Gideon's Spies: The Secret History of the Mossad

by Gordon Thomas

  In London, Nicholas Davies read the report on the execution on a Reuters message that came to the Daily Mirror foreign desk. As instructed about all stories emanating from the Middle East he judged to be important, Davies took the report up to the office of Robert Maxwell.

  Since 1974, the publisher had been the most powerful sayan in Britain. Davies would remember: “Bob read the report without comment,” but could not recall “in all honesty” what he had felt about Bazoft’s death.

  In Tel Aviv, among those who read about the execution was one of the most colorful characters to have served Israel’s spymasters, Ari Ben-Menashe. Until then he had never known of the existence of Bazoft. But typically, that did not stop the mercurial Ben-Menashe feeling a sense of grief that “another good man had been in the wrong place at the wrong time.” It was emotional judgments like that which had made the darkly handsome, quick-witted Ben-Menashe such an unlikely candidate for a key position in the Israeli intelligence community. Yet, for ten years, 1977–87, he had held a sensitive post in the External Relations Department (ERD) of the Israel Defense Forces, one of the most powerful and secret organizations in the intelligence community.

  ERD had been created in 1974 by then prime minister Yitzhak Rabin. Smarting over the way Israel had been completely surprised by the Syrian-Egyptian onslaught in the Yom Kippur War, he had decided the only way to avert such an intelligence failure occurring again was to have a watchdog to monitor other intelligence services and, at the same time, conduct its own intelligence gathering.

  Four branches had been created to operate under the ERD umbrella. The most important was SIM; it provided “special assistance” for the growing number of “liberation movements” in Iran, Iraq, and, to a lesser extent, Syria and Saudi Arabia. The second branch, RESH, handled relationships with friendly intelligence networks. Top of those was the South African Bureau of State Security. Mossad had a similar unit called TEVEL, which also had close links with the Republic’s intelligence community. The relationship between RESH and TEVEL was often tense because of the inevitable overlapping.

  A third ERD department, Foreign Liaison, dealt with Israeli military attachés and other IDF personnel working overseas. The department also monitored the activities of foreign military attachés in Israel. That brought further conflict, this time with Shin Bet, who until then had the sole prerogative to report on such activities. The fourth arm of ERD was called Intelligence Twelve. Set up to liaise with Mossad, this unit had further soured relations with the men on the upper floor of their building on King Saul Boulevard. They felt overall that ERD would diminish their power.

  Ben-Menashe had been attached to RESH, with a specific responsibility for the Iranian “account.” He arrived at a time when Israel was about to lose its most powerful ally in the region. For over a quarter of a century, the shah of Iran had worked diligently behind the scenes to persuade Israel’s Arab neighbors to end their hostility toward the Jewish state. He was still making limited headway, notably with King Hussein of Jordan, when the shah’s own Peacock Throne was swept away by Ayatollah Khomeini’s Islamic fundamentalist revolution in February 1979. Khomeini promptly handed over the Israeli embassy building in Tehran to the PLO. Equally swiftly, Israel turned to helping the Kurds wage guerrilla war against the new regime. At the same time, Israel continued to supply arms to Tehran for them to use against Iraq. The “kill both sides” policy that David Kimche and others in Mossad advocated was well and truly in force.

  Ben-Menashe soon found himself involved in David Kimche’s grand design to trade hostages for arms with Iran. Both men traveled together to Washington, where Ben-Menashe claimed he prowled the wide corridors of the White House, met President Reagan, and was on first-name terms with his senior aides.

  Charming, and with a devil-may-care attitude, Ben-Menashe was a popular figure at Israeli intelligence community parties, where senior politicians could swap stories with the spymasters to mutual benefit. Few could tell a tale better than Ben-Menashe. By the time Kimche was starting the hostages-for-arms deal, Ben-Menashe had been appointed Prime Minister Yitzhak Shamir’s “personal consultant” on intelligence, having told Shamir he knew where “all the bodies were buried.” Kimche decided it made Ben-Menashe the ideal choice to work with the one intelligence officer he admired above all others, Rafi Eitan. With the full approval of the prime minister, Ben-Menashe was released from all other duties to work with Eitan. The two men moved to New York in March 1981. Their purpose, Ben-Menashe would recall, was straightforward : “Our friends in Tehran were desperate to have sophisticated electronic equipment for their air force and air and ground defenses. Israel, of course, wanted to help them as much as possible in their war against Iraq.”

  Traveling on British passports, always a favorite of Mossad, they set up a company in New York’s financial district. They quickly recruited a team of fifty brokers who scoured the U.S. electronics industry for suitable equipment. All sales were accompanied by end-user certificates that stated the equipment was to be used only in Israel. Ben-Menashe would recall: “We had packs of certificates which we would fill out and send to Tel Aviv to keep on file in case anyone ever bothered to check.”

  The equipment was flown to Tel Aviv. There, without going through customs, it was transferred onto aircraft chartered from Guinness Peat in Ireland and flown to Tehran. Guinness Peat, a well-regarded aircharter company, was an obvious choice. The idea of using Irish pilots had also been Rafi Eitan’s. He had maintained what he called his “Irish connections. When it comes to a deal, the Irish understand the rules. The only one which matters is to pay on the day.”

  As the volume of the New York operation increased, it became necessary to have a central holding company to process the billions of dollars involved in the purchasing and selling-on of arms. The name chosen for the company was ORA, “light” in Hebrew.

  In March 1983, Ben-Menashe was told by Rafi Eitan to recruit Nicholas Davies into ORA. How the old spymaster had heard of Davies was almost certainly through Mossad; in turn the service would have been told about Davies by Bazoft, who had done freelance journalist work for the Mirror foreign editor. Later that month, Ben-Menashe and Davies met in the lobby of London’s Churchill Hotel. By the time they left, Ben-Menashe knew that Davies was “our man.” The next day they lunched at Davies’s home. Present was Davies’s wife, Janet. Ben-Menashe quickly formed the impression that the sophisticated, smooth-talking Davies was afraid of losing her. “That was good. It made him vulnerable.”

  Davies’s role as a consultant to ORA was finally settled over a meeting at the Dan Acadia Hotel on the beachfront north of Tel Aviv. Ben-Menashe remembered: “We agreed he would be our London conduit for arms, our contact man for various Iranian and other deals. His home address would be used on ORA stationery and during the day his direct office phone number—822-3530—would be used by our Iranian contacts.”

  In return, Davies would receive fees commensurate with his newfound role as a key player in the arms-for-Iran operation. In all, he would receive $1.5 million, deposited in bank accounts in Grand Cayman, Belgium, and Luxembourg. Part of the money went to settle his divorce. Janet received a single payment of $50,000. Davies cleared all his bank debts and bought a four-story house. It became ORA’s European headquarters, its phone number—231-0015—another contact for the arms dealers who now had become part of the journalist’s life. Through his position as foreign editor, Davies began to visit the United States, Europe, Iran, and Iraq.

  Ben-Menashe noted approvingly that “on his travels he introduced himself as a representative of the ORA Group. He would set up a meeting, usually for a weekend, and he would fly to the city concerned, arrange for the number of weapons to be supplied and how payment was to be made.”

  In 1987, Iran’s Ayatollah Ali Akbar Hashemi Rafsanjani received a cable from ORA concerning the sale to Iran of four thousand TOW missiles at a cost of $13,800 each. The cable concluded with the confirmation that “Nicholas Davies is a repre
sentative of ORA Limited, with the authority to sign contracts.”

  It was a champagne time for Ari Ben-Menashe, Nicholas Davies, and the powerful figure who loomed ever larger in the background of unfolding events, Robert Maxwell. But none suspected for a moment the grim truth of the Hollywood cliché Davies liked to quote, “There’s no such thing as a free lunch.”

  CHAPTER 9

  SLUSH MONEY, SEX, AND LIES

  Matters had looked very different on that morning in late March 1985 when Ari Ben-Menashe had caught the early-morning British Airways flight from Tel Aviv to London. Eating his kosher airline breakfast, he reflected that life had never been so good. He was not only making “real money,” but had learned a great deal at the elbow of David Kimche as they trawled through the Byzantine world of selling arms to Iran. Along the way, he had also furthered his education in the continuous interplay between Israel’s politicians and its intelligence chiefs. For Ben-Menashe, “compared to my former colleagues, the average arms dealer was a choirboy.” He had identified the problem: the aftereffects of Israel’s Lebanon adventure, from which it had finally withdrawn, battered and demoralized. Anxious to regain prestige, the politicians gave the intelligence community an even freer hand in how it waged pitiless war against the PLO, whom they saw as the cause of all Israel’s problems. The result was a succession of scandals where suspected terrorists and even their families were brutalized and murdered in cold blood. Yitzhak Hofi, the former head of Mossad, had sat on a government commission, set up after intense public pressure, to investigate the brutality. It concluded that intelligence agents had consistently lied to the court about how they obtained confessions: the methods used had too often been gross. The committee had called for “proper procedures” to be followed.

  But Ben-Menashe knew the torture had continued: “It was good to be away from such awful matters.” He regarded what he was doing, providing arms for Iranians to kill untold numbers of Iraqis, as “different.” Nor did the plight of the Beirut hostages, the very reason for his wheeling and dealing, unduly concern him. The bottom line was the money he was making. Even with Kimche’s departure, Ben-Menashe still believed the merry-go-round he was riding would only stop when he decided—and he would step off a multimillionaire. By his count, ORA’s business was now worth “hundreds of millions”—most of it being generated through the house in the London suburb from where Nicholas Davies ran ORA’s international operations.

  Ben-Menashe knew Davies had continued to amass his own fortune, far in excess of the sixty-five-thousand-pound yearly salary he was paid as foreign editor of the Daily Mirror; Davies’s commission from ORA was almost always as much in a month. Ben-Menashe didn’t mind if the newspaperman took “an extra slice of the cake; it left plenty to go around. It was still champagne time.”

  Robert Maxwell dispensed it by the magnum from his office on top of the Mirror building to his guests. When the BA flight landed, Ben-Menashe would be chauffeured to see the tycoon in a limousine Maxwell would have sent, a further sign, Ben-Menashe felt, of the importance in which Maxwell now held him. In the car with him would be Nahum Admoni, Mossad’s director general, traveling on board an El Al flight an hour behind the British Airways jet. Ben-Menashe planned to spend the time waiting at Heathrow Airport for Admoni by reviewing all he had put together on how a powerful press baron had become the most important sayan Mossad had recruited.

  Maxwell had volunteered his services at the end of a meeting in Jerusalem with Shimon Peres shortly after Peres had formed a coalition government in 1984. One of Peres’s aides would recall the encounter as “the ego meets the megalomaniac. Peres was haughty and autocratic. But Maxwell just drove on, saying things like ‘I will pour millions into Israel’; ‘I will revitalize the economy.’ He was like a man running for office. He was bombastic, interrupted, went off on tangents and told dirty jokes. Peres sat there smiling his Eskimo smile.”

  Recognizing that Maxwell over the years had developed powerful contacts in Eastern Europe, Peres arranged for Maxwell to see Admoni. The meeting took place in the Presidential Suite of the King David Hotel in Jerusalem, where Maxwell was staying. Maxwell and Admoni found common ground in their central European backgrounds; Maxwell had been born in Czechoslovakia (which had led Peres to utter one of his few remembered jokes, “He’s the only bouncing Czech I know with money”). Both men shared a burning commitment to Zionism and a belief Israel had a God-given right to survive. They also enjoyed a passion for food and good wine.

  Admoni was keenly interested in Maxwell’s view that both the United States and the Soviet Union had a similar desire to achieve global domination, but through significantly different approaches. Russia included international anarchy as part of its strategy, while Washington saw the world in terms of “friends” and “enemies” rather than nations with conflicting ideological interests. Maxwell had offered other insights: the CIA’s secret contact with its Chinese counterparts was causing unease in the State Department, which found it could impinge on future diplomatic action and policies.

  The tycoon had painted portraits of two men of particular interest to Admoni. Maxwell said that after meeting Ronald Reagan, he came away with the feeling that the president was an eternal optimist who used his charm to conceal a tough politician. Reagan’s most dangerous failing was that he was a simplifier and never more so than on the Middle East, where his second or third thought was no better than his original shoot-from-the-hip judgment.

  Maxwell had also met William Casey, and judged the CIA director as a man of narrow opinions and no friend of Israel. Casey was running a “can-do” agency with outmoded ideas about the role of intelligence in the current political global arenas. Nowhere, in Maxwell’s view, was this more evident than in the way Casey had misread Arab intentions in the Middle East.

  These views coincided exactly with those of Nahum Admoni. After the meeting, they drove in Admoni’s unmarked car to Mossad headquarters, where the tycoon was given a personally conducted tour of some of the facilities by the director general.

  Now, a year later, March 15, 1985, they would meet again.

  Not until Admoni and Ben-Menashe entered Maxwell’s office suite in Mirror Newspapers headquarters in London’s High Holborn did their host announce there would be one other person present to share the bagels, lox, and coffee Maxwell had ordered must be available whenever he was in the building.

  Like a conjurer producing a rabbit out of a hat, Maxwell introduced Viktor Chebrikov, vice chairman of the KGB, and one of the most powerful spymasters in the world. With masterful understatement, Ben-Menashe would subsequently admit that “for a KGB leader to be in a British newspaper publisher’s office might seem a fanciful notion. But at the time President Gorbachev was on very friendly terms with Prime Minister Margaret Thatcher, so it was acceptable for Chebrikov to be in Britain.”

  More debatable is what the founder of Thatcherism and its freetrade principles would have made of the agenda for the meeting. Sprawled in Maxwell’s hand-tooled leather armchairs, Admoni and Ben-Menashe led the discussion. They wanted to know if “very substantial amounts” of currency were to be transferred to banks in the Soviet Union, could Chebrikov ensure the deposits would be safe? The money was from ORA’s profits in the sale of U.S. arms to Iran.

  Chebrikov asked how much money was involved.

  Ben-Menashe replied, “Four hundred fifty million American dollars. With similar amounts to follow. A billion, maybe more.”

  Chebrikov looked at Maxwell as if to ensure he had heard correctly. Maxwell nodded enthusiastically. “This is perestroika!” he boomed.

  To Ben-Menashe the sheer simplicity of the deal was an added attraction. There would be no galaxy of middlemen chipping away their pieces of commission. There would just be “Maxwell with his connections and Chebrikov, because of the power he wielded. His involvement was a guarantee the Soviets would not steal the funds. It was agreed the initial $450 million would be transferred from Credit Suisse to the Bank of Bu
dapest in Hungary. That bank would disburse the money to other banks in the Soviet bloc.”

  A flat fee of $8 million would be paid to Robert Maxwell for brokering the deal. Handshakes sealed matters. Maxwell proposed a champagne toast to the future capitalism of Russia. Afterward his guests were flown in the tycoon’s helicopter to Heathrow Airport to catch their flights home.

  Apart from Nicholas Davies, not one journalist in the Mirror building realized a monumental story had just escaped them. Soon another would slip from their grasp as Maxwell betrayed their journalistic skills to try to protect Israel.

  At the beginning of his relationship with Mossad, it was agreed that Maxwell was too valuable an asset to be involved with routine intelligence-gathering matters. According to a serving member of the Israeli intelligence community:

  “Maxwell was Mossad’s high-level Mr. Fixit. He opened the doors to the highest offices. The power of his newspapers meant that presidents and prime ministers were ready to receive him. Because of who he was, they spoke to him as if he was a de facto statesman, never realizing where the information would end up. A lot of what he learned was probably no more than gossip, but no doubt some of it contained real nuggets. Maxwell knew how to ask questions. He had received no training from us, but he would have been given guidelines of areas to probe.”

  On September 14, 1986, Robert Maxwell called Nahum Admoni on his direct line with devastating news. A freelance Colombian-born journalist, Oscar Guerrero, had approached a Maxwell-owned Sunday tabloid newspaper, the Sunday Mirror, with a sensational story—one which would rip aside the carefully constructed veil disguising the true purpose of Dimona. Guerrero claimed to be acting for a former technician who had worked at the nuclear plant. During that time the man had secretly gathered photographic and other evidence to show that Israel was now a major nuclear power, possessing no fewer than one hundred nuclear devices of varying destructive force.