Iran-Contra Hearings: Robert McFarlane Testimony (Part 4)

July 14, 1987

On the day of McFarlane's resignation, Oliver North, a military aide to the United States National Security Council (NSC), proposed a new plan for selling arms to Iran, which included two major adjustments: instead of selling arms through Israel, the sale was to be direct, and a portion of the proceeds would go to Contras, or Nicaraguan guerilla fighters opposed to communism, at a markup. North proposed a $15 million markup, while contracted arms broker Ghorbanifar added a 41% markup of his own. Other members of the NSC were in favor of North's plan; with large support, Poindexter authorized it without notifying President Reagan, and it went into effect. At first, the Iranians refused to buy the arms at the inflated price because of the excessive markup imposed by North and Ghorbanifar. They eventually relented, and in February 1986, 1,000 TOW missiles were shipped to the country. From May to November 1986, there were additional shipments of miscellaneous weapons and parts.

Both the sale of weapons to Iran, and the funding of the Contras, attempted to circumvent not only stated administration policy, but also the Boland Amendment. Administration officials argued that regardless of the Congress restricting the funds for the Contras, or any affair, the President (or in this case the administration) could carry on by seeking alternative means of funding such as private entities and foreign governments. Funding from one foreign country, Brunei, was botched when North's secretary, Fawn Hall, transposed the numbers of North's Swiss bank account number. A Swiss businessman, suddenly $10 million richer, alerted the authorities of the mistake. The money was eventually returned to the Sultan of Brunei, with interest.

On January 7, 1986, John Poindexter proposed to the president a modification of the approved plan: instead of negotiating with the moderate Iranian political group, the U.S. would negotiate with moderate members of the Iranian government. Poindexter told Reagan that Ghorbanifar had important connections within the Iranian government, so with the hope of the release of the hostages, Reagan approved this plan as well. Throughout February 1986, weapons were shipped directly to Iran by the United States (as part of Oliver North's plan, without the knowledge of President Reagan) and none of the hostages were released. Retired National Security Advisor McFarlane conducted another international voyage, this one to Tehran. He met directly with the moderate Iranian political group that sought to establish U.S.-Iranian relations in an attempt to free the four remaining hostages. This meeting also failed. The members requested demands such as Israel's withdrawal from the Golan Heights, which the United States rejected.

In late July 1986, Hezbollah released another hostage, Father Lawrence Martin Jenco, former head of Catholic Relief Services in Lebanon. Following this, William Casey, head of the CIA, requested that the U.S. authorize sending a shipment of small missile parts to Iranian military forces as a way of expressing gratitude. Casey also justified this request by stating that the contact in the Iranian government might otherwise lose face, or be executed, and hostages killed. Reagan authorized the shipment to ensure that those potential events would not occur.

In September and October 1986 three more Americans — Frank Reed, Joseph Ciccipio, Edward Tracy — were abducted in Lebanon by a separate terrorist group. The reasons for their abduction are unknown, although it is speculated that they were kidnapped to replace the freed Americans. One more original hostage, David Jacobsen, was later released. The captors promised to release the remaining two, but the release never happened.

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