The "Shadow CIA" and the Revenge of the Spooks: The October Surprise, Part Two

Casey was able to get in touch with the Iranians with the help of the French intelligence service, Count Alexandre de Marenches. Carter had unwittingly sealed his own fate by refusing to trade arms for hostages. However, there is strong evidence that the Israeli’s played a major role in opening dialog between the Republicans and the Iranian government. The Israelis had been asked to sell a limited number of arms to Iran, and they wanted a green light from potentially the next American government to sell more. For that reason, Israeli intelligence sent an Arab merchant with Iranian ties to negotiate with Republican operatives at the L" Enfante Hotel in Washington. He proposed the kind of deal Casey negotiated, except that Israel would immediately begin unlimited arms sales The main Iranian spokesman was Ayatollah Mohanned Baheshti, an aid to Speaker Ransanjani and assistant to Ayatollah Khomeini.

Casey was a hard-bitten capitalistic high-roller with intelligence experience. He knew how possession of power would have positive economic consequences for himself and his friends. Others may have been driven more by ideology. Carrying on diplomatic negotiations with a foreign enemy is a violation of the law, as was coordinating arms shipments to Iran, before and after Reagan took power. One would think that patriots would want the hostages returned as soon as possible and would support the nation’s foreign policy in a time of crisis, even if the president was a Democrat. What led these people to violate the law overcame any patriotic impulses to carry on their own destructive foreign policy.

The best answer is that they were so convinced by their own ideology and attacks on the Democrats that they felt justified in doing anything necessary to restore Republican control of the White House. It was as though elected Democrats automatically lack legitimacy, except when they co-operate in enacting and carrying out Republican policy. There was an op-ed piece and a PBS special outlining the facts in this matter in 1991.

Not one Republican politician or pundit expressed any interest in the possibility that this may have happened. So-called liberal politicians and journalists showed little interest when it became clear that there was not overwhelming evidence that President George Bush was involved. The Secret Service records for Bush at that time were only partially made available to Congress. Because they were redacted, Bush’s claims to have been in Washington could not be proven.

One agent claimed to have been with the Bushes much of that day, but it was later proven thqat the agent was jogging along the C and O Canal that day and not on duty. Years later, Yasir Arafat told Jimmy Carter that the Republicans had asked them to help with the arms deal used to keep the hostages captive until after the election. In 1993, Russia Supreme Soviet agreed to give Congressional investigators files that showed that Casey met with the Iranians in 1980 and that Robert Gates and George H.W. Bush were involved in the deal with Iran.

The Russian report added that Robert Gates, then a Carter NSC staffer, was in Paris negotiating on behalf of Reagan and that Casey attended meetings at the Ritz Hotel in Madrid and Paris. The Russians saw a bidding war between Carter and Reagan for control of release of the hostages, with the Republicans able to disrupt the Carter operation and make a deal with the Iranians.

A Congressional task force had just concluded that the Republicans did not interfere in the hostage crisis before the Russian report arrived, and nothing was done to change the Congressional report. Some of the Russian report was based on allegations of former Israeli intelligence official Ari Ben-Menashe. Israel said he had never been a government employee until he produced documents. Then the Israelis simply said he was lying about the October Surprise. The Russian Report was ignored, and ended up in a box of documents in a former ladies room in the Rayburn Building.1

Among other things, Casey promised that Israel would sell some arms and parts to Iran immediately and that they would sell many more after Ronald Reagan became president. The Republicans promised to provide about $5 billion worth of arms. Much later, in May, 1986, McCarlane visited Iran and was taped saying that up until then the Reagan administration had provided 1.3 billion in arms and add3ed that it would provide trhe rest. The Iranians were also promised the return of $12 billion in blocked funds. Prime Minister Menachin Begin, who had promised not to sell so much as a shoelace to Iran, cooperated with the Republicans" efforts to undermine the Carter position. These activities thoroughly undermined the activities of the legitimately elected government of the United States and weakened the U.S. position in bargaining for the return of the hostages. Former Iranian president Bani-Sadr was ale to provide investigators with details of the money transferred to Iranians , along with bank account numbers. 2

Italian journalists believe that Licio Gelli, Grand Master of “Raggruppamento Gelli-P2.” Was present at one of the meetings. “P” meant Propaganda 2. Gelli has essentially taken over a defunct Italian Masonic Lodge to use as the superstructure of his criminal and political network. By the 1970s, P-2 practically ran Italy and even had important people posted in the Vatican. Members were very conservative and were dedicated to accumulating power and personal wealth as well as fighting Communism. The C.I.A. assisted P-2 in Italy, and it worked closely with the C.I.A. in Latin America. 3 Gelli took to using the password “Luciano” after the death of Pope John Paul I, suggesting he had something to do with the late pontiff’s death. Gelli eventually took up residence in Uruguay and his influence spread through much of Latin America, and his operatives were deeply involved in the activities of the right-wing death squads.

European journalists claim to have evidence that P-2 eliminated Swedish prime minister Olf Palme because he showed too much interest in the secret deal. Their informant said the C.I.A. used P-2 to help bring drugs into the USA and also to create terrorist incidents in Europe and Italy. 4 The story was circulated all over Europe, but a government inquiry turned up nothing. Often tales like this are linked to real events to discourage interest in the larger occurrence.