CIA Chief OKd Agency’s Role in Arms-to-Iran Deal : He Reportedly Recants Early Statement

CIA Director William J. Casey personally approved CIA participation in a secret U.S.-Israeli shipment of arms to Iran in November, 1985, contrary to the account he initially gave to the House and Senate intelligence committees, officials said Monday.

Casey ordered the CIA to provide “logistical support” for the shipment at the request of Lt. Col. Oliver L. North, then a member of the National Security Council staff, about two months before President Reagan signed the written intelligence “finding” normally required for such covert activity, the officials said.

The President did not learn of the November, 1985, arms shipment until February, 1986, about three months after it had taken place, Atty. Gen. Edwin Meese III said last week. Casey apparently ordered CIA involvement in the belief that he was acting in accordance with White House wishes, though he proceeded without written approval.

Nov. 21 Briefing

Casey initially told the intelligence panels that the CIA’s role in the shipment had been approved by John N. McMahon, then the agency’s deputy director for operations, committee members said. Some members said that the CIA director’s account, provided in a briefing Nov. 21, gave them the impression that Casey did not even know of the shipment at the time.

But Casey later told the Senate committee that he had “misspoken,” two knowledgeable officials said--reportedly after McMahon contested the Casey version.

McMahon “was furious. . . . He hit the ceiling” after he learned that some members of Congress believed that he had approved the unusual shipment on his own authority, one source said.

‘Sometimes People Misspeak’

A source at the Senate Intelligence Committee said the panel was satisfied with Casey’s explanation of his authorization of the shipment. “Sometimes people misspeak,” the source said.

The November shipment has been a focus of questions from members of the two intelligence committees because it marked the first CIA involvement in the Reagan Administration’s secret arms pipeline to Iran, and because the agency acted without a formal order from Reagan, legally known as a finding.

In fact, Reagan did not sign such a finding until Jan. 17, 1986, and he did not know about the November, 1985, shipment until February, 1986, Meese said last week.

Casey refused to comment Monday on the 1985 shipment or on his varying accounts of its approval. “Anything the agency has to say will be said to the intelligence committees, the Justice Department or the Tower commission,” CIA spokeswoman Sharon Foster said.

But members of the intelligence committees and several other sources said that the CIA helped ship the cargo, which contained Hawk anti-aircraft missiles and TOW anti-tank missiles, at the request of the National Security Council staff.

It was not immediately clear whether the CIA’s role in the shipment may have violated the law.

Presidential Finding

The National Security Act, which governs intelligence operations, bars the CIA from aiding or conducting a covert operation abroad unless the President issues a finding that the operation is in the national interest. And a senior Administration official who briefed reporters at the White House last month said then that the United States sent no arms shipments to Iran before Reagan signed the Jan. 17 finding because “that would have been illegal, and I have said we didn’t do anything illegal.”

He later admitted to “one exception,” which he said was a shipment sent to Iran “in our interests” by Israel.

The Iranian government actually returned most or all of the November shipment, according to one account because it contained an obsolescent version of the Hawk missile instead of the improved version that the Iranians expected. One source said the Israeli arms dealer who assembled the shipment apparently substituted the inferior missile.

Two Changes Resulted

The episode led to two changes in the way the Administration ran its secret arms pipeline to Iran:

--Responding in part to a demand from McMahon, Reagan issued his written order to approve the CIA’s role on Jan. 17;

--All later U.S. shipments were handled directly by the CIA from Pentagon arms stocks, instead of going through Israeli merchants.

Both changes had the effect of putting the United States government into a more direct trading relationship with the Tehran regime of the Ayatollah Ruhollah Khomeini.

The November shipment came after Israel already had sent a planeload of weapons to Iran in August, 1985, on behalf of the Reagan Administration, which was hoping that the Tehran regime could help free American hostages held by pro-Iranian terrorists in Lebanon. Meese and other Administration spokesmen have contended that no one authorized that first shipment, although Israeli officials have insisted that they had explicit approval from the White House.

One Hostage Released

The August shipment was followed by the release of hostage Benjamin Weir in September, 1985, and officials resolved to send another load of weapons. Meese indicated last week that the second shipment was approved by someone on the White House staff, whom he did not identify.

The Israeli arms dealers who were handling the shipment flew it to Lisbon but ran into difficulty moving it on to Iran, one knowledgeable official said. North, who was overseeing the operation for the NSC, then asked the CIA to arrange a cargo flight of its own, the official said.

Several sources said they believe--but do not know--that North was acting on orders from Robert C. McFarlane, who was then Reagan’s national security adviser and who had participated in the initial negotiations that set up the secret arms pipeline.

“The CIA, with all it went through after Watergate, would never take the word of a lieutenant colonel who called them up to ask for support for a covert operation,” said one knowledgeable official. “They’d check it out with someone higher. . . . (North) had some approbation; the question is, who?”

No Response to Requests

McFarlane did not respond to repeated requests for comment.

Casey told the intelligence committees Nov. 21 that he was traveling in China when the White House request came and that McMahon approved it--”without (Casey’s) knowledge,” Sen. Daniel Patrick Moynihan (D-N.Y.) later recounted. But another official, speaking on condition of anonymity, said that the CIA relayed the request to Casey while he was traveling and that the director approved it.

Casey has since told the Senate committee that the second version is correct, officials said. McMahon, who left the CIA last summer and is now an executive with Lockheed Corp. in Sunnyvale, Calif., did not respond to several requests for comment.

Agency officials also told the Senate panel that they agreed to move the November shipment under the belief that it contained not weapons but oil-drilling equipment, Sen. Dave Durenberger (R-Minn.), the committee chairman, said last week.

Moynihan said McMahon protested that the CIA should not have provided help for the shipment without a presidential finding. “He passed word back to the White House: ‘I’ll do it this one time, but next time I need orders,’ ” Moynihan said Sunday on NBC-TV’s “Meet the Press.”

‘Next Thing, He’s Out’

“John McMahon did exactly the right thing, and the next thing you know, he’s out,” Moynihan said. “Why?”

Both the Senate and House committees were still pursuing the issue of why they were not informed of the November, 1985, shipment, of the January, 1986, finding or of the four U.S. arms shipments that have been reported in 1986. The law specifies that the committees be informed of such actions in a “timely” fashion.

And one member of the House panel, Rep. Dave McCurdy (D-Okla.), on Monday called for Casey’s resignation. McCurdy, in an interview, recalled that Casey in his closed-door testimony before the House Intelligence Committee two weeks ago asserted that the CIA and the White House national security staff worked closely together on the arms shipments to Iran.

He quoted Casey as saying, “We did it as a team.”

“Well,” McCurdy added, “if they did it as a team and Poindexter went, then Casey should go also.”

Times staff writer Sara Fritz contributed to this article.