October 29, 2006 at 08:57:08

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Original October Surprise (Part 3)

By Robert Parry (about the author)     Page 13 of 13 page(s)

opednews.com     Permalink

After the election – because the FBI had picked up evidence of Cyrus Hashemi's arms dealing with Iran – the Carter administration finally froze the shady Iranian banker out of the hostage talks. But Hashemi kept his hand in, still moving money to key players.

On Jan. 15, 1981, Hashemi met with Iranian Revolutionary Guard officials in London and opened an account for them with 1.87 million pounds (roughly equal to $3 million), according to the FBI wiretaps.

The money apparently was to finance more arms sales, but also had the look of a possible payoff to Khomeini's hard-line military backers.

On Jan. 19, 1981, the last day of the Carter Presidency, Cyrus Hashemi was back on one of the bugged phones, describing to a cohort "the banking arrangements being made to free the American hostages in Iran." Hashemi was also moving ahead with military shipments to Iran, amid concern that there might be more competition ahead.

"How should we proceed with our friend over there?" the associate asked Hashemi. "I'm just a little bit nervous that everyone is trying to move in on the action here."

As the Inauguration neared, Republicans talked tough, making clear that Ronald Reagan wouldn't stand for the humiliation that the nation endured for 444 days under Jimmy 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? Teheran 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.

President Reagan named his campaign chief, William Casey, to head the CIA. Donald Gregg became Vice President Bush's national security adviser. Richard Allen became Reagan's NSC adviser, followed later by Robert McFarlane. Though relatively young, Robert Gates quickly climbed the CIA's career ladder to become deputy director and later CIA director under President George H.W. Bush.

In the mid-1980s, many of the same October Surprise actors became figures in the Iran-Contra scandal when that secret arms-for-hostages scheme with Iran was revealed in late 1986, despite White House denials and a determined cover-up.

According to the official Iran-Contra investigations, that plot to sell U.S. weapons to Iran for its help in freeing American hostages then held in Lebanon involved Cyrus Hashemi, John Shaheen, Theodore Shackley, William Casey, Donald Gregg, Robert Gates, Robert McFarlane, George Cave, Ronald Reagan and George H.W. Bush.

But a political firewall was quickly built between the Iran-Contra Affair and the October Surprise case. No aggressive investigation was ever conducted into whether the origins of the Iran-Contra scandal traced back to the 1980 election and whether CIA operatives, working with George H.W. Bush, had used their covert skills to alter the course of American political history.

[To examine the some of the long-hidden Task Force documents, click here. To obtain a copy of Secrecy & Privilege, click here.]

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