Reagan

by Bob Spitz

  Shultz’s acknowledgment was considered an embarrassment by White House officials. His public ending of arms sales put them in a bind, evidence of his increasing disloyalty. George Bush, when asked to comment, called the secretary’s remarks “inappropriate.” Don Regan was vastly more disapproving. “I don’t know what’s gotten into George,” Regan chafed. “If he doesn’t like it, he should quit.” But Regan had plunged into even hotter water than Shultz thanks to an unguarded interview he’d given to the New York Times. Defending himself against criticism that the chief of staff had failed to adequately serve the president in a series of stumbles, Regan said, “Some of us are like a shovel brigade that follow a parade down Main Street cleaning up. We took Reykjavik and turned what was really a sour situation into something that turned out pretty well. Who was it that took this [Libyan] disinformation thing and managed to turn it? Who was it who took on this loss in the Senate and pointed out a few facts and managed to pull that? I don’t say that we’ll be able to do it four times in a row. But here we go again, and we’re trying.”

  If Nancy Reagan had her way, both Shultz and Regan would have been fired posthaste. Neither man seemed to be protecting her husband from a tidal wave of political damage. Bill Casey, who cited Shultz’s “public pouting” and failure to support the Iran initiative as breaches of trust, petitioned the president to replace the secretary of state with either Paul Laxalt or Jeane Kirkpatrick. The disenchantment found its way into national news reports. But the president swore, “I’m not firing anybody.”

  He was still convinced of the merit of the policy and still convinced he could use his powers of persuasion to talk his way out of the crisis and salvage the situation. But another, more convulsive crisis was billowing on the horizon, and he would need every last dependable advocate to keep it from demolishing his presidency.

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  Ronald Reagan had always relied on his ability to communicate with any type of audience, friend or foe, and draw people surely into his confidence. He’d employed this talent, this gift, his entire adult life—during the Eureka College campus strike when, as he recalled, “for the first time in my life, I felt my words reach out and grab an audience”; as a silken-voiced announcer on Iowa radio stations; opposite the world’s most glamorous stars on movie and television screens; across the negotiating table as president of the Screen Actors Guild; in front of hostile cross-examiners of the House Un-American Activities Committee; convincing workers in General Electric’s plants that a fading movie star had their best interests at heart; persuading people who had never voted for a Republican, much less a conservative, to support him as governor and president. He had never failed to get his message across, and so now he decided he could speak unscripted and convincingly to his greatest adversary—the White House press corps—in order to explain away the Iran controversy. It was a disaster.

  The press conference was scheduled for November 19, 1986, a date chosen by the chief of staff after receiving word that the First Lady’s “friend” in San Francisco had signed off on it as being favorable to the president. Everyone knew what was riding on this event and pulled together to help. John Poindexter had supplied Reagan with a seventeen-page chronology of the Iran initiative, albeit one that was inaccurate and incomplete, to prepare and guide him through the ordeal. There was a run-through on November 17, at which his staff peppered him with likely questions, the most difficult questions they could think of, so he could formulate credible answers well in advance. The run-through left the staff badly shaken. It “was about as bad as I’d ever seen it,” recalled Peter Wallison, the White House counsel. The president was confused, error-prone. “He seemed to know nothing about what had happened. . . . We couldn’t imagine how he was going to go into a full-scale press conference the next evening when he was so ill-prepared.” A second run-through the next day was somewhat better, but by no means was it Ronald Reagan at the top of his game. Still, he remained confident that he would rise to the occasion, and he decided to go ahead as scheduled.

  His discomfort was obvious to the press. The president was defensive from the outset. He seemed poorly informed and lacking the trademark Reagan charm. Grasping a lectern in the East Room, a formal reception hall on the ground floor of the Executive Mansion, he attempted to justify his decision to sell arms to Iran, and in doing so, he jumbled the facts, often contradicting previous comments he’d made. Only a week earlier he’d assured the country that he “did not, repeat, did not, trade weapons or anything else for hostages.” Now he changed his story, admitting—inadvertently—that an exchange had been made. He asserted that Iranians had ceased kidnapping Americans, failing to mention that three more Americans had been taken hostage as recently as September by jihadists associated with Iran. He seemed to be unaware that Iran’s military was training and financing terrorist groups in Lebanon, that its clerics were indoctrinating Islamic radicals. The biggest faux pas, however, was the president’s answer to a CNN reporter who asked if the United States dealt with Israel in supplying weapons to Iran. “We, as I say, have had nothing to do with other countries or their shipment of arms or doing what they’re doing,” Reagan said. This left reporters scratching their heads, as most of their papers had already published articles verifying Israel’s involvement, and his chief of staff was on record saying that the U.S. government had condoned an Israeli weapons shipment to Iran before the release of Benjamin Weir.

  Reviews of the president’s comments were unsparing. The New York Times said, “The conflict of pretension and fact was so preposterous,” the focus “distinctly Reaganesque: a determined effort to believe in fairy tales.” The Los Angeles Times upgraded the charge of fairy tales to lies.

  Even the staff wondered if Reagan was losing his ability to cope, let alone to grasp basic details, in a complex situation with so many legal and moral considerations to weigh. In the wake of the dreadful press conference, staff members tried to follow up with a swirl of activity on their own, but the president seemed absent. He listened, but he didn’t seize control.

  No one was more aghast at the president’s performance than George Shultz. Shultz had warned him beforehand to come clean, that he had been “deceived and lied to” by the CIA and the NSC staff. “You must not continue to say we made no deals for hostages.” Now he saw that his admonishments had been futile. Shultz recognized right away that “many of the President’s statements were factually wrong.” And he found incredible Reagan’s insistence that “what we did was right, and we’re going to continue on this path.”

  Shultz visited the president in the residence the following evening and engaged in “a long, tough discussion, not the kind of discussion I ever thought I would have with the President of the United States.” He attempted to set Reagan straight on the myriad falsehoods disseminated in the press conference and warned him that Bill Casey was preparing to lie in his testimony before the congressional intelligence committees by swearing no one in the government had knowledge of the 1985 HAWK shipment to Iran beforehand. Shultz and Reagan went at it for an hour, “hot and heavy,” but the secretary’s appeals were mostly in vain. According to Don Regan, who monitored the conversation, “The President seemed puzzled” by the litany of complaints. “He refused to recognize that there was a problem,” Shultz would recall. The secretary of state left the meeting more frustrated—and alarmed—than before.

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  Casey’s testimony on November 21, 1986, was an exercise in obfuscation. He and John Poindexter conflated their accounts, using cover stories that the CIA had been asked by the NSC staff to transport oil-drilling equipment to Iran and was unaware “until later on” that the cargo contained missiles. Casey lied about the U.S. role in the HAWK shipment, and Poindexter did the same about the president’s involvement, claiming that when Reagan found out that HAWKs were involved, he persuaded Iran to return them to Israel. Both deceptions were patently transparent. Wh
en Shultz related the testimony to Abe Sofaer, the State Department’s legal adviser replied, “The President is in the hands of people who are lying.”

  The stories were growing more tortured and incredible. With the president seemingly disengaged, steadier heads in the Oval Office strained for the truth. An agitated Don Regan believed that North and Poindexter were fudging facts, and he pushed for accuracy. He charged Ed Meese with “getting his arms around the Iranian initiative” in an effort to “make sure we have a coherent and accurate narrative.” Over the weekend, while the president relaxed at Camp David, watching old movies, Meese began a fact-finding inquiry, conducting interviews with Bill Casey, George Shultz, and Bud McFarlane.

  On Saturday morning, November 22, Meese sent a team to the NSC offices to examine relevant documents. But Oliver North had been tipped off to the investigators’ arrival by John Poindexter and had spent all day Friday and Saturday morning hosting a “shredding party.” Assisted by his deputy, Robert Earl, and his secretary, Fawn Hall, North fed two feet of documents into a shredder and altered other memos and correspondence pertaining to the operation, taking great care to destroy the five memoranda outlining the plan to divert Iranian arms profit to the Contras. During the long and haphazard process, North read aloud a page from his notebook—“R.R. directed operation to proceed”—before feeding it into the shredder. Other documents were hastily edited and retyped to omit incriminating evidence. It never occurred to North that Fawn Hall’s files still contained the original versions.

  North had already left when the investigators arrived at his third-floor suite in the Old Executive Office Building. Their search was facilitated by Bob Earl, who handed over a cherry-picked selection of documents contained in six accordion files. Brad Reynolds, an assistant district attorney, and John Richardson, Meese’s intelligence chief, sifted through what was left of North’s archives. Ostensibly, they were looking for evidence of the HAWK shipments and whether there had been an arms-for-hostages deal. As the search wore on with little progress, Reynolds noticed a manila folder that seemed out of place. It contained a long memo—“Release of American Hostages in Beirut”—from North to Poindexter, outlining the May 1986 sale of weapons and HAWK parts. He started turning the pages . . . slowly . . . then more slowly.

  “Holy Jesus! Look at this,” he exclaimed, targeting two paragraphs he bid Richardson to read:

  $2 million will be used to purchase replacement TOWs for the original 508 sold by Israel to Iran for the release of Benjamin Weir. This is the only way that we have found to meet our commitment to replenish these stocks.

  The residual funds from this transaction are allocated as follows: $12 million will be used to purchase critically needed supplies for the Nicaraguan Democratic Resistance forces. . . .

  The two men couldn’t believe their eyes. A diversion of funds to the Contras. It was a clear violation of American law.

  At two o’clock that afternoon, Reynolds and Richardson met Meese for lunch at the Old Ebbitt Grill on Fifteenth Street, near the White House. Minutes after they sat down, an uneasy Reynolds blurted out the news of their discovery. Meese’s shoulders collapsed against the back of his chair. “Oh, shit!” he groaned. He remembers thinking: Iran and the Contras joined at the hip—this just took a big problem and turned it into a gigantic problem, even to the point of threatening the presidency. “It was like putting gasoline on a smoldering fire.”

  A more vigilant attorney general might have rushed to the phone and ordered the FBI to seal North’s office. Meese made no such request, nor did he realize it gave North the opportunity to return to the scene and continue the shredding of documents, which he did throughout the remainder of the day until nearly dawn on Sunday.

  Meese needed to inform the president before the details leaked and the press got wind of it, but first he intended to interrogate Oliver North. The two men met the next afternoon, November 23, after North had returned from church. The “wily renegade,” as Time referred to him, launched into a carefully planned cover story, and Meese didn’t interrupt, allowing North to dig his own hole. “He said nothing about the diversion of funds,” Meese recalls. “It was all gobbledygook—carrying out the exchange of weapons because the people before him had fouled it up.” North lied about his knowledge of the cargo, then he lied again about the excess funds. He insisted the whole thing was an Israeli operation. “Finally,” Meese says, “I showed him the incriminating memo—and he blanched. At that point, he totally confessed, he laid out the whole scenario.”

  Meese’s chief concern was whether or not the president knew. North refused to answer specifically. The closest he came to acknowledging White House collusion was admitting he reported through John Poindexter. Did Poindexter tell the president about the diversion of funds? Forty years later he insists he did not. “In theory, I knew the president would agree,” Poindexter says. “But I also knew that it would be too controversial if it became public, and I wanted him to have plausible deniability. I was the one who gave Ollie the go-ahead. By withholding the details from the president, I wanted him to be in the position to deny that he had approved it.”

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  The president was about to get an earful. Monday morning, first thing, Meese charged into the Oval Office. He was “sitting on a nuclear bomb,” as his deputy, Brad Reynolds, described it. If the truth about the diversion leaked, the consequences would be catastrophic. Don Regan was the first to get the news about the diversion of funds. “The phrase,” he recounted, “made my blood run cold.” He felt “horror, horror, horror,” believing the money had been skimmed from the U.S. Treasury. “We’re facing a problem here that looks much like Watergate,” he thought. But Meese’s details were sparse. Reagan’s time was short. Zulu chief Mangosuthu Gatsha Buthelezi was waiting outside to see him, and a foreign dignitary was never kept waiting. Meese had just enough time to reveal “the headline version”: he’d “uncovered a terrible mess” concerning the arms transaction. He’d explain in full later that afternoon, when the president had more time to listen.

  In the meantime, Meese confronted John Poindexter outside the Situation Room about whether he knew of North’s clandestine affairs. “Yes, I did,” the admiral admitted, “but it was consistent with the president’s wishes and nothing about it was illegal.” When Meese asked if anyone else in the White House knew about it, Poindexter answered, “No.”

  Nothing further was said of it in the afternoon National Security Planning Group meeting. The president, Shultz noticed, “was in a steamy, angry mood.” He was incensed that the press had broken stories about the exchange of weapons for hostages and blamed the publicity for the failure to get more released. “We are right!” he insisted, pounding the table with his fist. “We had to take the opportunity! And we were successful! History will never forgive us if we don’t do this! And no one is to talk about it!”

  Afterward, around 4:30 p.m., Meese and Regan reappeared in the Oval Office and elaborated in detail about the Nicaragua connection, including what Meese had learned from Poindexter. The president, Meese recalls, was “absolutely shocked.” He said, “We’ve got to get this out as quickly as possible so there is no sense we’re trying to cover it up.” Regan proposed that congressional leaders and the press be informed in the morning that laws had been broken. But it was crystal clear that the perpetrators had to be fired. “North and Poindexter would have to go.”

  For the longest time, Ronald Reagan said nothing. Don Regan had seen this before: the president was trying to process the facts. “His fault was he didn’t manage details,” Regan said. He didn’t ask enough questions. And worse: the chief of staff observed how, from time to time, the president’s mind wandered, that perhaps he was slipping.* Reagan had shared this worry with his wife, and was worried the effect this latest revelation could have. It was clear that Reagan was shaken, but Regan couldn’t seem to formulate a response. He suggested that the presid
ent pack up for the day and retire to the residence. As to the fate of Poindexter and North, Reagan said he wanted to sleep on it.

  But he didn’t sleep well. He recognized what Meese’s investigation had uncovered: “a smoking gun,” something that violated U.S. law and could be laid on the doorstep of his office. Crestfallen, he tried to come to terms with it later that night. Sitting at his desk, bent over his diary, he worked over the day’s troubling revelations. Many of the details continued to elude him. Still not acknowledging that Americans were running the operation, he wrote, “On one of the arms shipments the Iranians paid Israel a higher purchase price than we were getting. The Israelis put the difference in a secret bank account.” The Israelis—he’d convinced himself they’d managed the whole deal. Of his own advisers, he expressed a reservoir of dismay. “North didn’t tell me about this. Worst of all John Poindexter found out about it & didn’t tell me.”