matter of policy. In turn, the Americans had referred my reports back to Iranian intelligence. I was being placed in an extremely delicate position, and it was felt I should be pulled out of Tehran for a few weeks at least.

Not that the mission to Nicaragua was going to be a piece of cake. No one knew how I would be received by the Sandinistas and what they might decide to do with me once I was in their territory. And there would be no backup. I had to go in complete secrecy. Even the Israeli intelligence network stationed in Central America could not be informed of the mission, out of concern about a possible leak to the right wing.

I did not like the idea of leaving my post in Iran unattended even briefly when the country was at such a critical juncture. I felt I should return to Tehran as soon as possible, but I was excited about my new mission.

Late in March 1978, I flew to the United States and from there traveled to Managua. The city, leveled by an earthquake in 1931, badly damaged by fire four years later and then hit again by a major earthquake in 1972, was now in a state of great uncertainty, with recent fighting in the streets between Somoza's troops and the Sandinistas.

The leftwing movement had not forgotten Somoza's father's act of treachery in 1934 when, as head of the National Guard, he had invited Augusto Sandino, the revolutionary patriot after whom the movement is named, to a banquet and then murdered him. But now, with 500,000 homeless, a death toll of more than 30,000 from the political fighting between the Somoza government and the Sandinistas, and an economy that was in ruins, everyone knew it would not be long before Somoza was overthrown.

On arrival at the Intercontinental Hotel, a vast concrete structure rising up from old Managua, I phoned a number that had been given to me by an FSLN representative I had met in Washington while en route to Central America. The woman who answered said she would call for me at eight the following morning.

She arrived as arranged, dressed in jeans, a light-blue blouse and sneakers. I'll always remember that first image of her ... tall, slim, with green eyes, light-olive skin, and jet-black hair. She flashed a bright smile as she held out her hand.

"I'm Marie Fernanda," she said. "We're in for a bit of a trip."

Then she led me outside and with a soft chuckle introduced me to her old, mud-splattered yellow Fiat. That car was to be the catalyst for some of the happiest and most tragic moments of my life.

Less than ten kilometers out of Managua we reached the first military roadblock. Marie pulled out a press card that identified her as a Colombian journalist. She was going north, she told the inquisitive government soldiers, to write a story. I was merely introduced as her companion. We were waved through.

Skirting Lake Managua, we smashed over potholes as the road narrowed, but at least the traffic was thinning out. An hour later we hit a small town. The National Guard was everywhere with roadblocks at each end of the town. We were told that if we kept going we would be risking our lives because we would be entering areas held by the revolutionary forces.

"That's why I'm here," Marie told the officers. "To cover the war."

Twenty minutes on, we came to another roadblock. Russian submachine guns were trained on us.

"These are friends," said Marie. "They know the car." I was happy to hear her reassurance. A group of unkempt young men in "odds and ends" paramilitary dress approached, Kalashnikovs slung over their shoulders. After a few words of greeting, they moved back the barbed-wire barriers and we continued.

Now that she was in territory held by the FSLN, Marie lost her nervousness. Her voice now full of confidence, she let me have it.

"I don't understand you people," she said angrily. "You Israelis and the Jews who have suffered so much are now helping this Nazi Somoza. You don't care about what he has done to the Nicaraguan people."

There wasn't much I could say. It was true we were supplying Somoza.

She had not finished: "It's very bad that your country that was created on a socialist-egalitarian basis has turned into a fascist state which helps the Nazi dictators of South America."

I let her run with it. The fertile countryside, with rocky outcrops pushing through dense vegetation, flashed by.

"Where did you learn your English?" I asked. I'd taken her point. I wanted to talk about other things.

"In the United States. I lived there for a few years. Don't think we are all peasants," she said, her voice brimming with dignity and indignation. "While the revolution is for the peasants, it is being run by enlightened professionals."

She told me she was taking me to the Sandinista military headquarters in the area. There I could present my case -- "and it had better be good." I wasn't there to present a case, of course. My assignment was to find out what the Sandinista policies might be when they came to power and try to establish lines of communications.

Civilian traffic had been replaced by jeeps filled with youths, all clutching Kalashnikovs. It was obvious who controlled this part of the country. It was a long, hot drive, during which we stopped at small towns for cold drinks or to fill up with gas from old-fashioned, hand-cranked pumps. I asked where they got their gas.

"We have a supply system," she said. "We Sandinistas have everything under control. All civilian needs are being met."

Finally we reached a heavily guarded military base. The guards moved aside as Marie turned into the gates.

"Welcome to the regional headquarters of the Sandinista military forces," she said. An officer in full Uniform, who explained he was "foreign liaison," led me to a prefabricated building that had been comfortably fitted out with a bed and shower. This was my room. It was obvious I'd be spending the night here. Marie was given a similar "villa" next to mine.

She came in and sat on the bed. She told me she was 21, and that her role with the Sandinistas was also foreign liaison. "And maybe one day," she added, "I'll be foreign minister of a liberated Nicaragua."

She was so earnest and serious. I wanted to see that bright smile I'd seen earlier.

"Marie Fernanda, can I call you Freddie?" I asked, which made her laugh.

"Sure," she said.

There was a shy awkwardness between us. I was deeply attracted to her, and she knew it. I asked her why there had been no sound of gunfire. "Is this war? It's so quiet."

"There's a lull. The biggest fighting is a long way away, near Costa Rica. But soon there will be no more war. It's been a long struggle, but Somoza is finished." Having said that, she left.

Later that afternoon I was taken to the commander's office. A bespectacled man in his mid-30s greeted me with a warm handshake, then introduced me with great modesty to a number of his companions.

"I hope you had a nice trip to Managua, and I hope soon we will be able to meet there, too," he said in good English, with a trace of a Spanish accent. We sat around in the office, and he made it clear that the Sandinistas would like to have a relationship with Israel.

"We respect the Israeli people very much," he said. "We identify with the Jewish plight because we are facing the same type of Hitler in our country. We have faced him for many years. It's too bad that your government is aiding him and selling him arms." So I got it again, this time from the top man. But I had expected it.

I outlined our thoughts about our links with Central America. I repeated to him, as I had to Freddie, that I had no excuses to offer -- Israel was selling arms to Somoza in a big way: artillery, machine guns, mortars, and soon it would be helicopters. I could have given him the usual spiel that Israel wasn't to blame, that independent arms brokers were the real culprits. That was the accepted Israeli line, but I suspected that my hosts knew better.

However, I did have a point to make. A number of Sandinistas were being trained by our enemies, the PLO, in Lebanon. The commander shrugged.

"We have a war to win, Mr. Ben-Menashe. Your country is arming Somoza, we receive some training from the PLO. Who is to judge who is right? But I can only ask you to tell your government to stop arming Somoza and start siding with the people of Nicaragua. You could begin by providing us with any medical aid or field hospitals which you can spare. There is still a lot of blood that is going to be shed."

I made a note of his requests, and we established a means of contact through a Sandinista liaison office in South America. Of course, I had no authority to make any promises. I was there to sound them out -- and tell them that Israel would like to keep its embassy running in Managua when the Sandinistas were in control and that we could act as a go-between for them with the U.S.

My hosts said that they would support any peace moves in the Middle East -- but also emphasized that Israel should recognize the PLO.

"Although we recognize Israel's right to exist, we recognize the PLO as the legitimate representative of the Palestinian people," the commander said. It was clear that my hosts didn't want to commit themselves one way or the other.

"The Sandinistas are a very democratic movement, from the social democrats down to supporters of Soviet communism," the commander continued as we sipped sweet tea. "When we take over, there will be democratic elections. We are spearheading the revolution for the people of Nicaragua. We are not against a free market, but we don't believe the peasants should be starved out."

The commander was drawing a picture of a socialist country with freedom of the press, freedom of speech, free education, and a good health and welfare system.

I explained that I had been working in Iran. "Another revolution," he said with a laugh. "You must enjoy them."

He was interested to know if the Tudeh Party was going to have any part in the government after the Shah was toppled. I told him the Shah was going, but I certainly didn't think the left would take over. The new leaders would be religious.

"Are they going back to the Dark Ages?"

"Dark Ages or not, I think you'll find that religion, rather than accepted government principles, will soon be Iran's driving force."

We were served dinner in the office area. The air was thick with the smoke from the Marlboro cigarettes my hosts were smoking. "Not everything American is bad," the commander laughed.

Back in my room, Freddie showed up. "How was your discussion?" she wanted to know. I told her that it had gone well. She made coffee. My pulse pounded, and it wasn't the drink.

In the morning, we headed south, the Sandinistas again showing respect for my lovely companion. Back in government-held territory, the Fiat started to act up. Then, with a loud bang and gushing of steam, the radiator blew. Fortunately, we were close to a small village where we found a cantina and called a mechanic. The car would take several hours to repair, and we knew we'd never get back to the capital in time to beat the curfew. If you drove around the city after curfew, you were likely to be shot.

There was only one room available above the cantina with two beds. Freddie kissed me warmly, then told me she was going to sleep. I climbed into my own bed, my mind racing over the events of the previous day. Freddie, breathing softly in the darkened room, was foremost in my mind. She was no ordinary peasant woman, that was for sure. Apart from her beauty, she had a fast mind. I watched her sleep, so peaceful, and then dozed off myself.

We were back at the Intercontinental Hotel shortly after noon the following day. Freddie said she'd show me around the city. We sipped the strong, locally produced coffee, and wandered through the streets. She showed me the monument to the poet Ruben Dario and took me around areas that had been rebuilt following the devastating 1972 earthquake. And that night she stayed with me. The smell of her skin, her sparkling green eyes, overwhelmed me. I was her first lover.

She left at ten the following morning. I phoned Israel and reported that all was well. At noon there was a call from the lobby. Three men had come to see me. It was important, said the porter, that I meet them.

I guessed who they were as soon as they entered the room. Dressed in dark suits with bulges under their jackets, it was obvious they were from state security. They wasted no time.

"Where were you in the last few days?" the most senior, a well-built man with neatly trimmed hair, wanted to know. "Who are you working for?"

"None of your business."

He banged on the coffee table. "It is our business. If you don't already know it, we make everything our business in Nicaragua."

I told them I would not speak to them further until I had talked with my ambassador and that if they didn't let me call him there would be an "incident." They found the number and dialed it themselves. They wanted to be sure whom I was talking to. I asked for the ambassador. I didn't even know his name, because I hadn't told the embassy I was there. When I was finally put through, I spoke to the ambassador in Hebrew, explaining I was an Israeli citizen and that I worked for the government.

"We weren't informed," was the terse reply.

"I know you weren't informed. But please call the Tel Aviv office of Col. Meir Meir, chief of External Relations. And do it quickly, or you're going to be involved in something far bigger."

"Such as?"

"Such as trying to get an Israeli intelligence officer out of a Nicaraguan jail."

It was about 12:30 P.M. in Nicaragua, evening in Israel. There was still a chance Col. Meir would be in the office.

I hung up and waited. There was an awkward ten minutes as the security men and I sat staring at one another. I could see their patience was running out. Then the ambassador called back. He said he was coming around right away. Minutes later he hurried into the room. He gave me a cold glare, then told my visitors:

"I'm taking responsibility for this man. You have nothing to be concerned about. He'll be leaving the country tomorrow. He's just an Israeli adventurer traveling around Latin America."

They didn't believe him, but they had no authority to interfere with an Israeli citizen who had come under the official charge of his ambassador.

As soon as they left, he turned on me angrily. They had confirmed my identity in Israel, but he was not happy that he had not been informed. He wanted to know whom I had met, so he could prepare a report. I told him that Israel would tell him. And I sat and smiled at him until he left.

I spent that night with Freddie. I gave her my home and office numbers in Tel Aviv and the Carlton Hotel number in Tehran. As I traveled to the airport the next morning, there was a lump in my throat. I had already started to miss her.

A few weeks later, in April of 1978, she called me at my office in Tel Aviv. She was in Lisbon, Portugal, and she had a proposition to put to me. A short holiday in Athens, if I could manage to get the time off. I was owed a lot of days, so I made the arrangements and flew to Athens.

The first two days were magical, as we strode hand in hand around the ancient city. On the third day she told me she was pregnant.

"What should we do?" she asked.

I had no idea. I was totally unprepared for this.

"We're kind of an unlikely pair," she said.

That was putting it mildly. She was a socialist Catholic, a Sandinista, subject to party discipline. I was Jewish, working for Israeli intelligence, and my country was supplying her most hated enemy with weapons. There could be serious personal, political, and professional consequences for both of us.

"It would be awfully hard for us to be together to raise a baby," I said. "We live on opposite sides of the world."

"Opposites attract."

Yes, it was true. She was beautiful, passionate, sweet, fascinating, different from anyone I'd known. I wanted her. I wanted the baby. But I knew if we were ever together, my job would be in jeopardy. I'd be considered a security risk. My brain was saying one thing, my heart another.

Later that day we took a bus to Sounion, where the Adriatic and the Mediterranean meet. As we looked at the two seas merging, she turned to me and said, "I don't think I could ever have an abortion."

"Yes, but we barely know each other. Who are you? I don't know. Who am I? You don't know."

She looked up at me with that radiant smile, gleaming white teeth against olive skin. Then she kissed me. "I want the baby, Ari."

"Okay," I said, still confused. "It's your choice. Maybe it's destiny."

Which it was.


By April 1978, my warnings about an imminent revolution in Iran had been accepted by my superiors. Later that month, I sat in as my report was handed around at an intelligence exchange conference in Tel Aviv involving Israeli Military Intelligence and Mossad analysts on one side, and American CIA and Defense Intelligence Agency analysts on the other. This time my heart sank.

One American analyst dismissed my conclusions as baloney, saying that what was happening in Tehran was nothing more than a lot of shouting by a bunch of noisy kids in the street and that the demonstrations and unrest had been going on generally in Iran since the 1950s. It was not a friendly meeting -- in fact, there was an outright confrontation on the subject between the two sides. We were trying to tell the U.S. representatives that there would be a change in status quo in the Middle East and Israel could not depend on Iran for any military backup against the Arabs. It had always been accepted that if ever Israel was stormed by the Arabs, the Americans would come to the rescue, using Iran as a staging ground. Now the Shah was going to go, and Israel's security would be weakened. It was as simple as that.

The American analysts wouldn't listen.

That was a slap in the face for the Israeli intelligence network and for me personally. A further shock came later.

President Jimmy Carter, in a public speech, declared that the Shah of Iran was an ally and a friend and stood like a rock in the Middle East. We just couldn't believe it. The Americans had not only dismissed our warnings but had not even bothered to do any serious checking themselves. They had completely misread the threat to the Shah's rule.

It wasn't until the end of that year that the Carter administration finally admitted that the Iranian ruler was about to go. In December 1978, the CIA enlisted the aid of the Israeli intelligence community and the SAVAK in a plan to kill Ayatollah Ruhollah Khomeini, the Islamic cleric who was coordinating the upsurge of opposition from Paris. Put together by the prime minister's counterterrorism adviser, Rafi Eitan, the plan was for an Israeli hit team to fly to France without the permission of the French authorities and "eliminate" Khomeini. On the same day, the Iranian generals would declare martial law in Iran and, after order had been restored a month or so later, the SAVAK would move in and arrest or remove the generals and restore total power to the Shah.

On paper the plan could have worked, but the human element was too weak. There was no way on earth that the Shah, the generals, and the SAVAK had the ability to pull off their end of the bargain. The military and the SAVAK had been too well infiltrated, and they were all too busy shipping their booty out of the country to escape the inevitable doomsday.

Nevertheless, preparations continued. The Israeli selected to lead the raid on Khomeini's residence in the outskirts of Paris was Col. Assaf Heftez, chief of the Israeli Police Border Guard special antiterrorist unit -- a highly trained commando team set up to deal with hijackings and other terrorist incidents. There is no doubt the team would have successfully carried out its part and returned home without being caught, but the Shah did not have the backbone or the loyalty of his people necessary to retain his grip on the Peacock Throne.

The plan, however, was still put to the Shah by the recently retired Israeli ambassador to Iran, Uri Lubrani. It was instantly rejected.

"I will not allow any more Iranians to be massacred," said the Shah. "For the generals to carry out martial law will mean bloodshed in the streets of Tehran. We will handle the situation ourselves."

This was new. The Shah of Iran was showing concern for the people of Iran!

Lubrani told the Israeli intelligence community that the Shah could not stay in power and that no general in Iran could stage a military coup. The country was lost to the Shi'ite leadership, he said. It was just a matter of time.

In December 1978, I decided to let my CIA colleagues know what I thought of them. I was furious and personally offended that all my earlier reports had been dismissed. Nothing had been done about our warnings and then at the end of 1978, when it was too late, they had come up with an impossible plan that would have created more bloodshed.

"You guys better start listening a bit more instead of thinking you are always right," I told an official by phone. I don't recall who hung up first.

In that same month, with the assassination plan abandoned, a serious attempt was made to get Ayatollah Khomeini to agree to talks. Israel wanted to know where it stood when he came to power. Prime Minister Menachem Begin agreed with the intelligence departments that nothing would be lost by trying to talk to Khomeini. But who was going to do the talking on Israel's behalf?

The task fell on the shoulders of an unlikely person -- Ruth Ben-David.

In the early 1950s this charming, gracious French Catholic woman lived in Paris and entertained ultra-orthodox Jews who used to visit from Jerusalem. Rabbi Amram Blau, then head of an orthodox Jewish sect in Jerusalem known as Neturei Karte, meaning Guardians of the Citadel, was among those who visited Paris. Being a widower, he craved female attention. He was introduced to the stunningly attractive woman with whom he whiled away the hours. Eventually they fell in love. They decided to marry, and she converted to orthodox Judaism.

Before her husband died, she frequently accompanied him when he traveled to Turkey to attend seminars at which Jewish rabbis and Shi'ite mullahs entered into religious debates and tried to establish how theology could be brought back to earthly government. In those meetings Ruth met the exiled cleric, Ayatollah Khomeini. When Rabbi Blau died, his son from his first marriage took over the leadership of the Neturei Karte. But it was Ruth who was recognized as the matriarch of the sect.

Prime Minister Begin entrusted Ruth Ben-David with visiting Ayatollah Khomeini in Paris on his behalf in December 1978. She was to sound him out about how he would see relations with Israel if he were to take over -- and what his attitude to the Jews in Iran would be.

Khomeini gladly received the emissary, his old friend. It was said she was the only woman he would sit alone with in a closed room. She had a long conversation with him at his residence outside Paris, and she reported back personally to Begin.

According to accounts directed to intelligence analysts from the Prime Minister's Office, the meeting with the Ayatollah was very friendly. Khomeini made it clear that the Iranian Jews were Iranian citizens and Islam respected Judaism and all other religions that were not seen as heresy. He would not allow Baha'is to practice their religion in Iran, because in Islamic law it is stated that prophets who came before the Prophet Mohammed, including Moses and Jesus Christ, were true prophets, but anyone who came after him claiming to carry the word of God was a heretic, and heretics should be put to death. The Prophet Mohammed was the seal. Khomeini added that the Israeli state in Palestine was also a heresy and should not exist. However, the first interest of the Islamic state was to bring Islam and Islamic government to the Moslem populations in the Arab countries and rid the Moslem world of heretic governments. He also said that Mecca and Medina had to be liberated from the Saudis.

His message to Begin was clear: Don't worry, Israel. First on my agenda is to deal with my Arab enemies. Then I will deal with Israel.

This news was well received in Israel. Some Arab countries -- Jordan, Iraq, Saudi Arabia, Kuwait, Egypt, and the Emirates -- were going to have an active, formidable enemy. They were not only going to have to deal with Israel now, but also Iran. The Shah, in his last years, had started lining himself up with moderate pro-American Arabs, which could have become a deadly coalition against Israel. As the situation looked at this new stage, it seemed fortunate that the plan to assassinate Khomeini had not gone forward.


Shortly before Christmas 1978, I asked for a vacation. My superiors were happy to remove me from the scene for a while because I had upset the Americans by speaking my mind to them. I had already called Managua and made arrangements. I flew to Lisbon and took a cab to the Penta Hotel. Freddie had arrived ahead of me. She threw open the door. I'd seen her a few times since April, but not like this. She was huge. Our baby was due in two months.

"You're beautiful, Freddie," I said.

It was a blissful two weeks that we spent together in Portugal. As we strolled along the Atlantic at Estoril, she told me of the arrangements she'd made for the birth of our child.

I took her hand. "I'm glad we decided to have it," I said.

She smiled, that smile that had won my heart in war-ravaged Nicaragua. The Sandinistas had almost won control, even occupying the national palace for a few days in August that year.

"It looks like you might be foreign minister soon, after all," I said. But it was only half a joke. I didn't want her to be swallowed up by a far-away bureaucracy.

All too soon, it was time for me to go back to Tel Aviv. She patted her tummy.

"Don't worry about us," she said. "And you'll see us again when you can, huh?"

I took her in my arms. One day, I thought, I'd stop saying goodbye to this woman. It was not easy living without her.
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Re: Profits of War: Inside the Secret U.S.-Israeli Arms Netw

Postby admin » Tue Jun 09, 2015 3:36 am

4. Groundwork

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. [1]

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. [2]

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. [3] 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?"

He laughed.

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:


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.


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."


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.)


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.


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.


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)


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.
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Re: Profits of War: Inside the Secret U.S.-Israeli Arms Netw

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5. The Agreement

KHOSRO FAKHRIEH TOOK a gulp of his beer and stared me straight in the eyes. He was a stocky man, and his double- breasted suit made him look even broader.

"I'm deadly serious, Mr. Ben-Menashe," he said. "We want to deal with the Americans, but not the Americans who are in power. And we're relying on Israel to make the arrangements."

It was early May 1980. The first of the secret meetings between Casey and Karrubi had already been held in Madrid two months earlier. But Tehran wanted to involve Israel in the deal, if only to ensure, initially, that nothing went wrong.

I had flown to Vienna to meet Fakhrieh, a close aide to Supreme Council member Ayatollah Hashemi (who was assassinated a few years later), on the instructions of the director of Military Intelligence, who had asked me to keep in touch with my Iranian friends. I was not to commit myself on anything. Accompanied by my long-time contact Sayeed Mehdi Kashani, I had checked into the Hilton Hotel; Fakhrieh was also staying there. We met in his room. A cloud of cigarette smoke billowed around his face as he talked.

"I'll be frank with you, Mr. Ben-Menashe," he said. "We want to rid ourselves of this heretic menace from the west" -- he was, of course, talking about Saddam Hussein of Iraq -- "but we will have nothing to do with Carter."

It wasn't difficult to read the desperation in his words. I watched him stub out yet another cigarette.

"There is a problem," I said. "Carter is the president, and he is the only one with the legal -- and I repeat, legal -- power to talk to you people."

Fakhrieh chuckled. "You need not be so cautious. It's quite clear to us, as it must be to you, that the embarrassment Iran has caused him will cost Carter the election later this year. With that in mind, we're willing to make a secret deal with the Republicans -- and the CIA."

I asked him what he had in mind, knowing that what he told me would be the official Iranian line.

"America gets back their people, our money is freed from U.S. banks, and we also get our arms from Israel, with the blessing of your U.S. masters. We are willing to trust the Americans -- who are usually not trustworthy -- in reaching such a deal."

Fakhrieh revealed that at the next meeting in Madrid, to be held later in May, Karrubi would meet Casey again. But there would be another man present, representing a second Republican presidential candidate, George Bush. His name: Robert Gates.

Gates had visited Tel Aviv numerous times for intelligence exchange meetings. A career CIA official who at times served on various National Security Councils, he became a close associate of George Bush's when Bush was Director of Central Intelligence. Shortly before the Iranian revolution, Gates made several trips to Israel to meet intelligence community officials to discuss Iran's uncertain future. I briefed him and his aides on Iran several times, and I quickly reached the conclusion that he was not the Soviet analyst he was always represented to be -- he just didn't seem to know very much about the Soviet Union, nor did he seem very interested in it. Israeli intelligence had also learned of his connections with Ariel Sharon, Mike Harari, and arms sales to Central American governments.

Robert Gates was the new player at the second Madrid meeting. It took place at the end of May. As before, they met at the Ritz Hotel. Those present on the U.S. side, in addition to Gates, were William Casey, Robert McFarlane, and Earl Brian. Representing the Iranians were Mehdi Karrubi, Sayeed Mehdi Kashani, Ahmed Omshei, and this time an addition -- the man I had met in Vienna, Khosro Fakhrieh. By now the power structure of the Republican ticket had been defined. Casey was representing Ronald Reagan, while Gates -- although he was officially executive assistant to CIA Director Stansfield Turner, a Carter appointee -- was there representing George Bush.

No Israelis were present. Although Israel was determined to keep its finger on the pulse, it did not want to be seen to be intervening, especially after the outraged Carter phone call to Prime Minister Begin following the sale of the aircraft tires to Iran. Begin was worried that if Congress heard that Israel was meeting the Iranians along with a group of Americans that were not part of the official government, this would be perceived as subversion of legal government in the United States.

As before, Israeli intelligence received reports on the second Madrid meeting from Kashani, McFarlane, and Brian. At this meeting, as reported to me by Kashani, it was made clear to the Americans that in return for a promise that they would release frozen Iranian monies after the Republicans took office in January 1981, and that Israel would not be castigated by the Republicans or Congress for selling arms to Iran, the hostages would be released right away.

"You want to know something, Ari?" said Kashani. "These Americans don't want their people released yet. They've now come up with another proposal that a very high official of the future U.S. administration should meet with Hojjat El-Islam Karubi and work out the details of the deal with Iran. It's obvious these guys are procrastinating."

The reason was obvious, too. Even though steps could be taken immediately to free the hostages, Carter, as president, would get all the credit. Indeed, we also learned that the Hashemi brothers, on behalf of the Carter administration, had made contact with some Iranian officials at about the same time. Since they could not promise major arms sales through the Israelis, though, they got nowhere.

"Why don't they just come straight out and say they don't want their people released before January?" Kashani wondered.

So we knew as early as May 1980 that the Iranians were prepared to talk seriously about freeing the hostages. If they could receive U.S.-made equipment through Israel, the captives would be freed. Although they didn't want to deal directly with Carter, they would be happy to use the CIA as an intermediary. And yet Kashani and I had no doubt that the Republicans and their unofficial CIA friends were going to keep Carter in the dark and continue their negotiations at a pace that suited them.


Intelligence reports continued to flow in about the Iraqi build-up on the eastern border with Iran. The Soviets were arming the Iraqis, but Moscow was so uncertain what to do that it sent queries to Israel asking for an assessment of the Iranian situation, acting through the quasi-official representative of the KGB in Israel, the Russian Orthodox Church's Papal Nuncio in Jerusalem. [1] The KGB's contacts with Israeli intelligence had gone through him ever since Israel and the Soviet Union cut diplomatic ties in 1967. Moscow was officially represented at the time by an Interests Section in the Finnish Embassy in Tel Aviv. The queries were left unanswered because Israel did not want to pass intelligence to the Soviets who could, in turn, hand it on to Iraq.

War drums were beginning to be heard around Europe, and the United States, egged on by the Iranian opposition, asked for help from Israel to launch a coup d'etat against the Iranian government. The Israeli government, having decided by then that it was in Israel's interests to keep Khomeini in power, didn't respond to the American request.

About two weeks after Reagan and Bush officially won the Republican nominations for president and vice president in mid-July 1980, the third Madrid meeting took place. Parallel meetings between the Iranians and the Hashemis, representing the Carter administration, also occurred. The same issues were discussed, along with future U.S.-Iranian relations under a Reagan-Bush administration. If it was not clear beforehand, the cards were now on the table: The Americans would not commit themselves to any deal regarding the hostages before January 20, 1981, when the new president would be sworn in. They said they could not let Israel sell arms to the Iranians, despite the pleas from Tehran, until the Republicans were in power.

"Fine. These guys want to be popular with the American people," Kashani told me in a phone call from Europe. "Why not get the prisoners released after the November elections?"

"How do I know?" I said. "Ask your American friends." But the answer was obvious. The Republicans were going to wait until they could take all the credit.


At the beginning of August, a bizarre directive to the Israeli intelligence community on a "need-to-know" basis came out of the Prime Minister's Office. The document, which was read to me and others at a meeting called by the director of Military Intelligence, Maj. Gen. Sagi, revealed that the Israeli Cabinet had decided it would be "appropriate" for the Israeli security and defense forces to cooperate with elements in the United States that were not necessarily members of the present administration or blessed by the administration. In essence, the prime minister was telling his intelligence network that we were to cooperate with the Republican camp.

Now that the go-ahead had been given by the prime minister, who was also defense minister, the instruction that went out to me and other intelligence officials was to see what we could do for the Iranians -- but to be careful. The Carter administration should not know what was going on. As Sagi pointed out, the prime minister was still very sensitive about Israel being seen as subverting the legal government of the United States.

The second half of August 1980 was a very interesting period. I called Kashani, now back at his Paris number. He had been flying back and forth from Tehran by private plane, keeping in touch constantly.

"I have good news for you," I said. "We're ready to help. Prepare your wish lists."

I heard his sigh of relief on the other end. "I'm very happy, Ari. And please send my regards to your mother. I still remember her cooking."

At Kashani's suggestion, we arranged a meeting in Amsterdam.

"You think it's secure? We won't be spied on there?" I asked.

"Oh no, nothing to do with that," he laughed. "The women in Holland are very pretty."

I expected Kashani to be alone when we met at the Marriott Hotel in the middle of August. But he brought with him a battery of six Iranian officials from the Defense Ministry. I was surprised. I had come alone.

We spent a few minutes warming up. All seven men were expensively and elegantly dressed, and one was enjoying beer -- forbidden in Iran. Another of Kashani's companions, Cyrus Husseinzadeh, spoke Hebrew and was in SAVAMA, the revolution's version of the Shah's secret police, SAVAK. He told how he had originally been a member of the SAVAK and had been trained in Israel by SHABAK, the Israeli secret police and internal security service. He'd taken a course in counterintelligence, but "after I saw the atrocities committed by my superiors in the SAVAK, I refused to take part and joined the revolution."

After a while the Iranians handed me a 50-page file -- their shopping list -- that included everything a nation preparing for war required: aircraft, tanks, anti-aircraft missiles, anti-tank missiles, artillery shells, aircraft wheelbases, mortars, grenades, and many other spare parts.

They stressed the immediate need for supplies. There was no problem about the payment. As one of them told me, "As a sign of good faith, when you guys move, we will initially deposit $1 billion U.S. in a bank of your choice in Europe."

We talked about the hostages. "It's not up to us when they're released," I was told. "It's up to the Americans. They have the final say. The ball is in their court."

Kashani insisted on paying my hotel bill. As I checked out, he mentioned he would like to put a proposition to me -- to come and stay at his holiday house in Marbella, Spain, for two or three days. After that he would like to fly back with me to Israel. I didn't want to offend him, but I said I had to call my office first. I phoned Tel Aviv and mentioned the "shopping list."

"Go with him to Spain," said Sagi's chief of staff, Hebroni. "Enjoy yourself. And if he wants to come to Israel to spell out his requests, let him come."

At Amsterdam's Schiphol Airport, Kashani insisted on paying for the round-trip ticket to Marbella. The courtship with the Israelis had begun in earnest: It was now "unofficially official." And during the three days we spent at his modest red-roofed house overlooking the Mediterranean, waited upon by a North African maid, he expressed his relief that Iran would finally be getting Israeli military equipment with American blessing.

"Let's not get ahead of ourselves," I cautioned as we drank tea during one of those hot Spanish evenings. "We haven't got real American blessing. We've only got a nod from the shadows. And Sagi hasn't seen the details of your list yet. I don't even know if we've got all that stuff."

Kashani used his Philippine passport to get into Israel. And the following day, after breakfast at my parents' home -- a treat he insisted on, as he fondly remembered his earlier visit -- he watched as Gen. Sagi went through the Iranian weapons list.

"Of course, we're happy to cooperate," Sagi told him. "But I honestly don't know how much we can do until the new administration takes over in the U.S. A lot of these weapons and parts are American-made. But we'll certainly look into your request as far as it concerns Israeli-made materials."

It was my turn to do the entertaining, driving the Iranian around Jerusalem and taking him to Hebron to the place where the patriarch Abraham is believed to be buried. The Moslems, who believe that Abraham was their forefather, as do the Jews, call the site Haram El-Ibrahimi. The Moslems wanted a mosque on the site, the Jews a synagogue. The building is now alternately used both as a mosque and a synagogue, an arrangement imposed by the Israeli military.

"What do you think, Ari?" he asked as we strolled. "Do you think we can get enough from your people to arm us sufficiently?"

"As the boss said, we'll do what we can for you. Your enemy is also ours, don't forget."


On September 2, 1980, all Israel's fears came true when the Iraqis attacked southern Iran in the first big border clash, the precursor to the offensive that began on September 22. Saddam Hussein had decided that he should establish his control over Shatt Al-Arab and then go on to take over the oilfields in Khuzistan, Iran's southwestern province on the Persian Gulf. Iraqi troops poured into Iran, but the Iraqi Army was not as good as we had feared. Their air force was also ineffective in its attempts to destroy Iranian Air Force bases. The Iraqis quickly became bogged down by a surprisingly good defensive campaign launched by the Iranian military. Although the Iranians basically had only equipment left over from the Shah's time, much of it unusable because it had not been serviced and maintained, there was still enough to keep the invaders at bay.

Earlier that year, Iran had established an elected government, in which Abol Hassan Bani-Sadr had defeated Adm. Madani. However, even by the time of the invasion, the real shots were still being called by the Supreme Council. Bani-Sadr, as commander-in-chief, personally intervened to free from jail all the Iranian Air Force pilots who had been imprisoned for allowing the Israelis to steal their F-14 jets at the start of the revolution. But he insisted they each swear on the Koran to serve their country -- this wasn't a war for the Mullahs, he told them, but for the very existence of Iran.

Despite the strong defensive position taken by the Iranians, the Israeli government and intelligence community were extremely worried about Iraq's incursion. It would be in Israel's interest to flood Iran with military equipment, but we had to be cautious. Much of the material we had was American, and if that went to Tehran without the release of the hostages and Carter's okay, there could be serious repercussions in the U.S. Congress with its Democratic majority.

Within a few days of the September 2 incursion, Kashani called to tell me that a fourth meeting had recently taken place between the Iranians and the Americans, this time in Barcelona. An important decision had been reached: that a top-secret meeting between George Bush and Hojjat El-Islam Karrubi would be held in Paris. The Iranians wanted assurances from a Republican leader at the highest level that if they held off the release of the 52 Americans until the Reagan administration took office, they would be supplied with military equipment to defend themselves against the Iraqis, and their monies frozen in the U.S. would also be released.

"It's also been decided that Israeli representatives should come to Paris," said Kashani. "Although Bush and Karrubi will be making the ultimate decision, we'll be setting up numerous discussions between other officials and aides."

So this time it was the vice president of the anticipated Republican administration who would be in attendance. Carter would be furious if he knew what George Bush's intentions were, but then, of course, Bush's presence in Paris was not expected to leak out to the Carter people. Kashani had made no mistakes with his information concerning the Iranian decision to meet Bush -- the same details were fed to Rafi Eitan from his U.S. contacts, McFarlane and Brian.

"By the way" said Kashani, "we're still after anything you can give us for our war effort. The Americans have told us to hold out. They'll help, but only after the Republicans have taken over and the hostages have been released."

Some time around September 10 I was called into Sagi's office for an official briefing on a letter that had been sent by Stansfield Turner, curiously directed to the head of IDF/MI and not to the American's counterpart in Israel, the Mossad chief. In it, Turner outlined his thoughts about the Middle East situation; the most interesting part of the letter was his forecast that no matter who was elected as president of the United States, he expected to continue leading the CIA in 1981.

According to Sagi, there had also been phone calls from Casey to Begin and Sagi and to Nachum Admoni, the acting director of Mossad, in which Casey outlined his contacts with the Iranians. He confirmed he had met various Iranians in Spain and was about to reach an agreement with them. There would be a meeting, to which the Israelis were invited, in mid-October 1980. The Israelis were to be the channel used to sell arms to Iran. None of this was news to us, of course.

The Israeli intelligence community remained extremely concerned about the Iraqi threat to Iran. If Iraq won that struggle, Israel would have a major problem on its hands with that land mass and those oil reserves in the hands of Saddam Hussein. We started looking for a way to solve the problem of supplying arms to Iran and getting the hostages freed before January. Perhaps, it was suggested, we, the Israelis, could reach an independent deal with the Iranians, get them to release the hostages, and then present it to the Americans as a fait accompli. This way the Iranians would have their way, without having to deal with the Carter people, and on the other hand the Reagan people would have to accept it because it would have all been happily completed.

It was an interesting proposition, particularly since Begin was unhappy about the idea of an Israeli delegation participating with Carter's opposition at the Paris meeting. The prime minister was a very legalistic man who believed in law and order around the world.

So the fait accompli plan went ahead. First, Begin sent Khomeini's old friend, Ruth Ben-David, as his direct emissary to see the Ayatollah in Tehran in mid-September. Her mission was to get Khomeini's agreement to release the hostages immediately in exchange for Israeli guarantees of arms to Iran. Khomeini agreed in principle, and the details were left to be worked out by others at another meeting. Sagi briefed me on all this and then instructed me to ask Kashani to arrange a meeting between a senior Israeli delegation and an Iranian who could actually carry out the release of the hostages.

We met in Amsterdam in the second half of September. The Israelis included David Kimche, head of Tevel; Uri Simchoni and another man from IDF; Shmuel Morieh from SHABAK; and myself. From the Iranian side, there were Kashani; Ahmed Khomeini, the son of the Ayatollah; Khosro Fakhrieh; and Ahmed Omshei. The Iranian team was regarded as extremely high-level because of the presence of Ahmed Khomeini.

The meeting in the Marriott Hotel lasted nearly two days. At the end of it, we had a working agreement. The Iranians would arrange for the release of the hostages in the first week of October. They would be flown to Karachi, Pakistan, where a U.S. Air Force plane would be waiting. The cash side of the arrangement was that Israel would pay $52 million, through Kashani, so he could payoff the radical leaders. After the release, Israel would start supplying military equipment to Iran, for which Iran would pay. In addition, Israel would exact a commitment from the Republicans that, when they came to power in the U.S., they would release all frozen Iranian funds in American banks.

Just what the Americans would think of the deal was anybody's guess. But my superiors, at least, were happy. The scheme was then put to Casey by my boss, Maj. Gen. Sagi. The response was cool. Casey said that he didn't believe the Iranians would go ahead with the deal, and he proposed that an Iranian representative secretly travel to the U.S. to present the case. So the Americans were still employing their delaying tactics.

It was agreed that the Israelis would escort an Iranian official to the U.S. if Tehran agreed. The Iranians were desperate to try anything as long as they could receive arms from somewhere, so they agreed to send a representative. The American contingent said they would arrange a U.S. visa for the Iranian official in Germany, even though the State Department was not under their control.

We were told that the Americans would be represented at the Washington meeting by Robert McFarlane; Richard Allen; James Baker III, former campaign manager for George Bush; and Lawrence Silberman, a close friend of Bush's. The choices of McFarlane, Baker, and Silberman were all understandable, considering their connections. But Allen was a mystery; he was a man with connections to the Carter administration. We did not know, until McFarlane told Eitan, that Allen had a deal with the Reagan camp that assured him the position of national security adviser for Reagan.

These four people were to meet an Iranian emissary and an Israeli intelligence officer -- I was designated -- on October 2. In Frankfurt I was waiting to meet their man -- Dr. Ahmed Omshei, who was by now a familiar face. He collected his visa, and we flew to Washington via New York. The details of this meeting were coordinated by Hushang Lavi, an Iranian Jew living in the U.S. and working for Israeli intelligence. Lavi was a known arms dealer who left Iran under the Shah to live in the United States. From the U.S. he frequently visited Israel and was recruited by Mossad in the late 1970s as an intelligence asset to further Israel's arms-sales policies. His work for the Israeli government ended in 1983 because he refused to heed warnings about his unauthorized moonlighting in arms with the Hashemi brothers, among others.

As it turned out, James Baker did not attend the October 2 meeting, held in the lobby of Washington's L'Enfant Plaza Hotel. But the other three were there. I said nothing while they listened politely as Dr. Omshei once again outlined the Israeli plan accepted by the Iranians. The meeting lasted just half an hour, during which Omshei suggested that the planned Paris conference between Bush and Karrubi would now not be necessary because the Israelis were negotiating on America's behalf for the release of the hostages.

McFarlane smiled and slowly nodded. "I'll report to my superiors," he said. I didn't understand what that meant. Just who were his superiors?

Two days later I was back in Tel Aviv. I was whisked off instantly to see Sagi in his office.

"I hope you enjoyed your sightseeing trip to Washington, Ari," he said.

I immediately sensed a problem. "You're going to tell me it's all fallen apart."

"Was it ever together in the first place?"

No, I conceded. It had been too much to hope that the Americans would accept our plan.

The Paris meeting was still on. So we continued to make our arrangements to send a team of six who would discuss the minor details of the hostage release while Bush and Karrubi set the official seal on the arrangement. My assignment was to confirm my friendship with the Iranians, to get a list of all their addresses, phone numbers, and telex numbers, and to establish contact points throughout Europe as a prelude for what would certainly be a deal in which Israel would sell arms to Tehran.

When I called Kashani and told him that the Americans had quashed the Israeli plan and there would be no immediate supplies of equipment to Iran, he was devastated.

Iran had been ready to release the hostages months earlier. Israel had been prepared to negotiate a new arms deal. And, all along, the proposals had been delayed or downright-ignored. It was clear to everyone involved that the Republicans and their CIA representatives were going to work this thing out all by themselves and take all the glory on inauguration day.

"It's a blow, Ari," he said. "We're desperate. If nothing else, can you supply us right away with wheelbases for the F-4s?"

"I'll do what I can," I said, and hung up.

My superiors made an instant decision. The wheelbases, 60 of them, could come out of air force stock. It was arranged with Kashani that a French aircraft chartered by the Iranians would fly into Ben-Gurion Airport in late October, pick up the cargo, fly back to Paris, and then go on to Tehran. I asked the Iranians to make payment to Banque Worms.


The six of us, five men and a woman, who were chosen to go to Paris were briefed thoroughly about what was to take place there and what our roles would be. As it turned out, the Paris meeting went precisely according to plan. Simon Gabbay, my father's cousin, who was the head of a Jewish organization in Paris, and was for many years an Israeli intelligence asset, coordinated the meetings between the Israeli and Iranian delegations. The purpose of his participation was to eliminate contact between Israeli and Iranian embassy personnel. Gabbay continued to serve this function in years to come.

We six Israelis flew by El Al from Tel Aviv to Orly Airport in mid-October and were as inconspicuous as possible. Arrangements for security had been made. Upon arrival we were met by two Mossad representatives stationed in the Israeli Embassy in Paris. The two senior Israelis -- David Kimche and Shmuel Morieh -- were driven to their quarters at the Ritz Hotel; I rented a car and drove the remaining four of us -- Uri Simchoni, Rafi Eitan, a woman from Mossad, and myself -- to the Eiffel Tower Hilton, where we were to stay. That day my only business was to remain in contact with Israel by a secure phone in a safehouse on the rue du Faubourg Montmartre.

Over the next few days, between calls to Israel, I had the opportunity to meet both the Iranians and some of the American contingent, including Robert Gates and George Cave, a long-time CIA official. Cave was officially purged from the CIA in 1977 but was active until 1989. My career and his were somewhat parallel -- he is an Iranian expert and speaks, reads, and writes Farsi well. At times he was "downplayed" as a low-level translator, but in reality he was an active CIA operative, a member of what we in Israel called the "Iran Group," headed by Robert Gates, which was created as a result of this Paris meeting. Because of his expertise on Iran, he took part with the Israelis in the arms sales. Cave became well-known in Washington circles and was very close to Gates.

Gates and Cave came to the room of one of the Israeli contingent, and we talked about the Iran-Iraq war in general. My colleagues and I tried to keep our contact with the Americans as brief as possible, as we'd been ordered. I kept in close association with the Iranians -- including Kashani, Omshei, and Fakhrieh -- obtaining from them the names of contacts in their embassies and in their Melli Bank branches in London and Paris. These would be needed for future negotiations in the planned arms trade. By the third day, I had nearly completed my role in the mission.

The evening before the big meeting, the two Israeli seniors were to be received by Hojjat El-Islam Karrubi, who had just arrived in Paris. I was asked to go with them to Karrubi's suite at the Hotel Montaigne, a small establishment within walking distance of the Hilton. As Karrubi's two bodyguards watched carefully, I came face to face for the first time with this influential member of Iran's Supreme Council. He impressed his guests as an immensely shrewd and religious man. He spoke English and French and made it quite clear that he believed in the Islamic revolution in his country. He took the familiar position that any cooperation between Iran and Israel on Iraq should not be taken as a sign that the Islamic government would recognize Israel, but should be seen only as a matter of expediency.

The next morning, French security officers were scattered through the lobby of the Ritz Hotel hours before the top-secret meeting was due to take place in an upper-level conference room. I had one more task, which necessitated my going to the Ritz to meet the Iranians. Accompanied by my colleagues, and fully aware that we should keep our distance from the Americans at this important gathering, we walked past the vigilant eyes of the French security men to be confronted by two U.S. Secret Service types. After checking off our names on their list, they directed us to a guarded elevator at the side of the lobby.

Stepping out of the elevator, we found ourselves in a small foyer where soft drinks and fruits had been laid out -- the hotel had tactfully chosen refreshments that were not forbidden by anyone's religious beliefs. The Americans -- Gates, McFarlane, Cave, and Donald Gregg, who worked in President Carter's National Security Council as CIA liaison -- were among those already present, chatting with the Iranians. There was no sign of Bush or Karrubi.

I approached the Iranians to complete my final assignment. This was to arrange the route and clearance designator of the plane that would be picking up the wheelbases from Israel. Ten minutes later, Karrubi, in a Western suit and collarless white shirt with no tie, walked with an aide through the assembled group, bade everyone a good day, and went straight into the conference room.

A few minutes later George Bush, with the wispy-haired William Casey in front of him, stepped out of the elevator. He smiled, said hello to everyone, and, like Karrubi, hurried into the conference room. It was a very well-staged entrance. My last view of George Bush was of his back as he walked deeper into the room, and then the doors were closed.

Bush, Casey, Karrubi, and his aide would have no interruptions as the fate of the hostages was sealed. Iran's future arms purchases from Israel met, for the time being, with unofficial U.S. approval. I learned the details of the deal days later in Sagi's office in Israel. It was exactly as had been arranged in Amsterdam in September by the Israelis: The hostages would be released in exchange for $52 million, guarantees of arms sales for Iran, and unfreezing of Iranian monies in U.S. banks. The only difference was the timing of the hostages' release. Instead of immediately, the Republicans insisted that it take place on January 20, 1981, upon Ronald Reagan's inauguration.

It was such a secret arrangement that all hotel records of the Americans' and the Israelis' visits to Paris -- I cannot speak for the Iranians -- were swept away two days after we left town.

Shortly after the Iranians received their wheelbases, Carter called Prime Minister Begin and raged at him. No one knew how Carter had found out, but this time Begin gave back as good as he got, pointing out that the Iraqis were about to control the biggest known oil reserves in the world and were a danger to the very existence of Israel.

Kashani was happy to have received the wheelbases, but was upset that the arms sales were not going to start until the Reagan Bush administration took office. "The Americans have screwed up from the very beginning," he fumed. "Their people could have left Iran in mid-1980, and now our land is being abused by the Iraqis."

On November 4, 1980, America held its elections. No one who had been involved in the secret meetings in Paris had any doubts about the outcome -- or about how much longer the hostages would continue to eat rice in their Tehran "prison."

There are few rules in the murky depths of espionage, arms deals, and political trade-offs, but there are some rules, nevertheless. In 1980 we all saw that the Americans had gone beyond the pale.



1. The Russian Orthodox Church has its own Pope, and his representative in Jerusalem is officially known as the Russian Orthodox Papal Nuncio.
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Re: Profits of War: Inside the Secret U.S.-Israeli Arms Netw

Postby admin » Tue Jun 09, 2015 3:38 am

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:

• David Kimche, the senior member, head of Tevel at the time, was an intellectual who had a doctorate in social sciences and had spent most of his career in intelligence.
• Shmuel Morieh had been the legal adviser to SHABAK, Israel's internal security apparatus. An Iraqi Jew, he handled legal questions and contracts for the committee.
• Uri Simchoni, a brigadier general, was at various times assistant deputy chief of staff for operations for the Israel Defense Forces and military attache in Washington. He had also been the chief of the elite Golani infantry brigade.
• Moshe Hebroni, a young major, was chief of staff for the director of Military Intelligence.
• Rafi Eitan was the counterterrorism adviser to the prime minister. A small man who walked like a rabbit and wore cheap sports jackets, he was the only veteran covert-action mastermind on the committee.

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 ..."

"$52 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 [1] 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.
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