Iran Sale May Be His Biggest Bust : Hakim a Wheeler-Dealer Whose Deals Turned Sour
For Albert A. Hakim, business had not been good since he was forced from his Iranian homeland in the revolution that brought the shah down in 1979.
He still had his Swiss bank accounts, charm and contacts in high places. He had moved into a spacious, gated home with a swimming pool atop one of the highest hills in the wooded Silicon Valley suburb of Los Gatos. He continued to chase business deals worldwide. But, thanks to a combination of factors, many of those deals were turning sour.
In July, 1983, Hakim’s fortunes seemed to be changing. In what may have been one of the first events in what has become the Iran arms scandal, two Iranians met Hakim at his San Jose office and, according to a source familiar with the contact, asked for his help in acquiring an entire shopping list of weapons for use in the war against Iraq.
Hakim seized the chance. He quickly turned to his contacts in the U.S. intelligence community for approval in dealing with the Iranians. Ultimately, whether because of Hakim’s efforts or not, the Iran arms sales proceeded.
And Hakim himself--a private citizen considered by others to be less than reliable--became a pivotal individual in implementing one of the nation’s most delicate and sensitive policies. A recent Senate Intelligence Committee report said Hakim was the first to suggest that profits from arms sales be given to the contras of Nicaragua, and he was a key figure in moving money from Iran to the rebels.
Perhaps with arms sale profits, he bought an oceangoing freighter, according to Danish sources, and directed it on covert missions around the world, including the apparent transfer of arms to the contras.
But what might have been Hakim’s greatest triumph has become his worst bust. In the three months since the arms sales became public and developed into the Reagan Administration’s greatest crisis, Hakim’s company, Stanford Technology Corp. of San Francisco, seems to have virtually gone out of business, and Hakim has dropped from public view.
More than a personal disaster, Hakim’s role in the Iranian arms sales demonstrates what many congressmen and scholars regard as the inherent risks of allowing private individuals to carry out foreign policy.
Losing Checks, Balances
“There is limited accountability,” said University of Georgia political scientist Loch Johnson. “Once you use private sources, you are losing the checks and balances that have been built up over the past 200 years.”
Johnson, the assistant to the late Sen. Frank Church (D-Ida.) during a Senate investigation of covert CIA activities in the mid-1970s, said many of the missions operated by private individuals are “rather unsavory. Therefore, you’ve got to hire people who may be less than reliable.”
That, according to former associates, nicely describes Hakim.
“He’s not going to do anything for patriotism. Anything he did, he did to make money,” said Anthony S. Musladin, who has spent his career working for Silicon Valley engineering firms and was a partner of Hakim from 1974 to 1981. He described Hakim as typically wearing flashy jewelry and a shirt with buttons opened--an entrepreneur who “always had such a deal for you.”
‘Very Polite, Charming’
“He’s a pleasant guy,” Musladin said. “Not stupid. Very polite, charming. You end up liking the guy.” But, as a business partner, Musladin said, Hakim had his drawbacks: “He couldn’t sit still, couldn’t focus.”
Hakim’s own version of the story is missing. The Senate Intelligence Committee could not find him. His Washington lawyer, Richard Janis, refused to return telephone calls.
Hakim, now 50, first came to the United States at age 19 in 1955. To brush up on English, he attended San Luis Obispo High School and then enrolled at California Polytechnic State University there.
In the small town, Hakim was a big deal. He spoke French, English and Farsi. He summered in Europe, and his wealthy parents owned the Tehran building that housed the Turkish Embassy. But at Cal Poly, Hakim, taking perhaps the toughest major, electrical engineering, could not keep up.
“He got kind of sullen and into himself,” said Michael McRae, then his roommate and now a dentist. Finally, in 1958, the Immigration and Naturalization Service deported him because he failed to attend the requisite number of classes.
Back in Iran, Hakim began to make his mark as a businessman. He relied on personal contacts, often over long meals. He has admitted that his way of doing business sometimes involved payoffs.
He paid from $2,000 to more than $20,000 to Iranian officials who were involved in contract procurement, he said in a deposition in a 1983 Connecticut suit over a deal in which he arranged a $23-million contract for Olin Corp.’s Winchester Arms Division. He explained the transactions by saying he knew some government people who needed to be “taken care of.”
“We have more class than using the word ‘payoff,’ ” he testified.
In Iran in the 1970s, the golden period of Hakim’s business career, he sold medical supplies to the military and eavesdropping equipment used by Savak, the shah’s secret police, to spy on the military. He was the Iranian sales agent for such American companies as Hewlett Packard, Motorola, General Electric and Aydin Corp.
“I was wheeling, I was dealing,” Hakim said in his deposition in Connecticut.
By the end of the shah’s rule, Hakim had 60 to 70 employees. In 1976 alone, he grossed $15 million in commissions, a former associate estimated.
It was in the mid-1970s that Hakim met Richard V. Secord, then an Air Force colonel who was head of the U.S. group advising the Iranian air force.
One source who knew him then said Secord helped Hakim get Air Force contracts, including one from the Iranian government for $8 million to install phone taps at the main Iranian air force base. In turn, Hakim provided intelligence to his contacts among U.S. intelligence officers in Iran.
But he was not able to form a strong relationship with the CIA because the agency never quite trusted him. He “had too many deals going on,” the source said.
The source, who spoke on the condition that he not be identified, said Hakim met former CIA agents Francis E. Terpil and Edwin P. Wilson in about 1976. In fact, he said, it was Terpil who introduced Hakim to Wilson and Wilson who introduced him to Secord. Wilson is now serving a 52-year prison term for selling plastic explosives to Libya, and Terpil is a fugitive wanted in New York on gun-running charges.
Hakim’s association with the pair was brief. By late 1976 or early 1977, he learned they were using his Geneva office for their own deals, and that ended the relationship, said Larry Barcella, the former assistant U.S. attorney in Washington who prosecuted Wilson.
Associates say Hakim quickly moved money he made in Iran to Swiss accounts. To do this, he turned to Willard Zucker, an Internal Revenue Service attorney from 1957 to 1960 who now practices law in Geneva.
Zucker and his Compagnie de Services Fiduciaires were involved in money transfers in at least two Hakim deals unrelated to Iran in the early 1980s. That same Swiss company helped send profits from the Iran sales to the contras, investigators looking into the affair have said.
With the fall of the shah on Jan. 16, 1979, Hakim lost a home in Tehran, a summer home on the Caspian Sea and lucrative contracts with the Iranian military.
By March of that year, he had settled in California. He was granted permanent residency that month, bought his home in Los Gatos a month later and married Soony Oh, his second wife, in 1982.
Engineer Herman Neidhart, who worked for Hakim in 1981, said Hakim sometimes had a hard time meeting his payroll, but he never skimped when he saw a deal in the making. To impress some visiting Saudi Arabian businessmen, Neidhart recalled, Hakim once hired a limousine to meet them at the airport and installed 3,000 square feet of lush pink carpet in his office. Pink was also the color of his stationery and business cards.
Devotes All His Energy
“He’s full-on, full-off,” Neidhart said. “He drops everything to start a gourmet food shop, devotes all his energy to it for three months, then leaves the country.”
In 1984, as soon as he was eligible, he became a U.S. citizen.
Since his arrival in the Bay Area, Hakim formed alliances with one local firm after another, hoping to get deals going, only to see many of them fall apart. Such was the case with Tactronix, a fledgling company that made such James Bond items as hidden microphones and laser-directed sights for rifles used to spot targets at night.
The waterproof sights were smaller than most on the market, and the South Korean military and the governments of Guatemala and Honduras were interested in them. Seeing the potential, Hakim lent Tactronix $300,000 in 1982.
“Once he lends you money, he feels he owns you,” said a former associate who asked not to be identified.
Hakim had said he would help the company by giving it business, including a piece of a contract to install a security system at a nuclear power plant in South Korea. Hakim got the South Korean contract but did not pass any of it to Tactronix, the company claimed. Tactronix’s loan payments fell short, and the company eventually folded in 1983.
When Secord retired from the Air Force in 1983, he became a director of Stanford Technology, a position he kept until last Dec. 26, and his contacts once again brought the promise of deals for Hakim. In 1984, Ernie Garcia, then sergeant at arms for the Senate, asked Secord and Stanford Technology to assess the U.S. Capitol’s security needs.
Stanford Technology prepared the report for free in hopes that it would have a leg up when the Senate was ready to grant the contract for providing the Capitol with security. But now the project is dormant because the Senate changed hands last month from Republican to Democratic.
Another potentially lucrative deal that fell through for Hakim called for the installation of steel-reinforced airplane shelters at airports and military bases in the United Arab Emirates. Hakim told American associates that he lost the contract because the people with whom he dealt were offended at the dramatic interception by U.S. fighter jets of an Egyptian airliner carrying Achille Lauro hijackers in October, 1985.
Ironically, Lt. Col. Oliver L. North, the National Security Council aide fired over his role in the Iran arms sales, orchestrated that feat. But, by then, North and Hakim were working together on a new, far more important deal.
Staff writers Robert L. Jackson and Ronald J. Ostrow contributed to this story from Washington.
