PROBES OF IRAN DEALS EXTEND TO ROLES OF CIA, DIRECTOR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000807560014-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: February 8, 2012
• Sequence Number: 14
• Publication Date: November 28, 1986
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2012/02/08: CIA-RDP90-00965R000807560014-4
ARTICLE
ON PM is/
h'ASHINGTON POST
23 Novemher 1936
Probes of Iran Deals Extend
To Roles of CIA, Director
By Bob Woodward
W,,hmyhm P-?t Stiff Wr t,r
Justice Department and congres-
sional investigations of the secret
sales of arms to Iran and subse-
quent transfer of profits to help the
Nicaraguan contras are extending
beyond the White House to a de-
tailed study of the roles played by
the Central Intelligence Agency and
its director, William J. Casey, ac-
cording to informed sources.
Two areas of inquiry involving
the CIA, sources said, are its role in
setting up a Swiss bank account
used to transfer Iranian payments
for U.S. arms and its efforts on be-
half of the Nicaraguan rebels.
Knowledgeable sources have said
that in 1984, when Congress re-
fused to provide aid to the contras,
Casey was involved in overtures to
third countries, including Israel; to
explore whether they could secretly
supply assistance to the contras.
Casey is saying that the funneling
of money from Iranian arms sales to
the contras is a matter of concern
only to those "inside the Beltway"
and that when all the investigations
are over "no one will go to jail," ac-
cording to informed sources.
Casey, the sources said, main-
tains that he was only aware of
"gossip" about the secret funneling
of money to the contras until this
week. Casey has acknowledged to
members of Congress that the CIA
set up a Swiss account to accept
Iranian payments for American
arms, but it is not clear whether
that account was used to transfer
funds to help the contras. Under
rigid agency procedures, the move-
ments of funds through any CIA
account would have to be carefully
monitored, sources said.
In addition, sources said Casey
was one of the handful of officials
who over the last year regularly
received copies of top secret com-
munications intercepts that report-
edly provided the clues last week
that allowed Justice Department
officials to begin to unravel what
had happened.
Vice Adm. John M. Poindexter,
who resigned Tuesday as President
Reagan's national security adviser,
has said privately that Casey was,
"heavily involved" in the secret sale
of U.S. arms to Iran, according to
informed sources. Poindexter said
this before it was publicly known
that profits from the arms sales'
were diverted to the contras, and it
is not known whether he meant to
implicate Casey in that part of that
operation as well.
Attorney General Edwin Meese
III said Tuesday that no one in the
CIA, including Casey, knew about
the $10 million to $30 million in
proceeds from arms sales to Iran
that went to aid the contras.
Casey has been one of the con-
tras' strongest backers inside the
Reagan administration. Official
sources said the CIA has intensely
followed the progress of the Ni-
caraguan rebels, providing regular,
sometimes weekly intelligence as-
sessments of their efforts to the
White House.
In 1984, Casey sought to obtain
funding for the contras from other
WILLIAM J. CASEY
... sought outside contra aid in 1984
countries, according to sources
with firsthand knowledge of his ef-
forts. Casey has denied that any
formal.requests for third-country
aid were made, insisting that the
efforts were "unofficial."
A source familiar with Casey's
actions in 1984 maintained that
Casey's inquiries to other countries
came after Congress balked at pro-
viding a CIA request for $21 million
more for the Nicaraguan rebels but
before Congress passed legislation
prohibiting any U.S. assistance-in.
cluding by the CIA-to the contras.
"There was a window of several
months when it would have been
proper," this source maintained.
As reported last year, U.S. and
Israeli sources have said that in
1984 Israel found a way of secretly
providing several million dollars to
the Nicaraguan rebels. One source
said this was done through Marine
Lt. Col Oliver North, then a key
National Security Council aide.
North was fired this week for his
alleged role in secretly diverting to
the contra cause profits of arms
sales to Iran.
Officially Israel has denied it pro-
vided help to the Nicaraguan rebels.
An Israeli source who confirmed
the 1984 aid to the contras said it
was a "golden, clean and cheap" way
of repaying the CIA for intelligence
favors it had done for Israel.
U.S. sources said that Israel was
indebted to Casey for his decision in
1981 to supply Israel with sensitive
satellite reconnaissance photos. In-
side the Israeli intelligence agen-
cies, the satellite photos were often
called "Casey's gift" and were con-
sidered invaluable.
When Casey took over the CIA in
early 1981, he was determined to
increase U.S.-Israeli intelligence
cooperation. He visited Israel and
struck up good relations with the
heads of its intelligence services.
His predecessor, Stanfield Turner,
had refused Israeli requests for ac-
cess to information directly from
satellite photos-information the
Israelis maintained was . of great
tactical importance because of the
threat from neighboring Arab
states.
Casey granted access to the pho-
tos, sources said. Soon afterward,
Israel used the photos to pinpoint
an Iraqi nuclear reactor that was
bombed by the Israeli air force on
June 8, 1981. Casey then restricted
Israeli access to reconnaissance
Declassified and Approved For Release 2012/02/08: CIA-RDP90-00965R000807560014-4
 Declassified and Approved For Release 2012/02/08: CIA-RDP90-00965R000807560014-4
photography that could be used odi;
for "defensive" purposes relating to
Arab states directly on or near the.
Israel border, the sources said.
Intelligence cooperation between
the countries expanded in 19$2
during the Israeli invasion of Leb-
anon and into 1983 when Iranian-
supported terrorists struck at (J:$: `
installations in Beirut.
"The two services were in bed,"
said one U.S. intelligence source,
though relations were sometimes
strained by accusations that one.
country or the other was holding,
back some important intelligence.
In April 1984 the CIA was down
to its last $1 million of congres.
sionally authorized funds for the
contras. Sources said Casey dis-
patched a senior official in the op-
erations directorate to seek secret
contra funding from Saudi Arabia.
The Saudi government report-
edly declined, at least initially. At
that point, Casey turned to the Is-
raelis.
It has never been clear how Is-
rael might have been able to raise.:
several million dollars in 1984, but;
sources said that Israel at the time
was selling arms to Iran. Profitsi
from those sales could have provid-
ed the necessary funds, as theydid?,
for the 1986 diversion of funds , to..
the contras.
Said a senior administration
source, "We always assumed i,A,
1984 there was funding flowing,.
from third parties [to the contras'
The amount of money was small-
and whoever did it would get enor
mous good will with the White
House."
2
Declassified and Approved For Release 2012/02/08: CIA-RDP90-00965R000807560014-4