[ FINAL REPORT OF THE INDEPENDENT COUNSEL FOR IRAN/CONTRA MATTERS // Lawrence E. Walsh, Independent Counsel // August 4, 1993, Washington, D.C. // Volume I: Investigations and Prosecutions ]

Chapter 1

United States v. Robert C. McFarlane



Footnotes

1 McFarlane, North Trial Testimony, 3/10/89, p. 3946.
2 Ibid., 3/14/89, pp. 4357-59.
3 Memorandum from North and Menges to McFarlane, 1/13/84, AKW 038381.
4 Memorandum from Casey to McFarlane, 3/27/84, ER 13712.
5 Teicher, Grand Jury, 6/24/87, pp. 10-12.
6 McFarlane, North Trial Testimony, 3/15/89, p. 4619.
7 Shultz, Select Committees Testimony, 7/23/87, pp. 31-33.
8 McFarlane, North Trial Testimony, 3/10/89, p. 3933.
9 McFarlane, FBI 302, 3/10/87, p. 6. See Classified Appendix on the nature of this support.
10 McFarlane, Select Committees Testimony, 5/11/87, pp. 38-39. McFarlane, North Trial Testimony, 3/13/89, pp. 4203-04, said he notified the President of the first Saudi contribution in June 1984 by putting the information on a card that he slipped into the President's daily briefing book. He said he either told the President in writing on the card or orally that "no one else knows about this" and the President responded, either in writing or orally, "Good, let's just make sure it stays that way." When McFarlane learned from Bandar of a second donation in February 1985 and brought it to the President's attention, he said he got the same response.
11 Ibid.
12 NSPG Minutes, 6/25/84, ALU 007876.
13 Ibid.
14 Memorandum for the Record from Sporkin, 6/26/84, ALV 035917.
15 North attempted to persuade McFarlane to seek even more Saudi funding in a March 16, 1985, memorandum, recommending an additional $25 to $30 million for the purchase of arms and munitions; McFarlane responded, "doubtful." Between late February and the end of March 1985, the Saudis contributed a total of $32 million to the contras.
16 McFarlane, North Trial Testimony, 3/10/89, p. 3946.
17 Ibid., p. 3949.
18 McFarlane, FBI 302, 2/16/88, p. 7.
19 McFarlane, Grand Jury, 5/4/87, pp. 10-13.
20 McFarlane, North Trial Testimony, 3/10/89, p. 3975.
21 McFarlane, Grand Jury, 4/29/87, p. 21. There is documentary evidence that McFarlane was sensitive to questions of legality, even before the most extreme Boland restrictions were in place. In a September 2, 1984, memorandum to McFarlane, for example, North asked to approach a private donor to obtain a "civilian" helicopter for use on the contras' northern fighting front; McFarlane noted, "I don't think this is legal." (Memorandum from North to McFarlane, 9/2/84, ALW 019179.)
22 McFarlane, North Trial Testimony, 3/10/89, p. 3977.
23 Memorandum from North to McFarlane, 11/7/84, AKW 000329-30.
24 Also in the fall of 1984, Fiers attended an extraordinary meeting in which Casey asked North whether he was assisting the contras, and North assured him that he was not. Fiers said that Clair E. George, the CIA's deputy director for operations, told him after the meeting that this exchange had been a "charade", allowing meeting participants to deny knowledge of North's activities. See Fiers chapter.
25 McFarlane, North Trial Testimony, 3/15/89, p. 4645.
26 McFarlane, Select Committees Testimony, 5/13/87, pp. 10-12.
27 Ibid., p. 81.
28 Memorandum from North and Burghardt to McFarlane, 2/11/85, ALU 0086481-82.
29 Memorandum from McFarlane to President Reagan, 2/19/85, ALU 0101807.
30 McFarlane, North Trial Testimony, 3/15/89, pp. 4531-32.
31 McFarlane, Recommended Telephone Call, 4/25/85, ALU 0097413-14.
32 Ibid.
33 Ibid. The question mark in parentheses was part of President Reagan's handwritten note.
34 Memorandum from North to McFarlane, 10/30/85, ALU 0068483-86.
35 Ibid.
36 PROFs Note from North to McFarlane, 8/10/85.
37 McFarlane, North Trial Testimony, 3/13/89, pp. 4084-85, and 3/16/89, p. 4796.
38 See Thompson chapter.
39 Memorandum from North to McFarlane, 12/4/84, AKW 037386-88.
40 This sale of weapons to the contras was the first executed by retired U.S. Air Force Maj. Gen. Richard Secord and Albert Hakim. Washington attorney Thomas Green and a Canadian weapons dealer, Emanuel Weigensberg, were the chief investors. See Flow of Funds section.
41 Memorandum from North to McFarlane, 2/6/85, AKW 011528 (2 pages).
42 Ibid., 3/5/85, AKW 015554-65D.
43 Ibid., 3/16/85, AKW 000536-38.
44 McFarlane, North Trial Testimony, 3/10/89, p. 4017.
45 Memorandum from North to McFarlane, 4/11/85.
46 Ibid., 5/31/85, ALU 008429-31.
47 Letter from Barnes to McFarlane, 8/16/85, AKW 001511.
48 McFarlane, North Trial Testimony, 3/13/89, p. 4077.
49 Ibid., p. 4085.
50 In November 1986, North retrieved from the System IV files five of the six documents on the list and attempted to alter their substance. A sixth document, the December 4, 1984, document could not be located by the System IV officer at the time of North's request. North's secretary, Fawn Hall, altered the documents that North retrieved. North's purpose was defeated, however, because both the altered and unaltered versions of the documents were found in the NSC files by investigators.
51 McFarlane North Trial Testimony, 3/13/89, p. 4109.
52 McFarlane, FBI 302, 4/15/87, p. 5.
53 Instead of referring to the "guidance" the contras had received from the NSC staff about cutting Nicaraguan supply lines, North inserted the word "awareness;" he deleted the entire passage of the document regarding the delivery of lethal supplies.North was tried and convicted of altering and shredding official documents; his conviction was overturned on appeal.
54 McFarlane North Trial Testimony, 3/13/89, pp. 4114-15.
55 Ibid., p. 4074.
56 Ibid., pp. 4074-75.
57 Ibid., 3/10/89, p. 4035.
58 Ibid., p. 4038.
59 North was charged with obstruction of and false statements to Congress in regard to the 1985 false responses. He was not convicted of those charges.
60 Letter from McFarlane to Hamilton, 9/5/85, AKW 001528-29.
61 Letter from McFarlane to Barnes, 9/12/85, AKW 001512-14.
62 Letter from McFarlane to Hamilton, 10/7/85, AKW 001540-48.
63 Letter from Barnes to McFarlane, 9/30/85, AKW 001515-16.
64 Letter from Barnes to McFarlane, 10/29/85, AKW 011734-36.
65 McFarlane, FBI 302, 9/13/90, p. 13.
66 McFarlane, North Trial Testimony, 3/13/89, p. 4184.
67 Ibid., pp. 4168-69.
68 Ibid., pp. 4129-30.
69 On April 21, 1986, for example, North in a computer note to McFarlane expressed his frustration over a shortage of contra funds: "There is great despair that we may fail in this effort and the resistance support acct. is darned near broke. Any thoughts where we can put our hands on a quick $3-5 M?" North added, "the pot is almost empty." (PROFs Note from North to McFarlane, 4/21/86, AKW 001150-51.)
70 PROFs Note from McFarlane to Poindexter, 6/11/86, AKW 021425.
71 ,McFarlane, North Trial Testimony, 3/13/89, pp. 4234.
72 Ibid., pp. 4234-35.
73 The American hostages were William Buckley, the CIA's chief of station in the Lebanese capital; Presbyterian minister Benjamin Weir; Father Lawrence Martin Jenco, a Catholic priest; Associated Press reporter Terry Anderson; David Jacobsen, a hospital administrator; and Thomas P. Sutherland, a university dean.
74 Ledeen was an early subject of Independent Counsel's investigation because of allegations that he personally profited from the Iran arms sales. No evidence was found supporting these allegations, although Ledeen admitted that he asked Israeli arms brokers Adolf (Al) Schwimmer and Yaakov Nimrodi to open a bank account in October 1985 to cover Iran arms sales expenses. Ledeen said an account was opened in Switzerland, that Schwimmer and Nimrodi gave him the number, and that he subsequently gave it to North. After the Iran arms sales became public, he received a letter from Credit Suisse stating that the account was never used and no money was ever deposited in it. (Ledeen, Grand Jury, 9/18/87, pp. 125-27, and Letter from Credit Suisse to Ledeen, 4/23/87.)
75 Ledeen, Grand Jury, 9/18/87, p. 34.
76 Ibid., pp. 21-23.
77 Memorandum from Shackley to Walters, 11/22/84.
78 Ledeen, Grand Jury, 9/18/87, p. 48. Despite the lack of documentation by McFarlane and Ledeen, North's notebooks suggest the timing of Ledeen's early contacts regarding Iran. North's notebooks on January 15, 1985, reflect a call to CIA counterterrorism official Duane R. Clarridge, regarding Ledeen. (North Notebook, 1/15/85, AMX 000327.) On March 21, 1985, North noted: "Mtg w/Ledeen -- Wants to make trip to Israel -- RCM [McFarlane] . . ." On April 28, 1985, North noted, "Call Clarridge re Ledeen [] Iranian." (North Notebook, 4/28/85, AMX 000626.)
79 Ledeen, Grand Jury, 9/18/87, p. 30.
80 Ibid., p. 37.
81 McFarlane, Tower Commission Testimony, 2/19/87, p. 93.
82 Israeli Historical Chronology, Part One, 7/29/87, p. 5, AOW 0000018, as released in Select Committees Report, pp. 164-65.
83 Ledeen, Grand Jury, 9/18/87, pp. 40-41. North's notebooks reflect that he discussed the impending trip with Ledeen on June 3, 1985: "Call from Ledeen -- Re Iran contact -- so many people making approaches -- confused as to intermediary -- could we sit down and talk -- Mullah's want to meet with a 'person we can deal with' -- Ledeen leaving Friday on trip for Bud [McFarlane] -- Gone for week -- Ted Shackley 320-2190 (H) 522-3253 (O)." (North Notebook, 6/3/85, AMX 000732.)
84 McFarlane, FBI 302, 3/10/87, p. 4.
85 McFarlane, SSCI Testimony, 12/7/86, p. 9.
86 Israeli Historical Chronology, Part One, 7/29/87, pp. 12-13, AOW 0000025-26, as released in Select Committees Report, p. 166,
87 Ibid., pp. 13-14, AOW 0000026-27, as released in Select Committees Report, p. 166.
88 Ledeen, Grand Jury, 9/18/87, pp. 44-45. Ledeen said this was the first time he had ever heard of Ghorbanifar; he said he did not realize at the time that the memo he had received earlier from Shackley about ransoming Buckley was based on a meeting with Ghorbanifar. (Ibid., pp. 47-49.)
89 Ibid., p. 53.
90 McFarlane, North Trial Testimony, 3/16/89, p. 4761. According to "The Public Papers of the President, 1985," Appendix A, p. 1513, McFarlane on July 18, 1985, "briefed the President on the conclusion of round two of the U.S.-Soviet nuclear and space arms negotiations and also on terrorism and efforts to combat it." McFarlane's schedule also shows a meeting with the President and Secretary of State George Shultz at Bethesda Naval Hospital at 11 a.m. on Friday, July 19, 1985.
91 Ibid.
92 Ibid., p. 4762.
93 Ibid.
94 In an interview with the Tower Commission, McFarlane was perplexed by a lack of White House meeting agendas for the late July-early August 1985 time frame where all or more than two or three of the NSC principals gathered. "[I]t is those meetings where Iran was discussed," he said. " . . . I called the Executive Secretary at the NSC and I asked are there agendas for each of the following meetings, and I gave them six meetings from July 22 to August 7, and he said no, there are no agendas for meetings at which the President met with all of them on at least two occasions. I don't know." (McFarlane, Tower Commission Testimony, 2/19/87, p. 19.)
95 McFarlane, North Trial Testimony, 3/16/89, p. 4764.
96 McFarlane, FBI 302, 3/20/92, p. 5.
97 McFarlane, North Trial Testimony, 3/16/89, p. 4764.
98 Israeli Historical Chronology, Part One, 7/29/87, p. 27, AOW 000040, as released in Select Committees Report, p. 168.
99 Ledeen, Grand Jury, 9/18/87, pp. 103-04.
100 Platt Note, 9/4/85, ALW 0036259.
101 Ledeen, Grand Jury, 9/18/87, p. 105.
102 McFarlane, FBI 302, 3/20/92, pp. 1, 12.
103 Among these meetings, on October 7 and 8, 1985, Ledeen met in Washington with North, Schwimmer, Nimrodi and Ghorbanifar.
104 McFarlane, Grand Jury, 5/4/87, p. 59.
105 North Notebook, 10/30/85, AMX 001836.
106 McFarlane Calendar, 11/8/85, MF 856-57.
107 Weinberger Note, 11/9/85, AKW 018126.
108 Ibid., 11/10/85, ALZ 0039775.
109 Hill Note, 11/14/85, ANS 0001187. McFarlane said he did not believe he ever raised with Weinberger a request for 600 HAWKs and 200 Phoenix missiles for Iran, because he had rejected such a request by Ledeen in October and was strongly opposed to it. (McFarlane, FBI 302, 3/20/92, pp. 14, 15.)
110 McFarlane, Tower Commission Testimony, 2/19/87, p. 36.
111 McFarlane, FBI 302, 3/20/92, p. 14.
112 Memorandum for the Record by McMahon, 11/15/85, ER 32809-10.
113 Hill Note, 11/18/85, ANS 0001200.
114 Weinberger Note, 11/19/85, ALZ 0039795.
115 Ibid., ALZ 0039797.
116 Ibid., 11/20/85, ALZ 0039799.
117 McFarlane, Grand Jury, 5/4/87, pp. 60-64.
118 PROFs Note from North to Poindexter, 11/22/85, AKW 002068.
119 The failed HAWKs shipment resulted in the illegal involvement of the CIA. North had enlisted the help of CIA official Duane "Dewey" Clarridge to unsnag the landing-rights problem in the European country and to obtain the name of a CIA proprietary airline that could transfer the missiles to Iran. Clarridge's action caused CIA officials to insist, following the weekend of the HAWK shipment, that the President sign a covert-action Finding retroactively authorizing a CIA role. See Clarridge chapter.
120 Ledeen, Grand Jury, 9/18/87, p. 133.
121 Ibid., pp. 134-35.
122 Ibid., p. 150.
123 Ibid., p. 158.
124 "Remarks Announcing the Resignation of Robert C. McFarlane as Assistant to the President for National Security Affairs and the Appointment of John M. Poindexter," 12/4/85, Public Papers of the Presidents, 1985, p. 1440.
125 "Letter Accepting the Resignation of Robert C. McFarlane as Assistant to the President for National Security Affairs," Public Papers of the Presidents, 1985, p. 1443.
126 Weinberger Note, 12/7/85, ALZ 0039831.
127 McFarlane, FBI 302, 3/20/92, p. 20.
128 Secord, Select Committees Testimony, 5/6/87, pp. 11-14.
129 Weinberger Note, 12/7/85, ALZ 0039832, ALZ 0039838.
130 Hill Note, 12/9/85, ANS 0001246.
131 Memorandum from North to McFarlane and Poindexter, 12/9/85, AKW 02088-91.
132 McFarlane, SSCI Testimony, 12/7/86, p. 33.
133 McFarlane, FBI 302, 3/20/92, p. 21.
134 Weinberger Meeting Note, 12/10/85, ALZ 0040644B.
135 Ibid. These options tracked with an options paper dated December 9, 1985, that North prepared for McFarlane and Poindexter; the fifth option described in the paper was for the United States to sell arms directly to Iran, acting pursuant to a Presidential covert-action finding, using Secord as an operative. (Memorandum from North to McFarlane and Poindexter, 12/9/85, AKW 002088-91.)
136 See Casey chapter.
137 PROFs was the name of the NSC computer program; it stood for Professional Office system.
138 PROFs Note from North to McFarlane, 2/27/86, AKW 072209.
139 PROFs Note from McFarlane to North, 2/27/87, AKW 072211.
140 In a March 10, 1986, message to North, McFarlane expressed concern over renewed scrutiny by Congress over North's contra-aid activities, suggesting that North join him in the private sector at the Center for Strategic and International Studies (CSIS), a Washington think tank. He painted a simple scenario for North's future: "1. North leaves the White House in May and takes 30 days leave. 2. July 1st North is assigned as a fellow at the CSIS and (lo and behold) is assigned to McFarlane's office. 3. McFarlane/North continue to work the Iran account as well as to begin to build other clandestine capabilities so much in demand here and there. Just a knee jerk musing." (PROFs Note from McFarlane to North, 3/10/86, AKW 001141.)
141 PROFs Note from Poindexter to McFarlane, 4/21/86, AKW 021469.
142 PROFs Note from McFarlane to Poindexter, 4/22/86, AKW 021474.
143 McFarlane, FBI 302, 3/13/87, pp. 10-11.
144 North Note, 5/25/86, AMX 001128.
145 McFarlane, FBI 302, 3/13/87, pp. 12-13.
146 Teicher Note, 5/25/86, AKW 005419.
147 North Note, 5/25/86, AMX 001129.
148 Ibid., AMX 001132.
149 Teicher Note, 5/26/86, AKW 005420.
150 Memorandum of Conversation from Teicher, 5/26/86, AKW 005310-12.
151 Teicher Note, 5/26/86, AKW 005421.
152 Ibid., 5/27/86, AKW 005449-50.
153 Memorandum from Teicher, 5/27/86, AKW 005327.
154 Teicher Note, 5/27/86, AKW 005452.
155 Ibid., 5/28/86, AKW 005452. In testimony to the Select Committees, McFarlane said that North called the second plane to leave Tel Aviv for Tehran and that he (McFarlane) learned of North's order after the fact. (McFarlane, Select Committees Testimony, 5/12/87, p. 79.) North said he gave the order for the second plane to leave Tel Aviv based on the previously established schedule. (North, Select Committees Testimony, 7/9/87, pp. 113-15.) Teicher's notes indicate that the order for the plane to leave Tel Aviv came from President Reagan early on the morning of May 28, 1986: "12:45 Bud [McFarlane] talks to John [Poindexter]. Advises us to hold pending discussion w/RR [Reagan]. 1:30 [a.m.] JMP [Poindexter] calls. RR says launch second plane. If no word on hostage release by 4:00, leave Tehran. 2:00 [a.m.] RCM [McFarlane] meets [Iranian foreign affairs adviser]. They ask for us to delay until 6. They will get answer on hostages. RCM says if they give us a time we will launch A/C [aircraft] from T.A. [Tel Aviv] so that it will land here 2 hours after hostages in U.S. custody. 2:20 conveyed to Washington. Maybe they're serious now." (Teicher Note, 5/28/86, AKW 005452.)
156 Teicher Note, 5/28/86, AKW 005452-53.
157 McFarlane, FBI 302, 2/17/88, p. 10.
158 Ibid., 4/15/87, p. 11.
159 Ibid.
160 Ibid.
161 Facts on File, 11/7/86.
162 Ibid.
163 PROFs Note from McFarlane to Poindexter, 11/7/86, AKW 002047.
164 PROFs Note from McFarlane to North, 11/8/86, ALU 049630.
165 PROFs Note from McFarlane to Poindexter, 11/15/86, AKW 077240.
166 McFarlane, North Trial Testimony, 3/14/89, pp. 4262, 4267.
167 Ibid., pp. 4268.
168 Ibid., p. 4272.
169 McFarlane, Tower Commission Testimony, 2/21/87, p. 43.
170 McFarlane, North Trial Testimony, 3/14/89, p. 4281.
171 Ibid., p. 4277.
172 McFarlane, Grand Jury, 5/4/87, pp. 170-73.
173 Ledeen, Grand Jury, 9/30/87, p. 77.
174 Ibid., p. 78.
175 McFarlane, Grand Jury, 5/4/87, pp. 174-175. At a meeting with Ledeen in the Old Executive Office Building later that day, North became more specific about his concerns. Ledeen said North asked him, "Look, the basic question here is what will you say when you are asked or what would you say if you are asked about a shipment of HAWK missiles [to Iran] in November of 1985?" Ledeen said, "I said I would tell the truth which was that I was aware of it, that I knew that it had happened, but that I was not aware or could not recall who had made the decision to do it or when that decision had been made." North said, "Fine." (Ledeen, Grand Jury, 9/30/87, pp. 81-82.)
176 Ledeen, Grand Jury, 9/30/87, pp. 57-63. Arms financier Adnan Khashoggi concocted the story that there was a threatened exposure in order to pressure the U.S. Government into paying him $10 million to repay his investors. See the Flow of Funds chapter.
177 McFarlane, Grand Jury, 5/6/87, pp. 74-75. Ledeen believes North heard from Nir rumors that Ledeen was profiting from the arms sales. Ledeen denied that he profited. (Ledeen, Grand Jury, 9/30/87, pp. 16-20.) Independent Counsel found no evidence that he did. Israel never gave OIC access to financial accounts or records.
178 McFarlane, North Trial Testimony, 3/14/89, pp. 4285-86.
179 Ibid., p. 4286.
180 Cooper Note, 11/21/86, ALV 071808.
181 Ibid., ALV 071808-09.
182 Ibid, ALV 071810.
183 McFarlane, Tower Commission Testimony, 2/21/87, p. 56.
184 Ibid., pp. 56-58.
185 Meese, Select Committees Testimony, 7/28/87, p. 93.
186 Ibid. According to Cooper, Meese told him that McFarlane told him privately: "You know, I am trying and I am hopeful that I can keep the President's interests uppermost in this. I am trying to protect the President." (Cooper, Select Committees Testimony, 6/25/87, pp. 79-80.) Cooper later said, "I think he made a reference to the fact that, you know, the President was for this from the beginning or something like that," which Cooper said was inconsistent with what McFarlane had said in the interview. (Cooper, Grand Jury, 1/11/88, pp. 101-103.)
187 North Notebook, 11/21/86, AMX 001707.
188 McFarlane, North Trial Testimony, 3/14/89, pp. 4293-94.
189 Ibid., p. 4297.
190 PROFs Note from McFarlane to Poindexter, 11/21/86, AKW 021677.
191 McFarlane, North Trial Testimony, 3/14/89, p. 4299.
192 Ibid., p. 4300. McFarlane told a closed congressional hearing late in 1986: "Thinking about what I've said today, I can recall one thing that is certainly a very, very volatile thing to say if in the public domain, and that is that I believe the President must have known about this diversion of resources. It seems to me that that ought to be a matter, and it will surely become a matter, of record with Admiral Poindexter's testimony. But that is speculation on my part. . . ." (McFarlane, SSCI Testimony, 12/7/86, NK 0001205.)
193 Hill Note, 11/24/86, ANS 0001898.
194 Regan and Weinberger Notes, 11/24/86.
195 Hill Note, 11/24/86, ALW 0059439, ALW 0059441.
196 McFarlane, House Foreign Affairs Committee Testimony, 12/8/86, pp. 57-58.
197 Ibid., p. 66.
198 McFarlane, FBI 302, 2/16/88, pp. 2-3.
199 Ibid., 2/17/88, p. 3.
200 McFarlane, however, was an unindicted co-conspirator in Count One of the March 1988 indictment of Poindexter, North, Secord and Hakim.
201 Much later it also became apparent that the difficulties with classified information that arose in the North case would have certainly arisen in a prosecution of McFarlane.


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