The Consortium

Bill Casey' Iranian

Iranian banker Cyrus Hashemi was a mystery man of the 1980s, a nexus point for scandal, from accessing vaults of the corrupt BCCI to opening doors to the Iran-Contra Affair. But for years, the FBI withheld key wiretaps of Hashemi's secret conversations.

Now, from a dusty box in a Capitol Hill storage room, a classified summary of those incriminating calls has been recovered. It fills in crucial missing pieces of the history of the Reagan-Bush era: another chapter of the October Surprise X-Files

By Robert Parry

WASHINGTON -- On Sept. 23, 1980, in the midst of the Reagan-Carter presidential race, two men from Houston placed phone calls to an Iranian banker at his swank office in a mid-town Manhattan skyscraper. The two men had a cryptic message. They informed the banker, Cyrus Hashemi, that "a Greek ship captain" would be delivering a $3 million deposit from Beirut to Hashemi's offshore bank headquartered in the Netherlands Antilles.

Hashemi was told the "Greek ship captain" would use the name "Fibolous." One of the Texans, a former judge named Harrel Tillman, considered himself a 30-year friend of George Bush, the Republican candidate for Vice President. Hashemi, in 1980, was acting as a principal intermediary for President Carter's frantic efforts to free 52 Americans held hostage in Iran.

On Nov. 20, after President Carter failed to spring the hostages and lost to Ronald Reagan, Tillman was back on the phone with Hashemi, this time about the "purchase of [a] refinery," according to a "secret" FBI wiretap summary. Tillman said he had been in touch with Vice President-elect Bush and had consulted with "the 'Bush' people" about the troubles that Hashemi and his business associate, John Shaheem, were having with a bankrupt oil refinery in Newfoundland.

"Bush people would be cooperative with this matter and make it a showcase," Tillman said, according to the summary. "But the 'Bush' people would not act on it until after the Inauguration" in January 1981.

Interviewed this past week about those 1980 phone calls, Tillman said he recalled nothing about either the $3 million deposit or the promises from the "Bush people." "I don't remember having that conversation," Tillman told me. He acknowledged, though, being questioned about the calls by congressional investigators in 1992, but added that he could not recall the substance of that interview either. "I'm not trying to be evasive," he insisted.

But the ex-judge did add another twist to the mysterious phone calls. Tillman said that besides supporting the Reagan-Bush ticket in 1980, he was working as a consultant to Iran's radical Islamic government. Tillman also felt President Carter had bungled the hostage crisis.

Still, whatever the reason for the $3 million deposit -- whether it was a payoff or an unrelated business deal -- it added to Hashemi's already-deep dependence on the Republicans. Hashemi worked closely with former Nixon administration official Stanley Pottinger and was a business associate of John Shaheen, a Republican businessman who counted among his best friends William J. Casey, then in charge of the Reagan-Bush campaign.

A Madrid Meeting?

Hashemi's ties to Casey and Shaheen would be central to allegations that the Reagan-Bush campaign sabotaged President Carter's hostage talks. Hashemi's older brother, Jamshid, claimed that Cyrus and Casey began collaborating secretly on the Iranian hostage issue in the spring and summer of 1980.

According to Jamshid Hashemi's sworn testimony, Cyrus arranged a clandestine meeting in Madrid between Casey and a radical Iranian mullah, Mehdi Karrubi, in late July 1980. At the meeting, Casey allegedly opened a back-channel to Iran that disrupted President Carter's hostage negotiations and ensured Ronald Reagan's resounding victory that November.

As many as two dozen other Iranian, European and Middle Eastern officials made similar assertions of GOP interference. But in January 1993, after a year-long investigation, a special House task force concluded that "no credible evidence" existed to support allegations of a Republican dirty trick. One of the task force's principal arguments for the debunking was that a careful review of secret FBI wiretaps on Cyrus Hashemi's phones from September 1980 to February 1981 found nothing to support the so-called October Surprise charges.

So when I gained access to boxes of the task force's raw records in an obscure Capitol Hill storage room (see The Consortium, Dec. 21), I was startled to discover a "secret" FBI wiretap summary that revealed a much more complex story than the House task force's sanitized version of events.

For instance, while the task force was aware of the $3 million "Greek ship captain" deposit and the potential conflict of interest it represented for Cyrus Hashemi, no mention was made of it in the House report. Nor did the task force explain financial connections that tied Shaheen and Hashemi to wealthy figures from the Philippines, the Middle East, the corrupt Bank of Credit and Commerce International, and the ousted royal family of Iran.

All those links gave Hashemi powerful motives to betray President Carter -- and, in each one, William Casey was in the background.

'Two Faces'

The wiretap summary showed almost daily contacts between Cyrus Hashemi, a worldly financier in his 40s whose phone calls included chats with high-priced prostitutes, and John Shaheen, the fast-talking former officer in World War II's Office of Strategic Services. Shaheen and Casey, who met in the OSS, also had worked together on the failed Newfoundland oil refinery that Hashemi and Tillman discussed in the wiretapped conversation.

Indeed, on Sept. 22, the day before the first calls from Houston, Hashemi was on the phone discussing how to line up a $40 million loan to help Shaheen regain control of the refinery.That same week, Hashemi and Shaheen hashed over schemes for opening a bank together, possibly in Asia with some Philippine investors.

On Sept. 25, Hashemi and Shaheen discussed a "Hong Kong deal," according to the wiretaps. On Oct. 14, the two men were arranging a meeting with Philippine bankers and businessmen. Hashemi expressed concern because he had already deposited "a large sum of money in a bank in the Philippines."

In mid-October 1980, even as Hashemi supposedly was helping President Carter's last-ditch effort to resolve the hostage crisis, the Iranian banker began work with other Republicans lining up arms shipments to Iran, including parts for helicopter gunships and night-vision goggles for pilots.

The FBI wiretap summary also contained references to Hashemi lying about the hostage issue. On Oct. 22, 1980, the FBI bugs caught Hashemi's wife, Houma, scolding her husband about his denials that he had discussed the hostages with Iranian Prime Minister Mohammed Rafsanjani. "It is not possible to be a double agent and have two faces," Houma warned Cyrus.

The next day, Oct. 23, Shaheen again was in Hashemi's office at 9 West 57th St., using one of the bugged phones to brief a European associate, Dick Gaedecke, about the latest developments in the hostage negotiations. Hashemi was keeping Shaheen, Casey's pal, fully informed about President Carter's hostage strategies.

A Reagan Link?

On Oct. 24, the FBI recorded another cryptic note suggesting Hashemi's close ties to another prominent Republican. Using Cyrus Hashemi's initials, it read: "CH-banking business about Reagan overseas corp.," according to the wiretap summary.

The possibility of a Reagan-Hashemi link was not entirely new. It arose initially in 1992 when Reuters news agency quoted FBI sources in New York as saying that agents heasrd Ronald Reagan on one Hashemi tape. But the congressional investigators said Reagan was not recorded speaking on the 548 tapes made available to Congress, except for some television background noise.

But the investigators were unable to explain an eight-day gap on one tape. Eleven others were blank, a condition possibly caused by intentional erasure, according to tape experts. Still, the House task force found nothing suspicious about this pattern.

In clearing the Republicans, the House report also left out testimony from Iran's former Defense Minister, Ahmed Madani, who stated that he, too, had chastised Hashemi for collaborating secretly with the Republicans behind President Carter's back. Madani testified that Hashemi offered to bring Casey to a hostage discussion during the campaign.

"We are not here to play politics," Madani said he responded. The discussion convinced Madani that "Casey wanted to fish in troubled waters" and that Hashemi was "double-dealing" President Carter.

In the transition period after Ronald Reagan's victory, the FBI picked up more conversations about Hashemi's GOP ties. On Nov. 20, the same day as Tillman's call about the "Bush people," Hashemi boasted to fellow Iranian Mahmood Moini about ties to Casey, who was then running President-elect Reagan's transition office. "I have been, well, close friends ... with Casey for several years," Hashemi told Moini.

Although the Carter administration had finally frozen Hashemi out of the hostage talks because of the arms dealing, the shrewd Iranian banker kept his hands in. On Jan. 15, 1981, Hashemi met with Iranian Revolutionary Guard officials in London and opened an account for them with 1.87 million pounds (roughly equal to $3 million), according to the FBI wiretaps. The money apparently was to finance arms sales.

On Jan. 19, 1981, the last day of the Carter Presidency, Hashemi was back on one of the bugged phones, describing to a cohort "the banking arrangements being made to free the American hostages in Iran." Hashemi was also moving ahead with military shipments to Iran. "How should we proceed with our friend over there?" the associate asked Hashemi. "I'm just a little bit nervous that everyone is trying to move in on the action here."

The hostages were released the next day, immediately after Ronald Reagan's Inauguration.

BCCI Flies the Concorde

Over the next weeks, unusual deposits continued to flow into Hashemi's offshore bank, the First Gulf Bank and Trust Company. In early February 1981, the FBI recorded a call alerting Hashemi that "money from BCCI [is] to come in tomorrow from London on Concorde."

Within days of the BCCI-Concorde call, the new Justice Department ordered the wiretaps pulled from Hashemi's office. Though the FBI and field prosecutors wanted to use the wiretap information immediately to mount an arms trafficking case against Hashemi, the proposed indictment languished for more than three years. Even then, in May 1984, when the evidence finally went to a grand jury, the Justice Department insisted on tipping off Hashemi, allowing him to cancel a flight from London to New York and avoid arrest.

Less than a year later, in early spring 1985, Israeli arms dealers, Albert Schwimmer and Ya'acov Nimrodi, arrived at a luxury London hotel to meet with Cyrus Hashemi, Saudi financier Adnan Khashoggi and an Iranian intelligence man named Manucher Ghorbanifar. Hashemi was proposing more weapons sales for Iran.He was working again with John Shaheen and Bill Casey, who was President Reagan's director of the CIA.

A year later, still in London, Hashemi fell suddenly ill with what was diagnosed as acute leukemia. He died on July 21, 1986. But what Hashemi had started in that London hotel room would become known a few months after Hashemi's death as the Iran-Contra Affair.

@Copyright 1995

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