In summer 1981, when Assistant Secretary of State for the Middle East Nicholas Veliotes learned about the arms shipments to Iran, he checked on their origins and said, later in a PBS interview:
"It was clear to me after my conversations with people on high that indeed we had agreed that the Israelis could trans-ship to Iran some American-origin military equipment. ... [This operation] seems to have started in earnest in the period probably prior to the election of 1980, as the Israelis had identified who would become the new players in the national security area in the Reagan administration. And I understand some contacts were made at that time."
Those early covert arms shipments to Iran evolved into a later secret set of arms deals that surfaced in fall 1986 as the Iran-Contra Affair, with some of the profits getting recycled back to Reagan's beloved Nicaraguan Contra rebels fighting to overthrow Nicaragua's leftist government.
While many facts of the Iran-Contra scandal were revealed by congressional and special-prosecutor investigations in the late 1980s and early 1990s, the origins of the Reagan-Iran relationship was always kept hazy. The Republicans were determined to stop any revelations about the 1980 contacts, but the Democrats were almost as reluctant to go there.
A half-hearted congressional inquiry was launched in 1991 and depended heavily on then-President George H.W. Bush to collect the evidence and arrange interviews for the investigation. In other words, Bush, who was then seeking reelection and who was a chief suspect in the secret dealings with Iran, was entrusted with proving his own guilt.
Tired of the Story
By the early 1990s, the mainstream U.S. news media was also tired of the complex Iran-Contra scandal and wanted to move on. As a correspondent at Newsweek, I had battled senior editors over their disinterest in getting to the bottom of the scandal before I left the magazine in 1990. I then received an assignment from PBS Frontline to look into the 1980 "October Surprise" question, which led to a documentary on the subject in April 1991.
PBS Frontline's: The Election Held Hostage, co-written by Robert Parry and Robert Ross.
(Image by PBS) Details DMCA
However, by fall 1991, just as Congress was agreeing to open an investigation, my ex-bosses at Newsweek, along with The New Republic, then an elite neoconservative publication interested in protecting Israel's exposure on those early arms deals, went on the attack. They published matching cover stories deeming the 1980 "October Surprise" case a hoax, but their articles were both based on a misreading of documents recording Casey's attendance at a conference in London in July 1980, which he seemed to have used as a cover for a side trip to Madrid to meet with senior Iranians regarding the hostages.
Although the bogus Newsweek/New Republic "London alibi" would eventually be debunked, it created a hostile climate for the investigation. With Bush angrily denying everything and the congressional Republicans determined to protect the President's flanks, the Democrats mostly just went through the motions of an investigation.
Meanwhile, Bush's State Department and White House counsel's office saw their jobs as discrediting the investigation, deep-sixing incriminating documents, and helping a key witness dodge a congressional subpoena.
Years later, I discovered a document at the Bush presidential library in College Station, Texas, confirming that Casey had taken a mysterious trip to Madrid in 1980. The U.S. Embassy's confirmation of Casey's trip was passed along by State Department legal adviser Edwin D. Williamson to Associate White House Counsel Chester Paul Beach Jr. in early November 1991, just as the congressional inquiry was taking shape.
Williamson said that among the State Department "material potentially relevant to the October Surprise allegations [was] a cable from the Madrid embassy indicating that Bill Casey was in town, for purposes unknown," Beach noted in a "memorandum for record" dated Nov. 4, 1991.
Two days later, on Nov. 6, Beach's boss, White House counsel C. Boyden Gray, convened an inter-agency strategy session and explained the need to contain the congressional investigation into the October Surprise case. The explicit goal was to ensure the scandal would not hurt President Bush's reelection hopes in 1992.
At the meeting, Gray laid out how to thwart the October Surprise inquiry, which was seen as a dangerous expansion of the Iran-Contra investigation. The prospect that the two sets of allegations would merge into a single narrative represented a grave threat to George H.W. Bush's reelection campaign. As assistant White House counsel Ronald vonLembke, put it, the White House goal in 1991 was to "kill/spike this story."
Gray explained the stakes at the White House strategy session. "Whatever form they ultimately take, the House and Senate 'October Surprise' investigations, like Iran-Contra, will involve inter-agency concerns and be of special interest to the President," Gray declared, according to minutes. [Emphasis in original.]
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