THE IRAN--CONTRA HEARINGS : Excerpts: ‘I Don’t Mind Spears . . . Knives in Back Concern Me’

\o7 WASHINGTON\f7 —  Following are excerpts from testimony Thursday by former White House Chief of Staff Donald T. Regan before the congressional committees investigating the Iran-contra affair. He was questioned by Senate associate counsel Terry A. Smiljanich:

Meeting in Hospital

Question: Your first knowledge of any initiative being attempted in connection with the government of Iran took place in July of 1985 when Mr. (National Security Adviser Robert C.) McFarlane wanted to see the President, who was recovering in the hospital from an operation?

Answer: That’s right, it was at Bethesda Naval Hospital.

Q: At that time, Mr. McFarlane presented to the President the possibility of an opening to Iran that the Israelis were working on?

A: Yes.

Q: Now did he--do you recall his mentioning anything in connection with arms as being a part of this process?

A: I don’t remember arms being discussed at the time in the hospital. . . . What McFarlane was trying to do was to find or get permission from the President to initiate such discussions in order to have authority to continue, or rather to undertake, in accordance with what the Israelis had suggested, some openings to these Iranian persons. . . .

Q: . . . In mid-July of 1985 (in a cable message), Mr. McFarlane was advising the secretary of state that part of this plan involving the government of Iran contemplated the delivery of 100 TOW (anti-tank) missiles to Iran, and that in connection with that, the (American) hostages might be released. Your recollection is this was not brought to the President’s attention at this first meeting in the hospital?

A: Not at the first meeting. I believe that was at the second meeting (in August, 1985), which would have been after the President returned from the hospital to his quarters (at the White House).

Q: And you understood that a part of this plan was that Israel would ship some type of munitions to the government of Iran and it was also presented to you and the President that Israel would contemplate or expect the United States to replenish those munitions or missiles that were shipped to Iran.

A: . . . We would show our bona fides by using weapons, which was a common currency in the Middle East, and, in return, we were going to ask for their (the Iranians’) bona fides, which would be that they would use their best efforts to cut down on terrorism, to haul in or rein in any terrorists over whom they had influence and, at the same time, they would use their best efforts over the kidnapers of the American hostages to secure the release of the hostages. . . . I hasten to add before anyone gets the impression that this started out as strictly an arms-for-hostage deal. . . . That was . . . down number 3 and 4. The first purpose, obviously, was to start this dialogue with Iran, a very important nation, a crossroads between East and West. . . .

Q: In September of 1985, Mr. McFarlane specifically advised you and the President that the Israelis had, in fact, shipped 500 TOW missiles to Iran. Is that correct?

A: That’s right.

Q: Is it your testimony that you and the President did not know prior to that shipment of TOW missiles that Israel intended to do so?

A: I certainly did not know it, and I have no recollection of anyone telling the President in my presence about the shipment prior to its being done.

Q: What was said at that meeting in September of 1985 about the replenishment of the missiles that Israel had shipped to Iran?

A: The President was quite upset that his hand was being forced this way. He still wasn’t certain because he had told McFarlane in the Aug. 6 meeting to go slow on this and let’s make sure that we know who we’re dealing with before we get too far into this and, as a result, to have his hand forced that way was quite upsetting, and he said, as far as any replenishment is concerned: “We’ll cross that bridge later. I’m not going to do anything about that now.”

‘Cut Your Losses’

(Regan was asked about a White House meeting in December that followed unproductive efforts to obtain the release of hostages by selling Hawk missiles to Iran.)

Q: At the meeting of Dec. 7, 1985, Secretary (of State George P.) Shultz, Secretary (of Defense Caspar W.) Weinberger and you opposed the idea of going forward any further with this matter. What were your objections to it at that time?

A: It’s an old Wall Street expression that I use: “Cut your losses.” We had taken a chance here. We thought it was an endeavor that was worth exploring. We weren’t getting anywhere. Five or six months had passed, it didn’t look like it was going anywhere. Why bother? . . .

Q: . . . What was the President’s view during that session?

A: I think he was disappointed that there was no success, that we weren’t able to open up any dialogue with Iran. I know that he still wanted something. But he said--well, I think our compromise was that McFarlane would go to London, talk to those Iranian representatives and tell them that we were getting nowhere . . . and see what else would happen.

Q: All right. When Mr. McFarlane returned from London, he recommended that the entire operation be aborted or terminated, is that correct?

A: As I recall, he was quite disgusted with the sleazy type of characters that he had met there.

Q: Right. And he conveyed that impression to you and the President?

A: He did.

A Born Loser

(Despite this recommendation, Regan said, Vice Adm. John M. Poindexter, who had succeeded McFarlane as national security adviser, urged that efforts be made to pursue the matter by opening a “second channel” to persons with higher rank in Iran. Regan was asked about meetings on Jan. 6 and 7, 1986, at which more arms shipments were discussed.)

Q: At the meeting of Jan. 7, you expressed the view of moving forward with this initiative. Is that correct?

A: Ah, yes. I guess I’m a born loser. Having lost the first time around, why try it again? Well, it seemed, again, a worthwhile effort. I come back to the fact that it is important that we have contacts with Iran. . . .

Q: . . . Now, do you recall that that plan that was discussed during that meeting involved 4,000 TOWs total?

A: Up to 4,000 TOWs. . . .

Q: All right. And part of the plan was that a first shipment of 1,000 TOWs--missiles--would be sent to Iran in exchange for which all of the hostages would be released--all of the hostages. Is that correct?

A: Yes.

Q: . . . And at the Jan. 7 meeting, Secretary Weinberger expressed some concerns about the legality of this operation. . . . ?

A: I don’t recall it being Secretary Weinberger. It’s probable that he did so, but I know somebody raised objections.

Q: . . . And the President decided at that meeting on Jan. 7 that we wanted to move forward with this?

A: Yes.

Snookered Again

(Regan said that when no hostages were released after the shipment of the 1,000 TOWs, he recommended strongly to the President that the initiative be abandoned.)

I told him I thought we ought to break it off, that, you know, we’d been snookered again. And how many times, you know, do we put up with this rug merchant type of stuff? Or words to that effect.

Q: All right. What was the President’s attitude or decision?

A: I think he shared my view that, you know, we’d been had.

Q: Well, did he instruct anyone to terminate their activities?

A: No. . . .

Q: Well, it popped back up during the Tokyo (economic) summit in May of 1986 when Secretary Shultz came to you and was very concerned about something. Do you recall that?

A: Yes. . . . He told me that (U.S. Ambassador to Great Britain Charles) Price had called him to alert him to the fact that Tiny Rowlands, a British business person, was inquiring about whether or not we were engaged in shipping arms to Iran, that he was being offered, I suppose you’d say, a share in the underwriting of this, and wanted to know was this, indeed, U.S. policy, and when I heard the name Rowlands involved in this, I was really concerned.

Q: You knew of Mr. Rowlands?

A: By reputation.

Q: Well, what was your concern at that time?

A: Well, you know, what kind of a deal is this? Here we’re going to outsiders, to a British “merchant banker,” quote unquote, or entrepreneur, as part of Iranian arms sales. I couldn’t follow, you know, what’s going on, so I told him, I said, “You better get a hold of Poindexter and find out what is going on there. . . .

Q: . . . Now, in late May of 1986, the President . . . turned down a proposition that had been made to Mr. McFarlane for the delivery of two hostages for Hawk spare parts that were being shipped through Israel. Now, the President and Mr. McFarlane had insisted that all the hostages be released before any more parts would be delivered, isn’t that correct?

A: That’s right.

Q: By November of 1986, the President had authorized the delivery of all of the Hawk parts, 500 additional TOW missiles and two pallets of medicine, all in return for those same two hostages. Why did our negotiating position collapse so completely during that time frame?

A: I cannot offer you an explanation of that. I don’t know.

Q: Well, as someone who came to government service from a phenomenal career on Wall Street, it must have occurred to you that the United States was being hustled.

A: It was a bait and switch.

Q: Did you so advise the President?

A: Yeah.

Q: And what--what did the President say about why he was allowing this thing to continue?

A: Well, I think he assumed that there are many times when a political leader has to deal with unsavory characters in order to accomplish an end. And I think he was under the impression, “Well, if we can get to the top there, some place toward the top in Iran, perhaps, you know, we can deal with them, but we’ve got to work our way up the ladder.”

Q: . . . Now, that brings us to the events of November, 1986. Your contemporaneous notes indicate that you were a proponent of going public with this information early on. . . . What was your reasoning there?

A: Well, as a breaking story . . . whether it’s breaking in Beirut or breaking anywhere--that I could see was not going to stop. I recall discussing with other members of the staff: “The cover is blown here. We’ve got to go public with it. . . . “

Q: What did Adm. Poindexter recommend?

A: Absolutely not. . . . His reasoning was a good one, that (American hostage ) David Jacobsen had just come out . . . and there was a possibility of two more prisoners coming out . . . and maybe even the additional three . . . and, “Why blow this chance? We’ve got to keep the lid on this, we’ve got to deny it, we’re endangering their lives.” And then I might add here, a very dramatic thing happened. I recall it vividly. Jacobsen had a Rose Garden ceremony, welcoming him back. . . . He had cautioned the media about discussing this. . . . (He) very emotionally said, “For God’s sake, don’t talk about that. . . . You’re endangering the lives of people I love. . . . “ That made quite an impression on the President. And even though that same day I urged him again to get this story out, he said: “No, we can’t, Don. We can’t endanger those lives.”

Weapons Mistake

(Soon, Regan said, the President decided that he wanted to make a television address Nov. 13 and hold a press conference Nov. 19. Smiljanich asked why Reagan mistakenly stated at the press conference that all the weapons shipped to Iran could easily fit into a single cargo plane. Regan said the information had come from Poindexter before the press conference.)

I said, “John, how big is it?”. . . . “Oh, hell,” he said, “they’d fit on a small plane. A couple of pallets.” So, I said: “Well, can you find out the answer,” and he came back a little red-faced and said: “Well, make it a C-5” (cargo plane). . . . And I doubt that . . . even at that they would fit, but that’s something else again.

Q: Well, I think the record will probably reflect eventually that they would have a lot of difficulty getting into a C-5. Perhaps it could be done with a shoehorn.

(After the press conference, Regan heard that Lt. Col. Oliver L. North, a National Security Council staff member involved in the initiative, had a chronology of arms sale events and he obtained one the next morning from Poindexter.)

Two or three hours later, he came back and requested that I give it back to him. He said it was incorrect. I didn’t. I held on to it--it’s part of your records now. I had shown it to . . . the President’s counsel, Peter Wallison, and said: “Look this over, there’s something screwy here. . . . “

Q: . . . Did it concern you that here we were on Nov. 20 . . . and the NSC (National Security Council) staff could not put together an accurate three-page chronology?

A: Very concerned, very concerned.

Diversion of Funds

(On Nov. 24, Atty. Gen. Edwin Meese III, who was on a fact-finding mission ordered by Reagan, told Regan that he had turned up an apparent “diversion of funds.”)

Q: What was your reaction. . . . ?

A: Horror.

(Later, Meese gave the President and Regan details about excess proceeds from Iranian arms sales being diverted to help Nicaraguan contras at a time when Congress had cut off aid to the rebel forces.)

Q: And what was the President’s reaction upon being given this information?

A: Deep distress. . . . You know, the question has been asked . . . did the President know? Let me put it this way. This guy, I know, was an actor, and he was nominated at one time for an Academy Award. But I’d give him an Academy Award if he knew anything about this and watched his reaction. He expressed complete surprise at this news on Monday afternoon, the 24th. He couldn’t have known it.

Q: All right. It would be fair to say that, based on his reaction, he didn’t think it was such a neat idea?

A: No, I don’t--I wouldn’t characterize it that way at all.

Ironic Statement

(Regan said he told Reagan that Poindexter had to go.)

The President didn’t dissent, didn’t disagree. He’s not the type that likes to go around firing people. . . . An ironic statement coming from me.

(Regan described confronting Poindexter the next morning.)

He was sitting at the end of his conference table having breakfast from a tray. And I went in and, in my normal fashion, said, you know, “What’s going on, John? . . . What the heck happened here?” And he was very careful and deliberate. . . . He adjusted his glasses, he dabbed at his mouth with his napkin, put it down. He said, “Well,” he said, “I knew that Ollie (North) was up to something. But,” he said, “I didn’t know what.” And he said, “I just didn’t look into it.” I said to him, “Why not? What the hell. You’re a vice admiral. What’s going on?” And he said, “Well . . . that damn (then-Speaker of the House Thomas P.) Tip O’Neill, the way he’s jerking the contras around,” he said, “I was just so disgusted,” he said, “I didn’t want to know what he (North) was doing.”. . . . I told him then, I said, “Well, John, I think when you go in to see the President at 9:30, you better make sure you have your resignation with you.”

Q: And what did he say?

A: He said, “I’ve been thinking of that.” He said, “I will.”

Primary Fall Guy

(Democratic Sen. Howell Heflin of Alabama questioned Regan . )

Q: . . . We’ve heard a lot about fall guys and we’ve heard a lot about participants involved in this who would take the spears in the chest, but as of this stage . . . you appear to be the primary fall guy . . . (He noted that the Tower Commission said that Regan “must bear primary responsibility for the chaos that descended upon the White House” after disclosure of the Iran initiative.)

A: . . . I’m not sure I’m the fall guy. . . . As far as spears in the breast are concerned, I don’t mind spears in the breast, it’s knives in the back that concern me. Now, as far as chaos is concerned, I’m not sure what could have been done about the chaos. I did try, in all honesty, to get this word out as quickly as I could . . . make a clean breast of it.