SANITIZED COPY OF JOINT HEARING ON THE IRAN-CONTRA INVESTIGATION 5 AUG 87

• Document Type: FOIA
• Keywords: IRAN-CONTRA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0001296068
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 145
• Document Creation Date: June 22, 2015
• Document Release Date: June 9, 2009
• Case Number: F-1992-00896
• Publication Date: August 5, 1987

APPROVED FOR RELEASE - CIA INFO DATE: 16-Dec-2008
SANITIZED COPY OF JOINT HEARING ON THE
IRAN-CONTRA INVESTIGATION
5 AUG 87
OCA 87-3707
COPY 1
{PAGES 154 - 298 PICK UP
WITH PAGES 1 -199}
 Mniteb 'tateg senate
SELECT COMMITTEE ON SECRET MILITARY
ASSISTANCE TO IRAN AND THE NICARAGUAN OPPOSITION
MEMORANDUM
The enclosed transcript of your recent testimony before the
House and Senate Select Committees is furnished so that you
may review it and make necessary typographical and gram-
matical corrections. Subject to Committee review, other clari-
fying changes are acceptable, provided they do not change
the substance or context of your original testimony.
Material to be supplied for insertion in the printed record
must accompany the return of the transcript.
Please mark corrections in a contrasting color.
Printing deadlines require return of the transcript to the
Committee within 7 days after receipt.
If you are unable to comply with any of the above, please
call [phone].
In the event the Committee has not heard from you within
the stated time, it will assume you propose no changes and
will proceed on that assumption.
Please return corrected transcript to:
HILARY PHILLIPS
Select Committee on Secret Military
Assistance to Iran and the
Nicaraguan Opposition
Room SH-901, Hart Senate Office Building
Washington, D.C. 20510
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HSITS \ J /87
JOINT HEARINGS ON THE
IRAN'CONTRA INVESTIGATION
Wednesday, August 5, 1987
CONTINUED TESTIMONY 0
AND
TESTIMONY OF CLAIR GEORGE
HOUSE SELECT COMMITTEE TO INVESTIGATE
COVERT ARMS TRANSACTIONS WITH IRAN
AND
SENATE SELECT COMMITTEE ON SECRET MILITARY
ASSISTANCE TO IRAN AND THE NICARAGUAN OPPOSITION
Washington, D. C.
partially ft-lail ed7,R
Kom )"o-of Ea
b! L DO% W04 W* CO "N
OWN N0 ^~=_COPIEs
Amel [IEItfl.
 DOTSON
i9
CAS-1
The select committees met, pursuant to recess, at 2:15
p.m., in Room 2172, Rayburn House Office Building, Hon.
Daniel K. Inouye (chairman of the Senate Select Committee)
and Hon. Lee H. Hamilton (Chairman of the House Select
Committee) presiding.
Chairman Hamilton. The hearings will come to order.
We will begin with questions by Mr. DeWin. He is
recognized for 20 minutes.
Mr. DeWine. You were the point man for the contra aid
program. Since the contras have been receiving a hundred
million from the United States, we have seen conflicting
reports in the press regarding how they are doing, success
and lack of success.
regards to the contras.
I wonder if you can give me and the committee a current
assessment based upon your own knowledge of the situation in
Yes .I-can. I could tell you that the
doing better than we would have expected they would. We
think they are placing stress on the Sandinistas.
resistance forces on the ground in Nicaragua today are
They have the majority of their fighting forces
in country, numberin people.
Mr. DeWine
IIMN A1tIfl
 tthe resistant forces clearly have the initiative in
terms of forcing the Sandinistas to react to what they are
doing and that the Sandinistas don't like one bit what has
.been done.
I want to add our analysts don't think the strange balance
has shifted in favor of the resistance forces. They enjoy
- ----- -- -- -- - - -
-the -strategic-advantage.
The tactical advantage is with the resistance forces
today.
Mr. DeWine.. Are you getting any information back concern
the -- the question is more-on the political as far as
internal support for the contras inside Nicaragua.
We are getting information on that.
 what we see, however, in greater clarity is the--c
increasingly the population of Nicaragua is unhappy with the
Sandinistas. Most increasingly angry at the 1500 percent
rate of inflation working there. The Sandinistas are
becoming disenfranchised.
However, those people are tending to sit on the fence
right now waiting to figure out which way the wind is going
to blow.
Mr. DeWine. You talk abou in-country. From an
historical perspective, how does that compare with the number'
of people a year before?
It is the highest ever.
Mr. DeWine. Highest ever?
Ever. A year ago this time there werr
or so in the country. It is well over doubled.
 Mr. DeWine. Besides the high inflation that you have
about the internal economy?
mentioned, what else, what information are you getting back
They have an economy where they have serious, serious
Sandinistas.
machinery is breaking. It is the real Achilles heel of the
down, the export rates are down, the inflation rate is up,
The internal economy is in absolute shambles.
It has been badly mismanaged. The productivity rates are
problems. The war is causing them to divert
their resources into the war effort away from the economy
alternative that is attractive to the Nicaraguan people to
The trick is for the resistance forces to create a viable
the economy into distress, the economy is separating people.
have got is a cross ruffle going on with the war driving'
and it is a drain on their manpower. What essentially you
---generate that--late -animosity at play--for - the-Sandinista-
regime.
 ~i~GUISJI~~tu
proI Ci=ru
 Mr. DeWine. There was one portion of your testimony
that confused me. I just want to clarify. I want to go
back into it a little bit. Again,' the time in October of
1986, October 14 when you were in front of the House
Intelligence Committee. Clair George, could you tell me
when you walked into that meeting that day, what you thought
he knew at that point? I don't quite understand what'you
thought he knew before you went into the meeting. I apologize
if this has been gone over in this hearing.
I will try to go over it. I thought that
Clair George knew that Ollie North was involved in
causing things to happen for the resistance forces and that
20 he. was facilitating to some degree or to a real degree the
21 activities of the private benefactors, the donors, so on and
22 so forth and had been, was the Administration's point man
23 for rallying and directing private aid to the resistance
forces.
I didn't think that he had the same level of detail
that I had, but he ha A;C=tt r ha the broad
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outlines and knew in general details that Ollie --
general details what'Ollie had been up to without the
specificity we have gone into and that I have talked to
about the committees today, but enough certainly to know,
as I think did a great mean people in Washington, frankly,
about what Ollie was doing. I would like to sort of quote
what I said in my final comment to the grand jury, really
up until today one of the toughest questions I have been asked
by the foreman.
He said, you knew and developed this
information over this point in time, why didn't you report
it to somebody?
And my answer was, to whom should I report?
People from Capitol Hill? To the White House? To the
State Department? To Langley? The Pentagon? They knew
Ollie North was around the Central American operation.
If people wanted to look'at it in depth, it was there
to see.
It was no secret in Washington. And that is really --
I thought that*Clair had a general understanding of what was
going down as did a great number of people in Washington.
I did not think it was a great secret.
Mr. DeWine. Very quickly, as your testimony
continued that day, did your understanding change at all?
Did that change it in any way? I don't know that it did.
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As I. recollect, I don't think my recollection
my understanding changed. I thought that Clair was answering
the questions on a narrow basis, focusing on the agency.
I think if you look at the construction of his questions
that is exactly what he was doing.
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11 Mr. DeWine. Thank you very much.
12 Mr. Chairman, if I could reserve the balance of my
Chairman Hamilton. The gentleman from Ohio reserves
it.
time. I don't know if I will use it or not. I may not use
three minutes.
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airman Inouye. Senator Mitchell.
166
Mr. Mitchell. You were asked this morning about your
testimony to the Intelligence Committees following the
downing of the Hasenfus flight. I want to ask you about
Secretary Abrams' testimony )n the same panel before you
you and any conversations you had with him. When he was
before this committee, I was told that his testimony regard-
ing that was in his words completely honest and completely
wrong. He said that he was unaware at the time he testified
that his categorical denial of any involvement by U.S.
Government officials was inaccurate.
He also made that same statement in public several times
He testified that he was not corrected by any other officials
after he made. those categorical statements and, therefore,
repeated them and continued to believe them to be true.
I eed, the -lack- of -being ififormed others is`e by athez~-- -
officials apparently contributed to his confidence in their
accuracy.
Now, you-apparently testified this morning about your
testimony at the hearing. My question is: Did you ever
tell Mr. Abrams that his information was not accurate,
either after a hearing or at any time thereafter during that
period of several weeks when he repeated those same in-
accurate statements in public?
 him aside and saying "You are not right on that point."
167
I don't recall having done that, calling
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don't recall that.
Mr. Mitchell. Why didn't you? If you were present when
a government official made statements to committees of Con-
gress and then repeated them in public which you knew were
inaccurate, if you had been in Mr. Abrams' position, wouldn't
you have appreciated someone telling him you had better stop
saying that, it is not true?
-A-A A-& K
I didn't know what the status of Mr. Abrams'
knowledgeability was. I thought, and I don't know the man,
I am not going to impeach his testimony, I don't want to do
that, but take away conversations that I had with Ollie
North, various things, any glimpse I saw by then of my
operational activities and the understanding of just the
know-how operations and how that unfolded, I didn't quite
know how he got to where he got to, and I didn't ask him how
he got there. I didn't get involved with it. I didn't
understand, I didn't ask him about it. I just left it sit
there .
It's all part of a passivity that I described to the
committee just to get through troubled waters and get on to
the next program.
Mr. Mitchell. I understand you felt in an awkward _
position then and feel in an awkward position now.
Heine AA/ltrirrt.
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Let me state it more directly, what you are telling us
is that at that. time your state of mind was you thought
that Elliott Abrams knew the facts and believe he was
stating them, making false statements.
No, I felt that Elliott Abrams --
Mr. Mitchell. The statements were false, he acknowledge
that now. The question is whether he knew they were false.
I don't know what was in his mind, and I
can't speculate on that.
Mr. Mitchell. What did you think at that time? I am
not asking you to speculate now. I am asking what you
believed at that time.
will tell you my reaction. I was taken
aback by the statement, and I have subsequently talked to
Mr. George. Mr. George was taken aback by his statement. I
don't know, maybe I incorrectly assumed, therefore, because
I have tremendous respect for Assistant Secretary rams,
maybe I assume, which I did, I just kept my mouth shut.
Mr. Mitchell. Is it fair to say, although you had no
specific information about the state of his knowledge,
you were taken aback, you thought he knew the facts?
Not the facts. I thought he would have a
broad brush understanding, as did a lot of other people,
Ollie was in and around those things. Again, I didn't know
how much detail. I didn't know how he got to that
 169
statement, and I left him with that statement and said he
has got to be comfortable with himself, he's there, and that'
that.
Mr. Mitchell. All right. Thank you. I won't press
Thank you.
Yes, sir.
Mr. Mitchell. Why were you-bitter at Congress?
Because I felt that it was frankly tough,
I believe you said, bitter at the administration and at
Mr. Mitchell. You said this morning at one point that
because of the circumstance you found yourself in, you were,
Congress?
the delaying -- I am going to be very frank. I thought the
delaying tactics of the Speaker of the House and the Rules
rough, bipartisan politics that got us here. I think that
us into October. That is one.
Conference, it got us into August, into September, it got
warfare, delaying it and tying up when that bill went to
Committee attenaanz vv Ltiv Y+vv .?++++~?? r--
rough, first class, big-leag political sort of legislative
Frankly, I thought that the decision of the House of
that ruled CIA out of the legislation and left us in an
awkward and extended and difficult position, and I felt that
Representatives, once again, tough, tough partisan politics
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the plea that we had made in October in large part in some
measure, because I had pushed the issue very hard, to allow
CIA to get back into support of the logistics game and
was ruled down in the Senate-House Intelligence Committee
Conference on the fiscal year '86 legislation, left us
hanging out.
In short, I felt that I had made just Herculean
efforts for a person in my position three times to get out
from under the legislative vice I was in and three times,
because of partisan politics, it was turned down, and I
couldn't see any reason for it except for partisan politics,
and I felt that left me in a continuing, exposed situation
and that -- to this day, it sticks in my craw.
The reason I am here is partly because of that.
11A101 A.W.iLTU?
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official, it is my duty to serve the Administration. If
that administration is right in its pc licies, I -- in
my -- I serve them. If it is wrong I serve them and I
try and change it. If the Congress is wrong in its
policies and I am in a position as I was in, I serve the
policy and try to work with the Congress to change it.
That is how I see my job.
Now I have been in Democratic administrations as a
career intelligence official and 'I have been in Republican
administrations as an intelligence official, as a civil
was the policy of the Carter Administration that the U.S.
government had no strategic interest in
Mr. Mitchell. You are a career official in an intelli-
gence agency and you regard disagreements over policy as
partisan politics?
believe, and as a career intelligence
a silly policy. I staye
told. I served the Administration, I filed my reports and
tried to change the policy.
I came back and in this job I was in a situation
where I felt the Administration -- I don't feel, I know,
but it is still interpretative, so I will say my opinion
is that the Administration is dead right about Central
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I thought it was dead wrong. I thought it was
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America, the Congress is wrong and I worked as hard as I
could to change it.. Maybe I am wrong, maybe I am naive,
that there is every right to disagree, every right for
Congress to voice its disagreement, but when push comes to
shove there's got to be a boss; someone has got to make a
decision.
As I said in my opening statement a house divided
against itself cannot long endure, and I think that the final
prerogative to make a decision and the man with his hand
on the helm is the President, and he wanted to do it and
I am going to quote you Chairman Hamilton, when the law
passed Congress passed a very awkward law, difficult to
administer, put us in a terrible position, we talked about
it in your office, you knew we were in a bad situation and
you said we will try to help you implement this thing as
best you can, even though I'm against it. I knew it was
_bad~-Ius_t couldn't understand it. There was a. law. Why
give us half a loaf, why give us something that we
couldn't implement right. It was just ludicrous and it
was partisan politics because the Congress didn't like
Bill Casey and the Congress didn't want CIA in because of
the mining of the harbor and we couldn't get over our
internicean warfare and it shouldn't have been that way.
I am bitter, but it is not just Congress. I share it
with the Administration for hanging me out in November,
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December and January through silence.
Mr. Mitchell.
i understand. You explained that.
In the first place your obligation is to the Constitution
and the laws, not to any administration and when you swear
an oath it is to obey and defend the Constitution and-the
laws.
Absolutely, there is no doubt.
Mr. Mitchell. I will just say that I think it is
demeaning and insulting for you to suggest that those who
happen to disagree with you on policy are engaged in
partisan politics, obviously used in a pejorative manner as
though there is something in our system that in which a
person who disagrees is acting in a partisan manner but,.a
person who agrees with you happens to be right, and i think
it is simply preposterous to suggest that those who opposed
contra aid did so because they didn't like Bill Casey.
--I-would-hope- you would-have--a_somewhath igher_-apinion- of
the motives of those who happen to disagree with you on an
issue that people would vote on important policy issues on
that basis. But -- and every Executive Branch official has
an obligation to obey and uphold the law, and not to
select which laws will be obeyed or will not be.
I had some other questions but my time is up. I merely
wanted to make that comment.
Sir, I obeyed the laws, I think the record
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is clear that I made decisions to stay within the laws-
.-I don't mean any disrespect for those in the partisan sense.
When I said partisan politics, I meant it as a descriptor.
As a matter of fact, I had great respect for-the skill and
ability of the Speaker of the House and what he did, I
thought it was a masterful performance.
Mr. Mitchell. Well, it is noteworthy that you used
the phrase partisan-politics only to describe those who
disagree with you, never ones to describe those whose actions
agree with you.
That perhaps is a poor selection of words.
I don't mean to leave that out, but I do think that once
the Congress acted and passed a law we should have had&A
law that we could have implemented as effectively and as
efficiently as possible, and we did not have.
Mr. Mitchell. The fact is that the President's
--veto-power--gives him enormous-influence-.in the. process- of
writing laws in the first place, and the Boland Amendments
themselves were the product of compromise which we go
through here-all the time, every member of this committee
has been in a conference where we write the laws and the
Executive Branch official is sitting right there and it is
a three-way negotiation to try to figure out what we can
pass that will survive a presidential veto and the result
is you do get laws that are sometimes frustrating to some
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and ambiguous to others, and not as clearcut as everyone
would like, and one of the reasons for it is the significant
role that the Executive Branch plays in writing the laws by
virtue of the President's enormous power as through the veto,
and that is what occurred here and what occurs every day
when the Congress is in session.
Thank you, Mr. Chairman.
Chairman Hamilton. Mr. Rodino.
Mr. Rodino. Thank you very much, Mr. Chairman.
on March 31, 1986, two FBI agents and
Assistant U.S. Attorney went to Costa Rica to investigate
allegations of gun running to the contras by John Hull,
Rob Owen, Oliver North, Tom Posey and others. Were you-
aware of this investigation?
Mr. Rodino. Yes, I guess generally I was but I don't
recall it specifically. But generally I must have been.
.- Rodino_-no_}rku recall -when- you became--.aware?
would have to check the record, but I
was -- it was roughly sometime in the spring of '86, when
people were looking at the lawsuit surrounding the
possibility of drugs and money and John Hull and such.
But I don't remember -- some time in the spring of '86, but
I don't remember when exactly without checking records.
Mr. Rodino. Can you recall who called this to
your attention or did you learn it yourself?
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In the course of my normal duties, I think
artially through reporting from
Mr. Rodino. Did he then report to you regarding this
investigation?
He reported to us regarding the allegations
that were being done and information about the fact that
an invest ation was going and a suit or a possible
suit was going to be filed, and I don't recall all the
details of that.
Mr. Rodino. Are you aware of any cables or other
traffic concerning this?
Yes, there were cables concerning it,
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(Counsel conferring with witness.)
And there were, as my attorney points out,
a number of questions that we prepared in response to
congressional investigations on this issue. So generally
there was a lot of exchange on that. I don't remember
the details of it, but it was no secret and I knew about
I don't
recall specifically cables on the FBI investigation per se.
There may have been some, but I don't recall them.
---- Mr-.-Rodino.----Was--O].iv -North to our---know1edgee a_war_e--
of this investigation?
On the FBI investigation.
n general terms he must have been, yes,
because it was public knowledge and --
Mr. Rodino. Did he talk to you about it?
Not that I can recall specifically, but it
is possible in the context of one of the meetings he
might have mentioned it, but I don't recall. I don't
recall specific conversations about it. It is probably
Mr. Rodino. But the cables did reflect and report
on the investigation?
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I guess as I think about it that he would have discussed_
it with me.
Mr. Rodino. Do you know what if anything was done
about the investigation?
Not that I can talk to firsthand. It may
be that I knew more details about it at one point in time
than I can remember right now. As I
recall the initial
case was thrown out of the District Court for some reason,
and had to be refiled and I think the investigation may have
been stopped because of that or it may have gone forward.
I just don't know the details of it.
Mr. Rodino. I am going to refer you to Exhibit 41,
which is -- I think this was discussed today, but it'is an
excerpt from your interview by the Tower Board and
you stated that a courier met Director Casey in Central
America some time in the latter part of November of '86,
probably around the 19th or so, to deliver materials so
that Director Casey could prepare for his upcoming
congressional testimony.
And according to your testimony, this courier
whom you identified this morning as I believ
said that Director Casey at that time, you know there may
be a problem on diversion.
My questions
what did
Director Casey say whe made that remark?
said it to me. He said
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it looks like there may be a problem with Iran money.
There is intelligence that indicates that more was paid
in than came out. I just looked at him and said wow, or
something like that. I don't know that he told Director
Casey that.
I were standing off to one side. We were on the tarmack
Mr. Rodino. What did you tak comments
What I said,-that there might be a problem
out there with the Iran program. I didn't know much. about
it. When I heard that I suspected that there might be
a problem with it.
Mr. Rodino. After hearing tfla~id you make queries ---
about it?
I did not because I didn't know anything
about the Iranian initiative and I kept my mind on trying
to g
really didn't pay that much attention to it.
Mr. Rodino. Did you report this to Casey?
No. He took off on an airplane to come
back immediately, I stayed in Central America and continued
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the trip and subsequent to that I may have had only one more
meeting with Director Casey before he died.
Mr. Rodino. Did you report it to anyone else in the
No. No.
Mr. Rodino. So there was no follow-up at all?
(Counsel conferring with witness.)
No, I didn't -- no, I knew that it was
being followed up in the context of this thing, in the
context --
Mr. Rodino. What do you mean?
Agency?
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Al
I knew the Director was coming back and
was to testify, and others were looking at this thing, and
I didn't -- it was not my portion of the pie, and I didn't
focus on it.
Mr. Rodino. This didn't give you any concern when
he said there is a problem with this?
It gave me a concern, but I
was and didn't follow
up on it. I didn't know anything about it, and with those
things you have to have one or two pieces of data out there
to be able to link something together. It was a passing
comment, and it just was a passing comment.
Mr. Rodino. I have no further questions, except that
I want to say, Mr. Chairman and ~~~I have been here
listening to testimony, and I know that at least
during this session of his testimony he has attempted to tell
us clearly whatever questions I guess were being asked of him
and to respond as best he could. I'm a little distressed,
though, and I must say so as a member of this committee and
as a Member of Congress, recognizin that responsible people
in government, and I'm sure that has a responsible
job and certainly one that is very sensitive, but very
frankly, having listened this morning to your responses to
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Senator Cohen, and then responding to Senator Mitchell,
feel part of this. government, and I'm sure that we all respect
the law and I'm sure you do, as you say you do, and the
Constitution, but'it seems to me that when you suggest that
you were not happy or you felt that the Congress hadn't done
what you had'expected them to do or what they should have
done and you found yourself in sort of an awkward position
because you believed that there was something that needed to
be done and you felt that you could act and act in the
manner in which you did, and to many of the questions that
were put to you by members of an intelligence committee
which needed information and on which I believe a good many
of us have to rely who are not members of that committee,
when we look to the Congress as a co-partner, a co-equal
in trying to run this government, it bothers me really when
you talk about, well, I was technically correct, and yet not
-actually Yeci-fically--ace ate, -and I wonder-hew-we--are---
going to run this government of ours really, and recognizing
that there is a need for covert actions, there is a need
for ensuring that we don't permit it to go beyond the few
people who we consider responsible, but when even those few
people who are considered responsible and who the Congress
has established as the receiving committee or the receiving
group are in effect deceived and lied to, I don't know how
we are going to run this government of ours and run it in a
 183
manner that the people are actually going to continue their
Now, I don't expect you, of course you have said, and
I heard you and I note that in your responses you also
interjected how badly you felt and how terrible it was, and
it was a terrible time any how you are trying to sort of put
it all together now, but it seems to me we ought to learn a
lesson from all of this.
Thank you, Mr. Chairman.
Chairman Inouye. Senator McClure.
Mr. McClure. Thank you very much, Mr. Chairman.
want to return for a moment to a very
early exhibit. if you will return to your book,W No. 1,
that is a November 7, 1984, memorandum from Oliver North
to Robert C. McFarlane.
The second page of that memorandum, near the bottom
of the page, it says, "I aske-if he was aware of the
source of the resistance funding. He told me, no, that
CIA had been trying to determine this," et cetera.
You see that statement?
I'm looking for it.
Mr. McClure. Near the bottom of the second page.
Yes, I see it. I was on page 3.
Mr. McClure. Do you recognize that this is not your
memorandum, it is that of Mr. North? Do you recall Colonel
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North asking you if you were aware of the source of the
No, but I believe this is a good point in
time for me to put something on the record that is not on
the record. The reason it is not on the record is frankly,
the fir.,t three times I testified to the Senate, to the
Tower Commission, and after that, to -- I don't remember,
a couple of other times, I forgot it. Then I remembered it
and I just didn't put it on the record. I'm going to do it
today.
At some point in November of '86, I don't remember the
time, I would have put it later than this, there were a
series of events, and I don't recall them -- I was trying to
figure out what was happening, and I began to wonder whether
or not Oliver North were not involved in something. I took
it to my supervisor, my supervisor took it to Clair George,
Mie Tc td^U1reCtor asey,-riirector Casey convened --
meeting between Clair George, the division chief and myself
and Oliver North, and confronted him. He said, "Ollie, are
you operating in-Central America?" And Ollie said, "No,
I'm not operating in Central America."
I was obliged to kind of lay out my concerns. Ollie
backed out of the meeting. It was about 10 minutes. It
was a terribly sort of awkward meeting. We left that meeting.
Ollie went his way, I went back and Clair George and I sort of
A hip] A-"IfJT.R-
 talked about it a minute and that is where I, along with
Clair, decided that we were going to stay within the bounds
of the law, how we would handle the problem if it was a
problem, and it might have been this time or precipitated
this memo. That was the first time that I really began to
understand this.
That has never been put on the record anywhere before
today that I know of. I forgot the thing and didn't put it
on the record in my deposition because it didn't come out and
it didn't fit into the conversation at that time, but it does
now. I want it on the record. I think it begins to set
some of the backdrop as I develop the nutcracker that I was
Mr. McClure. The second part of that.sentence after
he told me no, it says that "CIA had been trying to determine
this." Do you know of any other efforts other than the one
We were trying to figure out what was
happening. We were trying to find ou
what was going on. We were doing
calculations. We were then fully collecting intelligence
because one of the key intelligence questions confronting
the Central American task force was, can the resistance
survive and how long. Our projections were that there was
no money and they were going to fall apart and they weren't
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So we were looking at it wondering where the money was coming
 187
Mr. McClure.. Was that a decision made to protect the
United States Government or a decision made to protect the
Agency?
I think it was both, a decision done to
protect the Agency and a decision to work in cooperati..n
with the Congress, to not be in a position where directly
or indirectly we might be influencing the political process
or accused of that.
Mr. McClure. Was that for the government or for the
Agency?
I would say for both.
Mr. McClure. If it were for the government, why was
it acceptable to hand it off to North to run with these
private benefactors?
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Because we were -- we wouldn't be using
2 -appropriate funds. The agency would have had no direct in-
3 volvement in i
You have to remember that if it went off,
I didn't know how that was working and -T thought that someone
would just be taking care of it.
Mr. McClure. Thank you very much.
I yield back the balance of my time.
Chairman Hamilton. Mr. Hyde.
Mr. Hyde. Thank you, Mr. Chairman.
I am going to try and moderate my approach to what I want
to say *more in sorrow than in anger, which is difficult for me
to do, because I really have some things to?say about partisan
politics, which apparently is a stranger to this committee and
to this Congress. There is an old saying, don't kid a kidder,
and it is my thesis and in that perhaps you are not alone that
I got a lesson in politics one day when I said on the
shakes this body, meaning the House and the Senate.
raw politics is one of the strongest forces that moves and
`-p-rtisa-n-pol-it cs-ice one-of-tthe-stro away,
Floor while we were debating the nuclear freeze, I said to one
learned, a real leader -- I said, blank, how can you support
this nuclear freeze, because it harms us in negotiating arms
of the smartest people on Defense matters, the brightest, most
control with the Soviets, and his answer to me kind of tossed
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off was, party policy. And it occurred to me that party policy
.is very strong around here and I got a lesson in practical
politics. Now we, we complain, this committee complains that
we bypassed the Secretary of State, we bypassed the Department
of Defense when we had this goofy off-the-wall Iranian arms
hostages operation. We were working it out of a gerrymandered
National Security Council with commercial cut-outs and lack of
accountability and that is right, I agree, I think it was
nonsense. But then didn't we in all our wisdom imposed upon the
people who worry about Central America a hybrid ad hoc gerry-
mandered little group called, The National Office for Humani-
tarian Assistance, or whatever its name was and impose upon
them a task of distributing humanitarian aid down there knowing
we couldn't get down there becaus
touch it with a ten-foot pole, looking around Washington to
find people with some experience on something that was unique
and-had- never--been- done-bef-ore-sand- -locki-no 4 the-CZA,----_-
blocking out the Defense Department.
Anybody that had any expertise was ineligible and that
was the wisdom we did. I don't want to call that partisan
politics. Call it stupidity if you want, but that is what
we did in all our wisdom. I can say that, I am protected by
a speech and debate clause, so I'll say stupidity. Remember
ignorance is salvagable, ignorance is forever.
You can say it was because we disliked Bill Casey or we
 LtcIt1ti.
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distrusted the CIA but I don't know what we had against any
agency that had an intelligence capability and impose it on
the national office, as though one ever existed, and then
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demand a meticulous accounting for everything they did. I don't
know what you call it, if you can't call it partisan politics
or raw politics. Let me just say, at least partisan politics
has a rational basis.. When you get visceral politics, then
you go off-the-wall and it is my thesis -- nobody has to agree
with me -- that the visceral contempt that the President of the
United States was held in at least insofar as Central America's
policy is concerned by the Speaker of the House, had to be --
I don't know what else you could say. When the Speaker of the
House says Reagan won't be happy until he has our boys down
there in Central America fighting -- the Speaker said that
several times. In other words, the President won't be happy
until American boys are down there getting killed. I don't
know how you deal with somebody who feels that way or who gets
their intelligence from the Maryknoll nuns on Central America.
I would say you have problems dealing with that. Maybe we
don't call it partisan politics. Give me another name and I
will be happy to adopt it.
MFJ A4&WJ?'
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Mr. Hyde. This committee, the cream of the cream,
present company excepted, is supposed to be, and I will
stipulate to that, I am lukcy to get in the room, but I
will tell you this, this committee is not above operating
partisan politics because a letter went from the
Chairmen of this committee, the two Chairmen,to Director
Webster on June 25 asking for certain things. It was not
submitted to the Vice Chairman, it was not submitted to the
Ranking Republican, but -- you don't know anything about this
carbon copies went to Senator Boren, Democrat, went to
Representative Lou Stokes, a Democrat, because they are
chairmen of their respective intelligence committees,
but no Republican was part of that, an important letter
wanting some action done by the CIA, but no Republican
was a part of that.
I don't know how you characterize that. A typographical
terror,' a-secretarial--oversight?-
I don't know. But it is wrong. It is partisan politics.
It shows you don't trust the Republicans. That may be
well justified,. but it shouldn't have happened, and it is
partisan politics. So here*is one member that does not fall
off his chair when I hear partisan politics blamed for what
goes on around here.
I agree, I think partisan politics is stronger than
the sex drive on this Hill and that is saying something, and
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I yield back my time.
Chairman Hamilton. You should.
Chairman Inouye. Senator Sarbanes.
Mr. Sarbanes'. ~~~kou said earlier at the
Gregg meeting you didn't like what you saw, but I wasn't
quite clear what it was you saw that you didn't like. And I
wonder if you would develop that.
I think I didn't like what I heard would be
more accurate, what was going down.
As I reported or as I told the committee, starting at
about May, maybe slightly before that, I was trying to pull
myself back. I was trying never to get involved, to keep my
involvement within the bounds of propriety, within the bounds
of law and particularly in the summer of 1986 was backpeddling
as best I could. to stay out of harm's way. That meeting
took me in a direction I thought was heading right for the
I didn't think that it was a topic that should have been
discussed and I just didn't want to be there and hear what
was being said and get into a debate over the efficacies
or the pros and cons, the pedigree of whoever the
private benefactors were. I didn't want to be pressed to
associate or to associate myself with Felix Rodriguez. I
didn't want to be pressed to sort of buy airplanes or to
comment on buying airplanes or not buying airplanes. I just
ould
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 194
do. It was an operation from the U.S. as best I could see
from the bits and pieces of it, and was better and more
properly investigated by that body or someone else other
than us, and we did not, we undertook not to investigate it.
Mr. Sarbanes. What was the illegality that you feared
was taking place that would -arrant an FBI investigation?
I didn't know that there was an illegality --
Mr. Sarbanes. No, I am not saying that-you knew, but if
you felt that an FBI investigation was warranted, what was
the transgression that you saw that warranted it?
What I was saying there was if somebody
wants to know where the money is coming from and wants an
investigation conducted, then someone other than us should
conduct it because it was my belief U.S. citizens were
involved, and you can say,CIA, why don't you do it and you
have Executive Order 1223, all of the fall-out of the
C 1'Y_dNZoinn-ission, and the Pike Commission, and you can't have
it, as I think Clair George said in his testimony on
14 October, both ways, we can't investigate U.S. citizens.
That is where my level of knowledge was going to take me.
And when I made those statements, my point was that if there
was more information wanted on those things, it was my
firm belief at that point in time that it led back to the
U.S. and they were U.S. donors and that was something
for someone to investigate other than me as a foreign
iitrn einrn
 Mr. Sarbanes. And that is the aspect of that meeting
that disturbed you?
195
intelligence officer. Right or wrong, that is what I
believed.
,tqfth&W1' ,
The totality of it, the fear of the unknown,
what was going to be discussed, where it was going, who
was going to say what. I just didn't want to be there because
I felt it could put me in an awkward position and I didn't
want to be in an awkward position.
Mr. Sarbanes. Now, let me ask you this question. I
have been disturbed as I have listened to your testimony
because I am frank to say to you I see no basis in the way
you have responded to feel any assurance that if placed in, as
you put it, in the nutcracker again, you wouldn't, in
effect, repeat your performance.
I mean, you have asserted you were put in a difficult
situation. I think you made the point to Senator Boren if
look at what is happening now. Is that correct?
you really want to look at how things would work, better
That is correct. Now, and referring
specifically to the way in which I am executing the trust
that has been given to me
and the testimony and
in cooperation with committees of Congress in executing the --
Mr. Sarbanes. You are not in the nutcracker now. The
UMPI [QQ[JL
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fact of the matter is that the substance of the congressional
-.position now and the 'substance of the Administration's
position and, therefore, the substance of your position
since, I take it, from your testimony on substance, you
agree with the Administration are all intangible.
The difficult situation is when the substance of your
position is at odds with one of those positions and in
particular with a congressional position. I am not quite
clear that if the situation had stayed as it was in terms of
the congressional judgment or indeed were to return to what
it was at the time of the application of the Boland
Amendment, where do I find from your testimony the assurance
that your performance would be any different?
Let me answer the question first by saying
that I hope it.is the outcome of this committee, the
investigation and the lessons learned, no civil servant,
---n-o- person-in--my -position-'is-- p-I$ced-gin- the --nutcracker-ag-ain-:
I think if we go through the annals of American history
we are going to find this is a unique situation. There
aren't many like this one.
It wasn't that my personal beliefs, Senator Sarbanes,
were different than the Congress of the United States. I
have been there before. In not quite as direct a way.
But it was the fact that has come out in front of this
committee there was a dynamic working out there that I
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couldn't control that created the other side of the nutcracker
the congressional side was only one part of it. The
administrative side was the other. And I made the decision,
and you can criticize me for the decision, that I was
within the bounds of the law and I would be very careful each
step of the way to stay inside the bounds of the law, do
anything and everything I could to support the Administration
in its policies.
And I did that. I would hope this would never happen
again. If I am put in this situation. again, I don't know
how I will respond. It is hypothetical. I hope to God I am-
never there, I will work doubly hard not to get there again
and I probably will respond differently because, quite
frankly, I don't have the physical nor the moral energy to
go through this thing again. That is the bottom line.
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Mr. Sarbanes. Let me add something to this, because I
don't think it is simply a question of in a sense saying you
don't have the physical or moral energy to go through it
again. I "think if you are in the posture of having to say
to this committee, upon examining your actions, particularly
with respect to the testimony that you gave, as questions
were presented to you, and your answers previously in
response were given to you where you finally had to say,
well, those answers were technically correct but specifically
evasive, I don't think at that point that you are dealing
with a Congress, which is after all also an essential part
of our government, in a forthright, good-faith manner, and
it seems to me that it is out of that issue that I perceive
your difficulties to have arisen.
I mean, I understand where you were in terms of the
__ pressure on__you within your organization in terms of your
activities, but then to come to the Congress and participate,
as you did, in terms of not replying, replying evasively,
dissembling, it seems to me at that point you, in effect,
have passed beyond being within the ambience of certainly
the spirit of the law.
I would take exception to the word dis-
sembling, I didn't think I dissembled. In times of crisis
and pressure, each one of us makes our decision. I made
mine, I live with it. I can't say anything else.
MIN A O(1fl!f
 Mr. Sarbanes. Well, I just -- the only point I want to
make --
I appreciate what you are saying.
Mr. Sarbanes. -- is that assertion, which on its face
is candid and forthright, does still not address the sub-
stance of the problem. It doesn't give me any reassurance
in the future if a comparable issue should arise for you to-
say, well, you make your.decision and you live with it,
because you know you may very well make the same decision at
decide to live with that decision again in the future.
I don't mean to be flippant, but my mother
teaches me actions speak louder than words. I can say-
mea culpa, I am sorry. All I can say, my actions and the u
I manage my operations that were not attendant to the nut
cracker I think speak loudly for themselves. Frankly, I
enjoy interpersonal relationships, I enjoy working with
Congress, I enjoy a spirited debate, and the situa+ tion~
troubled me then, it troubles me now. I can't do anything
that is going to set your mind at ease, I can tell you lik
it is.
I can tell you, look what I did before, look what I
doing now, you have to make your own judgment. I would I
to be more --
Mr. Sarbanes. Maybe it helps if you at least know t
some of our minds have not been set at ease?
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Yes, I understand that.
Mr. Sarbanes. Thank you, Mr. Chairman.
Chairman Inouye. Senator Nunn.
Mr. Nunn. I am sorry I haven't been able to be here for
all of your testimony. I don't want to repeat things, but
I want to ask one or two questions. I understand you have
already testified you did not know of the diversion of funds
from the contras to the contras from the Iranian arms sales.
Yes.
Mr. Nunn. When did you first learn of that?
n spades, in definitive terms, on the
Tuesday, it was just -- just before it was announced by the
Attorney General. There was one indicator, as Congressman
Rodino pointed out some days earlier, in that there'was a
discrepancy that may be looked at, but I did not assign
significance to that at that point in time.
Mr. Nunn. Did you'ever have a conversation either befor
or after that time, that Tuesday, that you learned of the
diversion, did you ever have a conversation about the
diversion either before or after that period with Director
Casey?
No.
Mr. Nunn. Did you ever have anyone tell you that
Director Casey knew about the diversion?
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Mr. Nunn. You have never had a conversation with any-
one in the CIA about whether Director Casey knew about the
diversion?
The discussions I had about it were after
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we returned from the trip to Central America, as best I can,
recall them, and it was, I was a peripheral sort of inflow
addressee is the best way to put it, about the Roy Furmark
letter or the Roy Furmark claims, the Vllffl-IM claims, and
P am
those other sorts of things that went back and forth.
But I never had a specific conversation with Director
Casey about it, nor do I recall having specific conversa-
tions with anyone else. I was the sort of kibitzer on the
side of the main action.
Mr. Nunn. Let's strike the word "specific conversation"
and leave the adjective off and ask whether you have had any
conversation with anyone in the CIA about the diversion.
just said yes, that we talked about the
memos and so
Furmark memos and talked about the
on and so forth. But it's all kind of a melange in time,
and I don't know exactly when it happened. My recollection
would be in December when things were sorting out and stuff
was coming down.
Mr. Nunn. December of 1986?
Yes.
Mr. Nunn. Well, has an one, e' her in or outside the
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CIA or inside or outside the U.S. Government, told you that
Director Casey?knew about the diversion?
Not -- I have heard what I have heard in
the context of these hearings. No one else has ever told me
anything about that except after December the letters,
the Ruy Furmark meetings, and those sorts of things that I
learned about sometime in December, but no one ever came up
to me and said Bill Casey knew about it prior to that time
or didn't know about it. No, I am pretty specific about
that.
(Witness conferring with counsel.)
Prior to this, and I don't know when it
was, but one time, and I have been searching my memory,
it's sort of like the computer going round and round and
round trying to dred a things up, I do recall the Director
asking me, saying, what do you know about where this
money from the Resistance is coming from, and-do you mow
about it?" I said, "I don't know much about it," and he
said "Neither do I." I kept away from it. I haven't asked
the questions on purpose, and that kind of left it there.
That was about the only time the Director ever really raised
those issues with me.
Mr. Nunn. About what timeframe would that have been?
on it. It was one of my meetings with the Director. I
 203
would put it in the -- I am guessing -- but I would say
sometime in the.April to June timeframe of '86, and that is
a real guess.
Mr. Nunn. That would have been before the letter came
from the Canadian businessman and so forth?
Yes, I am certain before that.
Mr. Nunn. Tell us again as nearly as you can what
Director Casey said about that.
standing getting ready
to leave the room, and he said he said, "what do
you know about those, about the funding for the Resistance
Forces?" And.sort of how it's being done and what Ollie is
doing. And I said, "Not very much, I don't know where it's
come from, I have stayed away from it."
He said, "So have I, I haven't asked any questions
about it, I don't want to know about it. I've kept myself
ignorant." That was the thrust of it.
Mr. Nunn. Where was that conversation?
n his office.
Mr. Nunn. Was anybody else there?
No, me and he.
Mr. Nunn. That is the only time you ever had a conver-
sation with Director Casey about the diversion?
That's not about diversion, that was about
funding, in general. It was the only time I ever really
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talked with him about that. Wait, there's one other one.
Before Thanksgiving -- when was Thanksgiving? Does anyone
have a calendar? Was it the 17th? Something like that.
I got a phone call from Miami from Director Casey. I was
at my office, I don't remember the date or the time, but
he was on vacation in Miami, and it was when this whole
thing was in full blow, and he said, he called me up and he
said, "Don't worry, Ewe haven't done anything illegal,
I first learned about this thing from Furmark and reported it
right away, I don't want you to worry."
Mr. Nunn. So he specifically told you he didn't know
That is what he told me. He said
don't worry." As you might guess, this whole thing is
public, and my heart is in my mouth where it has been eight
months. He made that phone call, I was a little taken aback
by it. It was from Miami. It was a secure line phone call.
Mr. Nunn. You never heard anyone else, either in the
CIA or otherwise, apart from these hearings, say that
Director Casey either knew or didn't know?
No. We have talked about it and speculated
about it. No one I have talked to said he knew about it.
Nobody knows. Those are two instances in which he made
comments to me.
Mr. Nunn. Do you know Colonel North?
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would say I knew him very well as a
professional acquaintance. I didn't know him well as a
social acquaintance.
Mr. Nunn. Did you hear his testimony where he said
Director Casey knew and they talked about it many times?
I didn't see it all, I saw snatches of it,
and I read most of his deposition.
Mr. Nunn. I would like to ask you whether you believe
that testimony.
UNet AI11flh
Yes.
Mr. Nunn. -Did you know him pretty well?
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Sir, with your indulgence, I don't want to
engage in opinions on'it unless you really, -- I don't know
what to believe. I can tell you another vignette which I will,
that will give you another side of Director Casey. At one
oint in time, I was in his office and he said, "You know,
"he said, "so and so said that I nad terminal cancer.
that day thinking he didn't have cancer and he was going up to
e did, it is possible he didn't. I walked out of that office
Isn't that. preposterous? Isn't that the most ludicrous thing
you heard? Do I look like a man with cancer?" I said, "No,
you don't." Well, he did. And I had no idea. So I mean the
man -- I just don't know what to make of it. It is possible
New York, I guess, for treatment of prostate cancer sort of on
a recurring basis and I didn't have a clue- about it.
Mr. Nunn. So at the time he told you that he knew he had
cancer?
would guess he did from what I unaerstana.
I don't know all the details but that is what I concluded.
Mr. Nunn. So you wouldn't know who to beleive in that
situation knowing both Casey and North?
wouldn't want to bet on it.
Mr. Cohen. If the Senator will yield. You talk about
playing with words. He did say terminal cancer didn't he?
Yes. I wouldn't want to bet on it one way
or another. I wouldn't want to speculate on it. I will say
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this from where I stand, I think there was a lot of truth in
`Colonel North's testimony. I never knew Colonel North to be
an absolute liar, but I never took anything he said at face
value because I knew that he was bombastic and embellished the
record, and threw curves, speed balls and spit balls to get
what he wanted and 7 knew it and I knew it well.
Mr. Nunn. Have you ever known anyone you would call an -
absolute liar?
No, not absolute. I do know that I have seen,
I have seen I guess the way to put it, I have seen Colonel
North play fast and lose with the facts. And I think the
record-will substantiate that. But, on the other hand, I.
believe that there is a, from where I sit, from the glimpsts
I saw of this thing as the train windows went by, there was
a lot of fact in what he said too.
Mr. Nunn. A lot of what?
Mr. Nunn. Did Colonel North ever give you false informa-
would assume he did.
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Mr. Nunn. Can you tell us what that was? Do you recall?
Do you know specific instances?
No. Let -- the specifics aren't in my mind
where he did give me false information but I know there were
lots of times I suspected he was putting the spin on something
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that wasn't exactly the way it was. An attempt to influence the
way things come out. He dropped names a lot.
Mr. Nunn. Let me just ask you one closing question. In
this business of covert activities you are involved in it, we
are in a different world, we see part of your world, not all of
and I sometimes have great sympathy for the position I know
you all find yourselves in dealing with covert activities, but-
how important is it in dealing with colleagues in covert areas
-- I am speaking of people in covert areas in the Executive
Branch -- how important is it to them?
You can't lie. You have got to believe each
other. Believe me, in the world in which I live and work, you
have got to have a moral compass, a moral anchor. It keep's you
clearly defined on where you are going, what you are, and what
is truth and what is lie. If you don't, you will go virtually
go and crash. We live in a schizophrenic world, a world where
deceit, deception and manipulation in a positive and negative
sense. You can't lose sight of your moral compass, or you wil:
end up like Terpil,. Wilson, Cline or those people who did lose
sight of their moral compass.
Mr. Nunn. Colonel North started his testimony before
revealing he had misled people to the point, some would call i
like that, covert activity is a lie in itself and the clear
we deal with the lie as a -tool of the trade. We (Tea with
implication from that was once you undertake covert activity
era ~QSQ.LEKIL
 by implication is. excusable. Do you agree with that philosophy.
being a lie in itself, everything that flows from that it seems
I don't think covert activity is a lie, I
think covert activity is a range; it is an operation undertaken
to influence an event. You may deal in truth, in lie, colora-
tion, wherever possible. As a standard operating procedure,
we'try to deal with truth. Truth is an easier thing to defend.'
We don't like to deal in lies even disinformation because you
get caught up in it. That doesn't mean we won't. But by and
large our preference is to deal with truth. It is a deception.
It is something that is designed to deceive, and frequently the
recipient of the action or the viewer of the action, but to cal]
it a iie in itself is only true in some regard -- with regard
to its deniability.
Mr. Nunn. Well, is it fair to say, and I know my time has
expired, this is the last question, Mr. Chairman: is it fair
you are dead in this world.
Chairman Hamilton. The Chair would like to point out
Mr. George is waiting. I have three, or four I guess additional;
Absolutely. If you can't trust each other,
to say tiat those who deal with covert activities in the
world of deception, in the world of secrets have to trust each
other? Is that a fair assessment?
people on my side and the Senate has three.
I would like very much to get into Mr. George's testimony
MUM A n mrirn
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today if at all possitble. So, I just advise members of that.
Mr. Fascell.
Mr. Fascell. Thank you Mr. Chairman. as
Central American Task Force director, are you part of operation!
Yes, I am.
Yes I did.
Mr. Fascell. Did Director Casey charge you or task you as
regard to the Nicaraguan operation at any time?
director of Central American Task Force to do anything with
Oh, I am sure he did, yes. We would discuss
talk about it. And there were many times when he said
it fregeuently. He would have me come to lunch and we would
do this or do that or do the other thing. Largely, in
specific time when he sai I want you to do that. He
response to my recommendations, however, I can't remember a
generally deferred to me.
Mr. Fascell. as director of the Central Ameri-
can Task Force, if you undertook' a new operation, how did you
get your orders?-
It depended on the breadth and sensitivity of
the operation. If it was a recruitment operation or a continu-
ation of an operation largely undertaken, I would make the
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decision. If it was another, at a higher level of sensitivity,'
Clair George would approve my action.
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Mr. Fascell. You didn't take any action on your own
I did.
Mr. Fascell.' You have the authority?
.Yes, I do.
Mr. Fascell. Without kn..iing what the task is?
I beg your pardon? I don't understand
Mr. Fascell. Well, if you don't know what you are
being tasked for, how can you take authority to do anything?
the question.
I think that by and large I thought I knew
what I was being tasked to do.
Mr. Fascell. That is verbal; it is not in writing?
It is in the context of an approved policy
papers that are very broad and very general, finding scope
papers -
Mr. Fascell. Did you have one with respect to
Yes, we did.
Mr. Fascell. And when was it issued to you?
It was there when I came in the task force.
and as we went forward through the years.
And it was modified several times through as laws changed
I might add I initiated a lot of those things. I
formulate the operations, and then they are approved and
nMrn (iltfl
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they come back to me.
Mr. Fascell.? You had to send it up the line?
Yes. Level of sensitivity is the main
deciding factor.
Mr. Fascell. Have we got those modifications and
variations of the task in this committee? Can anybody on
the staff tell me? I would be curious anyway to see it.
When NSC took over the operations. as distinguished
from you running the operations, and you distanced yourself
from detailed knowledge, as I understand your testimony, as
part of compliance as CIA saw it, because CIA could not be
directly or indirectly involved, that responsibility left
you and went to North.
Never explicitly stated.
Mr. Fascell. No, but that is what happened, as a matter
of fact?
I think that that is self-evident.
Mr. Fascell. You served on the RIG?
Yes.
Mr. Fascell. Why did you serve on the RIG when the
burdon was transferred? There wasn't anything you could
We still had statutory responsibility for
providing intelligence to the RIG and also on the other side
of the equation
 Mr. Fascell. So basically it boiled down to by.
necessity a joint operation in effect, although you tried
to distance yourself from it at the time when it became clear
that the CIA should not be directly or indirectly involved?
I tried to keep myself out of it almost
right from the beginning, very, very early on in the process.
Then as time wore on, I think that the magnitude of it
and the complexity of it sort of drove people together.
There was a natural force, I think, that it was --
Mr. Fascell. But you had determined by then that this
was an operation over which you had no control?
Absolutely, that is right.
 UNCLASSIFIED
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that was in December, when everybody thought that I had
provided him a Swiss bank account and was somehow involved
in the whole Swiss funding mechanism, the first days of this
investigation was untangling the facts and making sure every-
one understood what I did.
The answer to your question is, no, I did not know
Mr. Heflin. Has Colonel North or Mr. Abrams or
anyone given you any explanation as to why the bank account
that you set up was not to be used?
I accept the statement that Elliott Abrams
made in his testimony. At that time I said that the meeting
in the Pentagon in November was part of the real tug of war
going on between CIA and the St----.e Department on the
structure and management of the program, which at the time
I didn't understand because we had had fairly close working
procedures before then, but after Secretary Shultz's testi-
money, I understood it a bit more clearly. And I think
Elliott's explanation there was absolutely plausible. He
wanted to control it because he wanted to reduce CIA
influence in Central America.
Mr. Heflin. Colonel North testified that when he left
the government on 25 November that the aid that had been
voted in October, part of the $100 million aid to the
contras, had not yet at that time got in the pipeline and
 Chairman Inouye. Senator Heflin.
Mr. Heflin. In regards to the account Elliott Abrams
wanted to set up and you testified about that earlier,
was there any discussion with Mr. Abrams or any other
-official of the government that you had that he had acquired
an alternate bank account number from the Brunei donation
to be deposited in?
No. And the first time I heard about
4019ARKI
 been delivered to the contras.
2 Would you give us an approximate date whenever that
3 11 was starting to be received by the contras?
10
111 the major impact of it
wasn't felt until December.
Mr. Heflin. So now the humanitarian aid ended on
March the 31st but some was in the pipeline, and he testified
and documentary evidence verified that he thought it would
run out around the end of May.
I believe that you testified that you felt that -- you
had made the statement it would run out around the end of
July. But from July to December, was there any evidence
that you observed, learned about through documentary or
voice or any other manner, either before or during this
going on or afterwards that would indicate where the
humanitarian aid was coming from during that period?
Let me first correct the record. Ambassador
Duemling and I calculated the aid out and we calculated that
r*34 Alry-I
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it would last through the end of June and perhaps a bit
longer.
In fact, I think it ended about the first week of July.
From that point forward, all of our evidence indicates that
the resistance had no money. They started to accumulate
a deb
It was very clear that they were not -- I repeat
it was clear that they were not getting any money.
Mr. Heflin. All right. So now the Hakim-Secord
enterprises, their account, as reviewed by our accountants,
would indicate that during this period and during the entire
period that they made any contribution, it was about $3.5
million, and according to their reviews of these accounts,
none of that went to humanitarian aid, that theirs was
largely transportation-related expenditures, and I believe
you have told us that -- about the airfield
and the fact that it really didn't play a part -- I think
our records would indicate that we have got something in
the neighborhood of around $320,000 that was spent there.
Did you see any evidence other than transportation-
related expenses that -- expenditures that came from the
Hakim-Secord enterprises?
The short answer is no, and let me point
oinins AQitItJt
 10
if not, they asked me afterwards how much money I really
thought had gone-to the resistance forces during the time
in question, and my guess was between $3- and $4 million,
and was it all transportation. There is a possibility that
there may have been some arms deliveries in that time frame,
but I'm almost certain that from July forward there were
no deliveries of any type, either arms or food, consumables
that went to the resistance forces.
Mr. Heflin. According to the accounts that we have --
they'may not be fully complete, but they would reflect that
moneys from foreign countries, moneys from the Miller- '
Channell operation, all moneys either went into the Hakim-
Secord accounts or into Calero's accounts as far as we know
from donations from third parties or from countries.
221
out that when I testified in front of the Senate-committee
--on 9 December they asked me, I think it was in my testimony,
Do you know of j ny other f u-nd-that could--Have come rom -
during t-he year of 1986?
other sources that would have been of aid to the contras
No, sir. As I testified, I didn't know
where any of the moneys came from until this revelations
growing out of the proceedings after January, and I don't
know of any others or how that money was handled.
Mr. Heflin.
Did you see any evidence that would
raise a suspicion that'it would come from sources other than
.~~IJn ML1fl1
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what I've enumerated? That is the foreign government's
contributions, the Miller-Channell types, what Calero
raised on his own and went through is bank accounts.
9Mni c?J.rLI[n
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yes, let-me be specific, not with
Calero or the FDN or people in the North, but with the
remnants of ARDE, of Pastora we developed information that
they were receiving money from cocaine trafficking.
Mr. Heflin. But not in the north
No, we have looked at that as closely as I
can. We see no indication that anybody in the north or
anybody currently active in the resistance has been involved
in drug trafficking. We see considerable evidence, I think
much of it has been talked about now in public, that people
in and around Eden Pastora were in fact involved in cocaine
running to the United States to raise revenue for their
cause.
.Mr. Heflin. Mr. Chairman, I have no further questions.
Chairman Hamilton. Mr. Boland is recognized for 10
minutes.
Mr. Boland. Thank you, Mr. Chairman.
I am a little distressed with one of the answers you
gave to Senator Mitchell with respect to the fact that this
is a very partisan issue, the issue of contra aid, and it
is of course and everyone is entitled to his own opinion on
whether or not aid should have been supplied to the contras
and whether or not that was the best program for the
Administration to pursue.
I thought for a moment that I heard the voice of
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b1LI5c1t1LtftJL
Admiral Poindexter, who said that one of the reasons for
the great delay and one of the reasons for the problem in
Central America with respect to the contra aid was the
Speaker in that he dragged his feet in this particular area
and on what ultimately led to the appropriation. I thought
I would set the record straight at that time and I would
like to set the record straight now.
I will put into the record the dates and the actions
of the Congress from February 25th when the President
made his initial request for a hundred million dollars to
the Congress and wound up with the CR that he signed on
October 18th. The request came on February 25th for the
hundred million dollars. March 20th the request was
debated in'the House 210 to 22. On March 27 the request
was approved in the Senate 53 to 47. On April 16th the
second House vote on the supplemental of the President's
request was tabled because apparently the leadership on the
Republican side I presume didn't think it had the votes so
the Republicans voted for the Hamilton substitute of
$27 million for humanitarian aid.
On June 25th the House approves a request in a
Military Constructions appropriation bill, 221 to 209,
a great victory for the Administration. On August 13th the
Senate passes the Military Construction bill containing
the contra funds. August 14 recess begins and in September
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WR1LR&tflW
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8th recess ends.
September 25th the continuing resolution passes the
House with contra aid included. October 3rd the continuing
resolution passed the Senate. October 15th the continuing
resolution, the conference agreement passes the House.
October 16th the continuing resolution conference agreement
passed the Senate.
October 18th the CR was signed by the President.
Where do you find the Speaker dragging his feet or
acting partisan politics in that particular litany, will
you tell me?
Congressman Boland, I am not a legislative
specialist. I was probably getting my information and''
my impressions from exactly the same sources that Admiral
Poindexter was, and it grew out of the legislative meetings
I attended at the White House and that was the impression
that~was at .pray tfiere.-Zit
I would have to review the record.
I would have to look at the agendas. It is not
something I am an expert in and it was --
Mr. Boland. If you are going to make the change that
the action on this particular buill was prompted by politics
because of the Speaker's position, then I think you ought
to set the record straight for yourself, which you said
you would do.
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Let me also say I am a little distressed about the
response you gave again to Senator Mitchell's questioning
when you indicated that some people didn't like Casey.
happened to like him and I became the first chairman of the
House Permanent Select Committee on Intelligence back in
1977. That was at a time when the CIA had some problems
and President Carter wanted to get a separate committee on
the House side as the Senate did a year before us for the
purpose of making sure that not too many Members of the
Congress would be privy to top secret information, and the
House responded and that committee was set up.
I think it performed a valuable service to the entire
intelligence community and as a matter of fact, Director
Casey liked it so much that he awarded me the CIA Agency
Seal Medallion. That doesn't go to too many people.
in addition to that, there was a commendation sent
-ta- and-2"indicated-tits-was-acommendation--sent--t
me because of the committee's action, not particularly
my leadership, but the committee itself, from General Faurer,
who was a director of the National Security Agency and
another citation from General Tigue, who was the Director
of the Defense Intelligence Agency, all these agencies more
heavily involved in intelligence than any of the other
intelligence agencies of the United States government.
So it comes to me as quite a surprise you would say Members
 m5 111 didn't like Casey.
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One thing Casey had, Casey had the ability to win
the friendship of those with whom he conversed, didn't
always win the battles, sometimes it was difficult to
understand him..
In any event, I think I can say that he did have the
respect of the Members of Congress and I think he did
a lot for the Agency. As a matter of fact, the Agency
was built up in dollars and in personnel heavier in those
7 years than it had ever been built up before.
was a question about whether or not we built up a human
intelligence.- It was built up considerably.
Bobby Inman was a director who complained about the
fact that the analytical section of the intelligence
community was weak, that was strengthened and this committee
was congratulated. So it is rather disturbing that you
would sit there and I wanted to make the-record clear,
because you keep insisting you want to make the record
clear. I have one question for you and you have had a
distinguished career in intelligence, we need people like
you but sometimes the intelligence community is responsible
for the problems it might have because it fails to
communicate in the way it ought to on the Hill with
committees that are responsible for oversight. Let me point
to one instance where you and Elliott Abrams and Clair George
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appeared before the House-Permanent Select Committee on
Intelligence back in October of '86 and this was reference
to the Hasenfus shootdown. I think at that time as I
recall and the record indicates, that Clair George's response
to a question with reference to the shootdown was that the
CIA was not connected in any way with the Hasenfus operation.
You knew, you knew at that time that the CIA was connected
with the Hasenfus operation and you also knew tha
was up to his nec
in the operations of the Secord supply operation,
did you not?
No, sir, that is incorrect. I knew that
because the meeting in May '86,
had had some involvement. I thought we had cauterized that
involvement and it had been put to rest. At that time I
did not know the extent of
involvement. It came to
17 fl_----rn_a-tt-ention---I-believe--the--2.3rd.-of-.-October,.-Ibr9iigh t
18 II to the attention of my superiors, after it was investigated
1911 and our understanding was --
20 II Mr. Boland. Let me interrupt you. You say it came to
__II your attention in October '86?
22
October 23, 1986 is the date, when I went
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ith the interagency group and my discussions
were as I said in the lobby of the hotel we were staying
in, he told me about the telephone calls and I reported them
_U11pi LUMER-
 229
back. Prior to that time my understanding of his
-- direct involvement with the private
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involvement with the
benefactors was not well developed at all. As I testified
I knew of a little glinpse in May, I did not know he had a
KL-43 or that he was calling them on a regular and
continuing basis. That was one point in testimony that is
absolutely factual. That record was corrected in
December of '86 after the appropriate investigation was
conducted --
Mr. Boland. You are familiar with the fact, are you
not, that North has testified that you were familiar with
the details of this operation, it was a military operation.
I think you are also familiar with the fact tha
testified that you were aware of what he was doing and
of course, the Secord operation could never have been
successful without the complete cooperation o
--o-n the- -g r-ound- communiZaring w tt the-contrasrr tiorr
equipment that was supplied, the KL-43 by the CIA or by
Colonel North?
I am familiar with the testimony. Colonel
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North said in testimony; I am sure he must have known,
I think he knew, and he qualified it, he was wrong.
Mr. Boland. When you found out about the operation
did you inform any of your superiors in the CIA of your
knowledge of this matter?
I Ili
4LW,Pml Le-Q1.0m
TTUrIM"
 imbou ht#
When I returned from on the 23rd
or thereabouts of October, I reported what I had learned
t who reported it to Clair George. As I.
testified before that set in motion the wheels of
investigation, the wheels of determining the facts. There
is a memo in the record that lays those facts out dated
26 November, and so I did report them to my immediate
supervisor, and he reported it to the supervisor above.
It was reported to the Secretary of State that we may have
a problem I think several days thereafter, and Elliott
Abrams testified to that. I don't know whether Secretary
Shultz did so the answer to your question is yes, I did.
Mr. Boland. The red light is flashing. You are saved
by the red light and I by the bell on the floor.
Chairman Hamilton. Senator Cohen.
Mr. Cohen. At the conclusion of my questioning
ad-a--conversat-ion-wi-th r e-conee-rniiig--mfrev-ious-
question about the relationship between Director Casey and
Colonel North, and he related an event that I think would
be helpful to.have on the record. If you would care to
repeat'it for the committee?
Yes. In late November I believe it was
of '84, I received -- I don't recall the precise date
I received a phone call at my home from Director Casey,
very unusual for me at that point in time. I was eating
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dinner, he called up and said how are things going, I
said you really want to know, boss? They are going
terrible. We haven't got a policy, I don't know where we
are going and I.can't run the operations. He said see
me in the morning.
I went up to see him and he said put down on paper
for me a policy where you think we ought to go. I will
get the policy, you run the operations. I can't remember
whether I told Ollie about that conversation or
whether Ollie told me about that conversation, but Ollie
knew about that conversation and Ollie said give me a copy
of the paper. I said Ollie, I can't do that. I've got to
put it through the system. It has to go to the Director
and Ollie said, I'll talk to the Director, and he talked
to him.
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The next day, or sometime afterwards, I
g5t a call from the Director, I remember that one fairly
clearly because it was at his EOB office. He said, give a
copy of the paper to Ollie.
And that let me know that Ollie had a fairly close,
direct relationship with the Director. I was a little bit
surprised.
I brought a copy down, gave it to Ollie. Subsequently
we put the paper through the system and it went up and I
believe if you saw it today it is in, with all due modesty,
it is about the policy w And that gave me
some insights as I was developing, as I said, in December,
in October, November, and December kind of the frame work
of where I was, kind of how Ollie fit in and helped me
understand the dynamics I was living and working in.
Chairman Inouye. Senator Rudman.
Mr. Rudman. Thank you.
This morning or early this afternoon at the conclusion
of your testimony being questioned by Senator Cohen, I believe
you stated you would never dream of altering intelligence
because as an operations officer such an operation would
damage, destroy the mission you were trying to carry out. Is
that not correct?
That is correct. Cooking intelligence. You
can't have intelligence on a false premise or you will have
JJNeI AteJna
 bad operations.
Mr. Rudman. I want to show you a memorandum of a
draft trip report summarizing Director Casey report in
1986. I believe you wrote that trip summary.
Yes.
Mr. Rudman. The Director, I assume, would use that
report for preparing whatever he prepared for the President
or others who relied on him.
Yes. He was going to use it as a talking
points paper for whomever he talked with. I don't think he
actually did, however.
Mr. Rudman. But that was the purpose?
That was the purpose, yes.
Mr. Rudman. Of course, you are aware for the past
number of years, although some of the Central American
members have made statements to the contrary, we have all
been told privatel}by the Secretary of State,. I remember
Mr. Rudman. Let me send you a cable that was sent to
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you on
November 25, 1986, fro
Now, that did not find itself into your trip summary.
You were on the trip with the Director. This comes from
to you. It comes at a time
where I assume it is the basis for the preparation of your
intelligence report.
My question is very simple. Why is it that there is no
that it seems to me should have been included if
whoever was going to get that briefing from the Director
was to get an accurate briefing and evaluate it for
however he wanted to evaluate it.
I would have to go back and check my notes
and look at the context of that. I am, frankly, a little
bit stunned abou
 Mr. Rudman. I don't read it for the very good reason
Idon't read it'that way either and I am a
,
little stunned by this.
Mr. Rudman. We have been told things, say one thing,
mean something else. I have to assume we have a pretty. good
CIA, I always thought so.
You are exactly right. I don't deny that
and that should have been put in that report. Why it is
not there, I don't know.
Mr. Rudman. Let me go on -- I think there is your
answer, you don't know and I sure don't know.
What I have got to do is try to go back and
re-collect all the notes and figure out why I did that.
Mr. Rudman.' I would like to have an answer for the
record on that.
will get you one.
Mr. Rudman. I would particularly like to know why the
memoranda prepared for the Director which was the basis for
one of the intelligence estimates he would have sent
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probably to the President or someone at the National Security
Council level, that raw intelligence was not put in
there, it seems to me it ought to be there.
You are absolutely right, it ought to be
there. That is not right.
Mr. Rudman. Let me go on to another related item. One
of the things that I am sure, with the extraordinary record
you have had in the agency it has to concern you as much
as it concerns other people, is the whole feeling as expressed
by the Secretary of State whenever you start mixing up the
people who are doing the intelligence estimates and policy
making you get into kind of shakey ground. There is a
handwritten note for a 9 January 1986 NSC briefing of
Mr. Casey which read, and you were at the meeting, "The DCI
wants to make the insurgency choice stark. Either we go all
out to support them or they will go down the drain. DCI
wants to add some detail on how we are going to strengthen
the FDN."
Now that, of course, was during a period the CIA had a
very limited law according to the law that was then in
effect. And I guess my question is: would you agree with
me that that note gives some credence to the fact that
maybe there was some cooking of intelligence going on on.
which basis the President of the United States was making
some choices?
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Would you read it
Ms. McGinn.. Can we see a copy?
Mr. Rudman. I will send you mine.
Ms. McGinn. 'Thank you.
Mr. Rudman. If you look at all these documents we have,
and we have hundreds.of thousands of them, there are some
very interesting documents. This committee is going to have
a tough choice in deciding how many to publish because there
are so many.
That is just one of a number I have had called to my
attention I find most interesting read in conjunction with
the previous documents I have shown you.
I am still reeling from that one. I didn't
understand that one.
Mr. Rudman. Niether did I and I thought I would ask you
about it.
I think-that Director Casey, who is the
senior analyst, really believed that the choices were and are
stark. I believe that the body of intelligence there is to,
support that, that particular statement, and it was the
assessment, that is the assessment that as intelligence
advisor to the President he wanted to make, he wanted to add
details about how we could strengthen the FDN. It is
important to know at that 9 January meeting there was a
key decision taking place.
MA1M
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That was the meeting, as I recall, where the decisions
were going to be. made about how to go for the next aid package
That is the $10 million decision. That means what are we
going to do with the $100 million of tasking me or
somebody
Mr. Rudman. The problem is there is a reference there
you make it so stark either they get it or go down the drain.
Maybe that is true, but the characterization, of course,
when you read it in conjunction with other things we have
heard makes one very nervous.
(Witness conferring with counsel)
I don't know where these notes came from.
I recall getting ready for that meeting, and I believe --
Mr. Rudman. They came from the agency.
I beg your pardon. I can see they did.
I really don't think from my direct knowledge the Director
cooked intelligence on Central America. I think he presented
it the way he saw it. He felt very strongly. I think the
body of intelligence is there in the main to support what he
had to say. I'think the facts have spoken pretty well for
themselves.
I am one of the key operational analysts and I never
heard the Director say anything about Central America I was
personally uncomfortable with.
Mr. Rudman. Thank you
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i asked those questions in relation to what they state on
their face, but beyond that I have a very uneasy feeling about
the character of the intelligence the President of the
United States is receiving on this entire matter. For
instance, we have very disturbing evidence, public evidence,,
the President was told as part of the rational 4.zation for
selling arms to Iran and approaching those moderates over
there that Iran was in imminent danger of losing the war
when that flew in the face of every CI
nd NSC
evaluation, and I just wonder if this wasn't more of it.
Mr. Chairman, we can go off the record, can't we, for 30
seconds?
Chairman Hamilton. Yes.
(Discussion off the record.)
Chairman Hamilton. The Chair recognizes Mr. McCollum
for ten minutes.
Mr. McCollum. We aie about to wind down. I want to
clarify a couple other things, going through testimony all
day long and listening today. Exhibit 41, that is the
testimony that you gave regarding the courier coming down to
visit when you were with Mr. Casey in Central America just
before he gave his testimony, and you said there at one point
about the fact the courier mentioned there was a problem with
a diversion.
I said there is a possibility of the money
imm u uomm
 Mr. McCollum. That is what I wanted to clarify, is
that, was f the courier?
Yes, he was.
Mr. McCollum. It is my understanding it was based on
intelligenc.. information that he had indicating that there
was a difficulty.
He had heard something along the way, and
amount that was available or could be accounted for or had
and the amount of money going into one account and the
way that caused him to be concerned about a discrepancy
I am not clear on this, but he had heard something along the
been accounted for by the agency.
He made a passing comment to me as we went through
the -- at the airport.
Mr. McCollum. He didn't use the word "diversion"?
(Witness conferring with counsel.)
No, he didn't use the word "conferring".
Mr. McCollum. It was a remark to you not to Mr. Casey.
Yes, it was a private remark to me sort of
at the mouth of s it was starting up, right as Casey
was leaving the area.
Mr. McCollum. I also want to put it in context. This
is November of 1986, and it was in early October. We have
had testimony in this committee before Director Casey got
 the call from Mr. Furmark. As I recall, the agency was
C concerned at that point in time with looking into all what
Mr. Furmark may have said about the difference in the cost,
So from my perspective, I don't know from your knowledge
you can concur, but from my perspective it could well be
this remark by was a follow up on that
information, that trail, not anything new.
It is possible. I don't know, I didn't
know the details and, as I said, if you only got a little
glimpse, something like that doesn't jump out at you right
away and it doesn't mean that much to you. That is the way
the world is, you have to have clues before you can see
something.
Mr. McCollum. Let me ask another area completely.
Drug trafficking questions you were asked by Senator
Heflin a minute ago about that. Is my understanding correct
the only indication of any drug relations with the contras or
with any of our personnel at all was the question of a couple
of people with Eden Pastora's group?
With regard to the resistance forces; that
is 'correct. It is not a couple people. It is a lot of
people. And it is around Eden Pastora's group. I testified,
at our request we went down to the intelligence committees
and gave them a full briefing on that. We first reported
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it in November of 1984 to Justice Department and subsequently
periodically thereafter and the body of intelligence is
fairly complete on it.
Mr. McCollum. That is a primary reason we served our
connection with Pastora or one of the factors?
One of about three or four.
Mr. McCollum. I want to make sure you would concur
with the findings of our investigation or on this particular
matter. In a memo to Chairman Hamilton dated July 23
of this year, Robert Birmingham said in his findings for us.,
"our investigation has not developed any corroboration of
media-exploited allegations that U.S. Government condoned
drug trafficking by contra leaders or contra organizations
or that contra leaders or organizations did, in fact, take
part in such activity."
Now, there is a distinction, I su ose between our
involvement and the involvement of contra leaders and the
involvement of contras. Now, is that statement that
Mr. Birmingham made to us,his findings, comply with yours?
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paragraph again?
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o, it is not. Would you read the last
Mr. McCollum. It says "Our investigation has not
developed any corroboration of media exploited allegations
that G.S. Government condoned drug trafficking by contra
leauers or contra organizations or that contra leaders or
organizations did in fact take part in such activity."
That's accurate. CIA officers, U.S. Govern-
ment officials, to the best of my knowledge, which I think
is probably pretty complete, were at no time a party to,
directly or indirectly, knowingly narcotics activities;
Resistances forces with whom we are currently dealing are not
known in any way to have been involved with them.
investigated those who were, one had to leave the movement.
details because
but there was a lot of cocaine trafficking
around Eden Pastora.
Mr. McCollum. Not around the FDN?
None around FDN, none around UNO, it was
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Mr. McCollum. I would like, Mr. Chairman, for the recor
since I could only read a part of this, put this memorandum.
by our investigator into the record.
Chairman Hamilton. Without objection, so ordered.
(The information follows:)
COMMITTEE INSERT
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Mr. McCollum. Also on the same general area, looking
into things that relate to the contras in somewhat less than
favorable ways, I would like to follow up on something that
Mr. Rodino asked you about. He briefly asked you your
knowledge of the. Justice Department officials looking into a
matter in March of 1986 regarding perhaps the violation of
the Neutrality Act or arms shipments, or whatever, and you
indicated in your answers that you knew very little about it,
just maybe the fact they went down to Costa Rica to look
into it. Are you familiar with a man by the name of Jesus
Garcia and his allegations there were some arms that went dow
to allegedly try to work an assassination of Ambassador
I am aware of that. At one time, I 'was
very aware of.the details of it. Those details have faded,
but, yes, I am aware of it and was very aware at one point
in time.
Mr. McCollum. Has there been, from your knowledge and
involvement, any corroboration of this, or is this just an
allegation that stands out?
That's just made out of absolute whole
cloth. I don't know why Jesus Garcia was getting informa-
tion, particularly as he said CIA was behind it. That is
the old theory, you do something and make someone respond to
it. We didn't put much stock in that, and I still don't.
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'V(AKibh;4)* JWV
Mr. McCollum. Thank you very much on that point.
246
have one other thing that troubles me I want to raise with
you.
You testified this morning that you were concerned very
much at the time that we had the incident that five lower-
level employees of the CIA were tagged with the bla,ue. You
said you believed, I think I am correct, you made a special
effort to set up steps so if something happened with
subordinates under your watch, under you, you and not your
subordinates would take the responsibility, the beating from
Congress, the heat, or whatever. I believe you said words
to that effect this morning, am I correct?
Those were my words, and I would like to
repeat them. It working with Claire George, purposely
structured the situation so the responsibility and liability
accrued to me for whatever happened.
---qtr r cCo r ~ a m= cbff cern~d , in g h t- of t! at, in t e-=
of the testimony we had fro and I want to giv
you an opportunity to respond to an impression that I don't
think I am the-only one to have got during his testimony
before us several weeks ago now.
I got the feeling that you and his other superiors
didn't take any of the blame for what he did. I got the
feeling thathe was kind of left to hang out to dry, at least
that is the impression that came across listening to his
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WE 5t he pieces together
testimony at the
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we had then with regard to his involvement. I don't think
you have really-clarified that too much for us today.
We have gone all around the circle on that.
came along the line. We heard what he said. I think he is
a very patriotic kind of guy,.I personally liked him. But,
the idea he was out there alone is still an idea that is in
my mind, and I would like to have your thoughts on that.
was in the most difficult
position than any of us, he was in the nut cracker as well
as me, as well as others. My position was difficult, but
not as difficult as his. He was in the squeeze dealing with
people and operations on the ground.
His perception of where he was, his authority, is
different from mine. As I said before, I am not going to
criticiz I am not going to try to impeach
what it is he had to say. I can tell you the facts. He
was under instructions, if you will, from me, from CIA, to
put order in the political structure in the South, and then
as the laws changed, and you can see us kind of leaning into
it in the traffic in the fall of '85, and really getting into
it after the law changed in-December, December and January of
'86
He was also to do what he could within the context of
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the law to facilitate the operations of the Southern Front.
He had the same guidance, the same framework as my
did under his own volition, and finally I think, as I read
into the record very clearly, after it was I think pretty
know that much about it.
The direct contact with the private benefactor
that was his dacision. I didn't know he was involved in that
airfield until I read some of Oliver North's notes, I didn't
that was his decision. The involvement in the airfield,
who had a better structure to deal with.
made some decisions there on his own. Take the KL-43,
clear tc after the May meetings he ought to get away
What mental processes he went through to think I knew
from this thing, for some reason he came back into it in
June of 1986, and he made those decisions himself based on
the realities as he saw them at the time.
everything about them, had approved them and given him the
famous wink or nod, I don't really know.
Mr. McCollum. I don't have them in front of me to
point out, but I remember distinctly, because I had the
lead on our side on the Minority part of the examination of
there were a series of cables, messages, that
went back that got no response, as I recall, he relied on
the fact nobody, you or anyone else, said "Don't do this."
He put them in there. It looks to me like he did. What
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do you. have to say on that?
read into the record this morning some
exchanges that we sent out and a KL-43 message between.I
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think Colonel Dutton and General Secord which made it pretty
clearRunderstood he had to get away from that and that
he got back involved with it. And I don't want to impeach
I don't want to say sort of that it is all his fault.
He was in a difficult situation. I think that he is going
through a little rationalization along the way and is
seeing things through his glasses. I think if there is a
difficulty organizationally with it's not so much what
he did, it's that when confronted with multiple chances.to
tell his sotry, he didn't tell it along the way quite
completely.
I still am not at all sure, I think the organization
has been -- it's been very hard on
also been pretty fair with him in terms that he is still
there, and I think Judge Webster has been quite fair in
his treatment of him, and I have a lot of compassion for him.
Mr. McCollum. I am not going to beat a dead horse
with it, but I want to point out he did send some cable
traffic back after the fact when he had stopped the first
time using this, and he used it for some drops and got no
response back.
At any rate, we will leave it at that, but it seems to
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me and still does, despite his hope he be there, he was left
there to hang out.
Chairman Hamilton. The chair would note for the
record Mr. Stokes has to be on the Floor with relation to
a HHS appropriations bill, so he is not able to follow up
as he had hoped. It may b he will submit some
questions to you in writing, if that is. all right, and the
chair yields time to Senator Cohen.
Ms. McGinn. Mr. Chairman, if I may, with respect to
the questions that have been asked this afternoon about the
courier or individual that came down from CIA Headquarters
to Central America and had a discussion wit in
November of '86, I am not trying to add witnesses to the
list here this afternoon, but I did want to inform you all
that that person i and he is accompanying
Mr. George this afternoon or tomorrow for his testimony
should you care to discuss directly with him that conversa-
Chairman Hamilton. Thank you very much, Counsel.
Senator Cohen is recognized.
Mr. Cohen. Just for one minute to follcw up on what
Congressman McCollum was pursuing, it is something that has
been troubling me a bit, because you indicate
went over the edge, you indicated he was caught in the nut
cracker, as was you. I want too refer back to his
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deposition. has testified that he raised the
legality of the direct passage of information to private
benefactors, that an alternative plan was discussed at
Min May of 1986 with you and The idea
to train a UNO communicator. was scrapped on orders from you
because of a fear it might get into the papers and that he
then continued to pass the information directly.
Now, I raise that -- and that is his deposition, pages
72 to 76 -- I raise that in connection with the statement
that you made today concerning the so-called CYA memo, as
I believe Senator Nunn characterized it during the open
sessions, and that. is dated July 12, 1986. I am just going
to read it quickly for the record, that portion.
It says: "With the House passage of appropriated
assistance to the Nicaraguan Resistance, we have taken a
second look at the ccermn link.
To date we have maintained our
distance as to private benefactors providing assistance to
the Resistance and have briefed Congress we do not have any
relationship with the PBs."
You go on to say, "We don't want to get involved with
them because it might be misconstrued." It was following
that apparently that 1 = went out and continued
the operation which he said, "I've got a problem, I am
caught in a nut cracker", to use your phrase, "I am over the
edge, I want to get back, here is a proposal", he sends
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252
memos and cables and gets back one saying, "I am sorry, we
maintained our distance, and let's keep operating as we have
been operating."
I think that is the context in which Senator Nunn says,
"It looks to me like this is a CYA cable saying, 0 don't
do it differently, continue doing what you are doing.'"
I don't think that is at all what was meant.
as I said, where bias not going to be able to do this any
more. It was our intention, as I said, my compliance officer
came to me and said, "If you do that, you're over the line,
I think I read into the record this morning the KL-43 message
you can't do it." It was intended by me, once again, to
either stop or to get that buffer in between you so that you
are not right in the middle of it. And that was the purpose
for that cable. That is what it is meant to have said.
If there is ambiguity in it
Mr. Cohen. He came up with a buffer.
No, the buffer, as I said before, was to
put the Resistance leadership in the middle. He didn't
need to talk to them, he could have passed anything he needed
to pass through Resistance Leadership, and they could have
passed it just as was done in the FDN.
For some reason, he didn't do it that way, maybe he
didn't have trust and confidence in the structure. He made
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that decision, and that's the way he did it. I really was
not aware he was doing that.
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(4:45)
emm-1
Mr. Cohen. Thank you.
Mr. Sarbanes'. Mr. Chairman.
Chairman Hamilton. Senator Sarbanes.
Mr. Sarbanes. Could we identify for the record the
254
people with the Agency who are here wit that have
been on occasion counseling him.
I'm the attorney that has been in the
into the record Exhibits 1 through -47.
another attorney.
Mr. Rizzo. I'm John Rizzo, Deputy Director of Congres-
sional Affairs. I have been trying to coordinate these
matters with the committee.
Chairman Hamilton. Without objection, we will put
since June, 1985. Before that time, there was
Central American Task Force providing legal guidance to
moment.
Chairman Hamilton. We will come to you in just a
testimony after it has been declassified. Is there objection?
If not, it is so ordered.
Senator Inouye.
I have two statements I would like to make.
M
The Chair requests permission to releas
All right,
I go back to a question that Senator Cohen
asked me this morning, and I have run it through my head a
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couple of times during the luncheon break, and I want to put
2 a couple of things on the record that came to my mind,
3 because I want to leave here feeling as good as I can feel
4 about this testimony. I have to collect my thoughts here
5 because the thoughts have gone out of my head right now.
6 These things flash into my mind and they flash out of my
Mr. Cohen. I think it was Congressman Stokes who asked
you that question.
I didn't know who asked him -- I've been
trying to figure these things out and I don't want someone
to say "aha" later on.
And I said I don't want to get involved in those things,
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and I just stiffed him. And stiffed him hard, because that
was not the kind'of thing -- it just smacked of
and everything that would bust congressional consensus that
we had set up, and I stopped it and didn't pursue it at all.
That popped into my mind after that question was asked, and
I was racking my brain going through this catharsis to get
it all out.
Chairman Hamilton. Mr. Rodino.
Mr. Rodino. Thank you, Mr. Chairman.
For clarification, a while ago when I
addressed a question to you concerning what was supposed to
have been a conversation between Mr. Casey and the courier
November 19th, I think we identified the date, and you
stated in answer to my question. that you didn't believe that
it was Director Casey whom the courier addressed when he
said there may be a problem on diversion, and as a matter
of fact, my recollection is, and this was only a little bit
ago, that you said that Director Casey was on the airplane
and so the conversation was with you rather than Mr. Casey.
Well, I'm going to refer you,
to your
interview before the Tower Board, and that interview, in
answer to a question from Senator Muskie, he says, "I take it
from your opening statement that you had no knowledge at all
of any diversion of funds from the Iran operation." And
"No, I didn't know that even arms were being
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258
way it happened.
I have tried very hard to tell everything the way it
happened. That is not the way it happened. It was a private
conversation out on the side of the tarmac and it was not
to the Director, and that is not correct.
If I said that, I misspoke myself, because what I have
said today is the way I recall it happened, and I'm not
covering up for the Director.
Mr. Rodino. Thank you very much.
Chairman Hamilton. Senator Inouye.
Chairman Inouye. Mr. Chairman, I wish to advise the
panel that yesterday I received a letter from Mr. Ghorbanifar,
an 11-page letter, dated July 31, 1987, in which he responded
to statements made by other witnesses. I wish to make this
part of the record under the following conditions, that it
not be released to the public unless and until Mr. Ghorbanifar
is willing to respond to questions under oath or to submit
this letter in affidavit form. I make that request.
Chairman Hamilton. Without objection, so ordered.
I think we have now come to the end of your
testimony. We appreciate very, very much your testimony.
It has been most useful to the members of the committee,
and you are excuse, sir.
Thank you very much.
Chairman Hamilton. We will have a 10-minute recess
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while the books are prepared and the next witness is brought
in.
(Recess.)
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Chairman Hamilton. The select committees will come to
order, and the witness now is Mr. Clair George.
Mr. George, would you stand, please, and raise your.
hand?
(Witness sworn.)
Chairman Hamilton. I am advised that the House is
voting so House Members will be absent for just a few minutes,
and the Chair recognizes Mr. Kerr to begin questions.
Mr. Kerr. Thank you, Mr. Chairman.
TESTIMONY OF CLAIR GEORGE
Mr. Kerr. Good afternoon, Mr. George.
Mr. George. Good afternoon.
Mr. Kerr. Let's start with a brief biographical
sketch. You are Deputy Director for Operations of the
CIA at the present time?
Mr. Geroge. That is correct.
Mr. Kerr. You have held that position since July of
1984?
Mr. George. One July '84.
Mr. Kerr. Your responsibilities with the CIA began
in the mid '50s, is that correct?
Mr. George. I joined CIA in October, '55.
Mr. Kerr. During the course of your tenure with the
Agency, you have served primarily in the operations
directorate?
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Mr. George. I have served exclusively in the operations
directorate. Of my 32 years, approximately 20 have been
abroad.
Mr. Kerr. And then you served as ADDO under Max
Hugel, is that correct?
Mr. George. Yes. I--was one of two ADDOs under Max
Hugel, and when Mr. Hugel left, I was the one ADDO who was
left.
Mr. Kerr. Then in '83 you took on your responsibilities
as Director of the Office of Legislative Liaison?
Mr. George. I served as Director of the Legislative
Liaison, Congressional Affairs, from the spring of '83
through the summer of '84.
Mr. Kerr. And then, in '84 you took on your duties as
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DDO?
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Mr. George. That is correct.
Mr. Kerr. With regard to the responsibilities of the
DDO, can you give us a description of what that job entails?
Mr. George. I'm Director of Overseas Clandestine
Operations for the United States Government for the Central
Intelligence Agency reporting directly to the Deputy Director
and to the Director of CIA.
Mr. Kerr. Mr. George, there are several areas I want
to go into with you. The first area I would like to touch
on is an area relating to the operations directorate's
contact with and knowledge of the activities of Mr.
Ghorbanifar in the period '85 until January of 1986 when
the finding came down and you all received a formal assign-
ment to support the NSC.
Let me start with the knowledge the directorate had.
The directorate, prior to '85, had had dealings with Mr.
Ghorbanifar; is that correct?
Mr. George. If I recall from recent study on this,
Counsel, we had'our first contacts with Mr. Ghorbanifar in
the year.1979, after he came out of Iran at the time the
Shah fell.
Mr. Kerr. And those contacts had resulted in what is
called a burn notice that went out in July of '84?
Mr. George. It was a long, complicated relationship.
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We found him basically, to put it as simply as I can,
uncontrolled. His information was unverifiable. In many
cases we could prove it was not true and we put out, using
our jargon correctly, and I'm sorry -- '83, a burn notice,
meaning, in our language, we send a notice around the world
that the individual that we are speaking about should not be
dealt with because he's dishonest and untruthful.
Mr. Kerr. I believe the date of that first notice
was approximately July 25, 1984. That kind of a notice
is not an everyday occurrence, I take it?
Mr. George. It is a very rare occurrence. Our business
is to deal with a very strange variety of people. If we
only served and dealt with the honest and fair, we would be
out of business fairly fast. You have to work at it pretty
hard, Counsel, to get a burn notice out of the operations
directorate at the CIA.
Mr. Kerr. And one of the purposes of a burn notice
is essentially to warn off oth?rs that the person that is
the subject of the burn notice can cause them difficulty?
Mr. George. Yes
I don't know, I'm sure the
record will show whether we told others, but what we do is
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say if a man named Ghorbanifar strolls in, here is his size,
weight, coloring and so on, and he's a liar.
Mr. Kerr. That also gets circulated through the U.S.
Government?
Mr. George. I can't answ&& that. I assume we would
certainly share it with our friends in the State Department
and others in the foreign affairs world..
Mr. Kerr. There is a reference in the Agency0 File
to a repeat of the burn notice that occurred in March, '85.
Are you familiar with that event?
Mr. George. A second burn notice?
Mr. Kerr. Yes.
Mr. George. I'm not, Counsel.
Mr. Kerr. Let me take you to the summer of '85 and
essentially I'm going to be looking at documents in this
area that are found at Exhibits 22 through 58, and there's
another exhibit in '76 touching on some of these matters.
Let me take you to the summer of '85 and set the stage.
We have as Exhibit 22 an Agency document that reflects a
contact of Director Casey by John Shaheen, who is a former
client of Director Casey's and friend and business associate,
and Mr. Shaheen in that memorandum relates a contact he
had from Cyrus Hashemi, an Iranian expatriate who was at
that time a fugitive from U.S. indictment. Shaheen relates
akin! An(mri
 that the Iranians may be prepared to arrange for the release
of hostages and Mr. Hashemi is prepared to intervene in
those matters if he gets a nol prosse from his pending
prosecution..
Can you tell me, using that as a starting point, what
the Hashemi connection as it related back to Ghorbanifar?
August, '85, period with regard to this Shaheen contact and
the operation.- directorate was doing in the June, July,
Mr. George. Yes. John Shaheen was described to me
as a personal business acquaintance of Director Casey from
New York City.
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Now, to this issue, Shaheen, if I understand it and I've
reviewed it, told Bill Casey that his friend or acquaintance,
Mr., Cyrus Hashemi, whom I don't know of, had fled the country
after an indictment for, if I understand, arms sales --
correct me if I'm wrong on that. Mr. Hashemi had a record
of being on the edge of the law, the international arms
market.
All that aside, Mr. Hashemi said that he could produce
and please correct me if I'm wrong, two very
significant Iranian officials who could help release the
hostages. This is at a moment, and I'm sure we will get
into this as time goes by, and I think all of you heard me
say and other of my colleagues, that within the limits of
the law, I try not to leave any stone unturned to look for
any hostage.
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Mr. George. In a nutshell, Mr. Hashemi said if he
could produce some Iranians who could in turn release the
hostages would the United States of America give him
a nolle prosequi.
We went to the State Department and we went to the,
Department of Justice and we asked both of those agencies
what they might know about Mr. Hashemi, what was the charge,
what was the indictment, and felt them out on what their
feeling would be if there were to be an individual under
indictment for illegal arms activity who could actually
get the American hostages out of Beirut. There is a
series of papers on our discussions with these people,
and there was an agreement informally, if Mr. Hashemi did
bring
I guess senior Iranian officials who
in turn would be able to help us release the hostages,
the Department of Justice, the Department of State would
consider such a possibility.
Three things happened. The first thing happened,
which happens in our business so often, is that he did not
procude the Iranians, they never showed up, so it was never
a question of what can we do. about them.
Secondly, we found out at some point, counsel, and
I don't know when, and I. couldn't find, I was told this
earlier and I couldn't find the paper and maybe you have
it here, that the famous Iranians, he was to bring to
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who were to release the hostages were nonetheless
than Mr. Ghorbanifar an who become only too
famous in the fall. The entire affair drifted off, and if
I recall correctly, there was some contact with Mr. Hashemi's
American lawyer, Mr. Elliott Richardson, who had made
several contacts with the CIA. We told him to get in tough
.'with the Department of Justice and I believe that sometime
in 1986 this affair, having died out, Mr. Hashemi died.
Mr. Kerr. Let me just follow up a couple things
with you. The assignment of following up was given at the
outset to is that correct?
Mr. George. That's correct.
role at that time was what?
Mr. George. In early, I don't have the dates correct
and exact, but in early 1985, yes, all through 1985,
was the Deputy Director of my Near East Division
which is the geographic operating division that handles the
Near East area and was as such the immediate senior supervisc
of the hostage problem.
Mr. Kerr. With regard to who gav
assignment, would that have come by the way o
the Director --
Mr. George. Well, this was one of these affairs,
which is not unusual in our agency and has gone back to
when I joined under Andrew Dulles, a variety of supervisors
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are in touch with a variety of men down the ladder, we are
as you all know a rather busy organization and there is not
a sort of bureaucratic chain of events. This was a
Bill Casey contact. Whether he called or he
called me I cannot remember, but I'm sure at some point we
3
Mr. Kerr. There are a series of memoranda that we have
as, the exhibit here fro Would you have been
curious reviewing those memoranda?
Mr. George. Those memoranda if they are prepared by
us would have been involved in it.
probably put Casey in touch wit and so all of
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To add a point here, and I found this on several of my
depositions with others and with you, just because a
paper went through my office which hundreds do a day, I
may not know as much about it as I should. I'm not
apologizing. It's just the problems of paperwork..
Mr. Kerr. With regard to Director Casey and what
Director Casey was told, to your knowledge was Director
correct?
Mr. George. Yes.
and are routed, we mean sent through the
bureaucratic mechanism to the Director of Central
Intelligence, would normally go through me.
Mr. Kerr.. So you would have been in all likelihood
conversant with this matter as it was going on, is that
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Casey advised of the Agency's past history of
Mr. Ghorbanifar?
Mr. George. Ghorbanifar really wasn't the issue. The
issue was*Hashemi. If Hashemi would have produced
Ghorbanifar and Ghorbanifar would have produced all of the
hostages, it probably would have been one of the snappiest
little operations we ever ran. The truth is he never
produced Mr. Ghorbanifar so the issue of us judging
Ghorbanifar, counsel, was certainly, never brought up.
The first thing was Hashemi produced some, excuse me,
produced some Iranian bodies. Let's see what you have got.
If he had shown up with Ghorbanifar I think probably we
would have said -- we have moved, see, we have moved this
thing, even with the burn notice, we might say we don't
believe a word you say but please release the hostages.
But I'm guessing now.
Mr. Kerr. Let me try-%o focus your recollection.
The documents indicate that Hashemi was given the word
whil 4 would meet with the Iranians they didn't
want to meet only with Ghorbanifar, they wanted to have
present as well. That suggests --
Mr. George. That would suggest -- if Ghorbanifar
would have come alone someone would have said hey fellow,
come on, let's produce some real people.
Mr. Kerr. What I'm driving at, I'm trying to get a
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sense of what his subordinates would have told Director
Casey. Would they have advised Director Casey --
Mr. George. In the summer of 1985, if we would have
the paper that said Manucher Ghorbanifar was involved in
anything, and it was of such interest that the Director of
Central Intelligence was involved in it, I would have
assured him of the knowledge that he was dealing with a
person with whom we had a burn notice. That is a critical
decision for us in dealing with foreigners.
Mr. Kerr. If you want to follow the instruction on.
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what was to be done with Ghorbanifar as opposed to
is alluded to in Exhibit 26. In terms of
pursuing the chronology a bit further, apparently there are
additional contacts with Mr. Richardson in mid-October --
excuse me, mid-August, August 16, 1985, suggesting that the
matter was continuing into the early fall. Do you have a
recollection based on your~review of this matter on when
you all gave up so to speak on the Hashemi initiative?
Mr. George. I reviewed these very briefly. It was
my belief that Mr. Richardson had obtaine
name, which was a mistake, but such things happen, Mr.
Richardson was callin on behalf of Hashemi
and we decided Hashemi had nothing to sell. It is merely
Mr. Richardson is a prominent American, we are not going
to hang up in his ear*. It was more the ball is in your
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client's court is something I believe I read.
Mr. Kerr. Do you have any knowledge today of the
extent to which Director Casey took information about this
approach to the National Security Adviser?
Mr. George. I do not.
Mr. Kerr. So you do not know for example if Mr.
McFarlane even knew these discussions were going on in.
June, July, August 1985?
Mr. George. Knowing -- I don't, but knowing Bill
Casey, I would think he might have.
Mr. Kerr. Taking that a step further, given your
familiarity with Director Casey's approach, is it likely
that Casey would have advised McFarlane of the concerns
that the Agency had for Mr. Manucher Ghorbanifar?
Mr. George. Yes.
Mr. Kerr. We have
Mr. George. If all those things had happened.
Mr. Kerr. Yes, sir, I understand.
One point of interest is Secretary Shultz' recollection,
as he has previously testified to, that he knew about
Manucher Ghorbanifar and the Agency's concerns about
Ghorbanifar in July of 1985. So that was something that
would have been shared by CIA with State at the time?
Mr. George. I know we shared it with State because
Secretary Armacost with whom I do a great deal of business
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273
is sort of my normal contact at State Department at some
point last fall, in November of '86, as this thing unwound,
Mike said, hey, give me a copy of that burn notice I know
is out on Ghorbanifar. When Mike first learned that I
don't know but yes, I would think if there was an operation
that involved Manucher Ghorbanifar and dealt with the
hostages, we would have told Casey and Casey if he were to
urge higher ups than he or his equals would have told
them.
Mr. Kerr. Let me pursue the thought a bit further.
Do you have any recall or knowledge from another source
that the Agency was made privy to the conversations
Mr. Ledeen was having in the period of July, August, 1985
with Manucher Ghorbanifar?
Mr. George. I cannot speak for Mr. Casey and I cannot
speak for the Deputy Director, Mr. McMahon. But in my
directorate there was no one I knew who knew anything about
that.
Mr. Kerr. So in terms of your understanding of what
was going on in your directorate, was not
apprised there were discussions going on by other American
officials with Manucher Ghorbanifar during the same
period of time?
Mr. George. Well, you will take me there, but let me
put it, frame it as I see it. Ghorbanifar was the agent
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of Israel. It was the Government of Israel that said, we
have got one hot cookie here that can help us make
contacts with Iran, release the hostages. Michael Ledeen,
and I think as we walk through Ghorbanifar, seems to be
playing a variety of roles in this. But back to your
question, and I'm sure we'll get through all of this,
in the summer of 1985 when Cyrus Hashemi had his scheme
which we know involved Ghorbanifar, I cannot believe anyone
in my directorate, knew about the Ledeen-Israel-Ghorbanifar
connection.
Mr. Kerr. With regard to what you did know during
that period of time, it appears from the documents'that
we have that there was an effort to try to identify
and to track his travel going through
September of 1985 from the documents that we have.
Mr. George. There was a document that I have seen
somewhere in which we have aske
know why.
Mr. Kerr. I think you are referring to Exhibit 33,
which is a cable to
Mr. George. I have asked and I will -- because there
is a reference there as you see Why did
we ask that, and I would like that checked out, please.
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I've already asked.
Mr. Kerr. But in terms of what the Agency was doing,
this document certainly indicates that in this period of
time the Operatibns Directorate was A, keeping an eye on
Hashemi and Ghorbanifar by virtue of the conversations
in August and now by virtue of this cable keeping track of
the travel of during this period.
Mr. George. For some reason which we certainly will
be able to trace down when we trace back the reference
on these cables.
Mr. Kerr. Now, we know from other testimony and
documents that have been put before the committee that
the Israeli shipment of TOW missiles, the first shipment of
TOW missiles occurred the last of August, the first of
September and that there was then a subsequent shipment of
408 TOW missiles in mid-September of 1985.
Do you recall --
Mr. George. Excuse me. Two Israeli shipments in
September?
Mr. Kerr. One begins on August 30, but, yes --
Mr. George. Two different loads? I should know that
but I don't.
Mr. Kerr. In terms of what you all know-we have
received information fro. there was following
of cable traffic that allowed you to at least have a
 ml0
suspicion.
. Mr. George. There were newspaper reports in the
Israeli press. A plane had crash landed at the
Jerusalem airport.
276
There were signs, glips in the air in the fall of '85
something was going on between Israel and Iran.
Mr. Kerr. If I understand your testimony, in terms of
knowing of a relationship between Manucher Ghorbanifar,
~~~~and that knowledge you did not have that?
Mr. George. No, nor do I believe anyone in my
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277
directorate would have had that.
Mr. Kerr.. Focusing on the September period, you are
familiar with Mr. Allen's testimony he received an
assignment he places about September 9, another document
places it September 12, to begin,
for Colonel North?
Mr. George. Yes.
Mr. Kerr. He also indicated that you would have a
recipient of that material. Do you recall when you
received it?
Mr. George. I disagree with Mr. Allen. I'm sure
he may believe that he sent it to me. I think throughout
this entire affair Mr. Allen, who was rational Intelligence
Officer for Counterterrorism, who was not under my
direction, forgive me for saying it again,-the
intelligence officer on counterterrorism reports directl,,,
that I get it confused with a great series
Mr. George. I could have. My problem is
you yourself having see in this period?.
in theory, to the Director: In fact, I'm told
Mr. Allen was told by Colonel North at the time this took
place he was not to share this material with members of the
Operations Directorate.
Mr. Kerr. And in terms of having a recollection,
_"u the finding when we were just finding
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with the endless -horbanifar I have
a belief, counsel,'that in the fall of 1985 I saw some
type What I don't know.
Mr. Kerr. Would you place that later than September
of '85?
Mr. George. I cannot, sir.
Mr. Kerr. Do you have any recollection ofM
material in the fall of '85 being shared with the Near
East Division, an
Mr. George. No. I have again confidence they would
have told me.
Mr. Kerr. With regard to what it was that you knew
at that time and the role Mr. Allen played, let me focus
on that for just a moment. With regard to collecting
n the Operations Directorate, that
is not something I would assume is customarily done by an
Mr. George. in its generic sense
is handled by Directorate of intelligence.
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out of the ordinary for a national intelligence officer to
be charged to liaise
Mr. Kerr. Let me pursue the through a bit further.
Can you give me' an understanding, if you have one, of why
it was that Colonel North in September of 1985 looked to
NIO Allen for this type of assistance as opposed to going
through the Agency to its Operations Directorate and asking
you all to do that?
Mr. George. He didn't want us to know about it.
Mr. Kerr. Do you have any understanding today as to
why he didn't want you to know about it?
Mr. George. I think they were going to run an
operation on their own.
Mr. Kerr. When you use the term "they", you are
referring to the NSC?
Mr. George. I guess so. I would say that. But it
is based on an awful lot or television and newspapers over
the last three months.
Mr. Kerr. Let me focus on Director Casey for a moment.
Mr. Allen's testimony is while he didn't tell Director
Casey the day he got the assignment he did have a session
with Director Casey within the matter of a day or two after
the assignment to go over Did
Director Casey apprise you in September of 1985 that
effort
Mr. Allen was engaged in this kind o
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Mr. George. No, he did not.
Mr. Kerr. When did you learn, if you can recall,
that Mr. Allen was engaged in this type of task?
Mr. George. The unpealing of the onion, of the
relationships, the complicated relationships that are
involved in the Iranian caper came in degrees and degrees
and degrees, and we will discuss them I'm sure, the
famous flight, when did we know arms were aboard it, when
Michael Ledeen approached us independently of the National
Security Council in promoting Mr. Ghorbanifar; my first
recollection of
suddenly being made available to :ne with great regularity,
and I knew the purpose, although I will testify I didn't
follow it because there was so damn much of it I couldn't,
was after the finding. The finding formalized my participa-
tion in it.
Mr. Kerr. This strikes me as something of an
incongruity here that I wanted to explore to you. The
Director turned to the Operations Directorate when he had
a shady problem in the fall of 1985. The Director
apparently turned to Mr. Allen on a project Colonel North
was working on without telling the Operations Director
in the fall of 1985, again ultimately as we now know
relating to Mr. Ghorbanifar. Was there anything that
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occurred with regard to the way you all handled the
Hashemi matter that left a bad taste or problems between
you all and the Director to your knowledge?
Mr. George. The issue is we never had a fighting
charge on the Ghorbanifar -- I'm jumping to my
conclusion. We never had a jumping chance on Ghorbanifar.
It wasn't the Hashemi case or it wasn't Ledeen indeed sort
of saying this guy is really sensational, he can get a lot of
terrorism information.
Whether Casey knew it or not, our reaction was going
to be this won't work, but the White House was already
working it. In other words, we never played with a full
deck. I'm running around saying, hey, here is my burn
notice, this guy is a loser, and, Christ, he is working
with the Government of Israel, he has already arranged
a flight, he has helped, I assume, I'm sure you know, he had
arranged the November flight or was an intermediary and I'm
running around saying we don't want to work with him when
two major countries, the Government of Israel, a close
ally and ourselves are still working with him. It's
sort of would you please get out of the way. They
never dealt us a whole deck.
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CAS-1
Mr. Kerr. With regard to Colonel North, I am going to
leave him aside for the moment, but with regard to
Director Casey, again, trying to focus in on what happened,
is there anything that you know of in terms of Director
Casey's perception of the operations directorate that allowed
him to cause this to happen, to have you all marching in
one direction while Colonel North on a major initiative is
marching in another?
Mr. George. Well, you have have to tell me in your
report at what point and did Director Casey, is it really
true, decide we need something besides the operations
directorate to run covert operations? And I might say to
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you, counsel, and to the good members that this is not
the first administration and will not be the last
that becomes totally frustrated with its spy service. You
want a spy service that produces regularly and we don't.
Life is tough. And so at what point a director,and we saw
a bit of it in the previous administration and the
administration before that, and God knows, the
administration before that, I am going to set up an operation
and I am going to run it around these bureaucrats.
Mr. Kerr. Did you yourself have a perception in
the fall of 1985 that Director Casey was prepared to wire
around the operations directorate?
Mr. George. Not really. I know that now, but, no, my -
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again, I know this is the hearing, and this is the issue,
and it is Iran and contras, which I am sure we will
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discuss. May I say forgive me, I
263
hav Americans that
work for me, I hab~foreign nationals who support our
intelligence service
the continental
abroad, I have people in posts outsid
United
States and we send back and forth
any month,God knows most of it is trivia elegrams.
So this was not my whole world, and if he would have cut
me out of a corner of something I would have been so busy
doing 20 other things I am not sure I would have noted it.
Mr. Kerr. That may underscore the point, but I would
point out to you we have a State Department cable which
say was quite negative on the Hashemi
initiative. I was curious whether or not you had received
as of the fall of 1985 any feedback from the Director that
suggested he though you all had been less than aggressive?
Mr. George.
No, not' at all. In fact, to the day I last
saw Bill Casey and I had gone into the hospital last fall
and many days later Bill Casey went in the hospital, let
me assure all of you that he was a warm colleague of mine,
I always believed him to be fair, and he was the Director
and if he made certain operational decisions, he made
them.
But personally, although he was not an intimate,
personal friend, never at all, he was always good to me.
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Mr. Kerr. All right. With regard to what is going on
during that period of time, we now know Mr. Ghorbanifar
came to the United States on or about October 8, 1985,
and at that time the only American official with whom he
met apparently was Michael Ledeen, and you have as Exhibit
35 a copy of Charles Allen's memorandum from October 7,
1985, in which Mr. Allen asks for
that is blocked out but he goes by Ashgari, who
we now know to be Mr. Ghorbanifar.
Let me set the stage by asking whether or not the
operations directorate knew during the first week of October
1985 that Manucher Ghorbanifar was in Washington, D.C. in a
hotel and ultimately in the Executive Office Building
meeting with American officials.
Mr. George. No, we did not.
Mr. Kerr. Mr. Allen has testified that when he
sent up this memorandum,
he didn't know who Ashgari was. He has testified
he didn't know Ashgari's identity until early December
1985.
Do you have any knowledge of Mr. Allen on behalf of
himself or on behalf of the National Security Council asking
for an identifier on either Ashgari or Ghorban-ifar in the
fall of ?1985?
Mr. George. I do not, sir.
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 Mr. Kerr. Mr. Allen has lamented in his deposition
testimony that he did not know who Ashgari was because that
made it more difficult for him to do work
that was doing. Do you have knowledge today of the
compartmenting of Charley Allen by Colonel North, keeping
some of this information from him by Colonel North?
Mr. George. You are going to have to tell me again.
Colonel North telling Charley Allen?
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Mr. Kerr. Less that complete information, not telling.
him, for example,-who Ashgari was.
Mr. George. I can't speak to that relationship at all.
Mr. Kerr. You never had occasion to learn in 1986 that
Colonel North wanted to keep some information away from Mr.
Allen, is that correct.
Mr. George. i couldn't fairly answer that. Once you get
after that finding it complicates things a bit. I don't know
that. No, I don't ever re member Colonel North in my knowledge
saying, don't tell this to Charlie Allen.
Mr. Kerr. I think I understand you to be saying that
you did not know in early October of 1985 that Michael Ledeen
was playing any role with Mr. Ghorbanifar at that time?
Mr. George. I did not.
Mr. Kerr. The first occasion when the operations director-
ate would have had to learn that Mr. Ledeen was in fact involve
with Mr. Ghorbanifar would have been in December of 1985?
Mr. George. Yes, I was puzzled at that because the documents
I have been able to get my hands on indicate then-a sudden
tremendous, everybody in the whole directorate is being wooed
and wined by Mr. Ledeen. But I do not know of anyone -- I mean
people could have certainly known him socially, but I do not
know of anybody doing business with him.
Mr. Kerr. I am driving at the informational exchange
between the agency and Ledeen did not occur to the best of
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of your recollection until late November, early December of
2111985, would that be correct?
Mr. George. That is correct. -
Mr. Kerr. The agency did become involved with tracking
Mr. Ghorbanifar in late October of 1985. We have a series of
6 11cables beginning at approximately Exhibit 36
suggests that you had talked to Colonel North?
Mr. George. I did talk to Colonel North.
Mr. Kerr. Can you focus on that episode and tell me your
best recollection of what transpired?
Mr. George. I talked regularly to him on the telephone
and he said would it be possible for the operations directorate
on-behalf of the NSC to
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Mr. George. He talked to me and that is a question, since
in hell didn't say we are shipping arms to Iran,
I have been reminded of this incident, what he told me --sure
"snap to." I do not remember why he told me.
i don't recall what he told me. I suffer
the bureaucrat's disease that when people call me and say, I
am calling from the White House for the National Security Counc
on behalf of the National Security Advisor, I am inclined to
Mr. George. I did not.
the arms transactions that the Israelis were engaged in?
recollection, you do not believe that you knew at that time of
Mr. Kerr. In terms of using that as a way of focusing you
Mr. Kerr.
what instruction, if any, was give
to your agents to apprise Colonel North of the-nature of the
people with whom he apparently was dealing; to tell him about
the burn notice?
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be until 1986, because when we brought George back -
Cave that some time after but that would not
Mr. George. About the burn notice -- I am told by Mr.
-- he was on contract when we. brought
him into the Iranian affair -- he has told m
can't remember when anybody would have told Colonel North that
this is Manucher Ghorbanifar.
Mr. Kerr. has testifed that he is the one that
hand-carrie over to Colonel North. Do you have
and North about who
any knowledge of exchange betwee
ram
Manucher Ghorbanifar was and what his prior relationship was
Mr. George. Colonel North told me something about what
the sam hill he thought he was doing and I apologize, I can't
remember. I cannot beleive he said I am dealing with Mr.
with the agency?
Mr. George. I do not.
Mr. Kerr. You do not recall talking with Colonel North
about who Manucher Ghorbanifar was at that time; is that right?
You didn't have a chat withdolonel North on.the nature of
Manucher Ghorbanifar?
Mr. Kerr. i assume that had you known that-you would have
apprised Colonel North of the perspective of the Operations
Directorate on Manucher Ghorbanifar?
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Mr. George. Whatever else I did throughout this affair,
when the name Manucher-Ghorbanifar was put together with who
he was, meaning I suddently realized he was a man with a burn
notice, I am afraid I made a bit of a fool of myself telling
everybody that we should stay away from him. I would not have
excluded Colonel North from that pier of advice.
Mr. Kerr. You don't have a perception today though as
to whether or not North knew as of October 1985 of the agency's
prior bad relationship with Ghorbanifar?
Mr. George. I do not know.
Mr. Kerr. Mr. Ledeen was meeting in Switzerland at approx-
imately this time, 27th or 28th October,
with certain Iranians
and has attributed to informa-
tion that he provided to Colonel North as a result of that meet-
ing in Switzerland. Did you have any knowledge at that time of
Michale Ledeen playing a role with the Iranians on the initia-
tive?
Mr. George. I did not.
Mr. Kerr. So Colonel North, to the best of your recollec-
tion when you talked to him about this matter, did not mention
that Ledeen was dong anything on this matter?
Mr. George. I don't remember Colonel North discussing
anything with me except at a later period in time complaining.
Mr. Kerr. Moving ahead into November, there is an incident
that we have all heard about that occurred when the agency was
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was asked to provide some air support to Colonel North. Let
me ask you to focus on that. We are now the 22nd, 23rd, 24th
of November 1985. Your testimony usually picks-up on that
Monday, the 25th,-but bring us into focus on when you learned
of this incident.
Mr. George. 1 left Washington for a weekend that weekend.
I left Thursday morning and came back Sunday afternoon. -I went
into the office on Monday morning and John McMahon was in my
deputy's office, my deputy was Ed Juchniewicz and John McMahon
was visibly and outspokenly disturbed. I don't remember how I
put it all together, but I finally got the following picture.
Over that weekend, Colonel North had called the chief of my
European division and said that it was critical to arrange for
now know was General Secord at the time.
stayed up all night -- it was a charge, there was great confu-
sion going to a* foreign government at night and getting special
permission for a ;ane from Israel to land is not easy, no matte
who you are. John McMahon said to me that Monday morning -- I
heard him say to Ed Juchniewicz, and I do remember this, not
only did you send the cables, but you let the goddamned airplai
go to Tehran. Now we know the story I am telling. I put a
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cable package -- John said get me those damned cables and I put
a cable package together with him, my secretary and I, and
delivered it to him, I am sure that very day.
Mr. Kerr. Let me take you back. You would not have been
in the office that weekend, correct?
Mr. George. I was in the Hilton Hotel in Pittsburgh,
Pennsylvania.
Mr. Kerr. And no one contacted you in the Hilton Hotel in
Pittsburgh about this matter?
Mr. George. No.
Mr. Kerr. In terms of what happened Monday morning, you
come in and it becomes apparent to you that Mr. McMahon is
disturbed?
Mr. George. As William Saphire said that was the famous
through-the-overhead weekend.
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Mr. Kerr. Did you, as part of the task that you were
given at that point, have a meeting with Mr. Clarridge?
Mr. George. I talked to Dewey several times during that
day, I said to Dewey, "Bring me the damned cables", I said
to my secretary, "Dig up what we have here, get me a package
of these things. I've got to get them to McMahon. I am
sure I talked to Dewey more than once.
Mr. Kerr. Do you recall having a meeting of Clarridge
and yourself with Mr. McMahon that day?
Mr. George. I don't, but we could have certainly.
Mr. Kerr. With regard to the cable traffic, my assump-
tion is that you tried to get as complete a collection of
cables as you could?
Mr. George. It was simple. There were cables sent out
from the European Division t dealing with
a flight that was going to originate in Israel and whether I
knew whether it was going to Tehran or not, I certainly,
learned quickly, so it is not a complicated problem to find
that traffic and put it together. There is not that much
of it.
Mr. Kerr. Did it come to your attention from the
numbers or otherwise that there were cables in the sequence
missing?
Mr.-George. No, sir.
Mr. Kerr. You had your staff do that?
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Mr. George. Yes.
Mr. Kerr. No one told you there was a cable missing?
Mr. George. Among us, it would be my secretary would
say, "All right, Claire, we have this little pile of things
here in a manila envelope, this is it." She wouldn't, nor
would I have ever expected her to say, is
not there", and so there was no, to me, that Monday any
such discussion.
Mr. Kerr. So to the best of your knowledge, you
didn't have an awareness of a missing cable?
Mr. George. I did not that day.
Mr. Kerr. And until the recent events occurred, did it
come to your attention that there were ables missing
at that time?
Mr. George. No. I can't remember, so many things have
been going on in the last few months, but, no, there never
was an issue that there was a cable missing.
Mr. Kerr. In terms of the cables, they were coming in
on the privacy channel?
Mr. George. They were coming in on what we call a
privacy channel, a variety of links we have established, I
have one, the Director has one, the Deputy Director has one,
and each of my geographic division chiefs had one. The
primary purpose of this is to handle extremely sensitive
personnel matters, of which we have many, as people have
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serious problems abroad.
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The way it.works is, in this case, it would be Mr.
Clarridge's privacy channel in Europe. I get a copy of
every privacy channel sent out of the Directorate. You
cannot communicate with your man overseas without my receivin
a copy of it in the privacy channel.
Therefore, if the cable -- I have discussed this.on
many occasions -- if the cable went in and out of the
privacy channel, I should have received a copy. The only
person who can cable in and out of the building without any
other distribution, other than the office of Communications,
is the Director himself.
Mr. Kerr. You are familiar with the testimony given
Mr. George. Very well, and a very close friend for
30-years. I have great faith it ~~~&nd consider
him an outstanding officer.
Mr. Kerr. You are aware tha has testified
that he sent two cables after a meeting with Mr. Copp?
Mr. George. I sa when he came back to
testify and talked t' for a long time, and-said
he and Dick Secord, known to him I guess only as Copp,
stood in the parking lot outside of Copp's hotel i
and Copp said, "Do you know what is going on here?" And
Poo Chad been up for 72 hours trying to get
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to let an Israeli plane land, and he said, "Excuse
me, sir, I don"t." reports that the good
General Secord said we are trading missiles for hostages.
Mr. Kerr. As I understand, you have told me previously,
I take it, it continues to be your recollection that you
did not see such a cable?
Mr. George. I promise you, no matter how many cables
we send in and out over a month, that one would have grabbed
Mr. Kerr. You are aware, as you not, that the agency
has been unable to find aM cable that there is a
number for?
Mr. George. That is correct.
Mr. Kerr. Do you know of any explanation for what
happened to that missing cable?
Mr. George. I suppose three times in the last 20
years I have seen a cable eaten alive by the relay station
the odds are so high, I am afraid we wou3
be foolish to think that happened. A cable could have beet
sent in a non privacy channel. swears the traffic
was in privacy channel, he could have put a slug, a signal
at the top of the cable which would have sent it somewhere
else, all copies then to a single person. The issue which
have discussed with your staff and with the staff of the
Independent Counsel -- I would find it impossible unless
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there is a cabal of people'engaged in a cover-up to sort of
send a cable like that, somehow get all the copies of it and
make it disappear.
Mr. Kerr. And that is because there are a number of
people that are supposed to get copies?
Mr. George. I am the Office of Protection, and it is
not just me. I have a deputy, there are four secretaries,
and I have my own registry, mail room in our language, and
these things are seen. Even I couldn't fast enough whip up
a .cable like that and pick up all the companies and make
sure no one had seen it.
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Mr. Kerr. In terms of the work that was done to collect
the cables on that famous Monday morning of November 25th,
were you relying on cables that were already in your office --
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Mr. George. I think we went to Clarridge and said,
Dewey, bring us over the weekend cable traffic, please,
on this issue with Colonel North. We would almost
certainly have depended on that as our record, because other
than my own privacy channel, my office just because of
paper flow, is not an office of record. So I would have had
those cables but I never can swear that I have everybody's
privacy channels.
Mr. Kerr. It is within the realm of possibility that
Mr. Clarridge, who was working that weekend, could have
actually taken delivery of the cable traffic as it arrived.
Mr. George. He cannot get his hands on the copies that
are coming to my office.
Mr. Kerr. He cannot, as a matter of policy?
Mr. George. He cannot. The policy is that if you are
working the privacy channel, which again is mostly about
tragedies of personal lives abroad, you cannot take my
copies away from me. The only channels that I cannot see
is a slip-up -- in terms of my access to sensitive CIA
international cable traffic, the only two people who can
out-deal me are the Director and the Deputy Director, as it
should be.
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Mr. Kerr. Is there any logging system in your office
that would show the arrival by number or otherwise of
cables?
Mr. George. I don't know. No.
Mr. Kerr. So there is no document --
Mr. George. I cannot say to you, I tell you on this
weekend this cable did or didn't come in. There are great
piles of them, counsel.
Mr. Kerr. Let me shift gears for a moment --
Chairman Hamilton. Mr. Kerr, is this a good place to
take a break?
Mr. Kerr. Certainly.
Chairman Hamilton. Then we will take a recess at
this point and return tomorrow morning if we may, Mr. George.
Mr. George. Mr. Chairman, it would be my pleasure.
Chairman Hamilton. At nine o'clock. Until then,
this hearing will stand in recess.
(Whereupon, at 6:05 p.m. the select committees
recessed; to reconvene the following day at 9:00 a.m.)
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