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IRAN-CONTRA AFFAIR: THE FINAL REPORT : Excerpts: Majority, Minority Views of Committees

From Times Staff Writers

Following are excerpts from the report on the Iran-Contra affair issued Wednesday by the congressional investigating committees:

Majority Report

The common ingredients of the Iran and Contra policies were secrecy, deception and disdain for the law. A small group of senior officials believed that they alone knew what was right. They viewed knowledge of their actions by others in the government as a threat to their objectives.

They told neither the secretary of state, the Congress nor the American people of their actions. When exposure was threatened, they destroyed official documents and lied to Cabinet officials, to the public and to elected representatives in Congress. They testified that they even withheld key facts from the President. . . .

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Contradictions and Failures

The Administration’s departure from democratic processes created the conditions for policy failure and led to contradictions which undermined the credibility of the United States.

The United States simultaneously pursued two contradictory foreign policies--a public one and a secret one:

--The public policy was not to make any concessions for the release of hostages lest such concessions encourage more hostage-taking. At the same time, the United States was secretly trading weapons to get the hostages back.

--The public policy was to ban shipments to Iran and to exhort other governments to observe this embargo. At the same time, the United States was secretly selling sophisticated missiles to Iran and promising more.

--The public policy was to improve relations with Iraq. At the same time, the United States secretly shared military intelligence on Iraq with Iran, and (Lt. Col. Oliver L.) North told the Iranians in contradiction to U.S. policy that the United States would help promote the overthrow of the Iraqi head of government.

--The public policy was to urge all governments to punish terrorism and to support, indeed encourage, the refusal of Kuwait to free the Daawa prisoners who were convicted of terrorist acts. At the same time, senior officials secretly endorsed a (Richard V.) Secord-(Albert A.) Hakim plan to permit Iran to obtain the release of Daawa prisoners.

--The public policy was to observe the “letter and spirit” of the Boland amendment’s proscriptions against military or paramilitary assistance to the Contras. At the same time, the NSC (National Security Council) staff was secretly assuming direction and funding of the Contras’ military effort.

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--The public policy, embodied in agreements signed by (CIA) Director (William J.) Casey, was for the Administration to consult with the congressional oversight committees about covert activities in a “new spirit of frankness and cooperation.” At the same time, the CIA and the White House were secretly withholding from those committees all information concerning the Iran initiative and the Contra supply network.

--The public policy, embodied in Executive Order 12333, was to conduct covert operations solely through the CIA or other organs of the intelligence community specifically authorized by the President. At the same time, although the NSC was not so authorized, the NSC staff secretly became operational and used private, non-accountable agents to engage in covert activities.

These contradictions in policy inevitably resulted in policy failure:

--The United States armed Iran, including its most radical elements, but attained neither a new relationship with that hostile regime nor a reduction in the number of American hostages.

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--The arms sales did not lead to a moderation of Iranian policies. Moderates did not come forward, and Iran to this day sponsors actions directed against the United States in the Persian Gulf and elsewhere.

--The United States opened itself to blackmail by adversaries who might reveal the secret arms sales and who, according to (former NSC aide) North, threatened to kill the hostages if the sales stopped.

--The United States undermined its credibility with friends and allies, including moderate Arab states, by its public stance of opposing arms sales to Iran while undertaking such arms sales in secret.

--The United States lost a $10-million contribution to the Contras from the Sultan of Brunei by directing it to the wrong bank account--the result of an improper effort to channel that humanitarian aid contribution into an account used for lethal assistance.

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--The United States sought illicit funding for the Contras through profits from the secret arms sales, but a substantial portion of those profits ended up in the personal bank accounts of the private individuals executing the sales--while the exorbitant amounts charged for the weapons inflamed the Iranians with whom the United States was seeking a new relationship.

Flawed Policy Process

The record of the Iran-Contra affair also shows a seriously flawed policy-making process.

There was confusion and disarray at the highest levels of government.

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--(Former National Security Adviser Robert C.) McFarlane embarked on a dangerous trip to Tehran under a complete misapprehension. He thought the Iranians had promised to secure the release of all hostages before he delivered arms, when in fact they had promised only to seek the hostages’ release, and then only after one planeload of arms had arrived.

--The President first told the Tower Board (an Iran-Contra presidential inquiry headed by former Texas Sen. John Tower) that he had approved the initial Israeli shipments. Then, he told the Tower Board that he had not. Finally, he told the Tower Board that he does not know whether he approved the initial Israeli arms shipments, and his top advisers disagree on the question.

--The President claims he does not recall signing a (covert action) finding approving the November, 1985, Hawk shipment to Iran. But (former National Security Adviser John M.) Poindexter testified that the President did sign a finding on Dec. 5, 1985, approving the shipment retroactively. Poindexter later destroyed the finding to save the President from embarrassment.

--That finding was prepared without adequate discussion and stuck in Poindexter’s safe for a year; Poindexter claimed he forgot about it; the White House asserts the President never signed it; and when events began to unravel, Poindexter ripped it up.

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--The President and the attorney general (Edwin Meese III) told the public that the President did not know about the November, 1985, Israeli Hawk shipment until February, 1986--an error the White House chief of staff (Donald T. Regan) explained by saying that the preparation for the press conference “sort of confused the presidential mind.”

--Poindexter says the President would have approved the diversion, if he had been asked; and the President says he would not have.

--One national security adviser (McFarlane) understood that the Boland amendment applied to the NSC; another (Poindexter) thought it did not. Neither sought a legal opinion on the question.

--The President incorrectly assured the American people that the NSC staff was adhering to the law and that the government was not connected to the (Eugene) Hasenfus airplane (shot down on a Contra resupply flight over Nicaragua). His staff was in fact conducting a “full service” covert operation to support the Contras which they believed he had authorized.

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--North says he sent five or six completed memoranda to Poindexter seeking the President’s approval for the diversion. Poindexter does not remember receiving any. Only one has been found.

Dishonesty and Secrecy

The Iran-Contra affair was characterized by pervasive dishonesty and inordinate secrecy.

North admitted that he and other officials lied repeatedly to Congress and to the American people about the Contra covert action and Iran arms sales and that he altered and destroyed official documents. North’s testimony demonstrates that he also lied to members of the executive branch, including the attorney general, and officials of the State Department, CIA and NSC.

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Secrecy became an obsession. Congress was never informed of the Iran or the Contra covert actions, notwithstanding the requirement in the law that Congress be notified of all covert actions in a “timely fashion. . . . “

Poindexter and North cited fear of leaks as a justification for these practices. But the need to prevent public disclosure cannot justify the deception practiced upon members of Congress and executive branch officials by those who knew of the arms sales to Iran and of the Contra support network.

The State and Defense departments deal each day with the most sensitive matters affecting millions of lives here and abroad. The congressional intelligence committees receive the most highly classified information, including information on covert activities. Yet, according to North and Poindexter, even the senior officials of these bodies could not be entrusted with the NSC’s staff secrets because they might leak. . . .

In the case of the “secret” Iran arms-for-hostages deal, although the NSC staff did not inform the secretary of state, the chairman of the Joint Chiefs of Staff or the leadership of the U.S. Congress, it was content to let the following persons know:

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--Manucher Ghorbanifar, who flunked every polygraph test administered by the U.S. government.

--Iranian officials, who daily denounced the United States but received an inscribed Bible from the President.

--Officials of Iran’s Revolutionary Guard, who received the U.S. weapons.

--Secord and Hakim, whose personal interests could conflict with the interests of the United States.

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--Israeli officials, international arms merchants, pilots and air crews, whose interests did not always coincide with ours.

--An unknown number of shadowy intermediaries and financiers who assisted with both the First and Second Iranian Channels (negotiating intermediaries). . . .

It was not operational security that motivated such conduct--not when our own government was the victim. Rather, the NSC staff feared, correctly, that any disclosure to Congress or the Cabinet of the arms-for-hostages and arms-for-profits activities would produce a storm of outrage. . . .

Private Financing

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The NSC staff turned to private parties and third countries to do the government’s business. Funds denied by Congress were obtained by the Administration from third countries and private citizens. Activities normally conducted by the professional intelligence services--which are accountable to Congress--were turned over to Secord and Hakim.

The solicitation of foreign funds by an Administration to pursue foreign policy goals rejected by Congress is dangerous and improper. Such solicitations, when done secretly and without congressional authorization, create a risk that the foreign country will expect and demand something in return. . . .

Under the Constitution only Congress can provide funds for the executive branch. The Framers intended Congress’ “power of the purse” to be one of the principal checks on executive action. It was designed, among other things, to prevent the executive from involving this country unilaterally in a foreign conflict.

The constitutional plan does not prohibit a President from asking a foreign state, or anyone else, to contribute funds to a third party. But it does prohibit such solicitation where the United States exercises control over their receipt and expenditure. By circumventing Congress’ power of the purse through third-country and private contributions to the Contras, the Administration undermined a cardinal principle of the Constitution.

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Further, by turning to private citizens, the NSC staff jeopardized its own objectives. Sensitive negotiations were conducted by parties with little experience in diplomacy, and financial interests of their own. The diplomatic aspect of the mission failed--the United States today has no long-term relationship with Iran and no fewer hostages in captivity.

But the private financial aspect succeeded--Secord and Hakim took $4.4 million in commissions and used $2.2 million more for their personal benefit; in addition, they set aside reserves of over $4 million in Swiss bank accounts of (their) Enterprise.

Covert operations of this government should only be directed and conducted by the trained professional services that are accountable to the President and Congress. Such operations should never be delegated, as they were here, to private citizens in order to evade governmental restrictions.

Lack of Accountability

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The confusion, deception and privatization which marked the Iran-Contra affair were the inevitable products of an attempt to avoid accountability. Congress, the Cabinet and the Joint Chiefs of Staff were denied information and excluded from the decision-making process. Democratic procedures were disregarded. . . .

Policies that are secret become the private preserve of the few, mistakes are inevitably perpetuated, and the public loses control over government. That is what happened in the Iran-Contra affair:

--The President’s NSC staff carried out a covert action in furtherance of his policy to sustain the Contras, but the President said he did not know about it.

--The President’s NSC staff secretly diverted millions of dollars in profits from the Iran arms sales to the Contras, but the President said he did not know about it and Poindexter claimed he did not tell him.

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--The chairman of the Joint Chiefs of Staff was not informed of the Iran arms sales, nor was he ever consulted regarding the impact of such sales on the Iran-Iraq War or on U.S. military readiness.

--The secretary of state was not informed of the millions of dollars in Contra contributions solicited by the NSC staff from foreign governments with which the State Department deals each day.

--Congress was told almost nothing--and what it was told was false.

Deniability replaced accountability. Thus, Poindexter justified his decision not to inform the President of the diversion on the ground that he wanted to give the President “deniability.” Poindexter said he wanted to shield the President from political embarrassment if the diversion became public.

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This kind of thinking is inconsistent with democratic governance. “Plausible denial,” an accepted concept in intelligence activities, means structuring an authorized covert operation so that, if discovered by the party against whom it is directed, U.S. involvement may plausibly be denied.

That is a legitimate feature of authorized covert operations. In no circumstance, however, does “plausible denial” mean structuring an operation so that it may be concealed from--or denied to--the highest elected officials of the U.S. government itself. . . .

Intelligence Abuses

Covert operations should be conducted in accordance with strict rules of accountability and oversight. . . . In the Iran-Contra affair, these rules were violated. The President, according to Poindexter, was never informed of the diversion. The President says he knew nothing of the covert action to support the Contras, or the companies funded by non-appropriated monies set up by North to carry out that support. . . .

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In the Iran-Contra affair, the NSC staff not only combined intelligence and policy functions, but it became operational and conducted covert operations. . . . This was a dangerous misuse of the NSC staff. When covert operations are conducted by those on whom the President relies to present policy options, there is no agency in government to objectively scrutinize, challenge and evaluate plans and activities. Checks and balances are lost. . . .

Law Gave Way

In the Iran-Contra affair, officials viewed the law not as setting boundaries for their actions, but raising impediments to their goals. When the goals and the law collided, the law gave way:

--The covert program of support for the Contras evaded the Constitution’s most significant check on executive power: The President can spend funds on a program only if he can convince Congress to appropriate the money. . . .

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--In addition, the covert program of support for the Contras was an evasion of the letter and spirit of the Boland amendment. . . . The President set the stage by welcoming a huge donation for the Contras from a foreign government--a contribution clearly intended to keep the Contras in the field while U.S. aid was barred.

The NSC staff thereafter solicited other foreign governments for military aid, facilitated the efforts of U.S. fund-raisers to provide lethal assistance to the Contras, and ultimately developed and directed a private network that conducted, in North’s words, a “full service covert operation” in support of the Contras. . . .

The committees make no determination as to whether any particular individual involved in the Iran-Contra affair acted with criminal intent or was guilty of any crime. That is a matter for the independent counsel and the courts.

But the committees reject any notion that worthy ends justify violations of law by government officials; and the committees condemn without reservation the making of false statements to Congress and the withholding, shredding and alteration of documents relevant to a pending inquiry. . . .

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Who Was Responsible?

Who was responsible for the Iran-Contra affair? . . . At the operational level, the central figure in the affair was North, who coordinated all of the activities and was involved in all aspects of the secret operations. . . .

North’s conduct had the express approval of Poindexter. . . . North also had at least the tacit support of McFarlane. . . .

In addition . . . we believe that . . . Casey encouraged North, gave him direction, and promoted the concept of an extra-legal covert organization. . . . Further, it was Casey who brought Secord into the secret operation, and it was Secord who, with Hakim, organized the Enterprise.

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These facts provide strong reasons to believe that Casey was involved both with the diversion and with the plans for an “off-the-shelf” covert capacity. . . .

The attorney general recognized on Nov. 21, 1986, the need for an inquiry. His staff was responsible for finding the diversion memorandum, which the attorney general promptly made public. But . . . his fact-finding inquiry departed from standard investigative techniques.

The attorney general saw Casey hours after the attorney general learned of the diversion memorandum, yet he testified that he never asked Casey about the diversion. He waited two days to speak to Poindexter, North’s superior, and then did not ask him what the President knew. He waited too long to seal North’s offices. These lapses placed a cloud over the attorney general’s investigation.

There is no evidence that the vice president (George Bush) was aware of the diversion. The vice president attended several meetings on the Iran initiative, but none of the participants could recall his views. . . .

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Role of President

The central remaining question is the role of the President in the Iran-Contra affair. On this critical point, the shredding of documents by Poindexter, North and others, and the death of Casey, leave the record incomplete.

As it stands, the President has publicly stated that he did not know of the diversion. Poindexter testified that he shielded the President from knowledge of the diversion. North said that he never told the President, but assumed that the President knew. . . .

Nevertheless, the ultimate responsibility for the events in the Iran-Contra affair must rest with the President. If the President did not know what his national security advisers were doing, he should have. It is his responsibility to communicate unambiguously to his subordinates that they must keep him advised of important actions they take for the Administration.

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The Constitution requires the President to “take care that the laws be faithfully executed.” This charge encompasses a responsibility to leave the members of his Administration in no doubt that the rule of law governs. . . .

The President created or at least tolerated an environment where those who did know of the diversion believed with certainty that they were carrying out the President’s policies.

This same environment enabled a secretary (Fawn Hall) who shredded, smuggled and altered documents to tell the committees that “sometimes you have to go above the written law;” and it enabled Poindexter to testify that “frankly, we were willing to take some risks with the law.”

It was in such an environment that former officials of the NSC staff and their private agents could lecture the committees that a “rightful cause” justifies any means, that lying to Congress and other officials in the executive branch itself is acceptable when the ends are just, and that Congress is to blame for passing laws that run counter to Administration policy. What may aptly be called the “cabal of the zealots” was in charge.

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In a constitutional democracy, it is not true, as one official maintained, that “when you take the king’s shilling, you do the king’s bidding.” The idea of monarchy was rejected here 200 years ago and since then, the law--not any official or ideology--has been paramount. For not instilling this precept in his staff, for failing to take care that the law reigned supreme, the President bears the responsibility.

Minority Report

President Reagan and his staff made mistakes in the Iran-Contra affair. It is important at the outset, however, to note that the President himself has already taken the hard step of acknowledging his mistakes and reacting precisely to correct what went wrong.

He has directed the National Security Council staff not to engage in covert operations. He has changed the procedures for notifying Congress when an intelligence activity does take place. Finally, he has installed people with seasoned judgment to the White House chief of staff, national security adviser and director of central intelligence.

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The bottom line, however, is that the mistakes of the Iran-Contra affair were just that--mistakes in judgment and nothing more. There was no constitutional crisis, no systematic disrespect for “the rule of law,” no grand conspiracy and no Administration-wide dishonesty or cover-up. In fact, the evidence will not support any of the more hysterical conclusions the committees’ (majority) report tries to reach.

No one in the government was acting out of corrupt motives. To understand what they did, it is important to understand the context within which they acted. The decisions we have been investigating grew out of:

--Efforts to pursue important U.S. interests both in Central America and in the Middle East.

--A compassionate, but disproportionate, concern for the fate of American citizens held hostage in Lebanon by terrorists, including one CIA station chief who was killed as a result of torture.

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--A legitimate frustration with abuses of power and irresolution by the legislative branch.

--An equally legitimate frustration with leaks of sensitive national security secrets coming out of both Congress and the executive branch.

A substantial number of the mistakes of the Iran-Contra affair resulted directly from an ongoing state of political guerrilla warfare over foreign policy between the legislative and executive branches. We would include in this category the excessive secrecy of the Iran initiative that resulted from a history and legitimate fear of leaks.

We also would include the approach both branches took toward the so-called Boland amendments. Congressional Democrats tried to use vaguely worded and constantly changing laws to impose policies in Central America that went well beyond the law itself. For its own part, the Administration decided to work within the letter of the law covertly, instead of forcing a public and principled confrontation that would have been healthier in the long run. . . .

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The country’s future security depends upon a modus vivendi in which each branch recognizes the other’s legitimate and constitutionally sanctioned sphere of activity. Congress must recognize that an effective foreign policy requires, and the Constitution mandates, the President to be the country’s foreign policy leader. At the same time, the President must recognize that his preeminence rests upon personal leadership, public education, political support, and interbranch comity. . . .

Sadly, the committees’ (majority) report reads as if it were a weapon in the ongoing guerrilla warfare, instead of an objective analysis. Evidence is used selectively, and unsupported inferences are drawn to support politically biased interpretations. As a result, we feel compelled to reject not only the committees’ conclusions, but the supposedly “factual” narrative as well. . . .

The most politically charged example of the committees’ misuse of evidence is in the way it presents the President’s lack of knowledge about the “diversion"--that is, the decision by the former national security adviser, Poindexter, to authorize the use of some proceeds from Iran arms sales to support the Nicaraguan Democratic Resistance, or Contras.

This is the one case out of thousands in which the committees--instead of going beyond the evidence as the report usually does--refused instead to accept the overwhelming evidence with which it was presented.

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The report does grudgingly acknowledge that it cannot refute the President’s repeated assertion that he knew nothing about the diversion before Meese discovered it in November, 1986. Instead of moving forward from this to more meaningful policy questions, the report seeks, without any support, to plant doubts.

We will never know what was in the documents shredded by North in his last days on the NSC staff, the report says. Of course we will not. That same point could have been made, however, to cast unsupported doubt upon every one of the report’s own conclusions. This one seems to be singled out because it was where the President put his own credibility squarely on the line.

The evidence shows that the President did not know about the diversion. . . .

Open to Question

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Finally, the committees’ report tries--almost as an overarching thesis--to portray the Administration as if it were behaving with wanton disregard for the law. In our view, every single one of the committees’ legal interpretations is open to serious question. . . .

In our view, the Administration did proceed legally in pursuing both its Contra policy and the Iran arms initiative. We grant that the diversion does raise some legal questions, as do some technical and relatively insubstantial matters related to the Arms Export Control Act.

It is important to stress, however, that the Administration could have avoided every one of the legal problems it inadvertently encountered, while continuing to pursue the exact same policies as it did.

IRAN-CONTRA MONEY FLOW

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The funds that flowed into and out of the “enterprise” run by Oliver L. North, Richard V. Secord and Albert A. Hakim to run covert operations, including arms sales to Iran and to Nicaragua’s Contras.

In millions of dollars INCOME

In millions of dollars

Arms sales to Contras: $11.35

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Arms sale to CIA: $1.20

Donations by private Americans: $1.86

Donation by Taiwan: $2.00

Interest and miscellaneous: $0.26

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Arms sales to Iran: $31.29 Total: $47.96

EXPENDITURES

In millions of dollars

Arms for Contras: $16.50

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Arms for CIA: $2.23

Worldwide projects: $0.87

Other: $0.97*

Arms for Iran: $15.19 Total: $35.77

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SURPLUS

Reserves: $4.20

North death benefits: $0.20

Cash on hand: $1.23 Commissions

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Richard V. Secord: $1.51

Albert A. Hakim: $1.47

Thomas Clines: $0.97

Hakim-Secord companies: $0.49 Profit

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For Secord, Hakim and Clines: $0.42

For business ventures: $1.70 Total: $12.19

* Includes $16,000 for North’s home security system and $902,110 for unexplained purposes.

Source: Congressional Iran-Contra committees.

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