One of the biggest foreign policy scandals of the last half-century was the Iran-Contra affair, in which the Reagan Administration, prodded by CIA Director William Casey and NSC Advisor Oliver North, secretly arranged for an arms-for-hostage deal with one of its bitterest enemies in the Middle East. Put simply, Israel would sell weapons from the U.S. to Iran, which had been designated a State Sponsor of Terrorism in 1984 and the subject of an arms embargo, in exchange for the release of American hostages held by Hezbollah, Iran’s ally, in Lebanon.
North and Casey then doubled down, funneling the profits from the arms sales into yet another illegal venture, a secret plan to support the Contras, the militants in Nicaragua which opposed the communist Sandinistas. This was in direct contravention of the Boland Amendments, which Congress had passed from 1982-84, specifically prohibiting U.S. support of the Contras.
The entire plot quickly unraveled on November 3, 1986, when the Beirut newspaper Al Shiraa, revealed the arms-for-hostages deal for the first time. The scandal was compounded when North destroyed or hid pertinent documents between November 21- 25, 1986. Attorney General Edwin Meese then admitted on November 25 that profits from the weapons sales were aiding the Contras. On the same day, National Security Advisor John Poindexter resigned, and Oliver North was fired by President Reagan. Congressional investigations soon followed. Widespread criticism and outrage over the scheme forced Reagan to apologize on a nationally televised address on March 4, 1987.
Several high-ranking Administration officials were eventually indicted on various charges related to Iran-Contra. Secretary of Defense Caspar Weinberger was indicted on two counts of perjury and one count of obstruction of justice on June 16, 1992. He received a pardon from President George H.W. Bush in December 1992, before he was tried. William Casey, who was considered to be the mastermind of the plan, fell ill hours before he would testify. National Security Adviser Robert C. McFarlane was convicted of withholding evidence, but after a plea bargain was given only two years of probation; he was later pardoned by President George H. W. Bush.
Elliott Abrams, then Assistant Secretary of State, was convicted of withholding evidence, but after a plea bargain was given only two years probation.; he was also pardoned by President Bush. Clair George, Chief of Covert Ops at the CIA, was convicted on two charges of perjury, but was also pardoned by President Bush before sentencing. Oliver North, member of the National Security Council, was convicted of accepting an illegal gratuity, obstruction of a Congressional inquiry, and destruction of documents, but the ruling was overturned since he had been granted immunity.
John Kelly, Ambassador to Beirut 1986-88, discusses his handling of the initial hostage situations and the unraveling of the Iran-Contra affair and the blatant efforts to make him a “fall guy” for the ordeal. He also briefly details how the scandal impacted his dealings with the Lebanese government. John Taylor, Deputy Assistant Secretary 1986-87, elaborates on the heavy hand that William Casey played along with the somewhat silver lining to the entire scandal.
Michael Newlin, Principal Deputy Assistant Secretary for Consular Affairs 1985-88, explains his role in handling one particular hostage, David Jacobsen, and his perception of how Shultz became an outsider within the White House once the scandal became public. Charles Stuart Kennedy interviewed John Taylor, beginning in April 2000; and Michael Newlin, beginning in September 2006. Thomas Stern interviewed John H. Kelly, beginning in December of 1995.
You can read other Moments on hostages and about the Rise of the Sandinistas and Hezbollah.
“The well-known syndrome “It can’t happen to me” was in full flower”
John Kelly, Ambassador in Beirut, 1986-1988
KELLY: When I arrived in August 1986 there were about five hostages. In September, three more were taken – i.e., [pictured, Joe] Cippio, [Edward] Tracy — people associated with educational endeavors in Lebanon. Washington went ballistic; I was getting calls at all hours of day and night.
Most of the inquiries focused on how many more Americans were in Lebanon who were potential targets. I was told that the political heat in the U.S. was getting very intensive; the President wanted to know why I couldn’t get all of the remaining Americans out of the country.
I was told that I would have to make those Americans leave. In fact, we had no authority to arrest any Americans abroad and remove them forcefully, if they didn’t want to go. We could have arrested someone landing in the U.S. for having been illegally in Lebanon — a travel freeze had been imposed some time earlier — but in Lebanon, we had no judicial authority. In fact, there were several thousand Americans in Lebanon, most of whom were dual nationals, as we have so many in other countries as well. I know that Reg tried his damndest to get these Americans to leave; I did the same. Neither of us was very successful.
I would call up these Americans, particularly the adult males who were the obvious “target of choice”. If any women were taken, they were hostages for only a short period, probably primarily for romantic reasons. I told the potential targets that they were running a real risk. The answer would often be: “I have been in Lebanon in for thirty years; all my friends are Lebanese; I am married to a Lebanese; I have converted to Islam. They are not going to kidnap me, Mr. Ambassador!” The next thing we knew, one of them would be kidnapped. The well-known syndrome “It can’t happen to me” was in full flower.
The people who were to be kidnapped were targeted. They were under Hezbollah surveillance for some period before the kidnapping. They were taken because they were Americans and the kidnappers thought they would bring a handsome reward. The Hezbollah knew that [NSC Advisor Oliver] North and [National Security Advisor Robert] McFarlane were sending thousands of Hawk missiles to Iran who would in turn send millions to the Hezbollah as a payoff for release of a hostage.
Any American male served this “fundraising” purpose. I think as the numbers of Americans in Beirut diminished, the kidnappers took any American male they could find. Joe Cippio was taken because he was the last American faculty member at AUB [American University of Beirut] — out of the 400 who had been there. He stayed because he felt that it was important for one American to remain at AUB.
I don’t want to leave the impression that the issue revolved entirely around money. I was told that the Israelis held about 600 prisoners in the Khiem prison, in the South Lebanon security zone. Some Lebanese suggested that if we could obtain the release of those prisoners, then we might get some of our hostages back. Some even assured me that such a swap would be possible.
One man, who was referred to me by a friend, came to see me and told me that he could make all of the arrangements — all he needed was $100 million. I was taken aback; I expected something like $1 million per hostage — but even I was shocked when I heard the figure of $100 million.
“The myth of the ‘moderate’ Iranian persists to today”
We had lots of self-proclaimed “fixers” come to the Embassy all the time; I saw very few, but all were interviewed by our security staff. There was no shortage of “volunteers “who guaranteed the return of the hostages for some money. Occasionally, a known member of the Hezbollah would contact us; he would get close attention, but usually we found that these were disaffected former members or were about to be assassinated or threatened and were looking to make a deal to save their own skins. But we certainly listened closely to anyone we knew was a member of or closely associated with the Hezbollah.
I think clearly we could have obtained the release of the hostages, if were we willing to pay a hefty price. I thought such a policy would be a great mistake because I am convinced it just would have led to more kidnappers. I believe that one of the reasons kidnapping increased in late 1986 was because Hezbollah and others became full aware of the [Oliver] North operations, which in fact was a ransom for the release of the hostages.
The willingness of the U.S. to provide weapons to the Iranians, who then, as I said, would pay the Hezbollah, just increased Hezbollah’s appetite for hostages. North’s rationale, which was supported by those in the CIA who were helping him, was that the kidnappers in Lebanon were a different group from those who were getting the payoffs — “Our Shiites are reliable; it is a different group of Shiites that are doing the kidnapping”. It was total hogwash!
The myth of the “moderate” Iranian persists to today;…there were those who said that President [Bill Clinton] should not declare a further embargo on Iran because that would just weaken the “moderates” in Tehran. It is the same syndrome that prevailed among some Americans when it came to the Lebanese situation: there were some who thought that the Hezbollah had a “moderate” element, with whom we could deal. A great misperception!…
I didn’t know what was going on with Iran-Contra. I heard nothing about this operation from the time I arrived in Beirut in August 1986 until late October of that year.
One day, while hosting a Lebanese guest at lunch, I was interrupted by a secure telephone call from Washington – [NSC Advisor] Admiral Poindexter. He told that me that progress was being made on the release of more hostages and that I would be hearing more about that from Ollie North. Ollie was in Europe and would contact me to give me further instructions which I was to follow. That phone call was followed by written instructions which just repeated what Poindexter had told me orally. I was alerted that there would be more action to follow.
As I suggested before, most of my oral conversations with Poindexter and North were subsequently confirmed in writing; also the Situation Room in the White House kept logs on all telephone calls made from there. Both the confirming messages and the telephone logs were very helpful later when I was accused of all sorts of derelictions.
I didn’t realize the full import of this record until I was about to be grilled by Congressional committees investigating Iran-Contra. Before appearing, the committee staff, just a couple of hours before a hearing, would show me what written material it had collected. That was very helpful because it clearly showed a paper trail that would support my position.
I was amazed to find that it had the Situation Rooms were so complete that they not only recorded all telephone calls, but also included brief notations on the subject(s) discussed during the phone conversations. Those logs not only supported my recollections of events, but also Poindexter’s avowals that the Department had been kept informed about the Iran-Contra operations.
I mentioned this to the Secretary [George Shultz] during one of our bitter exchanges later on. His defense was that if the Department had been in fact been kept up to date, no one had told him — which I don’t believe! I believe that the logs were accurate since they were kept by a clerical staff that had no axe to grind. I was satisfied that the logs were accurate and truthful.
The gang that couldn’t shoot straight
John J. Taylor, Intelligence Coordinator – Deputy Assistant Secretary, 1986-1987
Q: Was the Iran-Contra affair an active project at the time and were you at all advised about it?
TAYLOR: Of course I was not informed. In November 1985, [pictured, NSC Advisor] McFarland told [Secretary] Shultz of the first illegal shipment of missiles to Iran in return for a hostage release.
Shultz was outraged and heatedly opposed this enterprise, which was originated and promoted by Israel. Schultz said it was crazy, stupid, illegal, and totally contrary to long standing U.S. policy for dealing with terrorists. It was too late, however, to stop the operation. At least McFarland refused to stop it.
Over the next two months, Reagan convened two White House meetings on the subject. Vice President [George H.W.] Bush was present, but later denied it. [CIA Director William] Casey was clearly the mastermind of the missile deal. At these White House meetings, Shultz and Defense Secretary Weinberger strongly opposed any arms for hostages operations. But the President had obviously had long discussions with Casey on the matter, and he went ahead and authorized future shipments to Iran by issuing a presidential “finding.”
Shultz was constantly misled by Casey and Poindexter about what was happening with Iran, but it seems clear he received enough reports and rumors to know that the operation was probably continuing — an operation that he had told the President was illegal, unconstitutional, and bound to blow up in their collective face. But Reagan remained unmoved.
It is not certain whether after January 1986, Shultz again talked directly with Reagan about this matter before it broke in the media.
Cy Vance had resigned as Carter’s Secretary of State over a policy involving Iran that he thought was too risky — the 1980 rescue attempt of the Iranian hostages. The arms for hostages’ policy was a thousand times more egregious than the hostage rescue plan — it was a criminal offense for one thing.
Simple integrity, of which Shultz normally seemed to have a more than ample supply, would seem to have required him to threaten to resign over this matter long before the scandal broke in the media, and to have followed through if necessary….
As for North, I met him in a couple of NSC meetings that we both attended. He focused on Central American matters — Nicaragua and El Salvador. Early on, he had the reputation in State of being a “loose cannon.” He and poor Bud McFarland both seemed to be straight out of “the gang that couldn’t shoot straight.”
“We suspected that CIA Director Casey had outright lied”
When the story broke in the press, INR [the Bureau for Intelligence and Research] and all of the Department of State, except for Shultz and a handful of his close staff, were caught completely by surprise. The rest of us immediately tried to figure out what this was all about.
At first the NSC crowd and Casey actually continued — with Reagan’s approval — the arms for hostages operation. At a NSC meeting, Reagan said that Shultz and the other seniors present should sign a paper saying they all knew of and supported the policy vis a vis Iran. Shultz refused.
The newspapers began to run stories on Oliver North and the CIA’s role in the building scandal. But before the Congressional investigation really got started, the House and Senate Intelligence Committees took secret testimony from Casey. I went with [Under Secretary of State for Political Affairs] Mike Armacost to attend the Intelligence Committees’ hearings — the first was to be at the House on November 21 .
When the session opened, the question arose whether Casey should be put under oath. The Chairman said he knew Casey would of course tell the truth whether under oath or not, so why bother. I always wondered about that. During the hearing that followed, Casey denied that he knew about the November 1985 CIA transfer of missiles from Israel to Iran — an act done without a presidential finding and thus clearly a criminal offense. Casey said he was out of the country. Maybe he had heard of a shipment but thought it was oil drilling bits.
That was Friday. Mike and I returned to the Department after the House session. Mike knew and I suspected that Casey had outright lied.
Back in the office, I received calls from a number of Congressional staffers; they wanted to know what we thought of Casey’s testimony. They also believed he had lied. On Sunday, Casey sent a note to the President urging him to fire Shultz. At a Monday NSC meeting, an angry Reagan did not attack Casey and Poindexter for the deepening scandal but amazingly proclaimed that the hare-brained missile sales had been a historic success.
“Another criminal offense, another violation of the Constitution, another political debacle”
The very next day, Attorney General Ed Meese dropped the bomb! He informed the same group, with Reagan again presiding, that his investigation had discovered that funds from the missile sales had been diverted to the Contras — another criminal offense, another violation of the Constitution, another political debacle. This was too much.
Reagan, who had praised the work of Poindexter and North the previous day, now fired them both. But what about Casey, Reagan’s old friend and the mastermind of the grand scheme? Amazingly, Casey carried on with his secret activities, persuading Reagan to authorize the CIA to continue its contact with Iran in order to build upon the “relationship.”
Meanwhile, Casey told his deputy, John McMahon, to find a scheme to pretend the November 1985 shipment came under the January 1986 Presidential finding. McMahon believed Casey would leave him hanging out to dry and refused to cooperate. McMahon, however, was hardly clean: he had gone along with the whole adventure.
On December 2, Casey amended his story to Congress and said he did know of the November 1985 shipment. Finally, on December 14, Shultz told Reagan of CIA’s unilateral efforts to win favor in Tehran by persuading Kuwait to release convicted terrorists tied to Iran and the establishment of a direct Iranian-CIA phone line. Shultz said he was obligated to inform Congress of all these facts.
What did Reagan do then? We don’t know. Mortified at the Pandora’s Box of vipers he had let loose, he certainly told Nancy. Afterwards, he probably called Casey and told him the jig was up.
“Casey was the only one who could have fingered Reagan”
That same day, as I recall, Casey was scheduled to appear before the Senate Select Committee on Intelligence. We expected that this session would be the moment of truth.
Casey must have been sweating blood. He could assume Shultz was informing the Committee of everything he knew, including the diversion of illegal Iranian funds to an illegal Contra account — of which $10 million would be found missing.
As I was getting ready to go to the Hill, I got word from the Committee staff that Casey had been rushed to George Washington Hospital. A brain tumor, it was later explained. [Washington Post reporter] Bob Woodward claimed to have snuck in and talked to him before he died [on May 6, 1987].
Casey had a family funeral, but for years I always suspected that Casey, who Shultz called “a street fighter,” was really running a bar on some island off Belize, his last covert operation. Alas, he probably passed away a few years ago and his beautiful mulatto girlfriend buried him at sea as he had wished, together with a Bible and a cake. Casey was the only one who could have fingered Reagan.
Whatever his end, Casey — and pretty much Ronald Reagan — escaped the judgment of history for an incredible debacle, which would not be surpassed until the 2003 invasion of Iraq on cooked intelligence.
Q: What happened to your job as soon as Iran-Contra became public? Could anyone in the Department trust the CIA after this episode?
TAYLOR: Iran-Contra illustrated the possibility of a CIA director carrying on an illegal covert operation without any interference from his Cabinet colleagues. Defense Secretary Weinberger also knew about the Iran-Contra scheme and opposed it as illegal and risky but he cooperated in carrying it out. George Shultz and his deputy found it crazy as well as criminal and unconstitutional but neither resigned. Casey was a close friend of the President and a powerful political partisan. He grossly distorted intelligence analysis as well as covert action to serve his ideological views and his passions.
If nothing else, the incident should have told the country that the CIA director should not be politician or a close friend of the President, but an individual of proven integrity as well as brains
KELLY: Ollie North came to Beirut two or three times after I arrived in Beirut during one week in connection with the release of David Jacobsen.
I found out later that Ollie really had no reason to come to Beirut. He came in a chopper, sat in my office for an hour or two and then chopper out again. He did nothing except to brief me on something that he wanted me to know.
It was clear that he was thrilled to be involved in such a covert caper and also that his visits enabled him to say to the few people in Washington who knew what he was up to that he had been in Beirut — at great personal risk. But he didn’t do anything in Beirut except to chat with me and David Jacobsen, after his release.
When Jacobsen was released, he was brought to my house. It was my intention to move him out of the country as quickly as possible to get him to an American military hospital in Germany for a thorough physical; he had been held for 555 days. But Poindexter and North ordered otherwise. I was to keep him in Beirut, which we did for almost 24 hours, during which there was shelling, which might well have landed on him. I was told that there might be a second release which Washington did not wish to have jeopardized by the premature release of Jacobsen’s release.
Of course, the press had gotten wind of the release within two hours of the event. It finally dawned on me that the real reason was that Ollie wanted to be in Beirut and escort Jacobsen out on the helicopter to Cyprus. It was a big boost and thrill for North to be able to do that. The same thing was true for Terry Waite; he also had to be in Beirut to escort Jacobsen out. We could have moved Jacobsen out to safety from Lebanon in one hour, except that he had to stay in Beirut awaiting North and Waite. That was a sham!
“They carried with them a Bible signed by Reagan, and they also had a chocolate cake with it”
Michael H. Newlin, Principal Deputy Assistant Secretary for Consular Affairs, 1985-1988
NEWLIN: I had a brush with Iran Contra. Up until this particular incident, Secretary Shultz had been aware earlier of Bud McFarland, who was the head of the NSC, and had mentioned to him or had let him know that there was a possibility of working with the Iranians to get our hostages released, and that the Iranians were interested in some arms shipments.
Shultz said, “Absolutely not. We should never have anything to do with that.” Our policy was we will not talk or deal with terrorism, and we had a policy during the Iran Iraq war which was going on, that we would not sell arms to either side. We were asking our allies not to do that as well. I got involved, I don’t remember just how. But when one of our hostages in Beirut would be released I would head up an interdepartmental working group, and go to Frankfurt where they would come. They would be released in Beirut. They would go overland to Damascus, and then they would be flown to Wiesbaden to the Air Force hospital there where they would be debriefed and have a physical….
I was cutting the grass one Sunday afternoon in the front yard, and I got a telephone call from the State Department. They said, “David Jacobsen has been released in Beirut. We want you to leave tonight with the team. Please show up at Andrews Air Force Base as soon as you can.” So I did.
This was the first time that Shultz really smelled a rat, because all of this happened two days before the mid-term elections on November 2, 1986. A White House draft statement was brought over to him; hand carried, that spoke of “hostages,” plural, being released. Somebody had struck out the “s” on “hostages.” Whoever was running this operation had expected all of the hostages being held or at least more than one would be released.
So on November 3, there was a newspaper article, Al Shiraa in Beirut, which reported that there had been a secret trip to Tehran by McFarland to talk to the Iranians about release of our hostages. Then that sensational report was followed by a statement by Rafsanjani, the Speaker of Iran’s parliament, who revealed that, yes indeed, McFarland did come to Tehran in September of ’86 with four others carrying military equipment which had been purchased from international arms dealers, clearly a swap of arms for hostages.
Rafsanjani said they were traveling with Irish passports. They carried with them a Bible signed by Reagan, and they also had a chocolate cake with it. Immediately this set off all sorts of alarm bells.
When they brought me the telegram in Wiesbaden with the Al Shiraa thing, the person who gave it to me said, “Look at this. Isn’t this the most ridiculous thing in the world?”
I said, “Well, it is so bizarre I think there might be something to it.”
The next day Rafsanjani’s bomb came out. Immediately the media picked up on all of this. Shultz let it be known immediately that he was opposed to any sort of arms for hostages deal. The media said the White House has made a deal with the terrorists, and Shultz was cut out of the action. Shultz was horrified, and he thought this had the possibility of becoming another Watergate.
In the Nixon administration he was Secretary of the Treasury, and he had resigned over a point of issue. It didn’t have anything to do with this, but he had resigned rather than go along with something Nixon wanted to do.
But he had seen what Watergate had done to destroy the Nixon presidency, and he was very concerned that this had the potential to do this to Reagan. Shultz called Poindexter, who at that time had replaced McFarland as National Security Advisor and said we had to give complete facts to the public right then, however Poindexter refused. He said this would complicate efforts to secure the release of other hostages and would prevent maybe the establishment of a correct relationship with Iran.
I got to Wiesbaden before Jacobsen. There is a small airport at that time, a military airport, near the hospital which was separate from the big Rhein-Main airport. I went out with some members of my team. A Lear Jet with Swiss markings landed. I went out to the plane, and when I got into the cabin there was Jacobsen and there was Terry Waite who was a representative of the Archbishop of Canterbury who was working on hostage’s release.
There also was Oliver North. North said, “I am not here.” So we talked briefly. The media was up in a grandstand. We agreed that Jacobsen should confine himself to talking about his situation as a hostage, and his release, but not get into any other areas. So we walked over to the media. We went then to the Wiesbaden hospital where he had a physical and the debriefings started.
The people doing the debriefing, from his descriptions of his confinement, he thought he heard airplanes, and he thought that they were near the sea. So the people doing the debriefing thought that they could pinpoint where in Beirut he had been held.
So CIA then was tasked to go to this particular place they thought the other hostages might be being held. It turned out that wasn’t accurate.
So after the debriefing, finally Jacobsen held a rather bizarre press conference. We were on a big balcony at the hospital, and the media was down below, including Pierre Salinger. Jacobsen meandered and meandered but he didn’t get into anything that would indicate he was knowledgeable about what had led to his release. So after two or three days of the debriefings and these other things, we got into a plane and went to Washington….
We were immediately whisked into the White House and we found ourselves in the Cabinet room with the President and Nancy Reagan and some others. The press was all outside in the Rose Garden waiting for Jacobsen and the President to come out.
I could tell there was a tremendous amount of tension, particularly Jacobsen talking with Nancy Reagan and the President. Then soon Ollie North came in and joined that group. Then Jacobsen and the President went out, and Jacobsen took the line that the press ought to just back off. Back off, your focusing on these hostages is causing difficulties for the hostages and efforts to get them released. After that then, my time with Jacobsen was over.
“Live hostages were worth something; dead ones were not”
KELLY: The Iran-Contra operation had a noticeable effect on my dialogues in Beirut. The Lebanese have an unfortunate tendency to see the world in distorted ways. They clearly believed that I was the most powerful ambassador in the U.S. diplomatic corps because even the Secretary of State couldn’t fire me. Unfortunately, my encounters with the Secretary enhanced my reputation in Beirut.
Some “yellow” newspaper wrote that I had been assigned responsibility not only for Lebanon, but for the whole Middle East. The story said that [Ambassador] Tom Pickering in Tel Aviv reported to me. It was pure fabrication, of course, but it was illustrative of the misperception that the Lebanese held about the world.
But despite my alleged new powers, I could not affect the release of the hostages; I wished I could have. I think that my efforts had in essence no effect. We might have had an effect if we had tried to forcibly rescue them. In 1988, I thought we could mount an armed rescue operation which would have had a high chance of success — that is, we might have gotten three or four of them out alive, out of about a dozen. Those were the ones which we thought we knew where they were being held.
We did not in 1988 believe that any of the hostages would be killed, even though we did not know for sure where they were located. I did not believe that the hostages would be killed even in retaliation for some American rescue mission. None of them were in fact ever intentionally killed, except Peter Kilburn, after the bombing raid in Libya. We worked, as I suggested earlier, on the theory that live hostages were worth something; dead ones were not. Peter was killed because Qaddafi had “bought” him so that he could take his revenge out on some American.
The hostage issue had to be viewed as a commercial enterprise with religious and political overtones. Hezbollah wanted money and it wanted to humiliate the U.S. At times, they proposed prisoner exchanges, e.g. for their “brothers” in Kuwait prisons who had blown up the American and French embassies there or the prisoners held by the Israelis in southern Lebanon. At times, they also demanded Israel withdrawal from southern Lebanon. So Hezbollah had political demands that it would surface from time to time.
When Jacobsen was released, he was given a set of demands which he was to convey to the American government. I think that had we met those demands, we might have gotten a few hostages released, but certainly not all and we might well have encouraged the taking of others.
I do not believe that one should give in to terrorists or kidnappers; it only encourages further despicable behavior. I am sorry to say that by the time I left Lebanon in 1988, there were still a dozen hostages in the hands of Hezbollah, as there were French, Italians and Germans….
My conclusions were that the Secretary correctly opposed North’s lunatic scheme, but that when the President approved it and the operation continued, he did not wish to carry his opposition any further because that might have meant that he probably would have had to resign. So he chose to pretend that he was an unknowing bystander.
I think Shultz was in many ways a wonderful Secretary of State, but in the of Iran-Contra case he did not cover himself with glory. He had indisputably seen the January briefing memorandum — his written notes covered it. It is quite possible that he had forgotten that had read that documented; after all, a Secretary sees thousands of documents. It could also have been true that he did not see the June memorandum from [Robert] Oakley. Some people have told me that he had read it, but I have no firsthand knowledge of that.
But to deny any knowledge of the Iran-Contra plan and operation was totally disingenuous. He was just saving his own skin. He did not carry his disagreement to the logical conclusion because he understood that the President was determined to get the hostages out in any way he could and that the only choices that Shultz had was to resign or to play the game that he did.
I think I became a convenient scapegoat which allowed him to deny knowledge of the North operation because “his Ambassador in Beirut had neglected to keep him informed”.
“There were some positive follow-ups to the scandal”
John J. Taylor, Intelligence Coordinator – Deputy Assistant Secretary, 1986-1987
TAYLOR: There were some positive follow-ups to the scandal. I proposed…that we suggest a new presidential decision memorandum that would tighten up the guidelines for approval of any covert activity or any change in on-going actions established by presidential “findings.”
Each covert action would have to include a statement by the State Department spelling out what U.S. interests and objectives would be served, providing a cost-benefit analysis, and declaring that the actions envisioned were legal and constitutional and the risks were acceptable. In addition, all existing “findings” would have to be renewed on a regular basis and renewals would also require State Department concurrence.
In addition, I proposed a working group to review implementation and a “sunset” principle in which each Presidential “finding” would have to be reviewed and justified each year. [We] refined the ideas and took them up with the Secretary. Eventually the NSC incorporated them in a Presidential Decision Memorandum. I also brought about a revision in the description of the role of covert action in a long-term intelligence strategy paper prepared by the intelligence community for the Congressional committees.