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Firewall: The Iran-Contra Conspiracy and Cover-Up

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Overview

In this historic, first-person account, the independent counsel in the Iran-Contra investigation exposes the extraordinary duplicity of the highest officials of Ronald Reagan's administration and the paralyzing effects of the cover-up that Judge Lawrence Walsh and his associates unraveled. Iran-Contra was far more than a rogue operation conceived and executed by Lieutenant Colonel Oliver North with the backing of National Security Advisor John Poindexter, as the Reagan administration claimed. It was instead a ...
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Overview

In this historic, first-person account, the independent counsel in the Iran-Contra investigation exposes the extraordinary duplicity of the highest officials of Ronald Reagan's administration and the paralyzing effects of the cover-up that Judge Lawrence Walsh and his associates unraveled. Iran-Contra was far more than a rogue operation conceived and executed by Lieutenant Colonel Oliver North with the backing of National Security Advisor John Poindexter, as the Reagan administration claimed. It was instead a conspiracy that drew in the chief actors of that administration: President Reagan, Vice President George Bush, Director of Central Intelligence William Casey, Secretary of State George Shultz, Secretary of Defense Caspar Weinberger, and Attorney General Edwin Meese, among others. With the president's support, the United States attempted to trade arms for hostages held by Iranian terrorists, then retained part of the proceeds from these undercover sales in Swiss bank accounts, where the secret money funded the guerrilla activities of the Nicaraguan Contras, a counter-revolutionary group that Congress had specifically forbidden the administration to support. An experienced and steely prosecutor, Judge Walsh built a powerful team of young lawyers to pursue the truth of the Iran-Contra affair through painstaking interrogations and reviews of hundreds of thousands of documents. His team confronted daunting barriers: some of the key players were given grants of immunity by Congress's own (and sometimes hindering) investigation, government agencies twisted claims of national security in order to hide the true nature of their activities, administration officials told outright lies in sworn testimony, and Republican leaders attempted to drown the investigation in a massive flow of often irrelevant material.
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Editorial Reviews

Publishers Weekly - Publisher's Weekly
Iran-contra independent counsel Walsh chronicles here his efforts to call to account senior Reagan administration officials for their deceptions and the arms-for-hostages fiasco, alleging that "no one... told the full truth." Having failed to put anyone in prison, he marshals considerable evidence of malfeasance to convict Oliver North, John Poindexter and Caspar Weinberger. Neither Beltway insiders nor the public at large, however, are likely to read this work for its insights into Iran-contra or the political culture of the Reagan era. Instead, Walsh's book will probably be cited in a growing debate about whether the expenditure of millions on independent investigations has made our government more honest. Foes of the independent counsel system will find a lot of material here with which to buttress their arguments. Despite years of effort from some of the most astute prosecutors in the country, the only high-level official left with a criminal record from Walsh's investigation was national security adviser Robert McFarlanea reluctant participant in the Iran-contra cover-up who pleaded guilty to deceiving Congress. Walsh attributes his meager results to systematic efforts by two administrations to frustrate his efforts and an executive bureaucracy mired in a culture of concealment.
Library Journal
Walsh was the independent counsel for the Iran-Contra investigation from 1986 to 1993. Though he writes earnestly and with the highest integrity, his recounting of the events surrounding Iran-Contra is as confusing as the hearings themselves and is overburdened by excessive detail. Walsh alleges that Presidents Reagan and Bush could have been indicted for obstruction of justice and misuse of the presidential pardon, respectively. However, Reagan is not Nixon, and Iran-Contra never fascinated and repelled the public like Watergate. The long ordeal ended with few perpetrators being convicted, while members of Reagan's cabinet built an impenetrable firewall around the president. -- Karl Helicher, Upper Merion Twp. Lib., King of Prussia, Pennsylvania
Library Journal
Walsh was the independent counsel for the Iran-Contra investigation from 1986 to 1993. Though he writes earnestly and with the highest integrity, his recounting of the events surrounding Iran-Contra is as confusing as the hearings themselves and is overburdened by excessive detail. Walsh alleges that Presidents Reagan and Bush could have been indicted for obstruction of justice and misuse of the presidential pardon, respectively. However, Reagan is not Nixon, and Iran-Contra never fascinated and repelled the public like Watergate. The long ordeal ended with few perpetrators being convicted, while members of Reagan's cabinet built an impenetrable firewall around the president. -- Karl Helicher, Upper Merion Twp. Lib., King of Prussia, Pennsylvania
John B. Judis
Walsh's book is a useful record of the scandal and its aftermath. -- The New York Times Book Review
Kirkus Reviews
Walsh, the former independent counsel for Iran/Contra matters, submits an injudicious, self-serving brief in aid of reversing the probable verdict of history that his extended and contentious investigation of malfeasance at the highest levels of US government produced appreciably more heat than light. Drawing on the record he compiled in the course of a six-year investigation, the author delivers a largely chronological narrative built around a rehash of serious charges that were never proved in court. At issue was the question of whether Ronald Reagan exceeded his presidential authority in sanctioning a hushed-up arms-for-hostages deal with Iran, which also yielded cash used to equip the Contra forces in Nicaragua. These clandestine operations came to light in the mid-1980s, and Walsh was called in to unravel the tangled web at the start of 1987. By the author's account, he had no axes to grind at the outset of his inquiry. Perhaps not, but his office became vaultingly ambitious in its selection of targets after failing to put the usual CIA, National Security Council, or White House suspects, let alone Oliver North and John Poindexter, behind bars. At various times, Walsh recounts, he and his aides went after George Bush, Edwin Meese, Donald Regan, George Shultz, and Caspar Weinberger. The fact that he got nary a one of these men in the dock does not stop the author from repeating in detail allegations of supposed misdeeds that resulted in but a single indictment. Attentive readers will learn that feckless subordinates, ill-informed judges, and national-security hurdles, not Walsh, are to blame for the paucity of scalps.

A spirited if one-sided effort by Walsh to have the last word on the Iran/Contra affair and to justify his largely unavailing stewardship of the independent counsel's office.

Scott Armstrong - Washington Post
“An important, perhaps singular, contribution…For patient students of accountability in government, the book's extraordinary detail makes for must reading.”
August Richard Norton - Boston Globe
“Not simply an important public accounting of an egregiously misconceived policy, but a cautionary tale of power.”
Doug Ireland - The Nation
“We would never have known the truth about Iran-Contra without the tenacious seven-year struggle by the independent counsel in the affair, Lawrence Walsh, to get to the bottom of it…Of first-rate historical importance.”
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Product Details

  • ISBN-13: 9780393040340
  • Publisher: Norton, W. W. & Company, Inc.
  • Publication date: 6/28/1997
  • Pages: 544
  • Lexile: 1300L (what's this?)
  • Product dimensions: 6.44 (w) x 9.56 (h) x 1.75 (d)

Meet the Author

Lawrence E. Walsh (1912—2014) was an American lawyer and former U.S. District Court judge and Deputy Attorney General who was appointed Independent Counsel in December 1986 to investigate the Iran-Contra affair during the Reagan Administration.

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Read an Excerpt



CHAPTER ONE

From Stonewall to Firewall

On Monday, November 24, 1986, Ronald Reagan left his handsome Oval Office, passed the bright cabinet room, and descended to the situation room in the White House basement. The low-ceilinged, tightly shuttered conference room looked nothing like the bustling wartime military command post its name suggested. The President sat at the end of a long conference table, between Vice President George Bush, Secretary of Defense Caspar Weinberger, Director of Central Intelligence William Casey, and National Security Advisor John Poindexter on his right and Secretary of State George Shultz, Attorney General Edwin Meese, and Chief of Staff Donald Regan on his left. The chairs along the walls, where subordinate staff members usually sat, were empty. A single CIA official had made a report and then left. The taping equipment that sometimes recorded presidential meetings was shut off. The cabinet members took their own notes.

Reagan was within range of impeachment for his secret authorization of the sale of American weapons to Iran in exchange for American hostages, which had violated not only the Arms Export Control Act and the National Security Act but also his own stated policy against dealing with terrorists. Moreover, breaking the cardinal rule of covert operatives, he had begun to believe his own cover: He had persuaded himself that he had not been trading arms for hostages; he had merely tried to establish a friendly relationship with Iranian moderates.

Sitting next to the president, the secretary of state was weighing resignation against the danger of dismissal. Weinberger andCasey, angered by Shultz's unwillingness to support the arms sales publicly, were eager to see him go. As the meeting began, Shultz and Poindexter battled for the president's ear over control of negotiations with Iran. After they wore each other down, Donald Regan turned the discussion to Meese, who, perhaps more than anyone else in the room, felt a personal responsibility for the president's political safety. Regan had that official responsibility, but Meese was the president's most devoted troubleshooter. He had been counselor to the president before becoming attorney general, and he had long served under Reagan in California and in political campaigns.

The sequence of events that necessitated this meeting had begun in 1979, with the overthrow of the shah of Iran and the seizure of the U.S. embassy in Tehran by radical Iranians loyal to an aged Islamic leader, the Ayatollah Ruhollah Khomeini. With its embassy's staff held hostage, the United States had broken diplomatic relations and embargoed trade with Iran. After the hostages were released, the United States made some concessions to Iran but continued to embargo arms shipments. In the meantime, Iraq had opened war on Iran. The United States remained neutral and refused to ship arms to either side.

On January 20, 1984, the secretary of state designated Iran a sponsor of international terrorism. Thereafter, in what was called "Operation Staunch," the United States actively urged its allies not to ship arms to Iran.

Beginning in March 1984, members of Hezbollah, a fundamentalist Shiite group sympathetic to the government of the Ayatollah Khomeini, kidnapped seven Americans—including William Buckley, the CIA chief of station—in Beirut, Lebanon. The United States and, in particular, President Reagan adamantly opposed dealing with hostage takers. "America will never make concessions to terrorists—to do so would only invite more terrorism," he stated to the press on June 18, 1985. "Once we head down that path, there would be no end to it." Three weeks later, I heard him say much the same thing in a speech to the annual meeting of the American Bar Association. The members responded with cheers and a standing ovation.

Not all American foreign policy experts favored the isolation of Iran. Poindexter's predecessor as national security advisor, Robert "Bud" McFarlane, had been concerned with a possible Soviet move after the death of the Ayatollah Khomeini. With support from the CIA, McFarlane had analyzed the feasibility of establishing better relations with moderate Iranians and relaxing the arms embargo to reduce the danger of Iran's being proselytized by the Soviet Union. This tampering with the embargo had been vehemently rejected by Shultz and Weinberger. Iran was desperate for weapons to use in its war with Iraq, however, and various Iranians approached U.S. officials with offers to help free the hostages in Lebanon in exchange for arms. In the summer of 1985, an offer from an Iranian arms broker, Manucher Ghorbanifar, found its way to McFarlane through Israeli intermediaries.

Despite the strong views of Shultz and Weinberger, the high-level Israelis persuaded McFarlane to explore with the president the possibility of discussions with the Iranians. The weapons were said to be merely a token of the administration's good faith to establish the credibility of the Iranian negotiators in their own country. If they succeeded in freeing the hostages, Israel would sell the Iranians missiles that Israel had previously obtained from the United States; the Israelis would then buy replacements from the United States. Casey supported McFarlane. Shultz and Weinberger questioned the likelihood of any favorable changes in our relations with Iran, and they vigorously opposed arms sales to Iran by any nation. Nonetheless, after reflection, the president approved the transaction. Israel, through Ghorbanifar and its private intermediaries shipped ninety-six wire-guided antitank (TOW) missiles to Iran on August 30 and another 408 on September 14. One hostage was released.

In mid-November, McFarlane and Poindexter learned from Lieutenant Colonel Oliver North, the National Security Council counterterrorism expert who kept them abreast of the Israeli arms shipments, that a much larger Israeli arms sale was in train. They informed the president, the vice president, Regan, Casey, and Shultz. Israel was to sell as many as five hundred large Hawk antiaircraft missiles to Iran, with replacements to be supplied by the United States. At least four hostages were to be released.

To locate enough Hawks to replenish Israel's arsenal, McFarlane telephoned Weinberger. The defense secretary protested that the shipment would be illegal, but McFarlane told him that the president had decided the matter. Shultz disapproved of the operation but agreed not to stand in the way.

There were logistical problems, however, because Israeli aircraft carrying weapons could not fly directly to Iran. After the privately chartered aircraft carrying the first shipment had lifted off from Israel, officials in the European country where the Hawks were to be transferred to planes of a different nationality for delivery to Iran unexpectedly denied permission for the cargo to land. The Israeli defense minister telephoned McFarlane for help. He turned to Oliver North, who drew in the CIA, arranging for one of the agency's proprietary air fleets to carry the first installment of the shipment to Iran.

The shipment was a disaster on all counts. Only about eighty Hawks had been available, and when the first eighteen were delivered on November 24, the Iranians were outraged to find that the shipment consisted of outdated Israeli castoffs with the Star of David stenciled on them. At the CIA, John McMahon, the acting director (in Casey's absence), was dumbfounded and then furious to learn of the agency's participation. To provide political and legal cover for the agency, McMahon and Casey promptly obtained a retroactive finding from the president approving the CIA's action.

Fearing for the hostages' safety, the president urgently convened a Saturday-morning session of the National Security Planning Group, the high-level core of the National Security Council. The NSC consisted of four statutory members: the president, the vice president, the secretary of state, and the secretary of defense. Additional invited members had traditionally included the head of the CIA and the chairman of the Joint Chiefs of Staff, but President Reagan had invited so many others to NSC meetings over the years that the NSPG was established to deal with the most sensitive and important issues.

When the group met in the president's residential quarters, Weinberger explicitly warned that the U.S. arms embargo imposed against Iran in 1979 and strengthened in 1983 made the sale of any weapons illegal, even if it was carried out through the Israelis. Moreover, the Arms Export Control Act provided that the resale of so large a quantity of arms by a foreign recipient had to be authorized by the president with notice to Congress.

Dismissing Weinberger's objections, the president declared that "he could answer charges of illegality but he couldn't answer [the] charge that `big strong President Reagan passed up a chance to free hostages.'" Jokingly, he remarked that if he went to jail, "visiting hours are Thursday."

Weinberger rejoined that Reagan would not be alone.

The consensus of the meeting had been to stop the arms sales and, for the time being, to limit discussions to the improvement of U.S.-Iranian relations. McFarlane delivered this message to Ghorbanifar and the Israeli representatives, but Ghorbanifar refused to relay it to his principals, arguing that the message would be tantamount to a death warrant for the hostages. Although McFarlane advised Reagan to end the negotiations, other Israeli proposals were pressed on the president.

After two more NSPG meetings in January 1986, the president ordered Poindexter and the CIA to drop the Israelis as middlemen and to negotiate a direct sale of arms from the United States to Iran. Reagan signed a presidential finding, which he kept secret from Congress, authorizing the sale. "I agreed to sell TOWs to Iran," he noted in his diary for January 17.

This new covert action was undertaken by Poindexter and North, with the CIA in a supporting role. The financial negotiations and the arms deliveries were handled by North and retired Air Force major general Richard Secord, who was also working with North to resupply the Contras in Nicaragua. North and Secord dealt with Ghorbanifar and midlevel Iranian officials.

Secord delivered a thousand U.S. TOW missiles to Iran in February. Ghorbanifar had paid Secord in advance. Secord had paid the CIA in advance. The CIA had bought the weapons from the Department of Defense at cost. With Poindexter's approval, North and Secord had marked up the price almost threefold—from $3.7 million to $10 million— and kept the extra proceeds to pay for arms for the Contras and for other purposes unauthorized by Congress. No hostages were freed.

In May, at President Reagan's request, McFarlane led a secret mission with North and others to Tehran to deliver two planeloads of spare parts for Hawk missiles and to recover the hostages. After three and a half frustrating days, McFarlane reported failure. He had delivered one planeload of parts, but when this failed to win the release of any more hostages, he held back the second planeload. On his return, he repeated his previous advice to the president: Quit.

Still Ronald Reagan pressed on. After six more weeks, a second hostage was released, so the president authorized the delivery of the second load of Hawk spare parts. North had marked the prices up by 370 percent, and Ghorbanifar had added a markup of his own. The Iranians discovered the markups, however, and refused to pay. Ghorbanifar, as an intermediary, had borrowed to prepay Secord for the U.S. materiel. Secord had already used part of the payment to buy arms for the Contras. While Ghorbanifar haggled with the Iranians for reimbursement, another Iranian intermediary negotiated the sale of five hundred more TOW missiles. Hezbollah then played a cynical hand: As one group of kidnappers was about to release a third hostage, another group kidnapped two more.

On November 3, the plot unraveled. A Lebanese periodical, Al Shiraa, published a story revealing that the United States had sold arms to Iran. The article also detailed McFarlane's failed mission to Tehran, portraying McFarlane as a supplicant and North as a naive amateur carrying a Bible and a chocolate cake. Picked up by the news media in the United States and abroad, and confirmed by the speaker of the Iranian parliament, Ali Akbar Rafsanjani, the story could not be ignored.

From the beginning, the White House had looked for ways to suppress the truth. The story had "no foundation," President Reagan assured reporters on November 6, and publicity about it was "making it more difficult for us in our effort to get the other hostages free." In his diary the next day, he sketched his approach: "We can't and won't answer [questions] because [to do so] would endanger those we are trying to help."

Vice President George Bush, who had just begun keeping a diary, also understood the need for secrecy. "I'm one of the few people that know fully the details," he wrote on November 5, "and there is a lot of flack and misinformation out there. It is not a subject we can talk about."

Poindexter and Casey argued forcefully against any disclosure. Both encouraged North to continue his secret negotiations with emissaries from Tehran.

Meanwhile, journalists energetically pursued the story. Rafsanjani supplied additional details of McFarlane's visit. Don Regan fingered McFarlane, in anonymous comments to magazine reporters, as the central culprit in humiliating the nation.

McFarlane had at first brushed off the story as "fanciful." On hearing that Regan was blaming him, however, he exploded in an angry computer message to Poindexter, threatening to sue Regan for singling him out for a policy that had received collective, though not unanimous, top-level endorsement from the start. Poindexter reported back that Regan "would keep his mouth shut."

On November 8, McFarlane sent a message to North concerning the records of the National Security Agency, an intelligence agency that had been monitoring the arms deals: "I hope to daylights that someone has been purging the NSA's files on this episode." North was already shredding and altering documents from his office and from the permanent files of the National Security Council.

Secretary of Defense Weinberger complained to Poindexter that the secretary of state had "suggested 'telling all' on attempts to deal with Iran to get their help." According to his notes, Weinberger had "strongly objected. I said we should simply say nothing—John [Poindexter] agrees."

This division deepened in a meeting of the National Security Planning Group on November 10. In a ninety-minute session at the White House, Reagan, Bush, Regan, Poindexter, Casey, Shultz, Weinberger, and Meese discussed the administration's dealings with Iran but could not reach a consensus about what to acknowledge publicly. Only Shultz wanted to concede the failure and try to defend it.

Donald Regan preferred a response more forthcoming than "no comment," as he noted on November 10: "We must get a statement out now, we are being attacked, and we are being hurt."

The president put the issue more colorfully: "We must say something but not much. I'm being held out to dry."

Admiral Poindexter, still hoping the stonewall would hold, warned that any acknowledgment of the arms deals would "end our Iranian contacts." If there had to be a statement, he thought, it should "say less about what we are doing and more about what we are not doing."

Poindexter drew the line at exposing the 1985 Israeli transactions, which the president had approved without notifying Congress. In briefing the NSPG, Poindexter falsely claimed that Israel had sold U.S. arms in 1985 without our permission; that we had only accidentally discovered the arms en route to Iran in a European warehouse; and that the presidentially approved sales had begun only after January 1986, when the president had signed a finding formally authorizing direct sales to Iran. Poindexter made no mention of the Hawks delivered in November 1985.

Shultz pressed Reagan for a commitment that no more arms would go to Iran, but his proposal drew no support. After the meeting, a White House press release stressed concern for the safety of the hostages and pledged that "no U.S. laws have been or will be violated and ... [that] our policy of not making concessions to terrorists remains intact." President Reagan "asked his advisors to ensure that their departments refrain from making comments or speculating about these matters." Before being released, the statement had to be revised because Shultz rejected a proposed reference to the "unanimous support for the president's policies." At his insistence, the final version recited only "unanimous support for the president."

To his aides, Shultz fumed that the press release showed that the presidents advisors were "trying to get me to lie." Whatever they were "trying to pull on me," he added, the maneuver was "taking the president down the drain." The way to halt that slide, he believed, was to make a clean breast of the errors, restore the authority to deal with Iran to his department, and end the freelance operations of the National Security Council's staff

While presidential aides worried about impeachment, Ronald Reagan considered the public reaction excessive. "This whole irresponsible press bilge about hostages and Iran has gotten totally out of hand," he noted in his diary for November 12. "The media looks like it's trying to create another Watergate.... I want to go public personally and tell the people the truth." In an address to the nation broadcast from the Oval Office the next day, the president declared that the dealings with Iran had been aimed primarily at restoring normal relations and only secondarily at freeing Americans held captive in the Middle East. True, Iran had acquired some defensive U.S. weaponry, but the charge that America had been "trafficking with terrorists," he said, was "utterly false."

His audience did not believe him. Polls by the news media and the White House found that for every American who accepted the president's version of events, six others doubted it and him. Ronald Reagan seemed to be deceiving himself. He had traded arms for hostages. He had pushed eager aides to keep bargaining when more seasoned officers had advised against it. In his own mind, he had arranged the facts into the context of McFarlane's original proposal of an "Iran initiative"—a secretive effort to open lines of communication and support to factions in Tehran that might someday replace the Ayatollah Khomeini's radical regime with pro-Western policies, and that might, as a gesture of goodwill, persuade their Lebanese followers to release the hostages. In fact, the dialogue had never gone beyond bartering missiles for prisoners. The hidden trade and the diversion of part of the proceeds to the Contras had violated American policy and law.

Two days later, in the situation room, the president and his top advisors fed congressional leaders the false account that had been developed for public consumption. Ronald Reagan described the activity as "principally a covert intelligence operation" that had involved "no negotiations with terrorists" and had been designed "to enhance [America's] position in the Middle East."

Poindexter began his report with the direct sales to Iran authorized by the president's January 1986 finding. Senate Majority Leader Robert Byrd asked when the first contact with Iran had occurred, and Poindexter admitted that the process had begun in 1985, but he claimed that "no transfer of material" had taken place until after the presidential finding had been signed.

The journalists were more aggressive than the congressional leaders had been. The day after misleading Senator Byrd, Poindexter had to acknowledge to a reporter that a "small amount of stuff" had gone to Iran in connection with the first release of a hostage, the Reverend Benjamin Weir.

McFarlane feared that by lack of candor, the administration might find itself caught up in a scandal on the order of Watergate. In the earlier debacle, he warned Poindexter, "well-meaning people who were in on the early planning of the communications strategy didn't intend to lie but ultimately came around to it." The Reagan White House had to choose, he urged, between ducking and accepting the blame. If the policy was to be defended "on its merits," the manner "must not be confrontational but open and candid."

Calls for congressional inquiries multiplied. After President Reagan's televised speech of November 13, the pressure for a public accounting heightened. The House and Senate intelligence committees scheduled hearings and asked Casey, Shultz, and Poindexter to testify.

Within the administration, concern centered on what to say about the illegal November 1985 Hawk shipment, which exposed the president to the most danger. Both the CIA and Oliver North compiled chronological accounts, which conflicted with each other and with the truth. The narrowly self-protective CIA version said that no one in the agency had known at the time that its proprietary aircraft had carried Hawk missiles rather than oil-drilling equipment. North broadened the claim to say that "no one in the government" had been aware of the cargo's true nature.

Richard Secord, who had arranged with the CIA proprietary for the delivery of the Hawks, was dismayed to read that the president had been upset and that those involved in the transport had thought they were carrying oil-drilling equipment. "The new, phony version would stand," Secord realized. Having believed that his activities had been authorized by the president, he told North, "I guess I get the picture, now. I'll get out of your hair. I'm not going to be a part of this anymore."

Appearing on a Sunday-morning television news show, George Shultz stated that he opposed any further arms transactions with Iran. Asked whether he, as secretary of state, spoke for the whole administration on this policy, Shultz candidly answered that he did not.

Ignoring a direct warning from Shultz that he was being deceived, the president repeated at a news conference on November 19 that he had not traded arms for hostages. He went on to deny that the Israeli shipments had occurred. The White House press office hastily issued a clarifying statement conceding that a "third country" had taken part in "our secret project."

On the evening of November 20, George Shultz and Don Regan visited the president in the family quarters in the White House. For forty-five minutes, Shultz tried without success to get the president to face the truth. Reagan insisted that because he had never intended to bargain arms for hostages, he had never done so. Shultz reminded him that McFarlane had told them both about the planned Israeli Hawk shipment during the November 1985 summit conference with Soviet leader Mikhail Gorbachev in Geneva.

"Oh, I knew about that," replied Reagan, "but that wasn't arms for hostages."

Shultz later told an aide, "I didn't shake him one bit.... He refuses to see that we have a problem. So I never got to what should be done."

Casey's prepared testimony to the House intelligence committee the next day simply omitted the Hawks, but in answering questions, he fell back on the canard about the oil equipment. Having denied knowledge that weapons were carried, he could not then reveal that at his request the president had signed a retroactive finding approving the CIA's carrying them.

Just before noon on Friday, November 21, Poindexter, Regan, and Meese met with the president in the Oval Office. Reagan agreed that someone should develop a coherent position for the administration. The assignment went to Meese.

When North and Poindexter learned about the attorney general's mission, they stepped up their efforts to purge their files. North and his secretary, Fawn Hall, shredded a pile of documents, including North's telephone records and copies of his memoranda to McFarlane and Poindexter. They also altered documents taken from the permanent files of the National Security Council. As North and the NSC staff counsel watched, Poindexter calmly tore up the original presidential finding that Ronald Reagan had signed on December 5, 1985, retroactively authorizing the CIA to assist the shipment of the Hawk weapons and specifying that the shipment's purpose was to obtain the release of Americans held hostage in the Middle East.

Over the weekend, the attorney general questioned cabinet officers. He exchanged many telephone calls with Casey and Regan but, departing from his usual practice, took no notes. Meese later claimed that he could not remember what was said. Casey and Regan suffered memory lapses, as well. In an early-Saturday-morning meeting in Shultz's office, Shultz told Meese that the president had admitted knowing about the Hawk shipment. Meese bridled, warning Shultz that if what he said was true and if the president had failed to notify Congress, the law might have been violated. Meese asked whether Shultz knew of any other writings except the notes he had himself dictated. Shultz knew of none.

The attorney general then left to meet with McFarlane, who said that he had told President Reagan about the planned Hawk shipment but that he had nothing in writing. Meese next telephoned Weinberger and concluded that he had little information about the transaction. In reality, Weinberger had preserved notes of his conversations with McFarlane, warning him in advance that the Hawk transaction would be illegal, whether carried out through Israel or not.

While Meese talked to the cabinet officers, his assistants found in North's office a draft copy of an April 1986 memorandum in which North explained for Poindexter the diversion of $12 million from the proceeds of the Iran arms sales to rearm the Nicaraguan insurgents known as the Contras. Not only had President Reagan flouted the National Security Act and the Arms Export Control law, but North's illegal use of the proceeds to finance the Contras had usurped Congress's constitutional authority over government appropriations. Because the proceeds should have gone to the U.S. Treasury, the diversion had amounted to theft. The next day, Meese and his assistants questioned North for four hours in what Meese later testified was "a chat among colleagues." North assured Meese that the memorandum had not gone to the president.

Shultz spent that Sunday considering resignation, and others were eager to hurry his departure. Before the weekend was out, William Casey had written to President Reagan to attack "the public pouting of George Shultz" and to recommend that he be replaced by Senator Paul Laxalt of Nevada or by Jeane Kirkpatrick, the U.S. ambassador to the United Nations.

Tension filled the situation room on November 24, as President Reagan pounded the table and insisted that he had not traded arms for hostages, that the sale of missiles was meant to restore normal relations with Iran, that the hostage release was only incidental to it. His undeniable prior knowledge of the Hawk shipment—which had been expressly intended to free the hostages—frustrated any honest effort to develop a coherent position that would exculpate him.

Finally, Regan turned to Meese for the answer to the critical question: Had the president approved the November 1985 Hawk shipment? Everyone in the room already knew the true answer. Regan had heard the president admit knowledge of the shipment to Shultz on Thursday. Shultz had confirmed this to Meese on Saturday. What was needed now was a political answer.

Before Meese could speak, Poindexter said that McFarlane had handled the Israeli-Iran sales all alone, with no documentation. Meese then fabricated the president's defense. He told the group that although McFarlane had informed Shultz of the planned shipment, McFarlane had not informed the president. Meese warned the group that the shipment might have been a violation of law because the arms had been shipped without notice to Congress. Meese suggested that even after the Hawk shipment, the president had been told only that the hostages would be out in short order.

Regan, who had heard McFarlane inform the president and who had heard the president admit to Shultz that he knew of the shipment of Hawk missiles, said nothing. Shultz and Weinberger, who had protested the shipment before it took place, said nothing. Bush, who had been told of the shipment in advance by McFarlane, said nothing. Casey, who had also known about the shipment ahead of time and had later requested that the president sign the retroactive finding to authorize the CIA-facilitated delivery, said nothing. Poindexter, who had torn up the finding, said nothing. Meese asked whether anyone knew anything else that hadn't been revealed. No one spoke.

Shultz left the meeting early. As always, he immediately dictated notes of the meeting to his executive assistant, Charles Hill. Poindexter's claim that McFarlane had run the operation by himself and that no one had known what he did, Shultz told Hill, was inconsistent with what Shultz knew. They were, he said, "rearranging the record." The president was "now saying he didn't know anything about [McFarlane's] November 1985 activities." The White House was employing, through Meese, a "carefully thought out strategy" to insulate the president and "blame it on Bud" McFarlane.

During the meeting, Meese and Regan had not mentioned the discovery of North's candid outline of the diversion of the arms sales proceeds to the Contras. The simple message they wished to convey to their colleagues was that the president needed to be insulated from the November 1985 Hawk shipment. After the meeting, Meese and Regan followed the president to the Oval Office and told him about the diversion of funds. Reagan seemed genuinely surprised—"as though he had been hit in the stomach," in Regan's words.

Regan, Meese, and Casey then embarked on a desperate gambit, which Regan laid out that day in a memorandum entitled "Plan of Action." "Tough as it seems," he wrote, "blame must be put at NSC's door—rogue operation, going on without president's knowledge or sanction " The goal would be to "try to make the best of a sensational story."

The authors of the plan concluded that it would not be enough to fire North. They needed more than a scapegoat; they needed a firewall. Poindexter had to go. The next day, he resigned at a meeting in which Reagan and Bush expressed their regrets. North, who would be summarily returned to the Marine Corps, received no advance warning of his dismissal; he learned about it on a live television broadcast from the White House.

At noon on November 25, the president and the attorney general went before the White House press corps. The president said he had not been "fully informed on the nature of one of the activities undertaken," which raised "serious questions of propriety." He announced the departures of Poindexter and North, then hurriedly left the podium without taking questions. The job of explaining was left to Meese.

The attorney general had already told his tale that morning, once to cabinet officers and then to congressional leaders, in meetings at the White House. In each case, he omitted reference to the Hawk shipment. He said that the Israelis had handled the arms sales, overcharging the Iranians and depositing the excess funds in Calero's Swiss bank accounts. He said North knew this and Poindexter suspected it. He repeated the falsehood that the president had not learned of the November 1985 Hawk shipment until months afterward.

Shortly before the press conference, an agitated Secord got through to Poindexter on the telephone and asked about rumors that he was resigning. Poindexter confirmed them.

"Stay at your post, admiral," the feisty Secord entreated. "Force the president to step up to the plate and take responsibility for his actions...."

Poindexter replied that time had run out. The attorney general, he said, was about to hold a press conference. The game was over.

Secord felt as if smoke were coming out of his ears. "I would like to talk to the president," he told Poindexter.

"It's too late," said Poindexter. "They're building a wall around him."

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Table of Contents

List of Illustrations

Preface
Part I. Rogue Conspiracy: The Congress againstthe Courts
1. From Stonewall to Firewall
2. The Private War
3. Call to Counsel
4. Opening View
5. The Bramble Bush
6. First Convictions
7. Close Pursuit
8. Crossroads
9. The Basic Indictment

Part II. Litigation: The Courts against the Congress
10. Half a League Onward
11. The Trial of Oliver North
12. Deniability Triumphant
13. The Trial of John Poindexter
14. Reversal and Revival
15. The CIA Cracks
16. Roller Coaster

Part III. Behind the Firewall
17. What the Secretary of State Knew
18. The Note-Taker
19. The Chief of Staff
20. The President's Protector
21. Like Brushing His Teeth

Part IV. Political Counterattack
22. Nuclear War
23. An Unusual Proposal
24. Boomerang: The Character Issue
25. Bob Dole, Pardon Advocate
26. The Last Card in the Cover-up
Reflections
Index

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Interviews & Essays

Before the live bn.com chat, Lawrence E. Walsh agreed to answer some of our questions:

Q:  What historical figure do you find most interesting? Why?

A:  Queen Elizabeth I of Great Britain. She led the successful fight as an underdog against Spain's effort to achieve domination. This was a turning point in British history, which led to a drive to become a preeminent world power. She accomplished this although her country was severely divided by religious hostility, and although her very succession to the throne was at times endangered. English survival and expansion was accompanied by the expansion of English law throughout much of the world.

Q:  Which president do you think has had the most-profound impact on the American legal system?

A:  Abraham Lincoln, whose leadership held the Union together and rejected the concept of a state's right of secession. If we regard the American legal system more narrowly, the answer would be Franklin D. Roosevelt, who led the vast expansion of federal power during his term of office. This, in turn, has greatly increased the importance of the federal courts, somewhat at the expense of the state courts. It has also led to the expansion of federal standards to eliminate unevenness of treatment in different states -- for example, the expansion of civil rights, which flowed from a Supreme Court decision ten years later.

Q:  Who were your favorite authors, growing up as a child?

A:  During my early childhood, there was no radio. Adventure stories were the favorites. First came the series of boys' books about prep school and college,(such as the Frank Merriwell series by Standish) and an earlier series about West Point and Annapolis and cousins who fought on opposite sides of the Civil War (author forgotten). These were followed by Booth Tarkington, Edgar Rice Burroughs, and a little later, Zane Grey and Sax Rohmer. Mark Twain, Stevenson, Kipling, Scott, Dickens, Hawthorne, and Conan Doyle were enjoyed for a single book or two, usually as a gift or a school assignment.

Q:  What is your opinion on the recent barrage of 24-hour news channels (MSNBC, CNN, Fox) and numerous news-magazine shows ("Turning Point," "Dateline," "60 Minutes")? Which news-magazine show and news channel do you prefer?

A:  The 24-hour news channels are valuable, particularly to a person whose hours are irregular and in areas where local news sources limit their coverage of national news. The magazine show to which I listen most consistently is "60 Minutes." The 24-hour news channel I watch most regularly is CNN.

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