U.S., Israeli Accounts of Iran Deal Said to Conflict

Israeli government officials, in discussions with Senate intelligence experts last week, gave an account of their role in the secret U.S. arms pipeline to Iran that appears at odds with a Reagan Administration version given to lawmakers Friday, government sources said this weekend.

The apparently contradictory accounts, part of a murky and still-emerging picture of the Administration’s arms-and-hostages dealings with so-called Iranian moderates, underlined the possibility that subordinates in the Reagan Administration may have led Israel to believe that it had White House approval to make arms shipments to Iran in August, 1985, even though President Reagan himself had recently rejected such a proposal.

That possibility, raised separately last week by a U.S. government source, could explain the apparent contradiction between the U.S. and Israeli governments’ versions of events: Unaware of a subordinate’s unauthorized action, senior U.S. officials may have thought that their account was accurate.

Meanwhile, senior officials in the Justice Department have quietly launched an inquiry into a wide array of questions about the Iran affair, including the conduct of staff members of the White House National Security Council. Handling of the inquiry is being strictly limited, and the FBI has thus far not been called into the matter.

Although Justice Department officials said Atty. Gen. Edwin Meese III was involved in the Iran operation “from the outset,” he is also taking a hand in the inquiry, Administration officials said.

The Senate Intelligence Committee was said this weekend to be “aware” of the dispute over responsibility for the first arms shipment and of allegations that Reagan’s own decision against shipping weapons to Iran may have been secretly countermanded. One knowledgeable source said the committee is prepared to look into the matter but has yet to begin a formal investigation.

U.S. government sources, speaking on a pledge of anonymity, said the Israeli and Administration versions of the Iran affair differ on the key question of whether Reagan actually gave permission for the Israelis to make the first clandestine delivery of weapons and spare parts in August, 1985--the shipment that began a 14-month operation in which U.S. weapons were sent to Iran and three American hostages were freed in Lebanon by their pro-Iranian captors.

Hostage Soon Released

Israeli officials are said to have told Senate Intelligence Committee experts that they received explicit White House approval for the arms transfer in August, 1985. Delivery of the arms was followed within weeks by the release Sept. 9 of an American hostage, the Rev. Benjamin Weir.

However, CIA Director William J. Casey told House and Senate intelligence committee members in closed-door briefings Friday that this shipment lacked U.S. government approval because Reagan neither approved of the shipment nor knew of it, said sources with direct knowledge of Casey’s testimony.

That August, 1985, shipment of U.S.-made weapons left Israel in apparent violation of a U.S. arms embargo in effect at the time. The Times reported last week that Reagan had earlier rejected a proposal by top aides--including then-national security adviser Robert C. McFarlane--to use Israel as a secret conduit for weapons shipments in connection with building bridges to Iranian moderates, reducing terrorism and winning freedom for hostages.

One source with knowledge of the Israeli discussions said it appeared that the Jerusalem government was circulating its version of the arms shipments on Capitol Hill in anticipation of a bitter White House dispute over responsibility for the politically disastrous Iran policy.

And a Senate official, while calling the Israeli account credible, cautioned that the unraveling of the Iran affair was “a labyrinthine exercise” and that the true story of how it was approved may still not have emerged.

A spokesman for the Israeli embassy, reached late Saturday, said that Israeli officials have not formally briefed members of Congress on the issue. “This embassy is not involved in any briefing,” the spokesman said. But he added that embassy officials had received “hundreds of calls” from Congress, the press and private citizens asking about Israel’s role in the operation.

The differing Israeli and White House versions of the Iran arms pipeline remain a side issue for the moment in a roiling political battle over the Reagan Administration’s eventual decision to begin direct U.S. arms shipments to Tehran without consulting Congress, as some experts say federal law requires.

Reagan’s Control Questioned

But government officials with knowledge of the issue say it could easily overshadow the debate over whether the Iran operation was legal. For it raises the question of whether the President’s control of U.S. policy toward Iran--ostensibly a sworn enemy--somehow slipped from his grasp at a key moment, with apparently momentous results.

More than a week after senior White House officials summoned reporters to give a private and supposedly definitive airing of the Iran arms operation and Reagan himself gave a nationally televised address on the subject Nov. 13, new and confusing accounts of the affair are continuing to emerge almost daily.

The official and public White House version of the operation remains sketchy:

--The Administration says only that it approved shipping a “modest” supply of weapons and spare parts to Iran in November, 1985, and in 1986. Reagan said last week that “a third nation was involved in our secret project with Iran” but repeated that the total volume of approved shipments to the Tehran regime would not fill a large military cargo plane.

--The White House also has admitted that Reagan signed a secret order last Jan. 17 that effectively funneled all arms shipments through CIA and other government conduits, instead of allowing the “third nation” to ship weapons from its stocks and receive replacements from the Pentagon. That secret order lifted an arms embargo against the Iranian regime and directed that the operation be concealed from Congress.

Although the quantities of arms shipped by the United States have been described as limited, when word of the U.S. action filtered out to other governments and private arms dealers, far larger quantities of military equipment began flowing to Iran despite the official U.S. embargo.

--Reagan and other aides insist that the shipments were not part of a direct weapons-for-hostages swap but were instead an effort to show “good faith” to Iranian moderates who might someday take power in the Tehran government and who now exert influence over some pro-Iranian factions that hold U.S. hostages in Lebanon.

In so-called “background” briefings for the press, senior White House officials said in mid-November that the third nation--now tacitly acknowledged to be Israel--made one arms shipment to Iran “in the general time frame” of U.S. hostage Weir’s release on Sept. 9, 1985. Those officials refused to say whether the shipment was made before or after Weir was freed.

1 or 2 Arms Shipments?

On Friday, however, CIA Director Casey told congressional intelligence committee members in closed-door briefings that Israel made not one but two arms shipments to Iran in 1985, sources said.

One shipment, in August, was undertaken without U.S. government approval, he said. A second shipment, in November, had Reagan’s approval, Casey is reported to have told the lawmakers. But part of that shipment was recalled when U.S. officials discovered that the Israeli government had attempted to ship more Hawk missile components than the White House had agreed to.

Casey did not explain why Reagan--who, sources say, had rejected any Israeli weapons shipments in a meeting with top White House advisers in the late summer of 1985--had decided by that November to condone the same Israeli pipeline.

Israel Chastised

Israel is said to have been chastised by the White House when the late-summer arms shipment was discovered by Washington that fall. But one government official has said Reagan’s mind was changed when McFarlane and other top aides told him that the shipment had led to Weir’s release and that future arms shipments might free others.

The 18-month secret relationship with Iranian factions appears to have grown steadily more involved until its cover was blown early this month, apparently by extreme elements of the Iranian government who sought to embarrass the United States and their more moderate Iranian foes.

Israeli officials are said to have told Congress last week that they were told that both the late-summer and November shipments were sanctioned by the President. Casey, one source said, told lawmakers Friday that only the November shipment had the blessing of the White House--and, therefore, Reagan himself.

Times staff writer Ronald J. Ostrow contributed to this story.