Walsh Final Report: Chapter 27, President Reagan

Walsh Iran / Contra Report - Chapter 27 President Reagan Chapter 27 President Reagan The President is the only individual granted power and responsibility by the Constitution. In other delegations of power and authority, the Constitution deals with entities -- the Congress, the courts, the states. In cases of conduct involving political objectives rather than venal objectives, the procedure of impeachment, which brings into play the political judgment of both houses of Congress, would ordinarily be preferred over criminal charges and a trial by jury. Further, the President's awesome responsibility for policy decisions necessary to our national safety was not intended to be belittled by requiring him to deal personally with the thicket of statutes, regulations, and orders that regulate Government activity. He ordinarily would be entitled to rely on his staff and Cabinet to see that his decisions are carried out in a legal manner. But because a President, and certainly a past President, is subject to prosecution in appropriate cases, the conduct of President Reagan in the Iran/contra matter was reviewed by Independent Counsel against the applicable statutes. It was concluded that President Reagan's conduct fell well short of criminality which could be successfully prosecuted. Fundamentally, it could not be proved beyond a reasonable doubt that President Reagan knew of the underlying facts of Iran/contra that were criminal or that he made criminal misrepresentations regarding them. President Reagan created the conditions which made possible the crimes committed by others by his secret deviations from announced national policy as to Iran and hostages and by his open determination to keep the contras together ``body and soul'' despite a statutory ban on contra aid.1 1 McFarlane, North Trial Testimony, 3/10/89, p. 3946. In the Iran initiative, President Reagan chose to proceed in the utmost secrecy, disregarding the Administration's public policy prohibiting arms sales to nations supporting terrorism. He also chose to forgo congressional notification under the National Security Act and the Arms Export Control Act.2 Having bypassed accountability to Congress, the President failed either to establish an effective system of accountability within the Administration or to monitor the series of activities he authorized.3 Working in a climate of extreme secrecy and operating without accountability, National Security Adviser John M. Poindexter, Lt. Col. Oliver L. North of the National Security Council staff and others associated with the initiative invited criminal acts including profiteering on the Iranian arms sales, the diversion of some of those proceeds to aid the contras, destroying documents, and lying to Congress to cover up their criminal activities. 2 See discussion on ``The Iran Hostage Initiative, 1985-1986'' later in this chapter. 3 In his written answers to interrogatories requested by Independent Counsel and the Grand Jury, Reagan stated that he did not monitor the details of the Iran arms sales and had no specific knowledge of such key matters as North's role or Secord's role. The President said he did not authorize any profits from the sale of arms to Iran and that he was unaware that there were excess proceeds and that some of them were diverted to aid the contras. When the Iran initiative was exposed on November 3, 1986, the President convened a series of meetings with his top national security advisers and permitted the creation of a false account of the Iran arms sales to be disseminated to members of Congress and the American people.4 These false accounts denied the President's knowledge and authorization of the initial sales from Israeli stocks of U.S.-made TOW and HAWK missiles to Iran in August, September and November of 1985. Attorney General Edwin Meese III and others were concerned that those sales violated the Arms Export Control Act and the National Security Act of 1947.5 Previously withheld notes by participants in the November 12 and November 24, 1986, meetings constituted evidence of an effort to cover up the true facts of the President's authorization of the 1985 Iran arms sales. But the discovery of the notes by Independent Counsel came too late to investigate effectively and to prosecute the false statements involved.6 The passage of time, claims of dimmed recollections and the running of the statute of limitations protected the underlying acts. 4 Two of the key meetings were on November 10 and November 12, where the principal account of the Iran initiative, given by Poindexter, left out the 1985 arms sales from Israeli stocks. At a meeting on November 24, Attorney General Meese said that the November 1985 HAWK shipment was possibly illegal but, he said, the President ``didn't know.'' 5 Later, the Department of Justice Office of Legal Counsel developed a purported defense for these sales. The participants in the November 24, 1986, meeting were concerned, however, with the question of legality, rightly or wrongly. 6 Former Defense Secretary Caspar W. Weinberger was indicted by a federal Grand Jury on June 16, 1992, on five counts of obstruction, perjury and false statements. He was to be tried on January 5, 1993. Weinberger was pardoned by President Bush on December 24, 1992. No direct evidence was developed that the President authorized or was informed of the profiteering on the Iran arms sales or of the diversion of proceeds to aid the contras.7 Yet, it was doubtful that President Reagan would tolerate the successive Iranian affronts during 1986 unless he knew that the arms sales continued to supply funds to the contras to bridge the gap before the anticipated congressional appropriations became effective. Only Poindexter could supply direct evidence, and he denied passing on this information. The wide destruction of records by North eliminated any possible documentary proof. 7 Two of the key persons involved in the operations said they believed the President either had approved of their actions or would have approved of them had he been asked. Poindexter, who testified that he did not inform the President of the diversion, said he nevertheless believed the President would have approved it had it been presented to him. (Poindexter, Select Committees Deposition, 5/2/87, pp. 70-72.) North testified that he believed that the President had authorized the diversion. (North, Select Committees Testimony, 7/7/87, pp. 23-25.) As with the Iran initiative, President Reagan was apparently unconcerned as to the details of how his policy objectives for contra support were being carried out by subordinates who were operating virtually free from oversight or accountability. President Reagan made it clear to his national security advisers Robert C. McFarlane and Poindexter that he wanted to keep the contra resistance alive ``body and soul.'' He said he told them to stay within the law, including the Boland Amendment restrictions on U.S. aid to the contras. In doing so, he confronted his staff with two virtually incompatible objectives. This determination to surmount Boland was seized on by North and others as a justification for violating Boland and later lying to Congress about such violations. Independent Counsel found no prosecutable evidence that the President expressly authorized or was informed of the illegal features of North's operational participation in the covert contra-resupply operation and his financing of the operation. President Reagan was aware of and even encouraged some aspects of external funding for the contras, such as solicitation of aid from third countries and contributions from private benefactors. He also was aware that North was the NSC's action officer on the contras, and he was regularly briefed on the growth of the contra movement during the period when funds to assist the contras were cut off by Boland.8 8 Answers of the President of the United States to Interrogatories, Answer to Question 10, In Re Grand Jury Investigation (hereafter, ``Reagan, Grand Jury Interrogatories''). President Reagan supplied information regarding his knowledge of these activities in sworn answers to written interrogatories posed by Independent Counsel and the Grand Jury, his testimony during the Poindexter trial, and a deposition by Independent Counsel in July 1992. In addition, North, Poindexter and other central figures testified during the investigation and in various trials. Documents were also produced after the Select Iran/contra Committees had completed their investigation in 1987. President Reagan's activities were analyzed in four broad aspects: (1) the military and paramilitary support of the contras from 1984 to 1986; (2) the Iran arms sales in 1985 and 1986; (3) the October-November 1986 cover-up of these activities from mounting congressional inquiries; and (4) the President's responses and testimony to the Tower Commission and to Independent Counsel. Military and Paramilitary Support to the Contras, October 1984 to October 1986 Financial Support From the congressional cut off of contra military aid until October 1986, when Congress again appropriated funds for contra assistance, there were three sources of funding developed by NSC officials to carry out President Reagan's generalized admonition to keep the contras together ``body and soul'': third-country grants; donations from so-called ``private benefactors''; and proceeds diverted from the Iran arms sales. Of the three, third-country funding, particularly from the Saudis, was by far the biggest source, amounting to $32 million. The Taiwanese government contributed $2 million. Other governments, at the request of the Administration, made available weapons, documentation to disguise the origin of weapon shipments, and facilities to accommodate contra camps and provide logistical support. Some $1.7 million in private contributions flowed through the tax-exempt National Endowment for the Preservation of Liberty (NEPL) to accounts controlled by North, and approximately $4 million from the Iran arms proceeds diversion, also controlled by North.9 9 See Flow of Funds chapter. The Administration was advised by the attorney general that, absent a quid-pro-quo arrangement, soliciting third-country contributions which would be paid directly to the contras would not violate Boland restrictions.10 It would obviously be difficult to proceed criminally against a President who operated on the basis of what he considered sound legal advice. The President held a similar view that he and his subordinates could publicly encourage private citizens to contribute directly to the contras without running afoul of Boland.11 10 See Minutes from National Security Planning Group Meeting, 6/25/84, ALU 007863-76. Although Vice President Bush and CIA Director William J. Casey felt third-country assistance would be legal absent any quid-pro-quo arrangement, Secretary of State George P. Shultz felt that a legal opinion should be obtained; and Casey agreed. The day after the NSPG meeting, Casey and CIA General Counsel Stanley Sporkin met with Attorney General William French Smith and two of his assistants and were told by the attorney general that he saw no legal concern if the United States Government discussed this matter with other nations so long as it was made clear that they would be using their own funds to support the contras and no U.S. appropriated funds would be used for this purpose. The Attorney General also said that any nation agreeing to supply aid could not look to the United States to repay that commitment in the future. An assistant to the attorney general, Mary Lawton, suggested that a specific written statement might be developed to make clear to cooperating nations that any decision to provide further assistance to the resistance in Nicaragua would be made without any monetary promises or inducements from the United States Government which would expect them to take steps to assure that no U.S. appropriated funds would be involved in the program. (Memorandum from Sporkin to the Record, 6/26/84, ER 21615.) 11 Reagan, Grand Jury Interrogatories, Answers to Questions 1-4. The President denied unequivocally that he was aware of the diversion of funds from the proceeds of the Iran arms sales, or that he authorized it.12 Independent Counsel could not prove the contrary. Poindexter testified that he did not inform the President of the diversion, and Meese and White House Chief of Staff Donald T. Regan testified that the President was ``shocked'' when he learned about it on November 24, 1986.13 12 The President denied knowledge of the diversion to the Tower Commission, in his sworn answers to Grand Jury Interrogatories, in his testimony in Poindexter, and in numerous public statements following the disclosure of the diversion by Attorney General Meese on November 25, 1986. (See, e.g. Reagan, Remarks at a Meeting with the President's Special Review Board, 12/1/86, Public Papers of the Presidents, 1986 Vol. II, 1986, p. 1591; Reagan, Address to Nation on Iran Arms and Contra Aid Controversy, 3/4/87, Ibid., p. 208-11; Reagan, Interview with White House Newspaper Correspondents, 4/28/87, Ibid., pp. 424-29; Reagan, Address to Nation, 8/12/87, Ibid., p. 942-45.) 13 Meese, Grand Jury, 2/17/88, pp. 51-56; Regan, Grand Jury, 2/3/88, pp. 43-47. Domestic fundraising for the contras presented a more complicated picture. There is no doubt that, at least beginning with his appearance at a dinner for the Nicaraguan Refugee Fund in April 1985 and continuing through mid-1986, President Reagan, like North, was a frequent and enthusiastic fundraiser for contra-related causes. The President's appeals seem to have been confined to non-lethal, ``humanitarian'' aid. North, in contrast, participated in direct appeals, mainly through the tax-exempt NEPL, for funds to buy weapons, a fact that Poindexter did not recall telling the President.14 President Reagan was unquestionably aware of NEPL. He held meetings and exchanged commendatory correspondence with its officials and big contributors, often at North's request. President Reagan stated that he did not know that North wound up with actual control of the funds raised through NEPL and passed them through to the secret Swiss accounts managed by retired Air Force Maj. Gen. Richard V. Secord and Albert Hakim.15 Independent Counsel could not prove that the President was aware of the misused tax-exempt status of NEPL, or that he was aware that contributions to it were used to purchase lethal materials for the contras. 14 Poindexter, Grand Jury, 11/28/90, p. 115. 15 Reagan, Grand Jury Interrogatories, Answer to Question 18. Alan D. Fiers, Jr., former head of the CIA's Central American Task Force, had a vivid memory of the NSPG meeting on May 16, 1986. According to Fiers, during a discussion of the need for funds to keep contras in the field until an expected congressional appropriation became available, President Reagan said: ``Can't some of Ollie's people help out?'' Regan quickly changed the subject. (Fiers, Grand Jury, 8/14/91, p. 39.) The official NSPG minutes record Reagan's remarks as: ``What about the private groups who pay for ads for the contras. Have they been contacted? Could they do more than ads?'' (Minutes of the May 16, 1986, NSPG Meeting, 6/4/86, AKW 018802-13.) In describing his understanding of NEPL, the President said in his Grand Jury Interrogatory Answer 19: I understand that NEPL was engaged in building grass-roots support for legislation to provide military support to the NFF [contras] including the funding of a public awareness campaign. My understanding came from briefing papers provided to me by my staff and by correspondence I received from NEPL . . . Moreover, NEPL engaged in similar public information programs for other national security issues, e.g., the Strategic Defense Initiative. I thought of their effort on behalf of the NFF as identical to these other information programs. North stated in a May 1986 computer note to Poindexter that ``the President obviously knows why he has been meeting with several select people to thank them for their `support for Democracy' in CentAm.'' 16 Independent Counsel could not prove, however, that the President had more than the generalized awareness of private U.S. support for the contras reflected in his Answer to Grand Jury Interrogatories 14-17: 16 PROFs Note from North to Poindexter, 5/16/86, Poindexter GX 66. I was generally aware that some assistance was flowing from the private sources to the NFF and that some of this assistance would have included military support. This information was public knowledge as early as 1985 and was even mentioned in Congressional debate about a request for funding in August 1985. Until the plane carrying Mr. Hasenfus was shot down in October 1986, I do not recall knowing of specific individuals or groups engaged in this activity and was unaware of any connection with the U.S. Government. I believed such activity to be similar to the efforts by Americans in other conflicts. Even after Mr. Hasenfus was shot down, I was told that he was not participating in a U.S. sponsored operation, and I was not informed of any particulars of that operation beyond what was in the news media. It was not until after November 25, 1986, when the full details of these operations became public, that I learned the nature and extent of the private support network and the role of certain U.S. officials in it. Although I did not seek or directly encourage private citizens to provide military support, I did encourage William Simon and others to provide humanitarian assistance through the Nicaraguan Freedom Fund (Tab 14A). I also knew, as had been previously reported in the press, that Mrs. Garwood had contributed money to refurbish a Medevac helicopter. I understood her contributions to be of a humanitarian nature, and when I met Mrs. Garwood, this subject was not discussed. The President's knowledge was much more complete regarding the obtaining of funds for the contras from foreign governments. But Independent Counsel found no evidence that he knew that, after North had set up his secret contra-resupply operation, control over most of those contributions also passed to North. Both McFarlane and CIA Director William J. Casey sought aid from foreign governments for the contras during the first six months of 1984.17 There is no doubt that the President was informed of the first successful effort to secure third-country funding. In May or June 1984, McFarlane advised the President that the Saudi Arabian ambassador, Prince Bandar, volunteered to deliver $1 million-per-month to a contra bank account. According to McFarlane, the President responded to this information with the words ``Good news'' or ``That's fine.'' 18 17 See McFarlane and Casey chapters; see also Reagan, Grand Jury Interrogatories, Answers to Questions 11-13. 18 McFarlane, Grand Jury, 4/29/87, pp. 36-37. On June 25, 1984, third-country solicitation was discussed at a meeting of the National Security Planning Group (NSPG). CIA Director Casey reported that the CIA was down to $250,000 remaining from the Fiscal 1984 appropriation for the contras, and that the contras had arms and ammunition to last only until August. Casey brought up the subject of third-country funding, prompting a debate between Secretary of State George P. Shultz and Casey over whether or not White House Chief of Staff James Baker, who was not at the meeting, believed that solicitation of third-country funding for the contras would be an ``impeachable offense.'' It was decided that Attorney General William French Smith would be consulted to resolve that issue. Those who were aware of the Saudi $1 million-per-month commitment did not mention it. According to the minutes, the meeting concluded with the following exchange: Vice President Bush: How can anyone object to the U.S. encouraging third parties to provide help to the anti-Sandinistas under the finding? The only problem that might come up is if the United States were to promise to give these third parties something in return so that some people could interpret this as some kind of exchange. Mr. Casey: Jim Baker changed his mind as soon as he saw the finding and saw the language. Mr. McFarlane: I propose that there be no authority for anyone to seek third party support for the anti-Sandinistas until we have the information we need, and I certainly hope none of this discussion will be made public in any way. President Reagan: If such a story gets out, we'll all be hanging by our thumbs in front of the White House until we find out who did it.19 19 Minutes from National Security Planning Group Meeting, 6/25/84, ALU 007863-76. McFarlane interpreted the President's final comment as a command that Congress not be notified of third-country contributions, but not a direction to lie to Congress if asked.20 20 McFarlane, North Trial Testimony, 3/10/89, pp. 3941-30; Ibid., 3/15/89, pp. 4626-29. The President himself received promise of the next major foreign contribution to the contras, which also came from Saudi Arabia. During a February 1985 visit to Washington by King Fahd, the king volunteered to double the Saudis' contribution to the contras to $2 million per month. Reagan later informed McFarlane and, according to McFarlane, directed that the information not be shared with others.21 21 Ibid., 3/13/89, pp. 4201-6. The NSC staff aided efforts to obtain both financial and other support for the contras from other third countries as well. The Republic of Korea was solicited through retired Army Maj. Gen. John K. Singlaub; no contribution resulted. Taiwan was solicited through a number of intermediaries; two donations of $1 million each were eventually received. Poindexter suspected that the President was informed of Taiwan's contribution.22 22 Poindexter, Select Committees Deposition, 6/17/87, pp. 268-69. For discussion of McFarlane and North involvement in solicitation of third-country funds for the contras, see McFarlane chapter. Finally, with regard to the contras' never-ending search for anti-aircraft missiles, the President was at least generally familiar with North's efforts to obtain foreign approvals necessary for the contras to obtain British-made Blowpipe missiles.23 Poindexter recalled, albeit vaguely, discussing with the President efforts to get Blowpipes or Chinese-made SA-7s for the contras.24 23 Ibid., pp. 76-79. 24 Poindexter, Grand Jury, 3/6/91, pp. 52-54. During 1985 and early 1986, the President and other Administration officials were called upon to send frequent messages to Central American countries to bolster their support for the contras and to remind them of the importance of their security and aid relationships with the United States. The President personally participated in flurries of this type of activity involving Honduras in February 1985, April 1985, May 1985, and March 1986. The most graphic example was an April 25, 1985, call from Reagan to President Roberto Suazo Cordova of Honduras, in which Reagan aksed on Suazo to persuade the Honduran military to release a contra weapons shipment which had been seized by the Honduran army.25 A briefing memo for Reagan's use in a subsequent May meeting with President Suazo states: 25 Recommended Telephone Call, 4/25/85, ALU 0097413-14. In your meeting it will be important to reiterate to Suazo the importance we attach to his continued cooperation in enabling the FDN [contras] to remain a viable element of pressure on the Sandinistas. Without making the linkage too explicit, it would be useful to remind Suazo that in return for our help -- in the form of security assurances as well as aid -- we do expect cooperation in pursuit of our mutual objectives. In this regard, you could underline the seriousness of security commitment, which the Hondurans seem to regard as the main quid-pro-quo for cooperating with the FDN.26 26 Memorandum from McFarlane Re: ``Meeting with Honduran President Suazo'', 5/21/85, ALU 0086547-60. When asked to explain this passage in his deposition at the trial of Poindexter, President Reagan said: A: Well, again, I think it is the same tone. That we don't want to press them to go so far that they challenge the Sandinista government and wind up in open hostilities with them. And the -- it would be useful however to remind them that in return for our help in the form of security assurances as well as aid that we do expect cooperation. That we feel that there is an obligation on their part, too. Q: Right. So, in other words, if some aid and assistance is given to them, you would expect some aid and assistance back from them -- . A: Yes. Q: . . . in combating the spread of the Sandinistas? A: Yeah.27 27 Reagan, Poindexter Trial Testimony, 2/16/90, p. 109. There is little doubt from the record that in their dealings with the Central American countries, the Administration, including the President, reminded the military and political leaders of those countries, who were dependent on U.S. aid and support, that support for the contras was a tacit condition for continuation of financial and other support. The Resupply Organization The President was regularly briefed by McFarlane and Poindexter on the progress and growth of the contra force and its operations during the 1984-86 period.28 At times the President almost seemed to claim responsibility for their activities.29 But in his answers to the Grand Jury's interrogatories, he denied either authorizing or approving a transfer of contra-support functions from the CIA to the NSC: 28 Poindexter, Grand Jury, 11/28/90, pp. 60-63. 29 Reagan, Remarks and a Question-and-Answer Session With Southeast Regional Editors and Broadcasters, 5/15/87, Public Papers of the Presidents, 1987, Vol. I, p. 514: ``These [the contras] are people who are fighting for democracy and freedom in their country. And here there's no question about my being informed. I've known what's going on there. As a matter of fact, for quite a long time now, a matter of years, I have been publicly speaking of the necessity of the American people to support our program of aid to those freedom fighters down there in order to prevent there being established a Soviet beachhead here in the Western Hemisphere, in addition to the one we already have in Cuba. And to suggest that I am just finding out or that things are being exposed that I didn't know about -- no. Yes, I was kept briefed on that. As a matter of fact, I was very definitely involved in the decisions on the support to the freedom fighters. It was my idea to begin with.'' I did not authorize or approve of the transfer to the NSC or any of its staff any function or operation performed by the CIA with respect to the Nicaraguan Freedom Fighters. I do not recall anyone ever asking me to approve or authorize the transfer of any function or operation from the CIA to the NSC, and I do not recall ever discussing such transfer.30 30 Reagan, Grand Jury Interrogatories, Answer to Question 8. * * * Beyond [Presidential Findings, National Security Decision Directives, and advocacy of third-country assistance], my instructions with regard to the support for the Freedom Fighters were usually of a general nature, and I do not now recall any authorization or approvals of specific actions with respect to the Freedom Fighters. With regard to Richard V. Secord and Albert Hakim, I do not recall approving or authorizing any action concerning them with regard to the Freedom Fighters or of meeting either individual during this time frame.31 31 Ibid., Answer to Question 9. * * * I knew that Lt. Col. North's responsibilities included work related to Central America and, specifically, Nicaragua. However, prior to my conversations with Attorney General Meese on November 24 and 25, 1986 concerning what has come to be known as the ``diversion'', I did not know that Lt. Col. North participated in planning, directing or advising NFF military or paramilitary operations or logistical support for such operations. Although I heard about allegations in the press that Lt. Col. North was engaged in such activities, I understood that these allegations were incorrect.32 32 Ibid., Answer to Question 10. In his testimony in United States v. Poindexter, the President said he generally recalled North as a ``communicator'' between the U.S. Government and the contras.33 The President said he did not have ``any inkling'' that the NSC staff was guiding the contras' strategy or that North was participating in planning and directing and advising the contras' military activities, including giving logistical support to them.34 Elaborating on his Interrogatory Answers, Reagan testified that he had ``heard reports about'' Secord and Hakim in connection with contra assistance 35 and he recalled that Secord had ``some kind of aero business'' or ``delivery business'' and ``might have been involved with delivering some aid to the contras when it was legal to provide such aid.'' 36 The President also recalled being informed by Poindexter about a Costa Rican airstrip, which Mr. Reagan said he ``hoped that it would be used in the delivery of when once again we could supply, keep the contras supplied, that it could be involved in the -- used there, if there was need for a refueling or anything of that kind of plane.'' 37 The President went on to speculate that the aircraft using the airstrip would have been ``some of those that weren't officially planes of ours that had been helping in the past in deliveries to the contras.'' He added it seemed ``logical'' that Secord would have been involved in that.38 33 Reagan, Poindexter Trial Testimony, 2/16/90, pp.131-38. 34 Ibid., 2/17/90, p. 170. 35 Ibid., p. 192. 36 Ibid., 2/16/90, p. 21. 37 Ibid., p. 121. 38 Ibid., p. 122. The President to this extent admitted to a good basic understanding of the logistics of supplying the contras' southern front from Ilopango air base in El Salvador: planes that were not ``officially'' U.S. government, using an airstrip in a neutral country to refuel for the long round trip from Ilopango, along the Pacific to Nicaragua near the Costa Rican border to avoid overflying Nicaragua. McFarlane testified that he kept the President apprised of what he was doing with respect to the contras, including what was ``close to the line.'' 39 Poindexter believed that the President would certainly have known that North was the NSC's action officer on Central America, and that the NSC was keeping close track of the situation in that region. Poindexter did not recall any conversation with the President about the breadth of these actions.40 In a Grand Jury appearance, Poindexter recalled that he did tell President Reagan that Secord was ``heading up the private operations to actually provide the logistics support to the contras.''41 Poindexter did not recall whether the President was told about the June 1985 Miami meeting in which North with Secord assumed control of the resupply operation.42 39 McFarlane, Select Committees Testimony, 5/13/87, p. 98. 40 Poindexter, Select Committees Deposition, 5/2/87, pp. 221-22; Ibid., 6/17/87, pp. 315-16; Poindexter, Select Committees Testimony, 7/15/87, pp. 138-41; Ibid., 7/20/87 pp. 3, 10. 41 Poindexter, Grand Jury, 11/28/90, p. 72. 42 Ibid., pp. 71-73. That the documentary record of precisely what was passed along to the President regarding the details of North's secret resupply operation is sparse is not surprising, considering the wholesale destruction of records by North. One surviving North document that reached the President was an October 30, 1985, memorandum requesting presidential approval of U.S. reconnaissance flights over Nicaragua.43 It is initialed ``approve'' by Poindexter, and also bears the words ``President Approved.'' Poindexter said this meant that he briefed the President orally on the content of the document rather than giving him the document to read.44 Poindexter did not recall whether he briefed the President on an attached, supplementary note from North which says in part: 43 Memorandum from North to McFarlane, 10/30/85, ALU 0060483-86. 44 Poindexter, Grand Jury, 11/28/90, p. 86-87. You should also tell the President that we intend to air-drop [the intelligence obtained from the reconnaissance flights] to two Resistance [contra] units deployed along the Rio Escondito, along with two Honduran provided 106 mm recoilless rifles which will be used to sink one or both of the arms carriers which show up in photograph at Tab I. Accordingly, there is some evidence indicating that the President was exposed to information about North's activities both in briefings from McFarlane and Poindexter and from documents. The President attached great importance during this period to the success of the contra effort. His personal diary is replete with references to the contra-aid struggle with Congress.45 It showed he followed the debate on the various contra-aid proposals on Capitol Hill very closely. There were frequent references to poll results regarding the lack of public support for the contra cause. Both McFarlane and Poindexter reported regularly to Reagan on the state of the contras. The question of how to continue their financial support was discussed at several NSPG sessions. 45 The OIC was permitted to read excepts from the President's diary entries from 1984-87 deemed relevant to Iran/contra by White House counsel. The OIC reviewers were not permitted to make copies, so the references to President Reagan's Diary quoted here, except where otherwise attributed, reflect OIC attorneys' notes of the excerpts. There is no question that within the Administration, President Reagan's support for the success of the contras assured high-level guidance for North from Casey, McFarlane and Poindexter.46 North's requests for assistance received warm and generous responses from working groups within the national security community.47 Ambassadors, assistant secretaries, CIA experts, and high-ranking military and intelligence officers responded to North's requests with alacrity. Only the impression, right or wrong, that North had the tacit authorization of the chief executive can explain this degree of support and cooperation in an area of manifest congressional hostility. 46 Reagan, Grand Jury Interrogatories, Answer to Question 9. When asked whether he authorized Casey, among others, to take action with respect to the contras during the Boland cut-off period, the President said the question was too broad to be answered specifically. He conceded that Administration policy was to support the contras. ``Thus, Administration officials were generally authorized to implement that policy.'' (Ibid.) 47 See North chapter. In spite of his insulation from North and his activities by McFarlane and Poindexter, President Reagan had to know the contras were being held together, as he directed. He knew that the funds from the Saudis had run out, but somehow other sources of funding were not only enabling the contras to survive, but to grow. When the press or Congress raised questions about the scope of the NSC and North's involvement, the President relied on McFarlane and Poindexter to respond to these allegations. The President, having issued generalized instructions to his subordinates that they stay within the law, relied upon the generalized assurances from McFarlane and Poindexter that his instructions were being followed.48 48 Reagan, Poindexter Trial Testimony, 2/16/90, pp. 53-54. Proof of President Reagan's authorization or knowledge of North's illegal activities, beyond a reasonable doubt, would have required more than the non-specific testimony that McFarlane and Poindexter were willing to give and that the few surviving documents would establish. The President's own activities on behalf of the contras were not on the face of it activities forbidden by criminal law. Procuring foreign assistance for the pursuit of objectives approved by Congress, such as the recent war with Iraq, is quite different from procuring foreign assistance for an objective rejected or prohibited by Congress. But diplomatic intercourse with the heads of foreign states is an essential presidential function. Even statutory restrictions in this field may be questionable. The constitutional remedy is impeachment. It is hardly a field for the application of criminal law. No criminal statute attempts to deal with this problem. The Iran Hostage Initiative, 1985-1986 In an effort to convince elements in Iran to use their influence to obtain the release of U.S. hostages in Lebanon, the President and his advisers in 1985 embarked upon the sale of arms to Iran, first through Israel, and subsequently directly through the CIA, under the operating direction of North, and using the Secord-Hakim ``Enterprise'' as a cut-out to disguise CIA involvement. In both phases, the President directed that Congress not be notified.49 49 Ibid., 2/17/90, p. 235. In the first phase, beginning in mid-1985, the President was informed of and approved in advance an Israeli shipment of 504 Israeli-owned U.S.-made TOW antitank missiles to Iran in August and September and a November shipment of Israeli-owned U.S. HAWK anti-aircraft missiles.50 The weapons were to be paid for by Iran and the Israeli stocks were to be replenished by the United States, which originally sold the weapons to Israel. 50 The President was briefed in advance on each group of weapons sold to Iran. With respect to the November 1985 HAWK shipment, the President was also told what happened to it (see Regan, Grand Jury, 2/3/88, p. 61-64; see also Poindexter Notes, 11/25/85, 000037-38). On December 5, 1985, President Reagan signed a Finding to validate it retroactively. The second phase in which the United States itself transferred weapons to Iran through the CIA and the Enterprise included 1,000 TOW missiles sent to Iran in February 1986 and 240 spare parts for HAWK missile systems sent in May and August 1986. In May 1986, the United States also sent 508 TOW missiles to Israel as part of the promised replenishment. In October 1986 a second group of 500 TOW missiles from the United States was delivered through the CIA and the Enterprise to Israel. The older-model TOWs the Israelis had received in May were then shipped to Iran. The Iranian representatives paid the Enterprise in advance for each 1986 shipment. The Enterprise reimbursed the CIA. During 1986 there was a substantial difference, aggregating roughly $16 million, after costs of delivery, between amounts collected by the Enterprise from Iran and the amounts transmitted by the Enterprise to the CIA to pay the Department of Defense for the weapons. The President's Finding authorizing the transaction specified the initiative's purposes; they did not include funding the contras or profiteering by Government agents.51 51 The January 17, 1986, Iran arms Finding listed three purposes: ``(1) establishing a more moderate government in Iran; (2) obtaining from [elements in Iran] significant intelligence not otherwise obtainable, to determine the current Iranian Government's intentions with respect to its neighbors and with respect to terrorist acts, and (3) furthering the release of the American hostages held in Beirut and preventing additional terrorist acts by these groups.'' (Presidential Finding, 1/17/86, AKW 001921.) The facts of the ill-fated Iran arms sales have been widely covered since the secret initiative began unraveling publicly in early November 1986. The question here is whether President Reagan violated any criminal law with respect to approving the arms sales to Iran, by failing to execute an appropriate Finding or a written determination authorizing NSC involvement, or by ordering that the arms sales not be reported to Congress. In the case of the two 1985 Israeli arms transfers, President Reagan knew from the outset that he was acting in conflict with his own announced policies of not rewarding hostage takers and of not selling arms to nations sponsoring terrorism. He knew this activity was politically and legally questionable.52 Two of his principal advisers, Secretary of Defense Casper W. Weinberger and Secretary of State Shultz, both opposed the initiative for those and other reasons. Nonetheless, the President decided to proceed, and he directed that Congress not be notified.53 52 Reagan, Poindexter Trial Testimony, 2/16/90, p. 16-19. 53 See the December 5, 1985, retroactive Finding referred to in footnote 50. There was no way in which President Reagan's action could be squared with the Arms Export Control Act (AECA). The AECA forbade the retransfer of U.S. arms to a third country unless the United States itself could make the transfer directly. It required certifications from the recipient country concerning further transfer. Finally, it required reports to the Speaker of the House and the Senate Foreign Relations Committee concerning retransfer agreements and notice to Congress 30 days after the end of each quarter of a transfer of more than $1 million of major defense equipment.54 54 22 U.S.C. 2753(a). These requirements were raised forcefully by Weinberger in November 1985 telephone conversations with McFarlane and in the December 7, 1985, meeting of Shultz and Weinberger with the President and others. On December 7, President Reagan was defiant. Poindexter had apparently passed to him North's prediction that the American hostages would likely be killed if the arms transfers did not proceed. President Reagan said he could explain to the American people a violation of the statute, but could not explain letting the hostages be killed for fear of violating a statute. When interviewed by Independent Counsel on July 24, 1992, President Reagan, although no longer remembering the December 1985 conversation itself, confirmed it in the sense that he believed that it was what he would have said, and that the views expressed were still held by him. President Reagan's defiance, if it had been public, would have presented an outright constitutional confrontation with Congress. The question would have been the validity of a statutory restriction upon President Reagan's view of his constitutional powers as commander-in-chief and as the officer responsible for dealing with foreign nations. Without any criminal sanction specifically provided for AECA violations, the question was whether this secret non-compliance with the AECA could be said to be a conspiracy to defraud the United States by the President and those assisting him in carrying out the transaction. In Independent Counsel's judgment, prosecution for such non-compliance would not have been appropriate. Right or wrong, the President's determination that secrecy was necessary to protect the hostages from murder was a matter for him to decide. Certainly, it was not a frivolous concern, nor was his view of his constitutional powers and responsibilities. The second statute relative to the Iranian arms sales was the National Security Act of 1947, as amended.55 This Act was considered first in connection with the 1986 arms sales but also, after the November 1986 exposure, as a retroactive validation of the 1985 arms sales. These opinions will be discussed in the chronological order in which they were given. 55 50 U.S.C. 413. The Foreign Assistance Act, 22 U.S.C. 2314, is arguably inapplicable. It concerns government-to-government transfers, not sales to individuals. In January 1986, the President was informed by Attorney General Meese that he could avoid the Arms Export Control Act. This opinion was based upon an October 5, 1981, opinion of Attorney General William French Smith that if the President determined that neither the Foreign Assistance Act nor the Arms Export Control Act could be used, he could approve a transfer outside the context of these statutes if he determined that the authorities of the Economy Act and the National Security Act should be utilized in order to achieve ``a significant intelligence objective.'' Whereas Attorney General Smith advised that reporting requirements imposed by the Intelligence Oversight Act of 1980 required that the House and Senate Intelligence Committees be informed of the President's determination, Attorney General Meese took a more extreme view that the National Security Act implicitly authorized the President to withhold any prior or contemporaneous notice to Congress, even the limited notice to the leadership of the intelligence committees and the leadership of the two houses of Congress.56 56 Meese, Select Committees Testimony, 7/28/87, pp. 6, 26; ibid., 7/29/87, pp. 45-46. Section 501(a) of the National Security Act of 1947, as amended, provides To the extent consistent with all applicable authorities and duties, including those conferred by the Constitution upon the executive and legislative branches of the Government, and to the extent consistent with due regard for the protection from unauthorized disclosure of classified information and information relating to intelligence sources and methods, the Director of Central Intelligence and the heads of all departments, agencies, and other entities of the United States involved in intelligence activities shall -- (1) keep the Select Committee on Intelligence of the Senate and Permanent Committee on Intelligence of the House of Representatives . . . fully and currently informed of all intelligence activities . . . including any significant anticipated intelligence activity, except that . . . (B) if the President determines it is essential to limit prior notice to meet extraordinary circumstances affecting vital interests of the United States, such notice shall be limited to the chairman and ranking minority members of the intelligence committees, the Speaker and minority leader of the House of Representatives, and the majority and minority leaders of the Senate[.] For the purposes of this section, the transfer of defense articles exceeding $1 million value by an intelligence agency to a recipient outside that agency was defined as a ``significant anticipated intelligence activity'' by the Fiscal Year 1986 Intelligence Authorization Act.57 57 P.L. 99-169, 502(b). Section 501(b) provides The President shall fully inform the intelligence committees in a timely fashion of intelligence operations in foreign countries . . . for which prior notice was not given under subsection (a) of this section and shall provide a statement of the reasons for not giving prior notice. Meese and the general counsel of the CIA advised President Reagan in 1986 that he could direct that notice not be given to any member of Congress. They reasoned that subsection (b) implied that the President, under certain circumstances, could avoid any notice to Congress, even the limited notice provided in 501(a)(1)(B). They supported this conclusion by the introductory language of subsection (a), which is a lengthy expression of deference to the President's other duties and constitutional powers. Section 501(b) could well be read more straightforwardly as a requirement that, in timely fashion, the eight specified representatives and senators be informed of intelligence operations specified in 501(a)(1)(B) which permitted notice limited to eight persons. Nevertheless, Meese's more extreme view that the President could forbid any notice whatsoever to any member of Congress had been expounded previously within the CIA and could not in a criminal case be treated as legally insupportable or frivolous. Under these circumstances, 501 of the National Security Act, with its deferential concern for the President's status in national security matters, would be poor support for criminal prosecution. In itself, it provided no criminal penalty for violation and, ordinarily, a President relying upon an opinion of the attorney general interpreting its deferential language could hardly be said to be conspiring to defraud the United States. After Meese learned in 1986 of the November 1985 shipments, he had the problem of legality analyzed by Assistant Attorney General Charles Cooper, the head of the Office of Legal Counsel in the Department of Justice. In a December 17, 1986, memorandum to Meese, Cooper reconfirmed that the AECA did not apply to the 1986 arms sales to Iran. He concluded that the National Security Act implicitly recognizes the President's discretion to authorize weapons transfers outside the AECA as part of an activity conducted by an ``intelligence agency,'' such as the CIA.58 58 Memorandum from Cooper to Meese, 12/17/86, pp. 5-6, ALV 077747-48. The Hughes-Ryan Amendment to the Foreign Assistance Act required that before the CIA might engage in such operations in a foreign country the President must ``find'' that the operation is ``important to the national security of the United States.'' 59 59 22 U.S.C. 662. The Israeli arms shipments in 1985, which the U.S. had approved, presented a problem. If the CIA was involved, there had to be a presidential Finding or the AECA would apply. Since there was no Finding, the AECA appeared to apply. In his memorandum dated more than three weeks after Meese's weekend investigation, Cooper ultimately took the position that the 1985 arms sales were legal under the President's inherent powers as implicitly recognized by the National Security Act.60 60 Memorandum from Cooper to Meese, 12/17/86, p. 17, ALV 007760. With respect to the August and September 1985 TOW shipments, Cooper explained that only the NSC, not the CIA, was involved. Therefore, no Finding was necessary. Assuming the NSC is an ``intelligence agency'' for these purposes, which Cooper found ``clear,'' the shipments would be legal under the National Security Act.61 This disregards Executive Order 12333. Before an agency other than the CIA could undertake a covert action outside the United States, that order specified that the President make a determination that the agency was more appropriate than the CIA to discharge the covert action. National Security Decision Directive (NSDD) No. 159 provided that the presidential determination under Executive Order 12333 must be made in writing. 61 Ibid., p. 5, ALV 007748. Ironically, Meese maintained that the Boland Amendment, which restricted actions of ``intelligence agencies,'' did not apply to the NSC because it was not an ``intelligence agency.'' Meese testified that ``certainly the NSC is not an intelligence agency'' and in his ``opinion the NSC staff would not be considered an intelligence agency within the general meaning of the term. (Meese, Select Committees Deposition, 7/8/87, p. 33.) Because the CIA was involved in the November 1985 HAWK shipment, however, the Hughes-Ryan Amendment required a presidential Finding. Cooper elided that problem with an ``oral finding'' theory. McFarlane had testified that the President had orally authorized the November 1985 HAWK shipment in advance. According to Cooper, that satisfied the Hughes-Ryan requirement that the President ``find'' the operation ``important to the national security of the United States.'' There remained the question of congressional notification. The National Security Act required the President to give Congress ``timely'' notice of ``intelligence operations in foreign countries.'' 62 The Administration took the position that because the lives of the hostages were at risk, it was not ``timely'' to notify Congress until the hostages were safe.63 President Reagan did not comply with Executive Order 12333 and NSDD 159. Whether a president is subject to his own Executive Order that had no criminal penalties was not a question to be settled by criminal prosecution. 62 50 U.S.C. 413(b). 63 Meese, Select Committees Testimony, 7/28/87, pp. 197-98. The November 1985 HAWK shipment had been significantly aided by the CIA: first, by its effort to use intelligence resources abroad to clear the snarled Israeli transportation effort; and, second, by using its own proprietary -- an airline that it owned -- to carry the HAWKs from Israel to Iran. The National Security Act required a Finding for such CIA involvement. CIA General Counsel Sporkin concluded that this Finding could be signed retroactively. Accordingly, on December 5, 1985, ten days after the HAWK shipment, President Reagan signed a Finding that it was in the national interest to further the sale of weapons to appropriate persons in order to facilitate the release of American hostages, and retroactively authorizing the CIA to aid such an effort.64 There was no evidence that the President knew in advance that the CIA was going to participate in the HAWK transaction. 64 President Reagan has said he does not recall signing the December 1985 Finding, but Poindexter testified that the President signed it on December 5. Poindexter testified that it was kept in his office safe until he destroyed it on or about November 21, 1986. North testified in his trial that he and Commander Paul Thompson, the NSC's legal counsel, witnessed the destruction of the Finding. None of the above statutes, the Executive Order, or the NSDD, provided for a criminal penalty. Thus their violation rises to a level of criminality only in the event of a criminal conspiracy. Independent Counsel has taken the position, and the District Court agreed, that a charge under the conspiracy statute, 18 U.S.C. 371, may be based upon a conspiracy, through deceitful and dishonest means, to violate a federal civil law or to prevent the Government from conducting its operations and implementing its policies honestly and faithfully. While such a charge was applicable under the facts in the North conspiracy count, involving unauthorized arms proceeds hidden in secret Swiss accounts to be used for other unauthorized activities, this hardly applied to the facts surrounding the President's initial decision to proceed with the arms sales to Iran. Congress was ultimately deceived, but the President's professed motive for secrecy -- a desire to protect the lives of the hostages and to effect their release -- had at least a surface plausibility. The October-November 1986 Cover-up of Iran/Contra With the downing of one of the Enterprise contra-resupply planes by the Nicaraguans on October 5, 1986, and their capture of the surviving crew member, American Eugene Hasenfus, the unraveling of the NSC's secret contra-resupply operation began. Despite immediate U.S. denials that either Hasenfus or the aircraft was connected to the U.S. Government or working under the direction of any American official or agency, evidence began piling up that the elaborate resupply network was being directed by North out of his NSC office. The Hasenfus shootdown did not create much of a stir with the President. On October 7, Poindexter briefed Reagan, telling him that the Hasenfus operation was not connected with the Government.65 The President did not even record the Hasenfus shootdown or the press reaction to it in his personal diary. In the President's Grand Jury Interrogatory Answers (45-47) Reagan gives this account: 65 Poindexter, Grand Jury, 3/6/91, pp. 140-41. Admiral Poindexter assured me that the Hasenfus operation had no connection to the United States Government whatsoever. When I asked whether General John Singlaub might be involved in this operation as had been reported in the press, I was told ``no'' by Admiral Poindexter. On the following day, October 8, 1986, also at an NSB [National Security Briefing], Admiral Poindexter confirmed there had been no U.S. Government involvement. Consequently, immediately following this NSB, when I departed the South Lawn en route to Raleigh, North Carolina, I answered in the negative when asked by a reporter whether there had been any U.S. involvement in this operation. (Tab 45-47B). Though the subject was not raised in my November 19, 1986, press conference, I was given talking points in preparation for that conference which stated that the downed aircraft was not a U.S. Government aircraft or involved in any U.S. Government operation (Tab 45-47C). Independent Counsel could not prove that President Reagan knew there was Government involvement in the Hasenfus operation. He apparently had been told by Poindexter on several occasions that there was none. The press and some members of Congress were skeptical as contrary evidence accumulated. But spokesmen for the State and Defense departments and the CIA continued the denials. Leading them was Assistant Secretary of State Elliott Abrams, who steadfastly denied before Congress and the public that the United States was involved in the resupply effort.66 As far as is known, no one on the inside sought to protect the President's credibility by telling him the truth or warning him against falsely denying a U.S. connection. 66 Abrams pleaded guilty October 7, 1991, to two misdemeanor counts of withholding information from Congress about secret Government efforts to support the contras during the Boland period. He was pardoned by President Bush on December 24, 1992. The Unraveling of the Iran Initiative Hostage David Jacobsen was released November 2, 1986. Poindexter and North were hopeful that a second hostage would also be released and discussions with Iranian contacts were still going on. When the story broke on November 3, 1986, that McFarlane had led a U.S. mission to Tehran and that the U.S. Government had sold weapons to Iran in exchange for hostages, a shocked Congress and national press corps began questioning the stark disparity between the reported secret arms sales and the Administration's public policies calling for a boycott of arms sales to Iran and the refusal to reward terrorism. The angry public reaction stunned the Administration, which spent the next three weeks trying to stem the protest, first by stonewalling and attempting to deny the story, then by making highly selective admissions aimed at stanching the flow of politically damaging information as much as possible. The initial reaction to stonewall is reflected in the notes of Rodney McDaniel, executive secretary of the NSC, taken during the President's daily national security briefings for November 6 and November 7, 1986. The notes reflect that a ``no comment'' posture was adopted.67 The President's initial public statements embodied the stonewall. On November 6, the President answered a press question as follows: 67 McDaniel Notes, 11/6/86, ALU 0128263-64. Q: Mr. President, do we have a deal going with Iran of some sort? The President: No comment, but could I suggest an appeal to all of you with regard to this: that the speculation, the commenting and all, on a story that came out of the Middle East, and that to us has no foundation, that all of that is making it more difficult for us in our effort to get the other hostages free.68 68 ``Remarks on Signing the Immigration Reform and Control Act of 1986,'' 11/6/86, Public Papers of the Presidents, Ronald Reagan, 1986, Vol. II, pp. 1521-22. On the next day, the President tried again to silence the controversy, as he was questioned by the press on his meeting with Jacobsen, who was at a White House ceremony celebrating his release: Q: Mr. President, the Iranians are saying that if you'll release some of those weapons, they'll intercede to free the rest of the hostages. Will you? The President: Bill, I thi