Reagan's Victory
Back in the United States, polls showed the race between Reagan and Carter close, but Carter suffered with voters because of his inability to resolve the hostage crisis, which was again at the top of the news because the first anniversary of the hostage-taking coincided with Election Day 1980.
So, On Nov. 4, 1980, one year to the day after the Iranian militants seized the U.S. Embassy in Tehran, Ronald Reagan routed Jimmy Carter in the U.S. presidential elections. In the weeks after the election, the hostage negotiations continued.
As Reagan's Inauguration neared, Republicans talked tough, making clear that Ronald Reagan wouldn't stand for the humiliation that the nation endured for 444 days under Carter. The Reagan-Bush team intimated that Reagan would deal harshly with Iran if it didn't surrender the hostages.
A joke making the rounds of Washington went: "What's three feet deep and glows in the dark? Tehran ten minutes after Ronald Reagan becomes President."
On Inauguration Day, Jan. 20, 1981, just as Reagan was beginning his inaugural address, word came from Iran that the hostages were freed. The American people were overjoyed. The coincidence in timing between the hostage release and Reagan's taking office immediately boosted the new President's image as a tough guy who wouldn't let the United States be pushed around.
In the days after Reagan's inauguration, participants in the October Surprise mystery seemed to be getting in line for payoffs.
The bank deal that Cyrus Hashemi and John Shaheen had discussed for months took final shape on Jan. 22, 1981. Shaheen opened the Hong Kong Deposit and Guaranty Bank with $20 million that had been funneled to him through Jean Patry, the Rockefeller-connected lawyer in Geneva who was fronting for Princess Ashraf.
Why, I asked one of Shaheen's associates, would Ashraf have invested $20 million in a bank with these dubious characters? "It was funny money," the associate answered. He believed it was money that the Islamic revolutionary government was claiming as its own.
A second Shaheen associate said Shaheen was particularly secretive when asked about his relationship with the deposed princess. "When it comes to Ashraf, I'm a cemetery," Shaheen once said.
From 1981 to 1984, Hong Kong Deposit and Guaranty pulled in hundreds of millions of petrodollars. The bank also attracted high-flying Arabs to its board of directors.
Two directors were Ghanim Al-Mazrouie, an Abu Dhabi official who controlled 10 percent of the corrupt Bank of Credit and Commerce International, and Hassan Yassin, a cousin of Saudi financier Adnan Khashoggi and an adviser to BCCI principal Kamal Adham, the former chief of Saudi intelligence.
Though Cyrus Hashemi's name was not formally listed on the roster of the Hong Kong bank, he did receive cash from BCCI, al-Mazrouie's bank. An FBI wiretap of Hashemi's office in early February 1981 picked up an advisory that "money from BCCI [is] to come in tomorrow from London on Concorde." (In 1984, the Hong Kong Deposit and Guaranty collapsed and an estimated $100 million disappeared.)
Langley Meeting
Early in the Reagan-Bush administration, Joseph Reed, the aide to David Rockefeller, was appointed and confirmed as the new U.S. ambassador to Morocco. Before leaving for his posting, he visited the CIA and its new director, William Casey. As Reed arrived, CIA official Charles Cogan was getting up and preparing to leave Casey's office.
Knowing Reed, Cogan lingered at the door. In a "secret" deposition to the House task force in 1992, Cogan said he had a "definite memory" of a comment Reed made about disrupting Carter's "October Surprise" of a pre-election release of the 52 American hostages in Iran.
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