Note Says Bush Knew of Arms, Hostages Swap

A new piece of evidence surfaced Friday that appears to contradict President Bush’s assertion that he was “out of the loop” when then-President Ronald Reagan launched a secret arms-for-hostages deal with Iran.

Bush dismissed the new information as insignificant, but it prompted Democratic candidate Bill Clinton to charge again that Bush has failed to tell the truth about his knowledge of the affair.

The evidence, a note written in 1986 by then-Defense Secretary Caspar W. Weinberger, confirms that Bush was present at a White House meeting at which the hostage deal was discussed in some detail, and says that Bush supported the swap even though Weinberger and then-Secretary of State George P. Shultz argued against it.

Bush, who was vice president when the Jan. 7, 1986, meeting occurred, has long acknowledged that he approved of the arms sales. But he has insisted he did not realize that the deals amounted to a swap of weapons for hostages, and that he never knew Weinberger and Shultz were opposed.

Weinberger and Shultz testified about Bush’s position in the 1986 meeting during congressional hearings five years ago. But Weinberger’s note, which he jotted down only hours after the meeting, is the first direct documentary evidence that supports their testimony.

“President (Reagan) decided to go with Israeli-Iranian offer to release our 5 hostages in return for sale of 4,000 TOWS (anti-tank missiles) to Iran by Israel,” Weinberger wrote in his note. “George Shultz + I opposed--Bill Casey, Ed Meese + VP (Vice President Bush) favored.”

William J. Casey was CIA director and Edwin Meese III was attorney general at the time of the meeting. The text of the note was released by Iran-Contra prosecutor Lawrence E. Walsh as part of an amended indictment charging Weinberger with lying to Congress about the affair.

Bush, campaigning in St. Louis, said there was “nothing new” in the Weinberger note. “I don’t think there’s anything there that’s going to contradict” his earlier statements, Bush said in a television interview.

But Clinton, who has spent much of the past week battling Republican charges against his character, called an impromptu news conference in Pittsburgh, Pa., to press the issue.

“Today’s disclosure that President Bush knew and approved of the arms-for-hostages deal with Iran not only directly contradicts the President’s claim, but diminishes the credibility of the presidency,” he said. “Secretary Weinberger’s notes clearly show that President Bush has not been telling the truth when he says he was out of the loop.”

And Sen. Al Gore (D-Tenn.), Clinton’s running mate, called the evidence a “smoking gun.”

“What gun is smoking?” Bush demanded angrily in an appearance on CNN’s “Larry King Live.” “What gun that hasn’t been reported in the hearings of the Congress?

“True, I supported the President (Reagan),” he said. “I’ve said so under oath . . . and they’re trying to make it into something new the eve before the election.”

The truth may lie somewhere between the conflicting claims of the two candidates. The Weinberger note does conflict with Bush’s assertions about what he knew--but it leaves several questions unanswered.

For example, Bush has long acknowledged attending the Jan. 7, 1986, meeting, but has suggested that he might have been outside the room when Weinberger and Shultz expressed their objections to the arms sales. Weinberger’s brief note does not indicate whether Bush was present during the entire meeting.

Reagan said in 1988 that Bush was not present when Weinberger and Shultz spoke, but that he was unable to recall any other details about the meeting.

Weinberger and Shultz objected to the arms sales because they believed the deals violated a long-standing U.S. policy against paying ransom in exchange for the hostages, who were American citizens kidnaped by pro-Iranian militants in Lebanon.

Initially, Reagan and Bush argued that they were not violating the policy because they were selling weapons to Iran, not to the hostage-holders themselves. But they later admitted that the scheme did constitute an arms for hostages swap.

“I didn’t say I didn’t know anything was going on,” Bush said in a television interview during his 1988 presidential campaign. “I said it never became clear to me, the whole arms-for-hostages thing, until it was fully debriefed” by the Senate Intelligence Committee in December, 1986.

Bush has repeatedly denied knowing of Weinberger’s and Shultz’s objections, although other officials present said the Cabinet officers pressed their complaints vigorously. “If I’d have sat there and heard George Shultz and Cap (Weinberger) express it strongly, maybe I would have had a stronger view,” he said in 1987. “But when you don’t know something, it’s hard to react. . . . We were not in the loop.”

On Friday, Bush offered a somewhat different explanation. “I knew they had reservations,” he said of Weinberger and Shultz. “(But) they weren’t shouting and yelling.”

Weinberger’s note appears to conflict with Bush’s account on both points. It confirms earlier testimony by several officials that those present at the NSC meeting were told of a straightforward swap of weapons for hostages: “our 5 hostages in return for sale of 4000 TOWs.” And it supports the earlier testimony that Weinberger and Shultz both expressed their objections at the meeting.

Weinberger’s notes, taken from notebooks he kept in his office at the Pentagon, also shed new light on several other episodes during the affair. At one point, Weinberger noted that he warned Reagan that selling missiles to Iran would be illegal. “President (said) he could answer charges of illegality but he couldn’t answer charge that ‘big strong President Reagan passed up a chance to free hostages,’ ” the notes say.

Another note reports that Nancy Reagan wanted her husband to fire Shultz as secretary of state in 1986, after he complained publicly about the arms sales. The note says Prince Bandar ibn Sultan, Saudi Arabia’s ambassador in Washington, told Weinberger of discussing a Cabinet reshuffle with Mrs. Reagan that would have made Weinberger secretary of state and sent James A. Baker III, then secretary of the Treasury, to the Pentagon.

The excerpts from Weinberger’s notes were released as part of a new indictment of the former defense secretary on a felony charge of making false statements to congressional investigators. In 1987, Weinberger told the House committee investigating the Iran-Contra affair that he did not generally write notes after White House meetings; but special prosecutor Walsh later discovered that Weinberger had kept hundreds of pages of previously-unknown notes.

Walsh indicted Weinberger on five related charges in June, but one charge of obstructing Congress was dismissed because of an appeals court ruling. Friday’s indictment replaced the obstruction charge with a count of making false statements to Congress.

“Mr. Weinberger adamantly denies this new charge,” said Carl Rauh, an attorney for the former defense secretary.

Walsh spokesman Mary Belcher said the timing of the indictment was not related to the presidential election only four days away.

“This isn’t a political decision,” she said. “We’re attempting to meet a very tight trial schedule and we announced earlier this month we would have a second indictment by month’s end.”

Nevertheless, the indictment was a political boon to Clinton in a campaign that has turned increasingly toward mutual accusations of wrongdoing and character flaws.

Times staff writers Cathleen Decker, with the Clinton campaign, and James Gerstenzang, with the Bush campaign, contributed to this story.