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Reagan's Secret Deal With Iran to Sabotage Carter's Re-Election

The October Surprise Was Real

by CARMELO RUIZ-MARRERO

In January 1992 I published my first journalistic article ever. Published in Puerto Rico’s Claridad weekly newspaper, it was titled “The October Surprise”. In it I affirmed that the 1980 Reagan-Bush campaign bargained secretly with Iranian radicals for the postponement of the liberation of 52 Americans that they were holding hostage. These hostages were employees of the US embassy in Iran’s capital city of Teheran, which had been stormed by militants loyal to the Ayatollah Khomeini in November 1979. This secret deal, known as the October Surprise, frustrated the attempts of US president Jimmy Carter to obtain the hostages’ release in time for the elections in November. This failure cost Carter his reelection, and swept Republican candidate Ronald Reagan into the presidency. Polls carried out before the election showed that the hostage issue was of top importance in the minds of the American electorate.

The Republican campaign’s main negotiators in this deal were George H. W. Bush, vice presidential candidate and former Central Intelligence Agency (CIA) director, and William Casey, the campaign’s director and veteran spook who spied for the Office of Strategic Services during World War Two. Once elected, president Reagan appointed Casey to direct the CIA.

The hostages were freed the same day Reagan was sworn in as his nation’s fortieth president on January 1981. What was in it for the Iranians? Weapons, tons of them. Iran needed them badly in order to repel an invasion by Iraq. The Iran-Iraq war lasted from 1980 to 1988 and took approximately one million lives. The much-publicized wars in Central America in those years positively pale in comparison to the horror and carnage of this Middle East war, which was almost certainly the bloodiest of that decade. The October Surprise conspiracy and the arms deals related to the Iran-Iraq war led to the Iran-Contra affair, the biggest political scandal of the 1980’s.

This is very serious business: aiding and abetting a kidnapping, secretly undermining a president’s foreign policy- with the express purpose of tilting election results at home, high treason. You could fry in the electric chair for less than this.

Public allegations of such a secret deal go back at least to 1987, when they appeared in a book titled Out of Control by journalist Leslie Cockburn, who herself had reported on Contra atrocities and on the Iran-Contra scandal for CBS and PBS Frontline. Robert Parry, then with Associated Press, also did some of the earliest reporting on this affair.

In the late 1980’s Gary Sick, who had been president Carter’s top aide for all matters related to the Persian Gulf region, reconsidered and reexamined the hostage negotiation process from October 1980 to their liberation in 1981, and declared in an April 1991 New York Times op-ed that the October Surprise theory was entirely plausible (1). Sick elaborated on this idea in his book October Surprise: America’s Hostages in Iran and the Election of Ronald Reagan, published that same year. At that time, former Iranian president Abolhassan Bani-Sadr, who was elected in 1980 and overthrown the following year, published an autobiographical book titled My Turn to Speak: Iran, the Revolution and Secret Deals With the U.S., in which he stated that islamic radicals associated with Khomeini negotiated the hostages with the Reagan campaign, thus sabotaging his negotiations with the Carter administration.

In June 1991 the Fund for New Priorities in America held in Washington a Congressional Colloquy on the October Surprise, with Sick as featured speaker. An open letter signed by eight former hostages calling for an official inquiry into the circumstances of their release was presented in the activity (2). The following year a Congressional investigation was launched under the direction of representative Lee Hamilton.

The lead counsel of the October Surprise Task Force, as the investigative body was called (3), was the renowned if controversial lawyer E. Lawrence Barcella Jr. As US attorney in the 1970s, Barcella became a hero of the left for his investigation and prosecution of the murder of Chilean patriot Orlando Letelier, who was car bombed in the streets of Washington DC. His legendary investigation, which led to the arrest of Cuban exile terrorists who worked directly with the DINA Chilean secret police agency, was narrated in the excellent book Assassination on Embassy Row, by John Dinges and the late Saul Landau.

But Barcella, who passed away in 2010, had many colors. He led the US Department of Justice’s international manhunt for former CIA agent turned arms dealer and fugitive Edwin Wilson, who had been supplying arms to Libya (read Manhunt by Peter Maas). According to Parry, Barcella worked with the CIA in that case: “Luckily for the CIA, the chief (October Surprise) investigator, E. Lawrence Barcella Jr. was a favorite of the intelligence community and had worked closely with many of the figures implicated in the October Surprise affair.” (4)

Barcella won great esteem and prestige for the conviction of Wilson in 1983, a feat which was key in Congress deciding to appoint him lead counsel of the October Surprise Task Force, a job he was keenly interested in. But the glory of that episode wore off in 2003 when it surmised that a Barcella affidavit that was key in swaying the jury against Wilson turned out to be full of falsehoods. “Barcella denied wrongdoing in connection with the bogus Wilson affidavit, which concealed about 80 contacts between Wilson and the CIA during the time period when Wilson was selling materiel to Moammar Khadafy’s Libya”, said Parry (5). Wilson was released in 2004 after a federal judge ruled that the prosecution had acted improperly and that both the Department of Justice and the CIA had covered up information in the case.

“His revenge for his framing came almost too late”, said an obituary in The Economist published after Wilson’s passing in 2012. “In 2003 his conviction… was overturned because, wrote the judge, the government had lied. Far from no contacts with the CIA between 1971 and 1978, there had been at least 80. Several ran intriguingly ‘parallel’ to the illegal acts he had been charged with.” (6)

Wilson’s closest business associates included current and former high-ranking officials of the Pentagon and the CIA who would later be implicated in the Iran-Contra arms deals.

In the 1990s Barcella, then in private practice, represented defendants in the BCCI affair, the biggest international banking corruption scandal in history. According to Parry’s Consortium News web site: “In the 1980s, Barcella and his law firm earned more than $2 million from the Bank of Credit and Commerce International for giving legal advice, lobbying and handling public relations problems. Barcella denounced as ‘absurd’ early press allegations that BCCI had secretly gained control of First American Bank in Washington. (The story turned out to be true.) In 1991, BCCI collapsed amid scandal over its ties to international drug money-laundering and influence-peddling.” (7) Parenthesis in the original.

The Congressional October Surprise investigation ended in January 1993, only days before US president Bill Clinton’s swearing-in, and concluded that there was no credible evidence to sustain the allegations of secret deals.

However, Parry did not let go of the story. Years after the Congressional investigation ended, the reporter obtained access to the Task Force’s documents and found a letter from Iran’s Bani-Sadr, dated December 17 1992, in which he detailed the contacts between Khomeini’s associates and the Reagan-Bush campaign. According to Parry, “In the Task Force’s final report, issued on Jan. 13, 1993, Barcella’s team simply misrepresented Bani-Sadr’s letter, mentioning it only briefly, claiming that it was hearsay, and then burying its contents in a little-noticed annex to the report along with other incriminating evidence.” (8)

Bani-Sadr’s testimony is supported by Iranian admiral Ahmad Madani, who was minister of defense in 1979 and presidential candidate in the 1980 elections. Madani’s presidential campaign was financed by Carter’s CIA through financier and arms dealer Cyrus Hashemi (9). Nevertheless, Bani-Sadr won with over 75% of the vote. In an interview in the early 1990’s Madani informed Parry that in 1980 Hashemi was double-crossing Carter, negotiating the hostages with the Republicans. According to Madani, Hashemi specifically mentioned to him the name of William Casey. Hashemi died in 1986 of a rare disease. According to a 1987 Los Angeles Times article published in the wake of the Iran-Contra scandal:

“…sources say, a U.S. government informant who had worked with Hashemi claims that Customs Service officials told him the arms dealer may have been “bumped off” by government agents to protect the then-secret Iran initiative…

…Hashemi, a rival for roles ultimately assumed by Adnan Khashoggi and Manucher Ghorbanifar in the Iran operation, died suddenly on July 21, 1986, three months before the secret arms deals were disclosed. Officially, death was attributed to a rare and virulent form of leukemia that was diagnosed only two days before Hashemi died.

Since then, persistent questions have been raised about the accuracy of those autopsy results.” (10)

But the most explosive piece of October Surprise evidence is most certainly a Russian intelligence report sent to the Task Force on January 11 1993, just as the investigation was drawing to a close (11). The six-page document stated that Soviet intelligence knew that Bush, Casey and other US Republicans had met secretly in Europe with Iranian officials in 1980. Congressman Hamilton told Parry that he did not recall Barcella informing him of any Russian report. Several other members of Congress who formed part of the Task Force likewise told Parry they never saw such a report. Barcella did not mention the Russian report at the January 13 1993 press conference in which the Task Force presented its final findings.

In the waning months of 2010, as his health deteriorated due to his bladder cancer, Barcella stubbornly insisted to Parry that he had not hidden the report.

But according to Parry, “The taped-up boxes were moved to some House office space that years earlier had been carved out of the Rayburn House Parking Garage and there dumped on the floor of an abandoned Ladies Room.” (12)

“Hide” is not too strong a word.

So, 22 years after that first article of mine I can confidently state that I was right all along. So, do I get a cigar or something?

******

NOTE: In 1996 I had Parry as a guest on my radio talk show on WGDR (Plainfield, Vermont), and we talked extensively about the October Surprise affair. In fact, it is this scandal that first sparked my interest in investigative journalism back in the 1980’s.

For more information: http://carmeloruiz.blogspot.com/search/label/October%20Surprise

Carmelo Ruiz-Marrero is a Puerto Rican journalist. His ten year-old bilingual blog, Haciendo Punto en Otro Blog (http://carmeloruiz.blogspot.com/), is a rather interesting hodge-podge of news items of progressive and activist interest. His Twitter ID is @carmeloruiz. For more info: http://carmeloruiz.blogspot.com/2013/09/a-brief-bio.html.

Notes. 

1) “In the course of hundreds of interviews, in the U.S., Europe and the Middle East, I have been told repeatedly that individuals associated with the Reagan-Bush campaign of 1980 met secretly with Iranian officials to delay the release of the American hostages until after the Presidential election. For this favor, Iran was rewarded with a substantial supply of arms from Israel.”

Gary Sick. “The election story of the decade”. New York Times, April 15 1991. http://www.nytimes.com/1991/04/15/opinion/the-election-story-of-the-decade.html

2) “Ex-hostages seek probe by Congress” Washington Post, June 14 1991; Fund for New Priorities video, “An Election Held Hostage?” June 13 1991 http://www.c-span.org/video/?18401-1/election-held-hostage.

3) It was formally named Task Force of the Committee on Foreign Affairs to Investigate Certain Allegations Concerning the Holding of Americans as Hostages by Iran in 1980.Robert Parry “October Surprise X-Files (Part 7): Bush & a CIA Power Play” Consortium News 1996 http://www.consortiumnews.com/archive/xfile7.html. “Barcella… had done work for and with the CIA in the famous Edwin Wilson case.” http://consortiumnews.com/2013/03/30/dieugenio-on-parrys-new-book/

5) Robert Parry. “A Lawyer & National Security Cover-ups” Consortium News, May 4 2005. http://www.consortiumnews.com/2005/050405.html

6) “Edwin P. Wilson, gunrunner and manager of CIA front companies, died on September 10th, aged 84” The Economist, September 29 2012. http://www.economist.com/node/21563687

7) “Clinton & a BCCI Lawyer” Consortium News http://www.consortiumnews.com/archive/story3.html

8) Robert Parry. “‘October Surprise’ and ‘Argo’” Consortium News, March 7 2013. http://consortiumnews.com/2013/03/07/october-surprise-and-argo/

9) Parry 2013.

10) William C. Rempel. “Panels Probing Mysterious Death of Iran Affair Figure” Los Angeles Times, June 13 1987. http://articles.latimes.com/1987-06-13/news/mn-6868_1_mysterious-death

11) Robert Parry “The Russian report” Consortium News, 1995. http://www.consortiumnews.com/archive/xfile1.html; “Russian Report on 1980 ‘October Surprise’ Case” Consortium News, 2005 http://www.consortiumnews.com/2005/russianreport1980.html

12) Robert Parry “Accusation of October Surprise ‘Lying’” Consortium News, August 5 2010 http://www.consortiumnews.com/2010/080510.html