The Consortium

The Ladies' Room Secrets

Stored away in a converted Ladies' Room on Capitol Hill, dusty boxes contained startling evidence of Republican dirty tricks in the 1980 presidential campaign -- and of a bipartisan cover-up that continues to this day.

From secret payments to an Iranian banker to incriminating CIA discussions, the documents painted a picture of political deceit at the highest levels of national power and of a fraud perpetrated on American history: another chapter of the October Surprise X-Files

By Robert Parry

WASHINGTON -- After its release on Jan. 13, 1993, the House task force report on the October Surprise controversy quickly hardened into historical concrete. Its conclusion that there was "no credible evidence" to support the allegations of Republican sabotage in the 1980 Iran hostage crisis won acclaim across the political spectrum.

Columnist David Broder lauded Rep. Lee Hamilton, D-Ind., the task force chairman, as the "conscience of Congress" for repudiating the accusations of GOP wrongdoing. No one, it seemed, examined the quality of the investigation or listened to the few dissenting voices.

But in the months following the task force's findings, more foreign leaders in positions to know told other Americans that there was more to the October Surprise story than the task force found. Palestine Liberation Organization chairman Yasir Arafat informed American journalist Richard Fricker that senior Republicans had traveled to Beirut in 1980 seeking avenues to the Iranian leadership.

In a May 1993 videotaped interview in Tel Aviv, former Israeli Prime Minister Yitzhak Shamir was asked "was there an October Surprise?" and he responded "of course, it was." In another interview, retired Israeli General Yehoshua Saguy, who was head of Israeli military intelligence in 1980, said Prime Minister Menachem Begin claimed American approval for Israel's secret 1980 weapons shipments to Iran. But the approval had not come from President Carter, who had angrily objected to the shipments when he learned of them.

The French Spymaster

Alexandre deMarenches, the man who ran French intelligence in 1980, privately mocked the House task force findings and let stand the sworn testimony of his biographer that he (deMarenches) had arranged meetings between Ronald Reagan's campaign chief William J. Casey and Iranians in Paris in October 1980.

In December 1992, deMarenches's biographer, David Andelman, an ex-New York Times and CBS News correspondent, had testified before the task force that deMarenches had discussed the Paris meetings while the two were writing deMarenches's autobiography, The Fourth World War. After Andelman's testimony, the task force called deMarenches. But when the imperious French spymaster failed to return the call, the task force concluded, paradoxically, that Andelman's testimony was "credible" but lacked "probative value."

These newer witnesses also were corroborating longstanding claims about Republican interference that had been made by top Iranians of the period, including Iran's President Abolhassan Bani-Sadr, Foreign Minister Sadeq Ghotzbadeh and Defense Minister Ahmed Madani. Other testimony supporting the October Surprise charges had come from intelligence agents with confirmed ties to Israel, France and the United States.

But the dismissive House task force report effectively buried the October Surprise story as an historical issue. Washington's conventional wisdom readily accepted that there had been no Republican contacts to Iran in 1980; that Casey, George Bush and other Reagan campaign officials had been falsely accused.

Then, last year, senior representatives of Iran's current government held informal talks in Europe with Americans close to President Clinton. Like deMarenches, these Iranians were amused at how wrong the House task force had been. Casey indeed had made secret overtures to Iran during the hostage crisis of 1980, these Iranians said.

The new Iranian claims were relayed to the highest levels of the Clinton administration. But fearing how a reopened October Surprise investigation might look, the White House refused to reconsider the House task force findings. For reasons perhaps explained best by Washington's acute sense for sniffing career danger, the October Surprise story had become one of the capital's most powerful taboos.

The Ladies' Room Files

Given that reality, I hesitated before seeking access to the task force's raw files. But having learned of the new Iranian claims, I decided to go ahead. I obtained permission from the House International Relations Committee to examine the task force's unclassified papers. I was told that there had not been a single prior request for these records that had been collecting dust in an obscure office off the Rayburn House Office Building's parking garage, across from the U.S. Capitol.

To reach the files required taking the Rayburn building's elevator to a sub-basement floor and then winding through the musty underground garage almost to the car exit at the building's south side. To the right, behind venetian-blind-covered windows was a small locked office. Inside were a few desks, cloth-covered partitions, phones and a rumbling old copying machine.

At the rear of the office was a converted Ladies' Room, now used for storage. The task force's taped boxes sat against the wall, under an empty tampon dispenser which still hung from the salmon-colored tiles. I began pulling the tape off the boxes and poring through the files. Not only did I find unclassified notes and documents about the task force's work, but also "secret" and even "top secret" papers that had been left behind, apparently in the haste to wrap up the investigation.

A few "secret" depositions were there, including one of a senior CIA officer named Charles Cogan. Cogan testified that he had attended a 1981 meeting at CIA headquarters in Langley, Va., in which a high-ranking Republican commented to Casey about their success in disrupting Carter's "October Surprise," the term used to describe President Carter's hope for a last-minute release of the 52 American hostages held in Iran.

FBI Wiretaps

Another box contained a "secret" summary of FBI wiretaps placed on phones belonging to Cyrus Hashemi, an Iranian financier who had worked for the CIA in 1980. Hashemi also was a key Carter intermediary in the hostage talks. But in fall 1980, the wiretaps showed Hashemi receiving a $3 million deposit arranged by a Houston lawyer who claimed to be associated with then-vice presidential candidate George Bush.

After the 1980 election, the Houston lawyer was back on the phone promising Hashemi help from "the Bush people" for one of Hashemi's failing investments. And shortly after President Reagan's Inauguration, a second mysterious payment to Hashemi arrived from London by Concorde, via a courier for the Bank of Credit and Commerce International (BCCI).

There were notes, too, describing Bush's active involvement in monitoring President Carter's Iran hostage negotiations. According to one set of notes, dated Oct. 27, 1980, Bush instructed foreign policy adviser Richard Allen to funnel last-minute information about the negotiations back to him via Theodore Shackley, the CIA's former associate deputy director for operations.

Still, another file contained a summary of all "secret" and "top secret" State Department records on arms sales to Iran in the 1980s. One "top secret/sensitive" document recounted private meetings that Secretary of State Alexander Haig had with Middle Eastern leaders during a trip in May 1981. The leaders told Haig about the continuing secret flow of weapons from Israel to Iran.

I also found a "confidential" October Surprise report that had been sent by Russia's Supreme Soviet informing the task force that Moscow's national security files contained evidence that Casey, Bush and other Republicans had negotiated secretly with Iranians in Europe in 1980. [See "The Consortium," Dec. 11, 1995, Vol. 1, No. 1]

All of this information had been excluded from the House task force report. And after the report was completed, the documents were left unceremoniously behind on the floor of the converted Ladies' Room.

'A Trap Door'

Other task force papers in the boxes revealed how flimsy the report's October Surprise debunking had been. Even, task force chief counsel E. Lawrence Barcella was nervous about the weaknesses. On Dec. 8, 1992, he instructed his deputies "to put some language in, as a trap door" in case later disclosures disproved parts of the report or if complaints arose about selective omission of evidence.

"This report does not and could not reflect every single lead that was investigated, every single phone call that was made, every single contact that was established," Barcella suggested as "trap door" wording. "Similarly, the task force did not resolve every single one of the scores of 'curiosities,' 'coincidences,' sub-allegations or question marks that have been raised over the years and become part of the October Surprise story."

But as the documents made clear, many of those "coincidences" left out were historically important. The October Surprise story connected some of the world's most powerful figures in secret interlocking business deals. The documents also revealed an investigation that not only overlooked a few "curiosities" or failed to mention a "lead" or two, but an inquiry that consistently slanted the evidence.

The boxes of documents revealed that the task force used false alibis on Casey's whereabouts for key October Surprise dates; withheld relevant documents and testimony that clashed with its conclusions; dismissed credible witnesses who supplied unwelcome support for the allegations; and accepted dubious -- if not blatantly false -- testimony from Republicans.

Conflicts of Interest

In addition, the task force's files contained new evidence of conflicts of interest for the House investigators, particularly chief counsel Barcella. In the 1980s, he had been a lead attorney for the corrupt international bank, BCCI, which paid his firm more than $2 million to shield it from press and governmental investigations. At that time, Barcella also was a law partner of Paul Laxalt, who had been chairman of the Reagan-Bush campaign in 1980.

Indeed, the Ladies' Room files showed that a fascinating chapter of recent American history -- the story of the pivotal 1980 election -- had been seriously miswritten. Even if one still judges that the evidence falls short of proving an explicit Republican-Iranian "deal" to delay the release of the 52 American hostages, the facts do point to significant GOP interference in President Carter's negotiations during the campaign.

Much of that missing history was there in the documents.

Copyright 1995

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