The alleged involvement of Gregg is another highly controversial part of the October Surprise mystery. A tall man with a trim build and an easy-going manner, Gregg had known George H.W. Bush since 1967 when Bush was a first-term U.S. congressman.
Gregg also briefed Bush when he was U.S. envoy to China. Gregg served, too, as the CIA's liaison to the Pike Committee investigation when Bush was CIA director.
"Although Gregg was uniformly regarded as a competent professional, there was a dimension to his background that was entirely unknown to his colleagues at the White House, and that was his acquaintance with one of the Republican frontrunners, George Bush," Sick wrote in October Surprise.
During later investigations, Gregg denied participation in any October Surprise operations. But Gregg's alibis proved shaky and he was judged deceptive in his denial when questioned about the October Surprise by an FBI polygrapher working for Lawrence Walsh's Iran-Contra investigation in 1990.
Gregg flunked the "lie detector" test when he gave a negative answer to the question: "Were you ever involved in a plan to delay the release of the hostages in Iran until after the 1980 Presidential election?" [See the Final Report of the Independent Counsel for Iran/Contra Matters, Vol. I, 501]
Spying Operation
Less than two months after Casey had taken command of the Reagan campaign, an internal structure for monitoring Carter's progress in Iran was in place.
On April 20, 1980, the Reagan campaign carved out from a larger body of Republican foreign policy experts a subgroup known as the Iran Working Group, congressional investigators later discovered. The foreign policy operation was run by Richard Allen, Fred Ikle and Laurence Silberman.
Back on the campaign trail, Reagan's robust conservatism was helping him pile up delegates as he gained control of the Republican primaries.
Bush managed to pull out some wins in Massachusetts, Connecticut, Pennsylvania and Michigan, but was dealt a crushing blow when he lost his home state of Texas on May 3. The path to the GOP nomination was now clear for Reagan.
As the Republican nominating battle drew to a close, Cyrus Hashemi and John Shaheen busied themselves more with business than politics as they tried to stave off Shaheen's financial ruin. Because of his failing Come-by-Chance refinery, Canadian courts had frozen Shaheen's bank accounts.
In a bid to avert disaster, Shaheen sent a personal assistant to London with a power of attorney to arrange a desperately needed loan, according to a close Shaheen associate whom I interviewed. Shaheen told the assistant to contact Cyrus Hashemi, who took the assistant to the London offices of the Bank of Credit and Commerce International and Marine Midland Bank, seeking a $3 million bail-out.
Cyrus negotiated the loan for Shaheen on his second try, at Marine Midland. Since Shaheen's accounts were frozen, the money apparently was funneled through a Bermuda-based front company called Mid Ocean. FBI documents showed a $2.5 million deposit from "Mid Ocean" into Cyrus's First Gulf bank in summer 1980, possibly the Marine Midland loan minus $500,000 for expenses.
Shaheen's reliance on Cyrus Hashemi for the infusion of cash also made clear that the two men were not just casual business associates. Shaheen counted on Hashemi to toss a $3 million life preserver that kept Shaheen's head above water. Yet even as their financial predicament worsened, the pair continued to plunge into the Iranian negotiations.
In July – four months after Jamshid Hashemi said William Casey approached the Iranian brothers in Washington – Cyrus Hashemi began a series of trips to Madrid on the hostage crisis. Ostensibly, the meetings were part of his initiative on behalf of the Carter administration, seeking inroads to the Iranian regime. But in Teheran, word spread that Cyrus Hashemi's real goal was to strike a deal on behalf of the Republicans.
Iranian President Abolhassan Bani-Sadr said he first learned of the Republican "secret deal" with the Iranian radicals in July after Reza Passendideh, a nephew of Ayatollah Ruhollah Khomeini, attended a meeting with Cyrus Hashemi and Republican lawyer Stanley Pottinger in Madrid on July 2, 1980.
Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq, can be ordered at secrecyandprivilege.com. It's also available at
Amazon.com, as is his 1999 book, Lost History: Contras, Cocaine, the Press & 'Project Truth.'
Must Read (
Well Said (
News (
Touching (
Funny (
Supported (
Interesting (
Inspiring (
Valuable (
