Good evening, I'm Barbara Walters. Hugh Downs is on assignment tonight, and this is a special
edition of Twenty-Twenty.
On the ABC News Magazine. Twenty-Twenty with Hugh Downs and Barbara Walters.
Tonight, forget what you've heard, that the Iran arms story is too complex. A clear picture
has emerged, and regardless of what President Reagan knew, regardless of who takes the blame,
President Reagan is the reason it happened. Tonight, ABC News Ted Koppel joins Twenty-Twenty
to make that case. These are the underlying factors. Ronald Reagan's immense popularity.
President of the United States!
Ronald Reagan's terrorist policy.
The message, you can run, but you can't hide.
And Ronald Reagan's battle with communism.
They are the focus of evil in the modern world.
Tonight, you'll see how those underlying elements led to the current crisis. A host of ABC News
correspondents will be joining Ted Koppel. There's new information and a clear picture
inside the Washington scandal. Secret moves, secret men.
If to you, the Iran arms contra-AIDS story has become a sea of information, and you feel
as if you're drowning, don't give up. There is sense to be made. Tonight, to show you
the clear picture that has emerged, ABC News is devoting a full two hours to this story.
This special edition of Twenty-Twenty, and after your local news, an expanded edition
of Nightline. What we're offering is not a rehash of the whole affair, instead some
fresh information so that you will find the pieces do fit. Ted Koppel and ABC News correspondents
will show how unique factors and a charismatic president created a climate that enabled all
this to happen. Ted Koppel begins our report, Inside the Washington Scandal. Secret moves,
secret men.
It's context we're talking about tonight, trying to understand how all these faces and
images fit together. We may ultimately applaud or denounce what resulted, but somewhere behind
everything that's emerged these last few weeks, there had to be some goals, a national policy.
Toward the end of 1985, this man, Lieutenant Colonel Oliver North, told a small gathering
of experts on counterterrorism from the departments of state and defense, from the FBI and CIA,
that the old man, the president, wants the hostages out by Christmas and he doesn't care
how we do it. Pressure had been building on the president from the families of the Americans
kidnapped in Beirut. They were complaining publicly that the administration wasn't doing
enough. And pressure from the director of the CIA, William Casey, who wanted this man,
William Buckley, released. The cover story on Buckley had been that he was a political
officer at the embassy in Beirut, but actually he was chief of station for the CIA. Worse,
in his previous job he had headed up the office of counterterrorism for the CIA at Langley,
Virginia. He was a walking encyclopedia of what his kidnappers wanted to know, and under
torture, he told them. Remember this incident, the hijacking of TWA's flight 847 in June
of 1985? When the crew of the plane was forced to fly in a seemingly random pattern from
one country to another, never staying at any airport for long, the administration blamed
it on media reports. U.S. intelligence sources say that at about the same time, groups of
military counterterrorist specialists were being assembled at Fort Bragg, North Carolina
in Elstree. Is this the Delta counterterrorist force preparing for a possible rescue mission?
Well, there have been reports that the so-called Delta force, the specially trained anti-terrorist
group, has been sent there. What can you give us on that? But it wasn't the media. Indeed,
the Delta force had never been dispatched. U.S. experts quickly concluded that the hijackers
were simply applying what they had learned from William Buckley. There is frustration
at the White House. In a piecemeal fashion, terrorists are doing to the Reagan administration
what they had done to Jimmy Carter. They bombed the U.S. Embassy in Beirut. No U.S. response.
They had blown up the Marine barracks, killing 241 Marines. No response. And now, one by
one, they were accumulating American hostages. And no one seemed to know what to do. Enter
Oliver North, Candoo action-oriented lieutenant colonel in the Marine Corps. He has been at
the White House in the National Security Council since 1981. Over the years, he's helped direct
the successful invasion of Grenada, the interception of an Egyptian airliner carrying the suspected
hijackers of the Achille-Lauro, funding and assisting the Contras, and eventually he will
help direct the bombing raid against Libya. North, in fact, has been put in charge of
a counterterrorism group at the White House. Basic membership, two men from the CIA, one
from State, one from Defense, one from the FBI. By late 1985, the group is convinced
that U.S. policy needs to move from reactive to proactive, from responding after the fact
to acting before the event, getting them before they get us. Colonel North has already drafted
an NSDD, a National Security Decision Directive, which calls for vigorous action to neutralize
terrorists. The terms kidnapping and assassination are deliberately avoided in meetings, but
as one source told us, everybody knew what neutralize means. It's a term of art. This
was not a debating society. Action was taken. The operational arm of this group is at the
CIA. But what kind of operational structure inside the White House permits or even encourages
this kind of authority for a mid-level official at the National Security Council, for a lieutenant
colonel in the Marine Corps. We turn first to our White House correspondent, Sam Donaldson.
If Lieutenant Colonel Oliver North is the evil genius of the present crisis, there stands
behind him a framework of ideological zeal, frustration, inattention, and tone that can
be laid to only one doorstep, the Oval Office.
An office that has been occupied for almost six years by a man at once majestic and inspiring,
warm and friendly, elegant and witty, and driven by a fierce determination to combat
communism, particularly in Nicaragua. To do nothing in Central America is to give the
first communist stronghold on the North American continent a green light to spread its poison
throughout this free and increasingly democratic country.
In the beginning, Ronald Reagan surrounded himself with some pretty good people, among
them a White House troika of principal advisors who kept tabs on the world around them and
on each other, a strong secretary of state who held the reins of foreign policy jealously,
and a national security advisor named Richard Allen, who had a low-profile office in the
White House basement and now gone, is appalled at what his old staff has been up to.
How staffers like that could get loose to perform such operations strikes me as being
absolutely remarkable. Staffers like that, like Oliver North, Allen
hired him, but doesn't remember much about him because in those days the National Security
Council staff studied and planned and coordinated, but did not perform operations.
David Aaron, NSC Deputy Director under Jimmy Carter, says the staff has never had the job
of performing operations. There's only one precedent for it. Unfortunately,
that precedent is the plumbers in Watergate. You have to remember that the plumbers were
part of the National Security Council staff. The plumbers unit headed by E. Howard Hunt,
set up to plug news leaks, wound up breaking into offices and performing third-rate burglaries.
But that was under another president. How could the NSC staff go wrong under this president?
Well, for one thing, many of his original aides moved on. The strongman Secretary of State
gave way to a less assertive replacement. National Security Advisors came and went with
the speed of summer lightning and perhaps most importantly moved out of the basement
and back upstairs to the corner office of power. And the Troika staff system, which
kept the president on an even keel, folded into one man, strong-willed, determined to
control all below him, and stoke, not dampen, the instincts of the one man above him.
And when you accept the king's showing, you sign a board.
Sign a board, said new Chief of Staff Donald Regan. But the train was now on the downhill
track, and communism was still pushing, terrorism still growing, U.S. hostages still languishing,
and the normal bureaucracy wasn't moving fast enough.
The president has been frustrated by the controversy. It's something he cares passionately about,
as we all know.
David Gergen, who was Mr. Regan's first communications director, says everyone knew the boss wanted
to aid the Contras against Nicaragua.
Everybody in the White House suddenly begins asking, how can we help him achieve this goal?
And that's when you get these renegade operations, because people are out there trying to please
the president.
But would this president want to be pleased so much that he would say, even if you have
to break the law? His longtime political associate, Lynn Nofsiger.
No, he would never say, even if you have to break the law. I can hear him saying, fellas,
we've got to do something about this situation. And people then going off and rushing off
to do it.
But the man who rushed to do it was Lieutenant Colonel Oliver North, coordinating activities
with the Contra leaders. And now, International Security Advisor Robert McFarland, free to
move into operations. McFarland's NSC had directed the capture of the Aquili-Lauro hijackers,
and McFarland brought to the president the plan to sell arms for hostages, which the
president approved. Richard Allen.
Someone indicated to him that there were moderates in Iran with whom we could deal.
That strikes me as absolute balderdash. That's absolutely ridiculous.
Maybe so, but no one told Ronald Reagan, a man who depends on his staff, to do the planning,
do the work, and take care of the details.
I don't think it's logical to ask a president to know every detail. What is logical is for
him to insist that his staff tell him every important detail.
There has been a tendency more and more to treat him as a living national treasure inside
the White House, and to not challenge him, to not press him hard within the staff.
Here he is.
I was not fully informed on the nature of one of the activities undertaken in connection
with this initiative. This action raises serious questions of propriety.
Propriety, and perhaps questions of policy, competence, misplaced loyalty, and inattention.
It is a scenario that makes Ronald Reagan out to be a captive of his system, not its
captain. But all the answers aren't in yet. Ted?
If the question is whether the president ordered profits from the sale of arms to Iran to be
funneled into a bank account for the Contras, the answer is, we don't know for sure, but
probably not. If the question is whether the president knew that profits from the arms
sales would go to the Contras, the answer is, possibly, but again, we don't know.
If, however, the question is whether President Reagan created the political and operational
climate that made the deal possible, if not inevitable, the answer is yes.
This story, as we will try to show you, ends up being about shadowy intermediaries and
Swiss bank accounts, international arms salesmen, and can-do patriots. But where it ends is
a consequence of where it began. It is a product of who was running the show and how and what
they believed the president wanted them to do.
This president, even his friends agree, is not a great organizer, but he is, even his enemies
concede, a great communicator.
This election is to make America great again, to restore us in the world.
It is that sort of broad-shouldered confidence that sweeps Ronald Reagan into office.
I, Ronald Reagan, do solemnly swear that I will...
Facing the men and women whose captivity in Iran for 444 days was evidence of America's impotence,
President Reagan lets our enemies know that America is back.
Let terrorists be aware that when the rules of international behavior are violated,
our policy will be one of swift and effective retribution.
No doubt America has dealt with the notion of fighting terrorism before, but now it becomes a creed,
a doctrine, an article of faith.
Send a message to terrorists everywhere, a message you can run, but you can't hide.
And President Reagan leaves no doubt in anyone's mind that he knows who sponsors the terrorists
and all the other enemies of a peaceful world.
Let us be aware that while they preach the supremacy of the state, declare its omnipotence
over individual manned and predict its eventual domination of all peoples on the earth,
they are the focus of evil in the modern world.
They, of course, are the Russians, and during the first years of the president's first term,
arms spending goes up, talk of arms control with the Soviets all but disappears.
And wherever this president can find men and women prepared to roll back the tide of Soviet communism,
he will help. It is a policy that comes to be known as the Reagan Doctrine.
In Afghanistan, occupied by more than a hundred thousand Soviet troops, military and financial assistance
to the Mujarjadin, the Afghan freedom fighters.
In Cambodia, occupied by the Soviet-backed Vietnamese army, the United States cooperates with China
to provide arms and assistance to rebel forces.
Never mind that these rebels are led by Pol Pot, whose Khmer Rouge exterminated more than a million and a half
of his own countrymen. In the framework of the Reagan Doctrine, these rebels are also freedom fighters.
The same is true of the former communist Jonas Savimbi and his rebel forces in Angola.
All freedom fighters.
But nowhere does the White House feel the moral certainty and political correctness of the Reagan Doctrine
more strongly than in helping the rebels who are fighting the Soviet and Cuban-supported government in Nicaragua.
The Contras, the president reminds us, are like our own founding fathers.
The doctrine of a global network of anti-communist freedom fighters has a certain logic,
and as presented by this robust and optimistic president, it has an undeniable appeal to a nation
long frustrated by what our enemies have been doing to us.
But implementing that policy, especially with regard to the Contras, becomes quite literally a minefield.
We begin with our national security correspondent, John McQuethy.
Ronald Reagan came into office with a rush of new initiatives and a distinctly different attitude.
There is a spiritual revival going on in this country, a hunger on the part of the people to once again
be proud of America, all that it is and all that it can be.
He said his administration would face up to and deal with what he called the alarming spread of communism
around the world. At the Defense Department, an extraordinary campaign was launched to rearm America.
At the CIA, restraints imposed during the Carter administration were cast aside.
Covert operations were soon sprouting all over the globe.
Terrorism was something else Ronald Reagan vowed that he was going to fight, as the U.S. had never fought it before.
It was easy to offer very, very tough rhetoric, but when it came actually to implementing such a policy,
the administration found that that was quite difficult.
Central America also drew early attention. There were even hints that U.S. troops could be sent to Nicaragua.
If we do not act promptly and decisively in defense of freedom, new Cubas will arise from the ruins of today's conflicts.
The first frustrating battles with Congress over how to deal with Nicaragua,
whether to fund a secret war or a public one, were already in the making.
See if this scenario sounds familiar.
National Security Advisor Robert McFarland urges a risky covert action upon the president.
Secretary of State George Shultz is opposed, says it won't work.
The president takes some time to be convinced, but finally gives McFarland the go-ahead.
Shultz is overruled. Within the White House, there is reportedly little discussion about disastrous public relations results,
should the plan ever become public.
Though the law requires the Congress be notified of the covert action, it is not done.
Months after the covert action is carried out, it becomes public, and there is public uproar.
There are calls for the CIA director's resignation. Congress is incensed.
Iran arms sales late 1986? No. The mining of Nicaragua's harbors early 1984.
The administration mindset about risky covert operations was established long before anyone thought of selling arms to Iran.
The risk-takers, including the president, have always been in the Reagan White House.
And they have always been concerned, some would even say obsessed, with Nicaragua.
Covert funding of a resistance movement there, the Contras, started in the earliest days of this administration.
But it wasn't very covert. It soon showed up on the cover of a national news magazine. You could read all about it.
According to the rule of the House, the chair is now going to order that the galleries of the House chamber shall be cleared of all persons.
But Congress could only discuss it in secret session. Doors sealed.
Congress had reservations. December 1982, Edward Boland, Democrat of Massachusetts,
proposed there should be no Contra funding for the purpose of overthrowing the government of Nicaragua, an obvious loophole.
Just claim you're not trying to overthrow the Nicaraguan government. Boland passed.
411 to nothing, to nothing. In the early stages of the Contra debate, Congress and the White House were not too far apart.
Congress also supported White House efforts to fight a rash of terrorism that was crippling American foreign policy.
All parts of the government were secretly mobilized to find a way to strike back.
The Joint Chiefs of Staff drew up a plan to hit selected targets in Iran. They never used it.
The CIA secretly trained cadres of local gunmen in Beirut to help find American hostages. They never did.
In parallel with secret operations to fight terrorism were still more covert programs to fight communism.
Communist subversion is not an irreversible tide. We've seen it rolled back in Venezuela and most recently in Grenada.
The tide of the future can be a freedom tide. All it takes is the will and resources to get the job done.
The way to get the job done was by adding still more muscle to the CIA's covert capabilities.
Members of the Congress, I have the high privilege and distinct honor of presenting to you the President of the United States.
In early 1983, Ronald Reagan went to Capitol Hill looking to rally public support for his Central American policy.
He never got it. August 1983, only 20% of those polled by ABC and the Washington Post favored support for the Contras.
And while the Reagan administration may have been claiming it didn't want to overthrow the Nicaraguan government,
the Contra leaders kept saying they did, a violation of the Bolin law.
It became clear that the administration's real object was to change the regime in Nicaragua itself.
And the CIA turned to tougher tactics like mining Nicaragua's harbors.
The CIA dipped illegally, probably, improperly for certain into contingency funds to pay for the mining. Congress was outraged.
These elements of President Reagan's Central American policy border on sheer lunacy.
The mining of harbors is an act of war. Does the President realize or accept responsibility for such actions?
That's where huge mistakes were made and you can just feel the confidence draining out of the Congress in respect to the operations.
And after a while, sort of feeling that, hey, we're being lied to. Don't do that.
The Senate voted 84 to 12 to condemn the mining. Even the President's closest friends, like Republican Laxalt of Nevada, voted against him.
Soon after, in the summer of 1984, funds for Nicaragua and the Contras were cut off entirely.
Congress felt betrayed by the administration's aggressive actions in Central America.
The administration, for its part, felt betrayed by Congress for its cutoff of funds. Betrayed, frustrated, but not deterred.
To keep the Contras in business, the administration secretly solicited help from other governments.
Such unlikely bedfellows as Saudi Arabia, Israel, and the tiny Asian kingdom of Brunei.
With White House coordination, private groups funneled money and supplies toward Central America.
As terrorist incidents continued, Oliver North and others at the NSC became deeply involved in searching for solutions, how to free the hostages.
A certain amount of desperation entered into it at that point.
A willingness to look at anything as a means of stopping this process and of getting the hostages back.
And I think that was the origin, then, of what followed in terms of making a deal with Iran.
North even suggested kidnapping Iranians and swapping them for American hostages. It is not known if this was ever attempted.
What is known is that the President signed off on a secret plan to sell arms to Iran.
We have a real concern for Americans that are held captive in some part of the world by terrorists. And we're going to be vulnerable.
But there was also the diversion of funds to the Contra rebels in Nicaragua.
A course of events that some feel the President is responsible for because of the atmosphere he created in the White House.
The administration has been too much infected by Ramboism.
It believes that Rambo is not simply an implausible adventure story.
It thinks of Rambo as a profound political treatise.
Although Congress has approved $100 million for the Contras this year, White House advisers anticipate that getting the money next time around will be far tougher.
Yes, it is a doggone confrontation between East and West, and don't you ever forget it.
Ten times in the last five years the House has debated and voted on Contra aid. The President lost most of those votes.
Aid to the Contras has taken more congressional time, perhaps, than any issue of our time. And it has always been emotional.
I see down the line this policy bringing American boys to their deaths.
I think it's wrong just to prove a point, and that's what they're trying to do, prove a point with the Soviet Union.
Congress feels the White House has always been willing to go to extraordinary lengths to carry out its Nicaraguan policy.
Some critics even say illegal lengths. The complaint here, that the White House has been willing to go to those lengths with congressional support or without it.
Charles Gibson, ABC News, Capitol Hill.
So what we've seen, a popular President unable to stop terrorism, a Marine in the NSC who brought the Rambo spirit to life,
a management style in the White House that let things get out of control.
Next, the secret network that took charge of American foreign policy.
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To all those who are coming home, and those we come home to, from Ernest and Julio Gallo, all the best.
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And they received a better offer.
How much?
A hundred thousand.
A hundred thousand? You're kidding.
And they want a response by noon.
This meeting is taking place in different cities around the country.
What makes it possible is AT&T Alliance Teleconferencing Service.
What's incredible is it sounds like it's taking place in the same room.
It's too risky.
Let's be smart. Raise it by 20, but no higher.
I agree.
Set up your own phone meeting with a touch-tone phone. 0700-456-1000.
Good night, folks.
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Saturday, top senior and LPGA players pair off for the richest prize on the tour.
Five hundred thousand dollars to the winning team at Mazda Champions Golf.
And in 1984, he won an Olympic gold medal.
Two years later, injury couldn't stop lightweight Parnell Whitaker.
He battles on against former champ Alfredo Lane live.
Plus, world champion Debbie Thomas leads a holiday celebration,
America on Ice, on ABC's Wide World of Sports, Saturday.
Remember, when this story first broke, it was viewed primarily as a policy blunder.
How could we battle terrorism when we were dealing with a terrorist state?
The word scandal would not be used until we learned about the Contra connection.
Once again, Ted Koppel.
By the summer of 1984, the White House finds itself still firmly believing in the Reagan doctrine,
passionately committed to helping the Contras in their fight against the government of Nicaragua.
But flat out of money, Congress has cut it off.
ABC News has learned that in conversations with colleagues, Lt. Colonel North reviews the available options.
That the U.S. military become directly involved in Nicaragua. Rejected. Not enough public support.
That President Reagan go on television and announce the formation of a Central American Freedom Committee.
The President would say that he and Nancy are contributing the first thousand dollars.
Others, like millionaires Nelson Bunker Hunt, Ross Perot, David Packard, are making major contributions.
And the public is invited to join in.
That option is also dismissed as politically impractical, with the presidential elections just a few months off.
Part of the answer, and it is only part, is found among the President's most ardent supporters.
In the ranks of conservative true believers.
Here's James Walker.
With Congressional aid cut off, Contra leader Adolfo Calero urgently appealed for 50 million dollars a year to arm, clothe, and care for his troops.
Almost immediately, conservative organizations, many of them newly formed, answered Calero's calls, spurred on by President Reagan.
Ladies and gentlemen, the President of the United States.
The President's appearance at this fundraiser for Nicaraguan refugees was unusual.
The only fundraisers that he normally attends are for political candidates.
But he left no doubt about his commitment to the pro-Contra cause and to the private groups that support it.
I truly believe the history of this century forces me to believe that to do nothing in Central America is to give the first communist stronghold on the North American continent
a green light to spread its poison throughout this free and increasingly democratic country.
With the President's call, a network of conservative groups embarked on a highly publicized and diverse campaign to aid the Contras.
Most visible, retired Major General John Singlaub, whose 35-year military career involved classified programs and covert operations beginning in World War II
when he worked for CIA Director William Casey.
Singlaub is former head of the World Anti-Communist League, which has helped raise between $5 and $10 million for the Contras.
Singlaub said he was in frequent contact with National Security Council staff member Oliver North about his fundraising efforts and work with different groups.
Singlaub's crucial role in the private aid network was the focus of this 1985 congressional report.
The first thing we found out was that it was coordinated through a system of boards of directors that really were interlocking.
Time after time on the boards of each little group that was aiding the Contras, we'd find General John Singlaub, retired Army General, or his associates.
Contra aid, humanitarian or military, came from some 20 groups, most of which refused to disclose their precise contributions.
Many of these organizations said they received encouragement, even briefings, from Lieutenant Colonel Oliver North.
Moreover, part of the strategy was to hold extremely visible events.
For example, TV evangelist Pat Robertson, head of the Christian Broadcasting Network, visited Contra troops on the Honduran border.
Conservative Republican Phyllis Schlafly's Eagle Forum drew nationwide attention when membership 8,000 so-called Freedom Fighter Friendship Packs to the Contras, worth an estimated $200,000.
The Washington Times, owned by Reverend Sung Young Moon's Unification Church, ran this front-page editorial asking for contributions.
The former head of the Citizens for America, Lewis Lehrman, promoted the Reagan Doctrine overseas in a meeting with rebel leaders from Nicaragua, Angola, and Afghanistan.
Wealthy conservative backers like Texas heiress Ellen Garwood were also tapped for support.
Garwood chipped in $65,000 to refurbish a helicopter for the Freedom Fighters.
She echoed the administration's determination to help the Contras.
I think this is the greatest crisis in our history, in our recent history.
It's as, as someone said, we're in greater danger than we were the day after Pearl Harbor.
But for all the talk and attention, the private groups failed to raise the $50 to $100 million needed to keep the Contras fighting.
In fact, they brought in less than $10 million. So why all the visibility, Ted?
Remember, the Contras do remain operational during this period, despite no money from Congress and totally inadequate sums from General Singlaub and his supporters.
What the Singlaub Group does provide, however, according to government sources, is cover for the administration's other secret fundraising operations.
Media attention is focused on Singlaub and his very visible friends.
Meanwhile, a shadow network has been created that raises much larger sums of money for the Reagan Doctrine in general and the Contras in particular.
Some of these funds come from friendly governments like Brunei, Earmarked, for the Contras.
Other money, weapons, and logistical assistance are provided by friendly anti-communist countries eager for the gratitude of the U.S. government, concerned only that their contributions remain secret.
Other money, we now know, was also raised by skimming profits from the sale of U.S. weapons to Iran.
The operation that raises the money, acquires the weapons, and arranges that they be delivered is run, again, out of the White House by Lieutenant Colonel Oliver North.
Here's John Martin.
This is a mystery story. It is pieced together from the people who lived it, from news reports, and from sources who want to remain anonymous.
It is a story about people and companies operating in the shadows of government.
It includes cash donations from foreign governments and a maze of Swiss bank accounts, some of them said to be controlled by Oliver North, some by his associates.
Most of the clues are still being collected and many of the mugshots are missing, but these are the strands of a web that investigators are trying to connect.
The first investigator on the case, perhaps improbably, was the Attorney General of the United States.
Edwin Mee says the trail of evidence led him from the Iranian arms sale to the Nicaraguan rebels.
What is involved is that in the course of the arms transfers, certain monies were taken and made available to the forces in Central America, which are opposing the Sandinista government there.
The trail of money begins with the men who raised it. They say the funds to finance the Iranian arms purchases went first into Swiss bank accounts.
Now, this money was put where?
In the company called Lake Resources in Geneva.
Who told you to put the money in it? Lieutenant Colonel North?
Yes.
General Secord?
Yes.
General Secord? Did you meet with them personally?
Yes.
So the names begin to appear. Oliver North, administrator from inside the White House, the man who could get things done.
Richard Secord, the retired general and former Deputy Assistant Secretary of Defense with a grasp of worldwide logistics and special operations.
And Secord's partner, Albert Hakim, an Iranian businessman educated in the United States, a man who knew how to move the money and deal with the right people in government.
Here's how their network operated in Central America.
From his service in covert operations in Laos, Secord knew people who could find him pilots and crews.
Last summer, perhaps two dozen cargo handlers and flyers assembled in El Salvador under William Cooper, a former Air America pilot who served in Southeast Asia for the CIA.
Cooper drew men like Dan Gamlin from California, Gene Haassenfuss from Wisconsin, men who had flown with him in Laos 15 years earlier.
Assisting them on the ground at Ilipongo Air Base, a man they called Max Gomez, a Cuban-born former CIA officer.
In a warehouse and at smaller bases in Honduras, they found tons of weapons and munitions stockpiled for delivery to rebels fighting inside Nicaragua.
There's hang grenades there, mortars, rounds for 60mm. That's all American made, yes.
Did Max Gomez ever say where that came from?
No, but it was all in U.S. crates and stuff.
U.S. government crates?
U.S. government packing, standard military packing crates, yes.
Did you ever meet anyone who said, I'm an American government official and...
No, I haven't. No.
Did you ever meet anyone who spoke, who said they spoke for the government even though they weren't in the government?
No.
Yet you're convinced the government was behind this?
Yes, I am.
Much of the munitions were delivered by an airline formerly owned by the CIA, Southern Air Transport of Miami.
Government records show its pilots flew hundreds of tons of cargo to Central America from the United States and Portugal, which manufactures arms.
In this year alone, Southern Air reported flying nearly 600 tons of cargo to Ilopango Air Base in San Salvador and Palmarola Air Base in Honduras.
The airline insists it did not fly resupply missions, but merely performed routine maintenance on the planes others flew.
Perhaps the biggest unanswered question is why the C-Cord network was so chronically short of money.
Investigator Mies said $10 million to $30 million had been diverted to the Contras in Central America, but Contra leaders said they saw far less than that.
The highest figure being generous that we can come out, that we have received up to now, will be between $5 million and $6 million.
That's the highest ever. Being very generous, that will be the highest ever. So, what happened to the balance?
That is what many people would like to know, including cargo master Hasenfuss, who said William Cooper twice announced the operation was closing down for lack of money.
Ultimately, Cooper died in the crash that Hasenfuss survived, but the strain of keeping the operation aloft had already taken a toll on his friend.
William Cooper carried a large burden on his shoulders many times. The guy was aging faster than he should be for the position he was in.
So, as far as finances, there was always problems with that. I know that for a fact.
Now that he is back in the United States, Congressional investigators and FBI agents will want to hear more from Gene Hasenfuss,
looking for him to help light some of the shadows that still remain in this mystery story, shadows that surround the men in the White House Web.
So, to Ronald Reagan, the Contra Cause became almost a religion.
True believers in the NSC would do anything to help, but the President never spelled out how they should help.
Next, some intriguing characters in this unfolding drama.
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It is an image that helped Ronald Reagan become president. What did he really hope to gain by reaching out to Iran?
Inside the Washington scandal. Secret moves. Secret men. When our special edition of 2020 continues.
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Next, from General Six. This is an action news brief with Jim Gartham.
Good evening. The verdict is guilty for Pennsylvania State Treasurer Bud Dwyer and former state Republican Chairman Robert Asher in a bribery scheme.
The full story on the verdict and reaction at 11. CIA Director William Casey recovering tonight from the removal of a cancerous brain tumor.
Tonight we'll hear from doctors and friends in Philadelphia.
And we'll have the story of a young man who died in part because of the neighborhood he lived in.
And it's anything but a goalies battle of the spectrum tonight. That and AccuWeather on action news at 11.
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Marlon Brando and Rita Marino star after Nightline.
If the Iranian story were ever offered as a miniseries, it would probably be rejected by the network.
Too big a cast. And further, several of the leading players are those whose names are barely known.
There was, first of all, Michael Ledin, a member of a Washington think tank, author of a book on Iran,
and a paid consultant to the National Security Council under Robert McFarland.
From the very first meeting, it was Ledin who represented America in talks with the Israelis and the Iranians.
The first such meeting took place in late July 1985 in Hamburg, Germany.
It was Ledin who gave the U.S. conditions to Iran.
At the very least, he said, we would want a cessation of terrorist activities against America.
The question of arms was also raised at this meeting.
And Iranian sources tell us it was Ledin who first brought up the matter of hostages.
Ledin was then in on every major negotiation until mid-November 1985,
when Robert McFarland resigned as chief of the NSC and Admiral John Poindexter took his place.
Ledin has not yet testified before the Senate or House.
On the Israeli side, the leading man was David Kimke, then head of the Foreign Office under Shimon Peres.
Kimke, who persuaded McFarland to get the Americans involved.
Along with two Israeli arms traders, Kimke arranged for the first shipments of arms to Iran,
$5 million worth of anti-tank missiles.
Kimke and the arms traders were in the picture until the Iranians had some complaints about the way the arms were being handled.
Enter, at this point, a new player.
General Neer, the Prime Minister's advisor on terrorism.
From then on, Neer ran everything from the Israeli side.
He was also part of the negotiating team, along with McFarland, on that now famous visit to Iran.
U.S. investigators have not yet talked to General Neer or indeed any of the other Israelis concerned.
The Israelis, besides wanting to help the U.S., were involved for three reasons.
One, in giving Iran their older arms, they would receive new ones from us.
Two, they were embarrassed by the revelation that an American had spied on the U.S. for them, and they wanted to make amends.
And three, it was to their advantage to have improved relations with Iran,
although almost until the last the Iranians thought the arms shipments came not from Israel, but from America.
And finally, there is the still mysterious Manoush Ghorbani Fah,
the ex-patriot Iranian businessman, wheeler-dealer, and negotiator,
who first came up with the idea that they were moderates in Iran, willing to do business with us,
and who continues to be a major part of the plot, even today.
Ted?
To put it mildly, the Reagan administration has mixed feelings about how to treat Iran.
U.S. intelligence knows that Iran was behind the bombing of the U.S. Marine barracks in Beirut.
They know a lot more linking Iran to terrorism.
Only yesterday, ABC's Pierre Salinger reported that U.S. officials learned in 1983
of an Iranian hit squad dispatched to assassinate President Reagan.
So why would the U.S. government even consider dealing with a nation so openly hostile to everything American?
The answer is as simple as geography.
It is the Soviet Union that sits just to the north of Iran,
and U.S. policymakers have concluded that influencing events in Iran
by the projection of military force would be impractical, if not impossible.
Some in the government conclude that the only viable option is re-establishing diplomatic contacts in Iran.
But with whom?
It is the hijacking of this Kuwaiti airliner in 1984, we're told,
that first suggests that there are powerful political elements inside Iran ready to deal with the United States.
When the hijackers bring the plane to Tehran, aides to the speaker of the Iranian parliament, Ayatollah Rafsanjani,
cooperate with U.S. officials in bringing the hijacking to an end.
Even then, the administration in Washington is deeply divided over how and whether to respond.
And once again, Lieutenant Colonel North turns to General Richard Secord
and other members of a shadow network outside the government to deal, this time, with Iran,
which has its own reasons for reopening ties with the United States.
Here's Pentagon correspondent Bob Zelnick.
By 1985, five years of war have left Iran with a desperate need for weapons.
They have bought arms from the North Koreans, from the Vietnamese.
They have secured them on the black market in Europe, they have gone to China, to Portugal, to Brazil, many other countries.
But the Iranians lack American systems on which the Shah's army was built.
Two of their most serious needs, American anti-tank and ground-to-air missiles.
By midsummer 1985, NSC chief Robert McFarlane has been persuaded by the Israelis
that letting some U.S.-made weapons move to Iran could open key channels to Tehran moderates and bring U.S. hostages home.
Thus begins a chronology of U.S. foreign policy disaster.
September. Israel completes its first big delivery of TOW anti-tank missiles to Iran
with President Reagan's knowledge and, McFarlane says, his approval.
One hostage, Benjamin Weir, is released, but U.S. hopes for the release of others are frustrated.
November. The Israelis send Hawk ground-to-air missiles to Iran,
but the Iranians claim they're outdated and later return them.
December 1985 and January 1986.
A plan for direct U.S. weapons sales to Iran is debated at the White House.
It's opposed by Secretary of State Schultz and Defense Secretary Weinberger.
CIA director William Casey supports the plan, requesting a presidential order or finding delaying CIA notification of the Congress.
January 17th. One among what may have been several presidential findings orders the shipments to begin.
Oliver North coordinates the effort, assisted by his colleague from the Contra Assistance Campaign, Richard Secord.
Weapons are transferred from Pentagon arsenals to the CIA for shipment to Israel and then Iran.
The administration says it sent 2,008 TOW missiles and 235 Hawks.
The U.S. places a value of $12.5 million on the weapons.
Iran is charged $42 million, generating profits of about $30 million.
Some reports suggest North rigged the prices, others that he found himself with extra money even after the weapons salesman took their chunk.
In any event, the money goes into Swiss bank accounts in the names of North and Secord,
from which $12.5 million goes into a CIA account and then back to the Pentagon,
with other money allegedly diverted to the Contras.
May 1986. McFarland and North accompany a weapons shipment to Iran in a futile effort to meet top Iranian leaders and win release of the remaining hostages.
But the shipments continue. In July, hostage Lawrence Janko is freed, and in November a third hostage, David Jacobson, also comes home.
But during the period of weapons transfers, three other Americans are taken hostage in Lebanon.
In November, a pro-Syrian Lebanese magazine blows the cover off the operation.
The political and diplomatic nightmare for President Reagan has begun.
How great a foreign policy disaster are we talking about?
We have not seen the end of the hostages taking thanks to this last operation.
The United States is an unconditional loser because it had lost credibility with the Persian Gulf states.
Most experts say the U.S. shipments could never have influenced political trends in a revolutionary society like Iran.
Colonel North came into this with no background, whatever, in Iran. He was not his experience. I think he was out of his league.
Bigger questions loom down the road.
Can this wounded administration salvage something of its policy in Latin America,
or manage relations with the Soviet Union, or speak with a single voice, or carry domestic and defense programs on Capitol Hill?
In the midst of a scandal that's become a national obsession, the ultimate question is, can Ronald Reagan still govern?
Bob Zelnick, ABC News, Washington.
What will complicate matters for the President even further, what will also complicate the job of congressional investigators,
is the fact that a key cabinet officer, CIA Director Casey, is seriously ill.
Only today Casey had a cancerous tumor removed from his brain.
His doctors predict that he will recover, but that obviously will take time.
So what we're left with then is a policy that came unraveled because some members of this administration
were so determined to forge ahead, despite congressional opposition,
despite opposition within the President's own cabinet, that secrecy became a goal unto itself.
Not just secrecy to keep the press or Congress from discovery,
but secrecy designed to keep other branches of the administration in the dark.
It turned into the privatization of American foreign policy,
a policy whose aims clearly had the President's blessing,
but whose methods were designed to provide him with deniability.
Barbara?
When we come back, more from Ted Koppel. Stay with us.
About 20 years ago, the first lit and microwave oven came to town.
The woman who ran the cafe thought she'd give it a try.
Pretty soon the Dog and Sutz had one too.
Then the Legion Hall, the high school, and the ball field.
One thing led to another, and today they're lit in microwave ovens wherever you find a kitchen.
And even some places you don't.
Life's worth a turn today.
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Brighten up someone else's holidays.
Give a Reunity gift box.
And may all your holidays be bright.
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Share the joy and happiness.
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...gun.
Saturday.
I forgot the muscle.
Spencer's Christmas spirit just ran out.
Any protective targets?
Set yourself up.
There is no other way.
Nervy lady, being the cheese at base of the trap.
Someone's following me.
Spencer.
Sunday.
We found a chance and we found the goal!
Brooke Shields in Paradise or Deep Trouble?
Wet Goal.
Sunday.
What we've seen tonight is the story of a president unable to implement his key policies.
Frustrated by a bulky Congress and a divided cabinet.
His mission ultimately undertaken by a shadowy network operating in utmost secrecy and possibly, at times, outside the law.
Tonight, on a special edition of Nightline, we'll be examining the effect of these ongoing disclosures on the president's ability to govern.
Among our guests, Michael Ledin, the chairman of the Senate Intelligence Committee, David Durenberger,
the former deputy chief of the CIA, Admiral Bobby Inman, and, of course, you, Barbara, will be joining us live also.
Thank you, Ted. I'll be looking forward to that.
As Ted said, there's a lot more to discuss and it should be a very lively hour, and we hope that you will join us right after your local news.
Now then, next Thursday, Christmas night, we will be back, you and I, with our regular 2020, and we look forward to being with you and your family on that night.
Perhaps more than any other time now, we need a respite from the stress of the past six weeks.
I think this is the time of the year when we most especially talk and think about peace on Earth.
So we wish you good holidays and we'll see you next Thursday.
Until then, remember that, as always, we're in touch, so you be in touch.
I'm Barbara Walters on behalf of you and everyone here at 2020. Good night.
Stay tuned for action news. Coming up next, with the latest sports scores and stories from Don Tollefson.
A week in ABC News exclusive told of an Iranian hit squad's plot to assassinate the president.
Tonight, new revelations of secret moves, secret men inside the Washington scandal are unfolding.
And tomorrow, ABC News will choose its person of the week on World News Tonight with Peter Jennings.