Key October Surprise Evidence Hidden A Russian government report, which corroborated allegations that Ronald Reagan’s presidential campaign interfered with President Jimmy Carter’s Iran-hostage negotiations in 1980, was apparently kept from the Democratic chairman of a congressional task force that investigated the charges a dozen years later. Email

Printer friendly Lee Hamilton, then a congressman from Indiana in charge of the task force, told me in a recent interview, “I don’t recall seeing it,” although he was the one who had requested Moscow’s cooperation in the first place and the extraordinary Russian report was addressed to him. The Russian report, which was dropped off at the U.S. Embassy in Moscow on Jan. 11, 1993, contradicted the task force’s findings – which were released two days later – of “no credible evidence” showing that Republicans contacted Iranian intermediaries behind President Carter’s back regarding 52 American hostages held by Iran’s Islamic revolutionary government, the so-called October Surprise case. I was surprised by Hamilton’s unfamiliarity with the Russian report, so I e-mailed him a PDF copy. I then contacted the task force’s former chief counsel, attorney Lawrence Barcella, who acknowledged in an e-mail that he doesn’t “recall whether I showed [Hamilton] the Russian report or not.” In other words, the Russian report – possibly representing Moscow’s first post-Cold War collaboration with the United States on an intelligence mystery – was not only kept from the American public but apparently from the chairman of the task force responsible for the investigation. The revelation further suggests that the congressional investigation was shoddy and incomplete, thus reopening the question of whether Reagan’s landslide victory in 1980 was, in part, set in motion by a dirty trick that extended the 444-day captivity of the hostages who were freed immediately after Reagan was sworn into office on Jan. 20, 1981. The coincidence between Reagan’s inauguration and the hostage release was curious to some but served mostly to establish in the minds of Americans that Reagan was a tough leader who instilled fear in U.S. adversaries. However, if the timing actually resulted from a clandestine arms-for-hostage deal, it would mean that Reagan’s presidency began with an act of deception, as well as an act of treachery. The Russian report also implicates other prominent Republicans in the Iranian contacts, including the late William Casey (who was Reagan’s campaign director in 1980), George H.W. Bush (who was Reagan’s vice presidential running mate), and Robert Gates (who in 1980 had been a CIA officer on the National Security Council before becoming executive assistant to Carter’s CIA Director Stansfield Turner). Casey, who served as Reagan’s first CIA director, died in 1987 before the 1980 allegations came under scrutiny. Bush, who was President during the task force’s 1992 inquiry, angrily denied the accusations at two news conferences but was never questioned under oath. Gates, who was CIA director in 1992 and is now President Barack Obama's Defense Secretary, also has brushed off the suspicions. Competing Offers As described by the Russians, the 1980 hostage negotiations boiled down to a competition between the Carter administration and the Reagan campaign offering the Iranians different deals if the hostages were either released before the election to help Carter or held until after the election to benefit Reagan. The Iranians “discussed a possible step-by-step normalization of Iranian-American relations [and] the provision of support for President Carter in the election campaign via the release of American hostages,” according to the U.S. Embassy’s classified translation of the Russian report. Meanwhile, the Republicans were making their own overtures, the Russian report said. “William Casey, in 1980, met three times with representatives of the Iranian leadership,” the report said. “The meetings took place in Madrid and Paris.” At the Paris meeting in October 1980, “R[obert] Gates, at that time a staffer of the National Security Council in the administration of Jimmy Carter, and former CIA Director George Bush also took part,” the Russian report said. “In Madrid and Paris, the representatives of Ronald Reagan and the Iranian leadership discussed the question of possibly delaying the release of 52 hostages from the staff of the U.S. Embassy in Teheran.”



Both the Reagan-Bush Republicans and the Carter Democrats “started from the proposition that Imam Khomeini, having announced a policy of ‘neither the West nor the East,’ and cursing the ‘American devil,’ imperialism and Zionism, was forced to acquire American weapons, spares and military supplies by any and all possible means,” the Russian report said. According to the Russians, the Republicans won the bidding war. “After the victory of R. Reagan in the election, in early 1981, a secret agreement was reached in London in accord with which Iran released the American hostages, and the U.S. continued to supply arms, spares and military supplies for the Iranian army,” the Russian report continued. The deliveries were carried out by Israel, often through private arms dealers, the Russian report said. [For text of the Russian report, click here. To view the U.S. embassy cable that contains the Russian report, click here.] The Russian report came in response to an Oct. 21, 1992, query from Hamilton, who asked the Russian government what its files might show about the October Surprise case. The report came back from Sergey V. Stepashin, chairman of the Supreme Soviet’s Committee on Defense and Security Issues, a job roughly equivalent to chairman of the Senate Intelligence Committee. In what might have been an unprecedented act of cooperation between the two longtime enemies, Stepashin provided a summary of what Russian intelligence files showed about the October Surprise charges and other secret U.S. dealings with Iran. In the 1980s, after all, the Soviet KGB was not without its own sources on a topic as important to Moscow as developments in neighboring Iran. The KGB had penetrated or maintained close relations with many of the intelligence services linked to the October Surprise allegations, including those of France, Spain, Germany, Iran and Israel. History had shown, too, that the KGB had spies inside the CIA and other U.S. intelligence agencies. So, Soviet intelligence certainly was in a position to know a great deal about what had or had not happened in 1980. The Supreme Soviet’s response was delivered to the U.S. Embassy in Moscow by Nikolay Kuznetsov, secretary of the subcommittee on state security. Kuznetsov apologized for the “lengthy preparation of the response.” It was quickly translated by the U.S. embassy and forwarded to Hamilton. Lost Report However, if the recollections of Hamilton and Barcella are correct, the report may never have reached Hamilton, instead being intercepted by Barcella who had previously acknowledged to me that he decided to simply file the report away in boxes containing the task force documents. After I discovered the Russian report in one of those boxes in late 1994, I failed to get a response to questions I placed with Hamilton’s congressional staff. Back then, Hamilton was a powerful figure in Congress, transitioning from being chairman of the House Foreign Affairs Committee to being the panel’s ranking Democrat. Years later, in 2004, while working on the book Secrecy & Privilege, I managed to get Barcella on the phone to ask him why the task force hadn’t at least released the Russian report along with the final task force report which had reached a contradictory conclusion. Barcella explained that the Russian report had arrived late and its classification, as “confidential,” meant that it couldn’t simply be made public. Instead he said he filed it away, assuming it would disappear into some vast government warehouse, “like in the movie ‘Raiders of the Lost Ark.’” In that interview, Barcella also acknowledged that new evidence implicating the Republicans in the October Surprise intrigue arrived in December near the end of the investigation, leading him to ask Hamilton to extend the investigation for a few more months so the new material could be evaluated, but that Hamilton refused. However, the task force report – released on Jan. 13, 1993 – reflected none of that uncertainty, as it attacked various witnesses who claimed knowledge of the secret Republican-Iranian contacts. The task force claimed to have established solid alibis for the whereabouts of Bill Casey and other key Republicans on dates of alleged meetings with Iranians. In my view, many of the task force’s alibis and other key findings were misleading or downright false. [For details, see Secrecy & Privilege.] However, in 1993, Washington’s conventional wisdom was that the October Surprise story was a bogus conspiracy theory, despite the fact that many of the same Reagan figures had been caught lying about the secret Iran-Contra guns-for-hostages negotiations in 1985-86. Back on the Radar The October Surprise case popped back onto my radar in late February 2010 while I was traveling in Los Angeles. I received an e-mail from one of the former task force members, ex-Rep. Mervyn Dymally, D-California. Since we were both in Los Angeles, I suggested meeting for breakfast, which we did. Dymally said he was pulling together some of his papers and was surprised to learn that Hamilton and task force vice chairman, Republican Henry Hyde, had forwarded the task force report to House Speaker Thomas Foley with a letter indicating that there had been a unanimous vote approving the debunking findings on Dec. 10, 1992. Dymally said he never voted to approve the findings and indeed tried to submit a dissent to the final report, only to face resistance from Hamilton and Barcella. Dymally added that Hamilton called him in January 1993, demanding that the dissent be withdrawn. “If it were the case [that there had been a unanimous vote on Dec. 10, 1992], why call me in January and talk to me about the dissent,” Dymally said. “I didn’t know of any meeting on the tenth.” Dymally’s dissent letter had protested some of the absurd alibis that Barcella and the task force were using to establish Casey’s whereabouts on key dates. For instance, the task force claimed that because someone had written down Casey’s home phone number on one day that proved Casey was at home, and that because a plane flew from San Francisco directly to London on another date, Casey must have been onboard. According to sources who saw Dymally’s dissent, it argued that “just because phones ring and planes fly doesn’t mean that someone is there to answer the phone or is on the plane.” But Barcella reportedly was furious over the prospect of a dissent and enlisted Hamilton to pressure Dymally into withdrawing it. In an interview with me back in 1993, Dymally, who had just retired from Congress, said the day his dissent was submitted, he received a call from Hamilton warning him that if the dissent was not withdrawn, “I will have to come down hard on you.” The next day, Hamilton, who was taking over the House Foreign Affairs Committee, fired the staff of the Africa subcommittee that Dymally had headed. The firings were billed as routine, and Hamilton told me back then that “the two things came along at the same time, but they were not connected in my mind.” Hamilton said his warning to Dymally had referred to a toughly worded response that Hamilton would have fired off to Dymally if the dissent had stood. Hoping to salvage the jobs of some of his staff, Dymally agreed to withdraw the dissent. However, Dymally told me at our Los Angeles breakfast that he never approved the report and was certainly not onboard for a unanimous vote on Dec. 10, 1992, which came more than a month after Congress had adjourned in that election year. Russian Mystery I also asked Dymally if he had known of the Russian report or the other late-arriving evidence that had supposedly led Barcella to recommend an extension of the task force investigation. Dymally said he knew of neither. Because of Dymally’s dispute about the unanimous vote, I began contacting other ex-task force members to plumb their recollections. I tracked down two former congressmen who had served on the task force, Edward Feighan and Sam Gejdenson. Neither had a clear recollection of the vote, but were stumped when asked about the Russian report and Barcella’s proposed extension. One Democratic congressional staffer who had served on the investigation told me that interest in the October Surprise inquiry faded quickly after the November 1992 election when Democrat Bill Clinton defeated President George H.W. Bush in his bid for a second term. The focus of Official Washington turned to staffing the new administration, he said. The Washington Establishment also had a great fondness for the departing President, so there was a feeling that pursuing old scandals that might implicate him in wrongdoing would be excessive. Incoming President Clinton also wanted to focus the Democrats on gaining as much bipartisan goodwill for his agenda as possible. When I first spoke with Hamilton recently, he said his memory also was foggy regarding the events of the early 1990s, including the circumstances surrounding the supposedly unanimous vote by task force members. But he said he would not have claimed a unanimous vote if there had not been one. Regarding Barcella's claim that he had urged an extension of the investigation and that Hamilton had turned him down, Hamilton suddenly bristled. “That would have been an extraordinary development,” Hamilton said, indicating that he would have remembered that. “We would not have closed an investigation if there was pending evidence.” When I asked Hamilton about the Russian report, he responded, “none of that is ringing a bell with me.” I then e-mailed him a PDF file of the Russian report. Barcella’s Response I also contacted Barcella, who is now a lawyer in private practice at Paul, Hastings, Janofsky & Walker LLP. He responded via e-mail, beginning with some personal insults: “It's sad that after so many years, you're still obsessing over this. It's equally sad that you have insisted on one-sided interpretations and twisted characterizations of things. Nonetheless, at the risk of feeding your quixotic obsession, here's my best recollection, recognizing it is at best partial after nearly 2 decades. “The information from Russia came in literally at the last minute. It's [sic] source was unclear and needed verification. The information was hardly self-authenticating and lacked detail. Russia was in chaos in this immediate post-Soviet Union period and information and disinformation was spewing out like and uncapped oil well. “The Task Force report was either printed or at the printers. The Task Force authorization was expiring or expired. It was only authorized for that Congress and that congress had expired. I spoke briefly w/ Lee [Hamilton] and don't recall whether I showed him the Russian report or not. “He felt ham-strung, as there was a new Congress, a new(and Democratic)President, a new Administration and new priorities and nothing could be done w/o a whole new re-authorization process. The original authorization had been very acrimonious and had taken weeks and weeks. “He wasn't sure there was any stomach for fighting for re-authorization, particularly given the thoroughness of the investigation and confidence in the results. There's no doubt in my mind that if It were up to Lee, he would have given me the green light. “The realist in him knew that the House leadership wasn't going to break their pick on a re-authorization fight.” Hamilton, however, told me that he had no recollection of any such re-authorization request from Barcella. After receiving the PDF file of the Russian report, Hamilton also reiterated that he had no recollection of having ever seen it before, nor did his staff aide on the task force, Michael Van Dusen. Barcella’s contention in his e-mail about “the thoroughness of the investigation and confidence in the results” is also open to question. On Dec. 8, 1992, recognizing the report’s shaky conclusions, Barcella ordered his deputies “to put some language in, as a trap door” in case later disclosures disproved parts of the report or if complaints arose about selective omission of evidence. [For the “trap door” memo, click here.] After the trap-door memo, more late-arriving evidence implicated the Reagan campaign, but that material was either shoved aside or misrepresented in the final report. For instance, a detailed letter from former Iranian president Abolhassan Bani-Sadr – dated Dec. 17, 1992, and describing his first-hand account of internal battles with Ayatollah Ruhollah Khomeini over whether to conspire with the Republicans – was dismissed as “hearsay” that lacked probative value. The next day, Dec. 18, 1992, David Andelman, the biographer of French intelligence chief Alexandre deMarenches, gave sworn testimony about what deMarenches had confided to him about the Republican-Iranian contacts. Andelman, an ex-New York Times and CBS News correspondent, said that while he was working on deMarenches’s autobiography, the arch-conservative spymaster admitted arranging meetings between Republicans and Iranians about the hostage issue in the summer and fall of 1980, with one meeting held in Paris in October. Andelman said deMarenches ordered that the secret meetings be kept out of his memoirs because the story could otherwise damage the reputations of his friends, William Casey and George H.W. Bush. Andelman’s testimony corroborated longstanding claims from a variety of international intelligence operatives about a Paris meeting involving Casey and Bush. But the task force report brushed this testimony aside, too, paradoxically terming it “credible” but then claiming it was “insufficiently probative.” The report argued that Andelman could not “rule out the possibility that deMarenches had told him he was aware of and involved in the Casey meetings because he, deMarenches, could not risk telling his biographer he had no knowledge of these allegations.” More Corroboration Yet, besides corroborative testimony from intelligence operatives, such as Israeli intelligence officer Ari Ben-Menashe and several members of French intelligence, Barcella also was aware of a contemporaneous account of the alleged Bush-to-Paris trip by Chicago Tribune reporter John Maclean. Maclean, the son of author Norman Maclean who wrote A River Runs Through It, had said a well-placed Republican source told him in mid-October 1980 about Bush’s secret trip to Paris to meet with Iranians on the hostage issue. That evening, Maclean passed on the information to David Henderson, a State Department Foreign Service officer who later recalled the date as Oct. 18, 1980. At the time, Maclean didn’t write about the Bush-to-Paris leak because, he told me, a Reagan-Bush campaign spokesman subsequently denied it and Maclean didn’t have additional corroboration at that time. The Maclean-Henderson recollection only bubbled to the surface in the early 1990s when the October Surprise investigation began. Henderson mentioned the meeting in a 1991 letter to a U.S. senator that was forwarded to me while I was working for PBS Frontline. In the letter, Henderson recalled the conversation about Bush’s trip to Paris but not the name of the reporter. A Frontline producer searched some newspaper archives to find a story about Henderson as a way to identify Maclean as the journalist who had interviewed Henderson. Though not eager to become part of the October Surprise story in 1991, Maclean confirmed that he had received the Republican leak on or about Oct. 18, 1980, precisely the time frame when Bush was alleged to have made a quick trip to Paris. Despite the mounting evidence that the Republicans indeed had made secret contacts with Iranians in 1980, the task force kept refusing to rethink its conclusions. Instead, to debunk the October Surprise suspicions, the task force relied on supposed alibis for Casey and Bush, but the investigators knew how shaky the alibis were. The alibis included the one about Reagan’s foreign policy adviser Richard Allen writing down Casey’s home phone number, which was interpreted as solid evidence that Casey must have been at home, even though Allen had no recollection of calling Casey and no record of any call. Other alibis were equally false or flimsy. [See Consortiumnews.com’s “The Crazy October Surprise Debunking.”] Barcella’s Game Now, with Barcella’s claim that he urged Hamilton to extend the investigation so the late-arriving evidence could be thoroughly vetted, the former chief counsel seems to be playing a double game, acknowledging that he was concerned about the fragility of the report’s conclusions while still insisting that the debunking was airtight. The fact that Barcella and Hamilton now differ on the question of whether Barcella requested an extension – and their apparent agreement that Barcella never showed the Russian report to Hamilton – suggests that Barcella may have decided to sink the October Surprise suspicions for his own reasons. That also might explain Barcella’s touchiness over the case being brought back up again. Barcella always seemed to be an odd choice for chief counsel, although he volunteered for the October Surprise job in 1991 and at the time had a reputation as a tough prosecutor because of his work in the 1980s capturing “rogue” CIA operative Edwin Wilson, who was subsequently convicted of selling explosives and other military items to Libya. However, Barcella had apparent conflicts of interest, including a friendship with neoconservative operative Michael Ledeen, who had been a key figure in the Iran-Contra scandal and was linked as well to the October Surprise case. For instance, an early draft of the task force report had identified Ledeen and another prominent neocon Richard Perle as participating in meetings of the Reagan campaign’s “October Surprise Group,” though “they were not considered ‘members.’” The campaign’s “October Surprise Group” was assigned the task of preparing for “any last-minute foreign policy or defense-related event, including the release of the hostages, that might favorably impact President Carter in the November election,” the draft report said. The draft also mentioned a Sept. 16, 1980, meeting on something called the “Persian Gulf Project” involving senior campaign officials, including William Casey and Richard Allen. According to the draft and Allen’s notes, Ledeen also participated in that meeting. However, both references to Ledeen were removed from the task force’s final report, apparently after Ledeen spoke with his friend Barcella. [To read portions of the draft report, click here.] “Yes, I believe I spoke to Larry Barcella about the October Surprise investigation,” Ledeen told me in an e-mail exchange last year. “And I undoubtedly told him what I have always said, namely that, to the best of my knowledge, the October Surprise theory is nonsense.” The Barcella-Ledeen relationship dates back several decades when Barcella sold a house to Ledeen and the two aspiring Washington professionals shared a housekeeper. According to Peter Maas’s book Manhunt about Barcella’s work as a prosecutor on the Wilson case, Ledeen approached Barcella regarding the investigation in 1982. Ledeen, then a State Department consultant on terrorism, was concerned that two of his associates, former CIA officer Ted Shackley and Pentagon official Erich von Marbod, had come under suspicion in the Wilson case. “I told Larry that I can’t imagine that Shackley [or von Marbod] would be involved in what you are investigating,” Ledeen told me in an interview years later. “I wasn’t trying to influence what he [Barcella] was doing. This is a community in which people help friends understand things.” Barcella also saw nothing wrong with the out-of-channel approach. “He wasn’t telling me to back off,” Barcella told me. “He just wanted to add his two-cents worth.” Barcella said the approach was appropriate because Ledeen “wasn’t asking me to do something or not do something.” However, Shackley and von Marbod were dropped from the Wilson investigation. Ledeen’s associate, Shackley, also had a connection to the October Surprise case in 1980, having worked with then-vice presidential candidate George H.W. Bush on the Iran hostage issue. [For more on Shackley’s role in the October Surprise case, see Parry’s Secrecy & Privilege. To reach a document on Shackley’s October Surprise work with Bush, click here.] The Collapsing Case on Wilson Barcella’s golden reputation from the Wilson conviction also has been tarnished in recent years. In 2003, an irate federal judge threw out Wilson’s Libya conviction after learning that the U.S. government had lied in a key affidavit which denied that Wilson was in contact with the CIA regarding his work with the Libyans. The government’s false affidavit, which disputed Wilson’s defense claim that he had been cooperating with the CIA, was read twice to the jury before it returned the guilty verdict in 1983. Jury foreman Wally Sisk has said that without the government’s affidavit, the jury would not have convicted Wilson. “That would have taken away the whole case of the prosecution,” Sisk said. The discovery of this prosecutorial abuse – after Wilson had been imprisoned for two decades – led U.S. District Judge Lynn N. Hughes to vacate Wilson’s conviction for selling military items to Libya. “There were, in fact, over 80 contacts, including actions parallel to those in the charges,” Hughes wrote in his decision. “The government discussed among dozens of its officials and lawyers whether to correct the testimony. No correction was made,” until Wilson managed to pry loose an internal memo describing the false affidavit and revealing the debate among government officials about whether to correct it. In an interview with ABC’s “Nightline,” Wilson called Barcella and another prosecutor “evil” for their role in the deception. “Once they got me convicted, then they had to cover this thing up constantly,” Wilson said. “They wanted to make sure that I would never get out of prison.” Barcella, who was the supervising prosecutor in the Wilson case, has said he doesn’t recall seeing the affidavit before it was introduced and has denied any impropriety afterwards, when other government officials challenged the affidavit’s accuracy. While the Wilson reversal dimmed Barcella’s standing, Hamilton’s reputation remains glittering, at least as far as Official Washington is concerned. After retiring from Congress in 1999, he became president of the Woodrow Wilson International Center for Scholars. Considered a Washington Wise Man by many, he has served on blue-ribbon panels in recent years, including the 9/11 Commission and the Iraq Study Group. Now, the question is whether Hamilton will insist that his task force’s certainty regarding its October Surprise debunking be reconsidered in light of the new evidence – or whether he’ll assume that it’s smarter to keep quiet and trust that Washington’s misguided conventional wisdom will continue to hold. [For more on this topic, see Consortiumnews.com’s “How Two Elections Changed America” or Parry’s Secrecy & Privilege.] Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & 'Project Truth' are also available there. Or go to Amazon.com. To comment at Consortiumblog, click here. 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