New Allegations Implicate Reagan

ARMS FOR HOSTAGES?

ON Oct. 20, 1980, Ronald Reagan introduced a new, potentially volatile issue into his campaign to unseat President Jimmy Carter and win control of the White House. After scoring the incumbent president for his record on defense and economic issues in a speech in Louisville, Mr. Reagan wondered aloud "why 52 Americans have been held hostage for almost a year now."

Through the long months of the presidential campaign, the former California governor had rarely mentioned the American hostages held in Iran, concerned that if Mr. Carter secured their release before election day the issue could backfire. A day later one perplexed commentator traveling with the Reagan campaign confessed that it was "not immediately clear why he had chosen to bring up the issue now."

This week, one controversial explanation has resurfaced: As recently as hours before Reagan spoke in Louisville, emissaries of his campaign may have closed a secret deal in Paris to have the release of the hostages delayed until after election day. The quid pro quo, demanded by representatives of the Iranian government, was arms, which reportedly began flowing into Iran within days of Reagan's inauguration.

'Whole thing is bizarre'

The new allegations of a hostages-for-arms deal, contained in a Monday New York Times op-ed article written by former Carter administration official Gary Sick and a Tuesday PBS "Frontline" broadcast, have drawn spirited denials from the Bush administration and from former Reagan administration officials.

"The whole thing is as bizarre as the day is long," says Richard Allen, foreign policy adviser during the Reagan campaign and later President Reagan's first national security adviser.

Even Dr. Sick, the Iran expert on Carter's National Security Council (NSC) staff, acknowledges that many details of the alleged contacts between the Reagan campaign and Iranian representatives are "murky" and may never be pinned down.

But in an interview Sick said information from 15 sources with direct or indirect knowledge of the meetings all point to the participation of Reagan's campaign manager William Casey and confirm the basic outlines of the arms-for-hostages swap that reportedly culminated at the time of Reagan's inauguration.

"It was the absence of contradictions on the key elements of the story that encouraged me to continue probing," wrote Sick, who is researching a book on the Reagan administration and Iran. "The weight of testimony has overcome my initial doubts."

In interviews this week, various Carter administration officials said they had no suspicion during the 1980 campaign that secret contacts were being made with Iranian officials through private channels. But several indicated that later revelations that the US sold arms to Iran to win the release of US hostages held in Lebanon have made the allegations more believable.

"Nobody contemplated that any leader of our country would go behind the back of the president to make a side deal with the Ayatollah [Khomeini]. It was too extraordinary to be plausible," says former NSC staff member Robert Pastor. "Now we know that Reagan did exchange arms for hostages, so the idea that seemed so implausible to President Carter in 1980 was not implausible to President Reagan."

Fifty-two US Embassy personnel were taken prisoner when Iranian militants seized the US Embassy in Tehran in November 1979.

To demonstrate concern for the hostages Carter first refused to leave the White House to campaign. But the "Rose Garden" strategy soon became a symbol of Carter's impotence in dealing with Iran and was abandoned.

Throughout the campaign Carter administration officials hoped - and Reagan campaign officials feared - that getting the hostages released would catapult Carter into a second term.

Account focuses on three

Sick's account focuses on three principal figures: Mr. Casey, who later became director of Central Intelligence; Mehdi Karrubi, an influential Muslim cleric who is now speaker of the Iranian parliament; and Jamshid Hashemi, an Iranian arms merchant who, along with his brother Cyrus, brought them together. According to Sick, when Casey first met Mr. Hashemi in late February or early March in Washington, he "made it clear that he wanted to prevent Jimmy Carter from gaining any political advantage from the hostage crisis."

During the summer Hashemi arranged two meetings in Madrid between Mr. Karrubi and Mr. Casey, who was accompanied by an unnamed US intelligence officer. At the second meeting Karrubi agreed in principle that Iran would "cooperate" with the Reagan campaign on the timing of the hostage release, according to Sick.

The agreement was finalized in a series of meetings in Paris between Oct. 15 and Oct. 20, where Casey is said to have promised that Israel would serve as a conduit for arms and spare parts to Iran, some made in the US, in violation of a US arms embargo on Iran. According to Sick's sources the meeting was also attended by Israeli representatives and then vice presidential candidate George Bush.

"Before Oct. 20, Reagan didn't take the offensive; he didn't want to put the hostage issue at the forefront of the campaign out of fear that if Carter got the hostages out it would work to Reagan's disadvantage," says one former senior Carter administration official. "But if he was assured by Oct. 20 that there would be no release, it would have been useful for him to take the offensive on the hostage issue."

Iran announced that the hostages would be released within half an hour of Reagan's inauguration. Within days the first shipments of arms were flown from Israel to Iran, according to Israeli and former American officials interviewed by Sick. "The planes [carrying arms and hostages] practically crossed," says Sick.

Reagan campaign officials have denied that any deals were made to delay the release of the hostages. Under a 1799 law it is illegal for private citizens to engage in unauthorized negotiations with foreign governments.

"Our position on all of this is the same as it always has been, that there is nothing to it," White House press secretary Marlin Fitzwater said this week.

According to Richard Allen the implications of the hostage crisis were regularly discussed by the Reagan campaign staff. But the only actual meeting with anyone even claiming to represent Iran - attended by Allen and Republican Party counsel Lawrence Silberman in Washington in August or September 1980 - ended abruptly and inconclusively.

Allen and Reagan's first secretary of state Alexander Haig have insisted that they had no know-ledge of Israeli arms shipments to Iran in 1981. Press reports partially confirmed by Israeli officials say Haig gave Israel tacit approval to ship equipment and spare parts to Iran.

Reagan and Bush officials say the hostages were eventually released not because of secret deals but because of intense negotiations that, according to Carter's own memoirs, "demanded the utmost in personal leadership."

Stansfield Turner, who headed the Central Intelligence Agency under Carter, acknowledged in an interview that it was possible that secret contacts could have been made without the CIA's knowledge - or at least without the knowledge of senior CIA officials. "There was enough pro-Reagan sentiment in the CIA that it was not out of the question that CIA officials knew about it but didn't inform their superiors," Turner adds. "It would have been a political consideration."

Speculation of identity

Speculation regarding the identity of the unnamed CIA official alleged to have participated in at least one of the Paris meetings has focused on Donald Gregg, the CIA's liaison to the Carter NSC who later served as Vice President Bush's chief foreign policy adviser.

Mr. Gregg, now US ambassador to South Korea, has denied any role in the alleged 1980 meetings. But a federal prosecutor lost a 1990 "false declaration" case against a self-proclaimed CIA contract agent, Richard Brenneke, who testified in an earlier trial that he had seen Gregg and Casey at a meeting in Paris.

Gregg's main defense, a family photograph he said was taken on a Delaware beach the weekend of the Paris meeting, was discredited by a meteorologist.

At the trial the government was unable to establish the precise whereabouts of Gregg, Bush, or Casey on Oct. 20, the day Mr. Brenneke says the three were in Paris. He testified that Reagan officials agreed to exchange roughly $40 million in cash and arms for Iran's promise to delay the release of the hostages.