In the White House briefing room on November 25, 1986, the president introduced Ed Meese to tell the world that the secret arms sales to Iran had an even more secret component—a slush fund for the CIA-backed contras in Central America. It was perfect in its simplicity: to pay for counterinsurgency operations in Nicaragua and other Central American countries banned by Congress, the NSC used funds made on illegal arms sales to Iran. Essentially, it was a contra tax on the unsuspecting mullahs. Ollie North and his operatives delighted in the irony of the situation: why shouldn’t the Ayatollah unwittingly pay for the illegal war in Central America? Through a series of complex transactions known as cutouts, international versions of three-card monte, the Iranians paid $30 million for the American missiles. But according to subsequent investigations, the weapons cost less than half that amount. As much as $20 million was diverted, some to the contras, the rest to shadowy middlemen.
To maintain secrecy, the operation was laundered through a convenient third country. What could add more irony onto the overall scheme than using Israel—Iran’s avowed enemy—as the middleman for the secret arms transfer between the United States and the Ayatollah’s regime?
I sat in the briefing room that day stunned as the president rushed out to avoid answering questions, leaving his attorney general on the firing line. Helen Thomas asked whether the president knew or had known about the diversion. I followed and asked whether Meese was still saying the policy of trading arms was “not a mistake,” since at that point he was still claiming that they were investigating only an “aberration” from the policy.
Quickly, the barrage of questions focused on what the president knew, and when he knew it. Did he approve the diversion? If not, what was his exact role in the arms sale? Who else knew? What about John Poindexter and CIA director William Casey? Meese stated, “The president was informed generally that there had been an Israeli shipment of weapons to Iran sometime during the late summer, early fall, of 1985, and then he later learned in February of 1986 details about another shipment that had taken place in November of 1985.”
If the president hadn’t known, I asked, “Why did he call the Israeli prime minister to thank him for his real help in sending that shipment of arms?”
Meese responded, “I don’t know, because that is something I have not discussed with the president.”
The press corps smelled blood. Sam Donaldson, Bill Plante, and Chris Wallace—the leading network correspondents—bombarded Meese with questions he couldn’t or didn’t want to answer.
“Will there be more resignations?” I asked.
Press Secretary Larry Speakes interrupted. “Andrea has had a few questions already.”
True, but Speakes wouldn’t have intervened to silence one of the men. As Lesley Stahl of CBS and other women who covered the Reagan White House have written, Speakes used a heavy hand when it came to punishing female reporters. As I was about to learn when the White House became besieged by the Iran-Contra crisis, threatening the tenure of Speakes’s boss, Chief of Staff Donald Regan, it was a dangerous time to be a woman correspondent.
In the following months, Regan retaliated. Two colleagues told me he had been slandering me in public settings. I was scared, and unable to strike back. It was the low point of my White House career.
As he was to find out, Regan himself was vulnerable. In addition to his tone-deaf comments about women not understanding throw weight and other foreign policy issues during the first Reagan-Gorbachev summit, six months later he suggested that the United States could not impose economic sanctions on South Africa for apartheid because of the potential impact on the world diamond trade.
Asked Regan, “Are the women of America prepared to give up all their jewelry?”
Nancy Reagan, among others, was not amused. Aside from his stupidity, Regan had forgotten the first rule of a staff person in the West Wing: Never forget that you are only staff, unelected and most definitely subordinate to the first family. Instead, Regan began to see himself as the president’s “prime minister.” He even tried to use the president’s helicopter to shorten his trips to Bethesda Naval Hospital in suburban Maryland when the chief executive was recuperating from surgery for colon cancer. Not even Nancy Reagan used the helicopter, instead commuting to the hospital by car.
When Iran-Contra embarrassed the president on Regan’s watch, he and Mrs. Reagan began fighting openly. As both have recounted in their memoirs, he even hung up on her during a heated argument over whether the president should risk having a press conference shortly after recovering from prostate surgery. By December 1986, the first lady’s confidant Michael Deaver had secretly recruited Bob Strauss, a Democratic “wise man” astute in the ways of Washington, to help persuade the president that Regan was protecting himself at the expense of the Reagans. Characteristically, the president found it difficult to confront Regan himself. He gave the job to Vice President Bush, who called Regan in to suggest that it was time to go.
By his own account, Regan exploded. He was damned if he’d leave under fire, and cared more about how his departure would affect his reputation than the political damage he was causing the president. A blue-ribbon commission led by Senator John Tower, appointed by the White House to investigate the charges, was about to report its findings on Iran-Contra. Regan did not want his departure to be linked to the Tower Board’s conclusions about the scandal. But the president’s political advisors, desperate to stop the political hemorrhaging, leaked Regan’s firing to CNN. The proud former Wall Streeter learned of his replacement by former Senator Howard Baker, a courtly and experienced Southerner highly regarded in Washington, only after the news appeared on cable.
It was a humiliating and angry departure. The depth of Don Regan’s resentment only became apparent when he struck back at the first lady in his book by revealing one of the White House’s darkest, and most bizarre, secrets: Mrs. Reagan had occasionally relied on an astrologer to determine the president’s travel schedule, perhaps in reaction to the assassination attempt, trying to figure out how to avoid “dangerous days.” Only later, reading how furiously Regan fought to save his job, did I realize how abusive he had been to everyone, even powerful figures like Nancy Reagan and George Bush. It gave me some context for his explosion at me.
On March 19, 1987, four months after the president’s last, highly damaging news conference, he met us again in the East Room. By then, Howard Baker had replaced Don Regan as chief of staff and persuaded the president to acknowledge his mistakes over Iran-Contra to the American people in an Oval Office address. An investigation conducted by John Tower, Brent Scowcroft, former secretary of state Edmund Muskie, and other foreign policy experts had concluded that the president was at fault for permitting the illegal diversion of funds and for putting the personal welfare of the hostages above broader foreign policy principles. It had been a long time since the press corps had had a chance to question the president, and a lot had happened. The star reporters—Helen Thomas, Sam Donaldson, and Chris Wallace—hammered away at the inconsistencies of the Iran-Contra operation and cover-up. I was seated toward the rear of the room, straining in my seat in order to catch Reagan’s eye. Finally, just as the allotted time for the session was expiring, he called on me. But before I could rise, the New York Times correspondent sitting in front of me jumped up and took my turn.
I was crushed, realizing I wouldn’t get to ask a question at one of the most important news conferences of Reagan’s presidency. But I hadn’t counted on the kindness of Ronald Reagan. Showing the same unfailing courtesy he always did, even when taking a beating from the press, instead of walking out, Reagan turned back toward me and said, “I remembered, I promised you I’d call on you.”
I asked about the Tower Board’s finding that there had been extensive U.S. military support for the contras for two years, involving airstrips, phony corporations, and tax-exempt foundations. How could all this take place without his knowing it? And, if he had been truly unaware of Oliver North and John
Poindexter directing millions of dollars to the contras, and couldn’t remember approving the Iranian arms sale, what did that say about his management style?
Ronald Reagan’s answer was a primer to understanding his presidency. He said, “Andrea, I’ve been reading a great deal about my management style. I think that most people in business will agree that it is a proper management style. You get the best people you can to do a job; then you don’t hang over their shoulder criticizing everything they do or picking at them on how they’re doing it.”
The president had outlined broad policies and let his national security officials carry them out. The result was Iran-Contra, a scandal that clouded his tenure and cast a long shadow over his successors. It created a sharp divide between Shultz and Jim Baker over the role of Baker’s patron, the vice president.
Shultz had fiercely opposed the arms deal and testified that he thought the proposal had been nipped in the bud. Instead, Shultz said, it had become “a hostage bazaar.” Each time arms were swapped for hostages, a hostage was released—but another was taken. Testifying to the joint House-Senate Iran-Contra investigating committee, Shultz was blunt in his outrage: “You cannot spend funds that the Congress doesn’t either authorize you to obtain or appropriate. That is what the Constitution says, and we have to stick to it.”
Shultz’s candor, after the appearance of so many administration witnesses who seemed to be suffering from amnesia, was refreshing. John Poindexter did offer a conflicting account. He claimed Shultz had deliberately closed his eyes to the illegal operation once the secretary of state realized the president was going to proceed anyway, against his advice. But Shultz emerged from the scandal with the reputation of being the last honest broker on the foreign policy team. He called Washington policy making a “seething debating society.”
Shultz was the most senior person in the cabinet, and enormously popular with career foreign service officers at the State Department. A stolid ex-marine, he had served previous presidents in three other cabinet posts. Usually phlegmatic, he had a flair for occasional flamboyance. At state dinners, Shultz always managed to get himself seated next to stars like Sophia Loren. And although he dressed as nattily as an advertisement for GQ, he was ahead of his time in one fashion: a proud Princetonian, he reportedly had a tattoo of a tiger strategically placed to advertise his alma mater to anyone following him to the shower.
Interestingly, in light of the 9/11 Commission’s recommendation seventeen years later for the establishment of a single intelligence czar, Shultz suggested a different remedy to the Iran-Contra investigators: separate intelligence analysis from policy making and covert action. He wanted to set up barriers to prevent a future Bill Casey from circumventing the State Department to pervert policy.
Shultz’s testimony cast suspicion for the first time on Vice President Bush, threatening to put Bush in the middle of the exploding scandal. That could potentially harm Bush’s hopes of becoming president. After Bush was elected, and Jim Baker succeeded Shultz as secretary of state, Baker made his displeasure clear. He never called Shultz for advice, not even about Middle East diplomacy, one of his areas of expertise. There was never a special envoy’s assignment, or special ambassadorship. In fact, once Bush became president, Shultz and Weinberger, who had both served with him under Reagan, were not invited back to the White House until March of 1991, and then only at the request of Margaret Thatcher.
President Bush was awarding Thatcher, no longer prime minister, the highest civilian award given by the United States, the Presidential Medal of Freedom. A dinner was arranged, upstairs in the White House residence more private and special than even a state dinner in the downstairs official rooms. I was invited as the guest of Alan Greenspan, with whom Thatcher had had a long and admiring professional relationship. It was my first time upstairs in the Yellow Oval Room, for what appeared to be a reunion of the Reagan White House. Thatcher had wanted all the foreign policy officials with whom she had worked under “Ronnie” to attend, so the White House was obliged to invite the former Reagan cabinet, despite their strained relations with Bush over the residue of Iran-Contra.
On that evening, Bush’s popularity was at its peak because of the first Gulf War. Thatcher had been his first, and most stalwart, ally. “Remember, George, this is no time to go wobbly,” she’d chided him when Saddam Hussein invaded Kuwait the previous August. With everyone now in a celebratory mood, there were effusive toasts from Bush, Thatcher, and her husband, Sir Denis. (His uninhibited whoops of delight at his wife’s success were among the high points of the evening.)
Alan was seated at the president’s table, as was Barbara Walters, whom he had dated during the Ford, Carter, and early Reagan years. I was at another table next to her escort, Virginia senator John Warner, a former secretary of the navy and member of the Armed Services Committee. After many testy interviews with the formidable prime minister, often live on the Today program, I didn’t know what she would be like at a private dinner. On morning television, she would challenge the assumption behind every question, getting into a spirited debate. On an occasion such as this, would she behave very differently?
Not a bit. Instead of responding informally to the president’s toast, the Iron Lady delivered a rousing, but lengthy, speech about her view of American “exceptionalism” that could have been delivered at Westminster. Sir Denis even punctuated it with shouts of “Hear, hear.”
I enjoyed being a fly on the wall at a private dinner in the White House; at the same time, I felt that the “designated shouter” from the press corps was a little out-of-place upstairs, sitting with officials whom I covered. I knew I could neither ask questions, nor quote anything that was said to me. It gave me an uncomfortable feeling that I might be gaining unusual access, but losing some independence.
My life had indeed become complicated. In June 1987, I was giving a birthday party for my friend, Reagan biographer Lou Cannon, who at the time was covering the White House for The Washington Post. Almost all of the other guests were reporters, except for Alan and our mutual friend Margaret Tutwiler, then assistant secretary of the treasury, working for Jim Baker. I sat Margaret next to Alan at the foot of the table, and noticed that the two of them were especially jolly, laughing and talking with great animation.
It was only after everyone else had left that I found out why. Alan took me aside and said, “Today, the president called and asked if I wanted to be chairman of the Federal Reserve.” He had, in fact, learned of his nomination in an unlikely setting. His back was bothering him, and he’d been on the examining table at the doctor’s when the presidential call came through. Of course, he’d accepted. Margaret, as an assistant to Baker, had been in on all the details.
We sat up late that night, trying to sort out how this would change our lives. Somehow, our commuting relationship had given each of us a way out of making a full emotional commitment. Now Alan would be moving from New York to Washington, and we would have to think about what we meant to each other, as well as how to handle the possible conflicts of interest.
Our first test came the very next morning, because I now had inside information that had to be kept secret until the president’s announcement. I had to prove I could be trusted, and Alan had to show he was not a risk, despite his ongoing personal relationship with a member of the fourth estate. That day, I sat with Chris Wallace in the Old Executive Office Building, the site of many White House briefings. At the end of a press conference by the secretaries of state and treasury in advance of an upcoming economic summit in Venice, Italy, Press Secretary Marlin Fitzwater stood up and said, “The president will be in the briefing room for an announcement at ten o’clock.”
We didn’t see Ronald Reagan very often in the briefing room, so everyone jumped up to rush back to the White House. We needed to notify our networks quickly, so our bosses could determine whether the announcement was important enough to warrant interrupting the soap operas that generate a great deal of advertising revenue. This was all pre
-cable at NBC, before we had a twenty-four-hour news operation.
As Chris and I, by then working well together, sprinted across the street toward the White House, he wondered aloud, “What personnel announcement could this be? Perhaps, a new FBI director?” Then he said, “What about Volcker?” because Fed Chairman Paul Volcker’s term was about to expire. I was very quiet.
All of a sudden Chris looked at my silent self and said, “Oh, my God, it’s Alan, isn’t it?”
I couldn’t lie to my colleague, but I said, “If you tell them, Alan’s credibility is in tatters with Jim Baker. He’ll never trust him, or me, for that matter.”
We raced to our little cubicle, where Chris informed our boss that it was indeed important to carry this briefing live, but preserved my secret as to the identity of the new appointee about to be announced. For that, I will always be grateful to him.
When Alan walked in at the stroke of ten that Tuesday morning alongside the president and Paul Volcker, a gasp went up from the briefing room; I wasn’t sure whether to beam with pride or slump in my seat to avoid notice. Years later, Jim Baker told me he and his aides had all been backstage, watching the TV monitors before they walked out, waiting to see if NBC broke the news first. An important test, the first of many more to come.
After that, I sat down with my bureau chief to work out the rules of the road. I removed myself from any economic coverage that would conflict with what Alan does. In fact, even if I weren’t a reporter, he wouldn’t be able to talk shop with me. His work is highly classified, market sensitive, and very complex. I am no economist, and his decision making covers an array of monetary and regulatory issues. I enjoy talking to him about broad philosophical issues, but when it comes to policy, we draw the line.
Talking Back Page 18
