The Consortium

Lies Spun into History

Better than Democrats, Bob Dole and other Republicans grasped the value of defending heroes, even imperfect ones. So the GOP battled the charges that Bill Casey and other Republicans played a nearly treasonous dirty trick to win in 1980.

The defense required enforcing absurd alibis, bullying investigators and massaging the facts. But it worked. The Democrats acquiesced and the Republicans proved that they respected history enough to falsify it, the final chapter of the October Surprise X-Files.

By Robert Parry

WASHINGTON -- Bill Clinton's Inauguration ended the 12-year Reagan-Bush reign, but the Republicans still had the legacy. On Feb. 3, 1993, two weeks after Clinton moved into the White House, GOP congressmen took to the House floor to celebrate the debunking of the October Surprise allegations. During a "special order," Rep. Henry Hyde denounced the long-standing suspicions as a "myth." He trumpeted the bipartisan House task force's finding -- that William Casey and George Bush did nothing to undercut President Carter's Iranian hostage talks in 1980.

"October Surprise" quickly passed from allegation to Republican grievance. It would become a GOP battle cry, echoing through the next three years as Sen. Bob Dole and others demanded investigations of Clinton by citing the attention given the "baseless" accusations from 1980. House Democrats may have thought they were buying some political peace by clearing Casey and Bush on the 1980 matter. But the Democrats were wrong.

In a gleeful House colloquy, Hyde, a white-haired rotund Republican from Illinois, did acknowledge some weakness in the House task force findings. Casey's 1980 passport had disappeared, as had key pages of his calendar, Hyde admitted. He noted, too, that the chief of French intelligence, Alexandre deMarenches, had told his biographer that Casey, while Ronald Reagan's campaign director, did hold hostage talks with the Iranians in Paris in October 1980. Several French intelligence officials were corroborating that assertion.

But Hyde insisted that two solid blocks of evidence proved that the October Surprise allegations were false. Hyde's first cornerstone was hard-rock alibis for Casey and other suspects. "We were able to locate [Casey's] whereabouts with virtual certainty" on the dates when he allegedly met with Iranians in Europe to discuss the hostages, Hyde declared.

For instance, Casey had been in California on the late July 1980 weekend of a purported meeting with Iranians in Madrid, Hyde said. There was an alibi, too, that weekend for the late Cyrus Hashemi, a mysterious Iranian banker with ties to the CIA, Tehran's radical mullahs and the corrupt Bank of Credit and Commerce International (BCCI). Hashemi was in Connecticut, Hyde said -- even though Hashemi's older brother Jamshid testified under oath that he and Cyrus were with Casey and a senior Iranian cleric in Madrid.

The second debunking cornerstone, Hyde added, was the absence of anything incriminating on FBI wiretaps of Cyrus Hashemi over five months in late 1980 and early 1981. Hyde noted that according to the task force report, "there is not a single indication that William Casey had contact with Cyrus or Jamshid Hashemi. ...Indeed, there is no indication on the tapes that Casey or any other individuals associated with the Reagan campaign had contact with any persons representing or associated with the Iranian government."

Cracked Cornerstones

But under any careful inspection, both of Hyde's cornerstones crumbled. The alibis were laughably bogus. The clear and documented record showed that the House investigators put Casey in California on the wrong weekend. (See The Consortium, Feb. 14, 1996)

Plus, the "proof" of Hashemi's presence in Connecticut consisted of phone records showing two one-minute calls, one from a lawyer to Hashemi's home and one back to the lawyer. There was no evidence that Hashemi received or made the calls, and the pattern more likely fit a call asking a family member when Hashemi was due home and the second call giving the answer.

The Republicans were wrong, too, about the absence of incriminating evidence on the Hashemi wiretaps. But since those wiretaps were secret in 1993, that argument was impossible to assess then. But when I accessed the raw House documents (which I dubbed the "October Surprise X-Files") in a remote Capitol Hill storage room many months later, I found a classified summary of the FBI bugging.

According to that summary, the bugs actually revealed Cyrus Hashemi deeply enmeshed with Republicans on arms deals to Iran in fall 1980 as well as in business schemes with Bill Casey's close friend, John Shaheen. And contrary to the task force's claim of "not a single indication" of contact between Casey and Cyrus Hashemi, the Iranian banker was recorded as boasting that he and Casey had been "close friends" for years. That claim was supported by a CIA memo which stated that Casey recruited Cyrus Hashemi into a sensitive business arrangement in 1979. (See The Consortium, Dec. 31, 1995)

But beyond that, the secret FBI summary showed Hashemi receiving a $3 million offshore deposit, arranged by a Houston lawyer who said he was a longtime associate of then-vice presidential candidate George Bush. The Houston lawyer, Harrel Tillman, also told me in an interview that in 1980, he was doubling as a consultant to Iran's Islamic government.

After Reagan defeated Carter in November 1980, Tillman was back on the line promising help from the "Bush people" for one of Hashemi's floundering business deals. Then, the FBI wiretaps picked up Hashemi getting a cash payment, via a courier arriving on the Concorde, from the corrupt bank, BCCI. (For more details, see The Consortium, Dec. 31, 1995, & Jan. 15, 1996)

The House task force concealed these documents and then grossly miswrote an important chapter of recent American history. But even the primary author, the chief counsel, E. Lawrence Barcella Jr., saw potential problems caused by the report's omissions. According to another document I found in the storage room, Barcella ordered his staff "to put some language in, as a trap door" to allow a last-minute escape should complaints arise about selective use of evidence.

Barcella also needed to duck another problem -- conflicts of interest confronting him from the October Surprise case. Not only was the chief counsel friends with some of the suspects, he had earned more than $2 million from BCCI for his law firm which was headed by former Sen. Paul Laxalt, who had served as Reagan's campaign finance chairman in 1980. The conflict-of-interest difficulty was handled simply by purging any reference to BCCI and Barcella's associates from the final report. (See The Consortium, Feb. 29, 1996)

Dissent Denied

Inside the House task force, Barcella encountered some resistance to the report's bogus alibis and twisted logic. When a draft was belatedly shown to Democrats on the panel, in December 1992, one congressman, Mervyn Dymally of California, authorized the writing of a formal dissent.

Dymally's staff aide, Marwan Burgan, quickly spotted some of the report's absurd alibis, including the claim that because someone wrote down Casey's home phone number on one day that proved Casey was home, or that because a plane flew from San Francisco directly to London on another important date that Casey must have been onboard.

According to sources who saw Dymally's dissent, it argued that "just because phones ring and planes fly doesn't mean that someone is there to answer the phone or is on the plane." But Dymally's reasonable observations were fiercely opposed by Barcella, who enlisted the task force chairman, Rep. Lee Hamilton, D-Ind., to pressure Dymally into withdrawing the dissent.

If the dissent were not pulled, Barcella and Hamilton threatened to denounce Dymally for missing task force meetings and for not having Burgan cleared to review all the classified material. Hamilton warned Dymally, who was retiring from Congress, that he [Hamilton] would "come down hard" on Dymally. The next day, Hamilton fired all the staffers who had worked on Dymally's Africa subcommittee.

Seeing the firings as retribution (though Hamilton denied a connection), Dymally relented and withdrew the dissent, which was never made public. With the road cleared, the task force report, resplendent in its irrationality, rolled ahead to become the official history of the United States.

But the silencing of Dymally was only the final act in a long-running campaign to halt any serious accounting for Reagan-Bush misdeeds in the 1980s. Two weeks earlier, on Christmas Eve 1992, President Bush had pardoned six Iran-contra conspirators, effectively ending the Iran-contra investigation by independent counsel Lawrence Walsh. Bush also left office with his aides ripping out the hard discs of their computers and still stonewalling congressional requests for documents about the secret arming of Iraq.

Dole to the Defense

On Bush was aided in these national security cover-ups by a sometimes political rival, Senate Republican Leader Bob Dole. The dour Kansan, now seeking the Republican presidential nomination, played the same protective role for Bush that House Minority Leader Gerald Ford had for President Nixon in the early days of the Watergate scandal in the 1970s.

Throughout the Iran-contra affair and its spin-off scandals, Dole fought rear-guard actions to frustrate investigations. In doing so, he earned credit with the GOP's dominant right wing, which was in denial that Ronald Reagan could do anything wrong. At the Conservative Political Action Conference in 1993, Dole boasted how he had gone to the Senate floor "on countless occasions" to hector special prosecutor Walsh, often over petty issues.

"I've discussed his violation of Washington, D.C. tax laws, his first-class air fares, the lavish office space," Dole said. "I've talked about his breakfasts, his paid-for room service and dinners provided by American taxpayers." Dole bragged that he even examined the "political leanings" of Walsh's staff lawyers, some of whom were then set up for bashing in the right-wing press.

But on the October Surprise issue, Dole went straight for the jugular. Not content to harass an ongoing investigation, Dole mounted a filibuster against any independent Senate inquiry. On Nov. 22, 1991, Dole invoked party discipline to defeat a cloture vote and block special funding for the investigation.

When a Senate Foreign Relations subcommittee still sponsored a small-scale investigation, Dole's lieutenants, Sens. Mitch McConnell and Jesse Helms, summoned the chief counsel, Reid Weingarten, into a closed-door meeting. McConnell brow-beat Weingarten with personal insults. Helms barred Weingarten's investigators from interviewing witnesses outside Washington.

Though hamstrung by lack of funds and hampered by Republicans, Weingarten did make some significant discoveries. He obtained testimony corroborating claims that Casey had known Cyrus Hashemi before the 1980 election. His investigators found that some FBI wiretaps of Hashemi might have been intentionally erased. He revealed that key Casey records -- the 1980 passport and several calendar pages -- were missing and that the Casey family was withholding documents.

In the end, however, the best Weingarten could do was conclude that Casey had been "fishing in troubled waters" on the hostage issue in 1980 and was engaged in "informal, clandestine, and potentially dangerous efforts on behalf of the Reagan campaign to gather intelligence on the volatile and unpredictable course of the hostage negotiations."'

Thanks to the Dole filibuster, most of the October Surprise investigation was delivered into the friendlier hands of the House task force. Then, with crucial evidence hidden, the House task force concluded that Ronald Reagan won the Presidency without recourse to a very dirty trick. In that way, the historical legitimacy of the Reagan and Bush presidencies was preserved.

Henry Hyde and the other Republicans could celebrate.

(c) Copyright 1996 -- Please Do Not Re-Post

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