NORTH AND CASEY SAID TO HAVE MET OFTEN ABOUT LEBANON HOSTAGES, AID TO CONTRAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000707060028-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: February 10, 2012
• Sequence Number: 28
• Publication Date: December 26, 1986
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2012/02/10: CIA-RDP90-00965R000707060028-5
ARTICLE APPEARED WALL STREET JOURNAL
26 December 1986
ON PAIL .
North and Casey Said to Have Met Often
About Lebanon Hostages, Aid to Contras
By JOHN WALcirrr
StaffRrporfcrofTIIK W,%i.i.SrKr:I- rJ'a it%,%i.
WASHINGTON-Lt. Col. Oliver North
often met privately with Central Intelli-
gence Agency Director William Casey to
discuss efforts to free American hostages
in Lebanon and to help Nicaraguan rebels,
administration sources said.
Senior administration officials have
sought to portray Lt. Col. North, the Na-
tional Security Council aide who was fired
for his role in the Iran-Contra affair, as
someone who acted alone. But intelligence
sources said he worked closely with Mr.
Casey and enjoyed unusual, direct access
to the CIA director.
For example, the two officials worked
together last April to mount an unsuccess-
ful "sting" operation to free Peter Kilburn,
one of the hostages in Lebanon, intelli-
gence sources said. The body of Mr. Kil-
burn, a librarian, was found in April in
Lebanon.
The sources said it isn't known whether
Lt. Col. North told Mr. Casey during their
meetings about his efforts to divert profits
from Iranian arms sales to the Nicaraguan
insurgents, known as the Contras. The CIA
director has denied knowing about the di-
versions before last month, when Attorney
General Edwin Meese made them public.
But the sources said that Mr. Casey was
a driving force behind both the Contra
cause and the administration's arms sales
to Iran. Mr. Casey still is listed in stable
condition at Georgetown University Hospi-
tal following the removal of a malignant
brain tumor last week.
Push for Arms Sales
They said, for instance, that Mr. Casey
last January pushed for U.S. arms sales to
Iran through an Iranian arms dealer, Man-
ucher Ghorbanifar, even though Mr. Ghor-
banifar had failed a CIA polygraph test.
"It was Casey who authenticated Ghor-
banifar," said one administration official.
"He was pushing him and pushing him."
Even after William Buckley, the CIA
station chief in Beirut who had been ab-
ducted in 1984, was reported to have been
murdered in 1985, Mr. Casey's interest in
freeing the remaining hostages never
flagged, intelligence sources said.
Last March, the sources said, the CIA
was told that Moammar Gadhafi, Libya's
leader. had offered to pay a Lebanese
criminal group a large sum of money, per-
haps several million dollars. to gain con-
trol of Mr. Kilburn. The CIA previously
had learned from a paid informant in the
Lebanese underworld that Mr. Kilburn had
been kidnapped for money, not seized by
religious extremists for political reasons.
The sources said that at Mr. Casey's di-
rection, Duane Claridge, the head of the
CIA's Counterterrorism Center. working
with Lt. Col. North and with agents from
the Federal Bureau of Investigation,
planned an elaborate "sting" to free Mr.
Kilburn and to bring at least some of his
kidnappers to justice.
The sources said the CIA recruited an
intermediary to bid against Mr. Gadhafi
for control of Mr. Kilburn. They saiq the
..CIA provided this intermediary with
money, and instructed him to spend some
of it in Lebanon to prove his wealth to the
kidnappers.
Plan to Take Kilburn, Captors
At the same time, the sources said. the
CIA arranged to have a boat off the Leba-
nese coast to serve as the transfer point
for the ransom and Mr. Kilburn. The plan,
the sources said, was to seize Mr. Kilburn
and his captors without paying the ransom.
.No money was to change hands," said
one administration official.
But the intermediary, intelligence
sources said, became accustomed to living
his free-spending cover and didn't move
swiftly enough to close the deal with Mr.
Kilburn's kidnappers. After U.S. planes,
some operating from bases in England.
bombed Libya, intelligence sources said,
Mr. Gadhafi paid the criminal group to
murder Mr. Kilburn and two British hos-
tages on April 16.
Lt. Col. North. however, retained at
least one element of the plan in his next at-
tempt to free the hostages, which took
place a month later. After obtaining i2 mil-
lion in ransom money from H. Ross Perot.
the Texas billionaire, he again arranged to
have a boat off the coast of Cyprus to
serve as a transfer point for the money
and the remaining hostages.
That time, no one ever appeared to
claim the ransom or deliver the hostages,
administration sources said.
Intelligence sources said Mr. Casey was
"visibly shaken" last month when Lt. Col.
North was fired. The sources said the two
men frequently had discussed the National
Security Council official's secret efforts to
free the hostages and the condition of the
Nicaraguan insurgents.
Administration sources said that al-
though President Reagan, White House
Chief of Staff Donald Regan, Mr. Casey
and other top officials may not have known
that Lt. Col. North was using the proceeds
of Iranian arms sales to help the Nicara-
guan rebels, they all were fully aware that
he was helping to oversee a network of pri-
vate contributors to the Contra cause.
"Getting aid to the Contras was a pre-
occupation of Reagan, Regan and Casey.
as well as North," said one official. ''Rea-
gan certainly knew that Ollie was in
charge of efforts to get help for the Con-
tras."
L/
The CIA appears headed for a period of
some uncertainty. Administration sources
said Mr. Casey hasn't recuperated as well
as expected from the cancer surgery, and
officials have begun assembling lists of
possible successors. Among those who
have been mentioned are Mr. Casey's dep-
uty, Robert Gates; Army Lt. Gen. William
Odom, a veteran intelligence officer who
now heads the National Security Agency;
and the former deputy director of the CIA,
Adm. Bobby Ray Inman.
In the past, Adm. Inman has said he
doesn't want to return to government serv-
ice. Mr. Gates is believed to have testified
to a Senate committee that Lt. Col. North
mentioned an Iran-Contra connection dur-
ing an October luncheon with Mr. Casey.
Former Republican Sen. John Tower of
Texas, who also has served as Mr. Rea-
gan's strategic arms negotiator, and Sen.
Malcolm Wallop (R.. Wyo.1, also have
been mentioned, officials said. But some
White House aides noted that appointing
Sen. Wallop, whose current term ends in
1989, could cost the GOP a Senate seat be-
cause Wyoming's governor, who would ap-
point a temporary replacement for Wallop,
is a Democrat. Former Undersecretary of
State Lawrence Eagleburger, now presi-
dent of Kissinger Associates, had ex-
pressed some interest in the CIA job before
Mr. Casey fell ill, but his ties to former
Secretary of State Henry Kissinger dont
play well with Republican conservatives.
Separately, officials of the Justice De-
partment and the FBI said they have
agreed to requests by independent counsel
Lawrence Walsh for help in tracking bank
records. Mr. Walsh asked in several letters
that Mr. Meese, other department officials
and the FBI provide assistance while Mr.
Walsh prepares for his investigation of the
Iran-Contra affair.
Mr. Walsh asked the department, in his
behalf, to continue efforts to gain access to
bank records in Switzerland. Panama. the
Cayman Islands and possibly other Carib-
bean havens of bank secrecy. Investigators
Continued
Declassified and Approved For Release 2012/02/10: CIA-RDP90-00965R000707060028-5
 Declassified and Approved For Release 2012/02/10: CIA-RDP90-00965R000707060028-5
suspect the accounts were set up by mid-
dlemen or companies they controlled to
handle funds connected with C.S. arms
sales to Iran.
Officials familiar with the request said
Mr. Walsh apparently is concerned about
protecting bank records, deposits and
other evidence during the several weeks he
probably will need to hire his own team of
investigators and begin a full-scale
probe.
Mr. Walsh, according to Justice Depart-
ment officials, also said that even after his
staff is on board, he will rely on FBI
agents and some of the Justice Depart-
ment's international financial specialists to
do much of the detailed investigative work.
Associate Attorney General Stephen Trott.
the third-highest appointee in the depart-
ment. has been designated as the primary
contact with Mr. Walsh.
Mr. Walsh has said he will start with a
"relatively small" staff and increase it as
the investigation proceeds. Under the ar-
rangement worked out with Mr. Walsh. of-
ficials said the FBI also has been in-
structed to turn over all of its files dealing
with its investigation of Southern Air
Transport, a Miami-based cargo airline
hired by the U.S. to ship arms to Iran and
suspected of carrying arms to the Contras.
In late October, Mr. Meese was persuaded
by former National Security Adviser John
Poindexter to delay the Southern Air
probe. Mr. Trott, at Mr. Meese's behest.
is said to have relayed Mr. Poindexter's
request to the FBI.
Declassified and Approved For Release 2012/02/10: CIA-RDP90-00965R000707060028-5