The Iran Arms Imbroglio

By Dennis J. Wamsted

What began as a foreign policy dispute concerning the wisdom and morality of selling armaments to Iran in an effort to secure the release of US hostages held by terrorists in Lebanon has blossomed into a full-blown scandal. It involves possible violations of the law by growing numbers of US government officials and seriously impairs the Reagan administration's ability to conduct foreign policy, particularly in the Middle East. The scandal spread beyond the Middle East on November 25, 1986, when US Attorney General Edwin Meese III confirmed that between $10 million and $30 million paid by Iran for US weaponry had been funneled through Swiss bank accounts controlled by Lt. Col. Oliver L. North, a staff member of the National Security Council, to the Nicaraguan rebels or contras. (Congress, through the Boland Amendment, has prohibited US military aid to the contras since August, 1984. In addition, last year Congress placed a $27 million cap on "nonlethal" US government aid to the rebels.)

This announcement, and subsequent reports that some of the funds may even have found their way into 1986 congressional campaigns by pro-contra US candidates, drastically altered the parameters of the debate. Previously, the issues were who should design and implement US policy toward Iran and whether or not the policy that had been designed by the NSC made any sense. Following Meese's statement, however, questions immediately arose concerning the legality of the NSC's policy in general, as well as the specific actions of North and any others who may have played a role in implementing that policy.

The immediate results of Meese's announcement included:

1) The resignation of National Security Adviser Vice Admiral John M. Poindexter;
2) The firing of NSC staff member North;
3) The formation of a three-person special review board, chaired by former chairman of the Senate Armed Services Committee John Tower (R-TX), to examine the role and procedures of the NSC and its staff; and
4) The convening of congressional hearings to investigate the entire affair.

The long-term consequences of the uproar remain unclear at this time. However, a number of officials—both in and out of Congress—have already voiced their concern about the scandal's deleterious impact on President Reagan and his administration. One, outgoing Senate Majority Leader Robert Dole (R-KS), wrote in the Washington Post: "The Iran arms sale controversy threatens to keep the country bogged down for months. The president's credibility is being challenged, potentially undermining his ability to provide the leadership we need the next two years....We have to get all the facts out now, so that we...can settle this issue once and for all, and get on with the nation's business."

Even some Democratic members of Congress have expressed concern about the scandal's impact. For example, in the Democratic reply to President Reagan's regular weekly radio broadcast on November 29, 1986, Senator Daniel P. Moynihan (D-NY) said in part:

Your presidency, sir, is tottering. It can be saved, but only you can save it and only if you will talk with us, the Congress....Laws have been broken....Men have betrayed your trust....that undermines you, you who are responsible for executing the laws. This nation does not want and does not need another destroyed presidency. And so I plead, Mr. President, clean house, out with all the facts, out with all the malefactors.

From early December, attention focused on organized congressional efforts to investigate the affair after the Senate Select Committee on Intelligence, chaired by Senator David Durenberger (R-MN) for the remainder of the 99th Congress, began a series of closed hearings. On the House side, both the Foreign Affairs Committee and the Permanent Select Committee on Intelligence held hearings during the middle weeks of December.

The cast of characters testifying at these hearings was largely the same. Poindexter and North were summoned by both the Senate Intelligence Committee and the House Foreign Affairs Committee. Little was learned however, as both officers invoked their Fifth Amendment right against self-incrimination and refused to testify. Two men who did testify before the House Foreign Affairs Committee, Secretary of State George P. Shultz and former national security adviser Robert C. McFarlane, revealed a number of fascinating details about the Iran initiative.

Shultz, for example, told committee members that the new US Ambassador to Lebanon, John H. Kelly, had bypassed regular State Department channels, i.e. Shultz, and dealt directly with NSC staff members concerning arms transfers to Iran and ongoing negotiations to gain the release of US hostages being held in Lebanon by the pro-Iranian Islamic Jihad group. Shultz also became the first high-ranking administration official to term the diversion of funds obtained from Iran to the contras as "illegal."

McFarlane, meanwhile, contradicted statements by Meese and other administration representatives that North had been the only US official to know of the funds' diversion. The former national security adviser testified that North had told him last May that "the US government had applied certain...funds" garnered from its arms sale to Iran to support the contras.

Another administration official who testified was CIA director William Casey. In a closed hearing before the House Foreign Affairs Committee December 10, 1986, Casey said an informal group of private investors had arranged financing for at least one of the US arms sales to Iran. According to congressional and administration sources, Casey claimed that he learned of this arrangement through an old acquaintance, Roy Furmark, a New York-based energy consultant, and that he did not know of the diversion of funds to the contras until Attorney General Meese informed him in late November. If true, one congressional source said, Casey is effectively saying "the CIA is so incompetent it can't even monitor its own bank accounts or keep track of the contras, which are one of its highest priorities." On the other hand, if Casey did know, then he wasn't telling the truth during the congressional testimony. Either way he, the CIA, and the administration as a whole, lose credibility.

The next step in the investigative process will occur in early January when the 100th Congress convenes. At that time, both the House and the Senate will continue independent select committees to investigate the affair. The Senate panel will have 11 voting members (six Democrats and five Republicans) and two non-voting ex-officio members. Since the Democrats will control both the Senate and the House, both panels will have Democratic chairmen. A leading candidate for chairmanship of the Senate panel is Daniel Inouye (D-HI). Other likely members of the Senate panel are David Boren (D-OK) and Claiborne Pell (D-RI), incoming chairmen of the Senate Intelligence and Foreign Relations Committees.

The House panel will have 15 members (nine Democrats and six Republicans). Five House committee chairmen are virtually certain to be included:

1) Lee Hamilton (D-IN), Permanent Select Committee on Intelligence;
2) Dante Fascell (D-FL), Foreign Affairs Committee;
3) Les Aspin (D-WI), Armed Services Committee;
4) Jack Brooks (D-TX), Government Operations Committee; and
5) Peter Rodino (D-NJ), Judiciary Committee

House Republican sources say it is likely the ranking minority members of each of these five committees will also be named to the panel. The chairmanship of the panel is uncertain.

The various and contradictory replies given by those administration officials who have testified, plus the establishment of these two select congressional panels, virtually insures that the issue will remain in the headlines well into the new year—exactly what the administration had hoped to avoid. When, or even if, the administration will be able to pick up the pieces of its shattered Middle East policy is problematic at best.

Dennis J. Wamsted is a free-lance writer specializing in Congress and Middle East affairs.