CASEY REPORT ENCOURAGED IRAN TALKS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00587R000100200002-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: August 30, 2011
• Sequence Number: 2
• Publication Date: December 12, 1986
• Content Type: OPEN SOURCE

Approved For Release 2011/08/31 : CIA-RDP91-00587R000100200002-9
WE-.SHINGTON POST
12 December 1985
Casey Report Encouraged Iran Talks
CIA Chief Judged Israeli Data on `Moderates'to Be Bona Fide
By o W ward
W.uMnybn ost ,titf Wnhr
Central intelligence. Agency Di-
rector William,,._Ca encouraged
the secret White House initiative
toward Iran in the summer of 1985
by providing his own intelligence
evaluation, which supported Israeli
claims that "moderates" in Iran
wepe willing be open talks with the
United states, informed sources
said yesterday.
Casey, who has consistently de-
scribed his and the CIA's role in the
Iran affair as minimal, was asked to
make the evaluation by Robert C.
McFarlane, then national security
adviser to President Reagan, ac-
cording to the sources.
This followed a July 1985 meet-
ing in Washington between McFar-
lane and David Kimche, then direc-
tor general of the Israeli' Foreign
Ministry and a 30-year veteran of
the Israeli Mossad secret intelli-
gence service.
Kimche told McFarlane that
there were Iranian moderates open
to negotiations with Washington
and "Bill Casey found the Israeli
analysis bona fide, based on his own
intelligence," said one well-placed
source.
The CIA director took several
weeks to assemble information
from U.S. intelligence agencies and
compare it to the Israeli intelli-
gence, the source said. Only months
earlier, Casey's senior Middle Fast
analyst, sham Full had ad-
vanced the arguinea in the admin-
istration that the time was ripe to
seek improved relations with Iran.
Kimche and other high-ranking
Israeli diplomats had brought a
large amount of sensitive intelli-
gence data to McFarlane's White
House office to support their as-
sessment that there was an oppor-
tunity to restore a United States-
[ran dialogue, the sources said. In-
cluded were communications inter-
cepts, tape recordings and an ap-
pendix listing 1,000 well-placed
Iranians described as favoring a re-
lationship with the United States.
The Iranians listed included bri-
gade commanders in the military,
members of parliament and other
key figures, according to two
sources. One source said some of
the names included those who had
been secret CIA contacts prior to
the Iranian revolution in 1979. In
testimony to the House Foreign
Affairs Committee Monday, McFar-
lane referred to "extremely persua-
sive intelligence information" he
had been given about the so-called
moderate Iranians, but said he
could not discuss it in open session.
As congressional committees
continued their investigations yes-
terday, a number of sources with
firsthand knowledge said there is
growing unhappiness among mem-
bers of Congress about Casey's role
in the [ran affair, as it becomes in-
creasingly apparent that the CIA
played a major part. The sources
said that the director's answers in
closed-session testimony have been
evasive; some members of the in-
telligence oversight committees are
said to feel that Casey broke faith
with them.
Referring to a Reagan order to
Casey last January not to notify
Congress of U.S. arms sales to Iran,
a Republican member of the Senate
Select Committee on Intelligence
said yesterday, "Despite the direc-
tive from the president that he not
inform the Congress, Casey has
severed the feeling of trust ....
Arms merchants from the Middle
East to Canada knew of this, and he
went along with keeping it secret
from us."
In recent weeks, officials and for-
mer officials have increasingly en-
gaged in finger-pointing, attempting
to emphasize the roles of others in
the affair. A source said that Casey
defends his intelligence assess-
ments, noting that sometimes the
government must take reasonable
chances. Casey, the source said,
believes that all senior administra-
tion officials were under the pres-
ident's instructions to "woo" the
Iranians.
On May 28, when McFarlane
flew into Tehran with a planeload of
arms, there was little secrecy, an
informed source said. McFarlane'
and his party traveled in a four-car
motorcade to the Tehran Hilton,
where they stayed for four days.
The congressional committees
are discovering that dozens of peo-
ple-including arms merchants,
foreign middlemen and others with-
out security clearances-knew at
least something about the secret
18-month initiative. Two members
used the same word-"absurd"-to
describe the decision not to inform
the two intelligence committees or
at least the chairmen and vice chair-
men, as provided by law.
A Democrat on the House Per-
manent Select Committee on Intel-
ligence said, "Casey should have
stood up and said there will be hell
to pay for not telling the commit-
tees .... Well, he's paying it now."
The House and Senate intelli-
gence committees are attempting
to determine if the CIA and the
White House made faulty, overly
optimistic assessments about * the
Iranian "moderates," sources said.
"There's a major intelligence fail-
ure at the bottom of this entire af-
fair," said a key government official,
who added that there is now evi-
dence that the Iranians may have
fed false information and may have
successfully sprung an elaborate
trap on the Reagan administration.
Sources said that one key "mile-
stone" in Casey's attitude toward
Iran was a 25-page paper produced
in early 1985 by Graham Fuller,
then the national intelligence officer
for the Middle East. The paper
"raised consciousness" about Iran,
according to a source who read the
document, and laid the groundwork
for the belief that there were "mod-
erates" in the regime of Ayatollah
Ruhollah Khomeini who might be
used or contacted.
It also contained information that
the Iranian government was becom-
ing unglued and emphasized the
efforts being made by the Soviet
Union to gain influence there.
"There was the usual talk about the"
need to look beyond Khomeini," said
a second source who dealt with the
document.
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 Approved For Release 2011/08/31 : CIA-RDP91-00587R000100200002-9
A
Though Fuller's paper was ini-
tially for internal CIA use, Casey
thought it good enough to send to
the White House, as well as to the
departments of State and Defense
where it received a skeptical, if not
hostile, reception.
Nonetheless, the sources said,
this was the document that
launched other studies in the CIA.,
including a May 17, 1985, memo on
Iran that emphasized the Soviet/
efforts to cultivate Iranian contacts;,
Though concerned about Amer.
ican hostages being held in Leba.
non, sources said that Casey saw a k
opportunity to get a jump on they
Soviets. "If we could have done it, it
would have been a coup to get'C
foothold right in the underbelly o[
Russia," said one well-placed source
familiar with Casey's thinking. "Tot
many people underestimate theA
Russian aspect of this." C
Several intelligence sources deb
fended Casey's actions, noting hig
intense concern with the fate a
Ail(fgBe the CIA station
chief in irut, who had been k>di
naped by terrorists in Lebanon iilC
March 1984. Part of Casey's inter
est in Iran, sources said, grew out
of his belief that the Iranians could
intercede on Buckley's behalf.
Staff researcher Barbara Feinman
contributed to this report.
s
Approved For Release 2011/08/31 : CIA-RDP91-00587R000100200002-9