The "Shadow CIA": The Revenge of the Spooks and the October (1980) Surprise: Part Three

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. 1Gelli 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. 2 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.

The Reagan effort to derail Carter’s efforts to free the hostages was assisted by Republicans in the C.I.A., other parts of the intelligence community, and the State Department. Miles Copeland, a former senior agent, said the “ C.I.A. within the C.I.A.” was invbolved. As a result of their activities, the Reagan campaign often had better information on the Iranian situation than the President of the United States. Sympathetic elements in the press, including columnist Jack Anderson, printed classified information and clever disinformation . A C.I.A.-connected writer for the Washington Star wrote a speculative scenario for rescuing the hostages that predicted Rescue One, the failed effort to extract the detained Americans. Richard Allen’s notes show that the French assisted the Republicans by giving the Iranians spare parts, in an effort to injure Carter;’s negotiations.

There is solid evidence that the Reagan campaign, with the help of C.I.A. people and some military and F.B.I. people, made a deal with Iran to hold the hostages until after the American election. Oliver North was involved in getting the payment, in the form of arms, to Iran and his diaries suggest some of the money flowing from the deal went to Hezbollah, perhaps as black mail.

There were a number of meetings between Republican operatives and representatives of Ayatollah Ruhollah Khomeini in Paris and Madrid.. Jamshid Hashemi, an Iranian C.I.A. agent, testified in the 1991-1992 hearings that he accompanied Casey at the two day Madrid meeting with mullah Mehdi Karrubi. After one of the meetings, Casey appeared in London a day later on , July 29, 1980. He went to Madrid four times, were he laid out the main outlines of the deal, which was concluded in mid October at a meeting in a Paris suburb.

The key meetings were in Paris area hotels on October 18-20. A day after they concluded, the Tehran government made it clear it was no longer interested in negotiating with the Carter administration. A key figure at the this meeting was Manucher Ghorbanifar, an Iranian born Mossad agent and arms dealer. Another key figure was Ari Ben Menashe of the Mossad. Iran was represented by Ali Akkabar Hashemi Rafsanjani, then speaker of the parliament, and Mohammed Ali Raja, a future president of Iran. The Iranians were promised weapons for delaying the release of the hostages, and it has been suggested that millions were given to the Iranian leadership in bribes.

The weapons and parts, worth about $5 billion, were shipped to Portugal on ships by means of false documents, where other items were added to their cargoes. The payment in arms then went to Israel for transshipping to Iran The Portuguese Prime Minister, who objected to his territory being used for the transfer of weapons, later died in a plane crash, along with one cabinet minister.

It has often been charged that vice presidential candidate George Bush attended that meeting, and there is evidence to sustain the charge. Israeli agent Ari Ben Menache told Frontline that there were three meetings in Paris, and that George W. Bush attended one of them. An intelligence agent testified at the subsequent hearings that he had seem a November 18, 1980 copy of a French intelligence agency ( SDECD) reporting that it has successfully moved Bush around Paris without being recognized. This agent said Bush attended three meetings with Iranians rather than one.

The Congressional task force that investigated all this found two separate witnesses, who did not know one another, who knew Bush was flying to Paris for the final meeting with the Iranians. The task force people also knew that many current and former C.I.A. people were involved. For them, it was unthinkable that people still on the government payroll could participate in what amounted to a coup against a sitting president. Too little was done to pursue all this, and investigators were further discouraged by the vigorous stone-walling activities of the Republican leadership under Senator Robert Dole.

Bush’s explanation of where he was then cannot be proven and seems somewhat implausible. He has refused to release the kind of information that would settle the matter. Moreover, the Secret Service eventually had to admit that it had lost track of George H.W. Bush for 23 hours at that time. This came out in the trial of intelligence operative Richard Brennecke, who had talked to the congressional investigators in 1991. He was subsequently arrested on charges not related to t he October Surprise of 1980 and eventually acquitted. He was cousin of Captain Russbeacher and part of his flight crew.

Whether Bush was flown there by Captain Gunter Russbacher of ONI is another matter. The captain claimed to have evidence that he was Bush’s pilot. Russbacher had taken part in a number of Naval Intelligence and C.I.A. operations, and was son of a famous US intelligence operative.

A Russian speaker who even knew Gorbachev, Russbacher was eventually accused of profiting from covert operations and imprisoned. However, there is not enough solid evidence to prove that Bush attended the Paris meeting. He claimed to fly a BAC-111, owned by the Saudi royal family. Bush was joined by passengers Bill Casey, Donald Gregg, Robert Gates, Robert McFarlane, Richard Allen and Dr. Carl Brian. The latter was later to own UPI and the Financial Times,, had been on Reagan’s California cabinet, and was a close friend of Ed Meese. He was convicted in 1994 in California of nine counts of fraud, but the court released no information on the exact nature of the charges, and news of trhe case was not made public until 1995.

Jennifer Fitzgerald, Bush’s longtime paramour, was also aboard. According to some sources, two DemocratsBDan Rostenkoweski and Senator Robert Byrd-- were also present. The plane arrived in the military section of a Paris airport, and Bush departed on the same day via a SR71- Sources disagree on whjether it was Le Bourget .

Blackbird was flown by Russhbacher to McGuire AFB in New Jersey. His five Secret Service agents returned later. A second plane piloted by intelligence agent Heinrick Rupp, a former Nazi pilot, brought others to Paris. Later, as a C.I.A. operative, he was convicted of bank fraud in connection with the savings and loan scandal. Testimony at the 1991-1992 joint congressional hearings revealed that Dr. Earl was entrusted with paying the Iranian leaders $40 million, which was deposited in a Luxemburg bank. Bill Casey told CIA agent William Buckley that the money had been contributed by wealthy Republican businessmen. 3

Earl's payment for these services was the right to sell a copy of sophisticated information-gathering software called PROMIS to the Canadian government. The Department of Justice had seized this software from Inlaw, a firm that had leased the software to the government. Justice refused to pay, claiming that not all terms of the contract were met. Litigation over this would continue for years. Brian and others subsequently sold the software to intelligence agencies and banks throughout the world.

During the subsequent hearings, both Newsweek and the New Republic, were parties to efforts to discredit the claim that Casey was in Madrid at that time. When their evidence collapsed, they did not retract their comments. The Congressional Committee staff then tried to prove that Casey was at Bohemian Grove, in northern California, and they stuck with this story even after business receipts showed he was there a week later than that.

The investigation chaired by Democrat Lee Hamilton was shut down, probably for national security reasons. Hamilton’s chief counsel was Larry Barcella, who was lawyer for the Bank of Commerce and Industry, when it was indicted in 1988. That institution was the depository for all manner of covert action funding. Barcella’s senior law partner was former Senator Paul Laxault, a close friend of Ragan. Barcella was also a good friend of Michael Ledeen, whom some believed was tied to the October Surprise. Hamilton was not interested in looking at the arms for drugs business and seemed to accept Oliver North’s testimony. Hamilton and 18 other members of the House pressed hard to force Costa Rica to release drug operative John Hull.

Newsweek assigned Bob Parry to follow the story but forbade him to attend the hearings. He arranged for someone to surreptitiously bring him document transcripts and followed the story subsequently. Later, he played a role in breaking the Iran-Contra story, which ended his career in mainstream journalism.

The hearings into the October Surprise resulted in the jailing of several intelligence agents who spoke to the Joint Committee or its staff. Lee Hamilton, who chaired the investigation let Henry Hyde, a C.I.A. man, veto the hiring of one investigator. Hamilton refused to look at files the Soviet Union provided. 4 After serving in Congress, he was vice-chair of the 9/11 Commission, which endorsed the George W. Bush administration’s account of what happened when the World Trade Center and Pentagon wre attacked .

Rossbacher’s incarceration may have been more connected to a recent re-marriage than to the October Surprise. After his divorce, he was ordered not to remarry for two years because there was a fear that the intended bride could be a KGB agent. He quickly wed her and ended up in prison, a situation that prompted him to start talking. As he successfully battled one charge, he would be accused of something else, including the kidnaping of his niece. Michael Riconosciuto, who provided information on how the deal was financed was imprisoned in Pierce County, Washington and then removed to another site. He was accused of operating a meths lab. Two other agents were jailed, one of whom later won acquittal. Covert operatives call the October Surprise C.I.A. agents who later went to jail the Brown Helmet Society. They were expected to do their time and keep quiet. Though not directly involved in the October Surprise, Michael R. Senci had been in a position to know more than one should as he had worked for the C.I.A.’s Republicans Abroad. In 1991, he was convicted of six counts of mail fraud and put on ice.

THE AFTERMATH OF THE OCTOBER SURPRISE

Robert Gates established Operation Ringwind in 1981 to take care of everyone who was likely to reveal the October Surprise. Lt. Commander Robert Hunt (ONI) later named most of the men involved in the operation John Aldridge; Phil Burgess; Bob Burdige; Gregg Note; Robert Lister; Fred White, and Rodney Harmon . Some of the victims were investigators and some were participants. Assassins were trained at Camp Perry in Virginia, Fort Story, and Mint Farm Hill. Among those killed was the Portuguese Prime Minister.

It is unclear who else was killed but there is evidence that the same hit team was active for more than decade. Young named some of the victims: Danny Casolaro, Alan Standorf, Barry Kumnick, Dennis Eisman, Alan May, David May Paul Macesca, David Mayer, Dexter Jacobson, Gary Pimmell. Michael Hand, Anson Ng, Jonathan Moyle, Arnold Raphel Mohammed Rajai, Cyrus Hashemi, and Shahpour Bhktior.

Casolaro was investigating many things including the October Surprise, and Alan Standorf was his NSA source. Kumnick was a software developer who helped the US government refine PROMIS, a program the Justice Department seized from a private firm. Casolaro was also investigating this. Kumnick disappeared while Congress was investigating the matter and it was being litigated. Attorney Eisman was shot to death April 5, 1991. He was defending Michael Riconosciuto, a C.I.A. employee who led in the effort to modify PROMIS.
Iranian banker Cyrus Hashemi , along with his brother, were middle men in the October, 1980 surprise. There were damaging F.B.I. wiretaps on his phone then and his elder brother Jamshid later testified to the Hamilton Committee, which whitewashed the whole business anyhow.

The brothers were tied to BCCI and the shah and had many reasons to cooperate against Jimmy Carter. Reuters reported in 1992 that the tapes showed that Cyrus was also tied to Ronald Reagan and that the Gipper himself appeared on one tape. The Reagan administration indicted him in 1984 for selling arms to Iran and he died in 1986. ( One thing this writer has learned is that the best way to control hostile witnesses was to indict and jail them. This appeared many times in the Reagan-Daddy Bush year.) Three months before he was killed, he started talking to Customs about the Iranian arms trad3e and to Frontline about the October Surprise. Shahpour Bhktiar , the last imperial prime minister of Iran, was assassinated in 1979. It was assumed that revolutionaries were guilty.

Attorney Jacobson was found murdered the night before he was to present evidence about massive corruption in California bankruptcy courts. Michael Hand was a US intelligence agent who helped run the Nugan-Hand Bank. The chairman of the board was a retired US admiral whom this writer has found protecting sderveral unsavory intelligence operatives. Anson Ng, stringer for the Financial Times, was killed in Guatemala wher he went to inverview the agent who paid for the murder of three men who complained about whent on at the reservation where PROMIS was modified and weapons were manufactured for the Contras. Moyle was a British defense expert who was murdered on March 30, 1990 in Chile, where he was checking out a story that the US and Israel were modifying an helecopter so it could be sold to Iraq. Frankly this writer and others thought he was killed by MI6. Rajai, President of Pakistan, died in a bomb blast on August 30, 1981.

Young claimed that some members of the team were involved in Operation Mount Rushmore ( 1992), the failed effort to kill candidate Bill Clinton