In an apparent contradiction of Israeli claims that Israel played only a minor role in the shipment of U.S. arms to Iran this year, sources confirmed Friday that a top aide to Prime Minister Shimon Peres tried to help two arms merchants obtain $15 million to finance a U.S.-to-Iran weapons deal this spring.
The aide, Amiram Nir, accompanied Saudi Arabian arms dealer Adnan Khashoggi and Iranian businessman Manucher Ghorbanifar to a meeting in London the night of April 8 with Roland W. (Tiny) Rowland, chief executive of Lonrho, a British trading and mining conglomerate, sources said. The meeting continued into the early morning.
An Israeli magazine reported in an issue this week that Khashoggi and Nir may have approached other unnamed "millionaires" in search of front money. The involvement of Nir in any such meeting was bound to give the impression that top-level Israelis backed such deals, but it is unclear whether Nir's involvement was authorized by higher Israeli officials.
Nir has reportedly confirmed to top Israeli leaders that he met Rowland but has downplayed the meeting's significance. "Amiram Nir's involvement was to deliver American assurances from his American contact person to Tiny Rowland, and that's it," a senior Israeli government official told The Times.
Disclosure of Nir's participation in the attempted fund-raising effort--which occurred more than four months after Israeli officials have said they ceased all but minor logistical support of the arms operation--casts new doubt on statements minimizing Israel's role in the later stages of the affair.
While Israel has conceded that in the summer and fall of 1985 it shipped U.S.-made weapons from its own stockpiles to Iran, officials say that Defense Minister Yitzhak Rabin balked at the arrangement late last year when the volume of weapons grew far beyond what he considered safe to release from Israeli stocks.
It took two or three months for the United States to replace arms sent in those first shipments, a senior Israeli official explained. And while that was acceptable when the shipments were smaller, Rabin said, "I can't afford this lag time," given the quantum jump in volumes contemplated in subsequent shipments.
View of U.S. Role
In Israel, it has been commonly assumed that the United States took over all essential aspects of arms shipping and financing for the duration of the covert operation. And in all public statements since news of the controversy mushroomed, Israel has stressed repeatedly that it was particularly distanced from any financial involvement in the affair.
The involvement of Nir in fund raising figures to undermine that claim. It was also learned that Nir reportedly had advised Israeli authorities about his participation some time ago.
According to Rowland, the arms merchants sought a $15-million "bridge loan" to cover the costs of shipping a load of arms until Iran's payment was returned.
"(Khashoggi) was in a hurry to get the cash," Rowland said. The funds were to be transferred to a Swiss bank account in Ghorbanifar's name.
However, negotiations broke down, Rowland confirmed, when at about 3 a.m. he called his longtime friend, David Kimche, former director general of the Israeli Foreign Ministry. Kimche, who had been involved in the 1985 arms shipments to Iran via Israel, told Rowland: "I wouldn't touch that with a 10-foot pole," Rowland recalled.
Soured on Arrangement
Reliable Israeli sources said Kimche had soured on the entire arms arrangement near the end of 1985 after a December meeting in London between all the principals involved. At that meeting, Robert C. McFarlane, the President's former national security adviser, and Iranian representatives had failed to agree on a final trade of arms for the pre-Christmas release of all remaining American hostages in Lebanon.
After that failure, sources said, Kimche recommended to Peres that Israel extricate itself from the whole affair. Sources said it was revived, however, after Nir's trip to Washington in January.
Rowland, the British tycoon, refused to make the loan. According to reports published this week in the Israeli publication Koteret Rashit, the arms merchants contacted a number of other wealthy businessmen in search of front money for the shipments.
Sources outside Israel also confirmed Friday that Peres had met privately in Israel with Khashoggi and Iranian businessman Cyrus Hashemi in the summer of 1985, just weeks before the first U.S. arms shipment to Iran via Israel.
Shortly after that visit, Hashemi became a U.S. government informant in a Customs Service "sting" investigation of illegal arms shipments, leading to the arrest of three Israeli citizens, including Avraham Bar-Am, a retired general.
A Joint Venture
At the time they met with Peres, Khashoggi and Hashemi were partners in a joint venture called World Trade Group that was seeking to trade farm equipment, oil and military weapons with Iran.
However, Hashemi apparently was cut out of the government-sanctioned arms deal when, within days of the Peres meeting, Khashoggi began dealing directly with Ghorbanifar, a better-connected Iranian businessman in Europe.
The disclosure of Hashemi's meeting with Peres on the eve of Israel's first U.S.-sanctioned arms shipment to Iran raises further questions about the future of a $2.5-billion arms smuggling conspiracy case in New York.
The defendants in that case--including Bar-Am--contend they had reason to believe they would be engaged in a government-sanctioned arms deal when dealing with Hashemi. Hashemi and federal investigators had earlier dismissed those contentions as "fairy tales." The case has been delayed three times in less than two weeks to permit U.S. Justice Department officials to reassess whether to continue.