CASEY HAD ANOTHER Central American agony that spring. Mexico, with its 77 million people, was a time bomb.
Though Constantine Menges was gone from the CIA, tucked away in the National Security Council, his ghost and some of his simmering worries about Mexico remained. He had swayed Casey to the view that Mexico might be a potential Iran on the U.S. border. No analogy resonated more strongly than Iran—the premier intelligence failure for the Carter Administration.
Menges argued that Mexico was ripe for revolution; the government was dangerously anti-American and anticapitalist and had a debt crisis that could lead to expropriation of foreign investments. Its social conditions were a breeding ground for the radical left.
Casey knew that Mexican President Miguel de la Madrid was a big pain in the ass for the Administration. The Harvard-educated de la Madrid was obsessed with his internal anticorruption campaign, dubbed “moral renewal.” A worthy cause, Casey felt, but de la Madrid’s real problems were economic and the chain around Mexico’s neck was its $80 billion foreign debt. De la Madrid’s other obsession was trying to get the United States and Nicaragua to negotiate a settlement of their differences. That would mean abandonment of the contras. Casey was opposed, and he resented the intrusion. Negotiations with Communists were essentially futile. De la Madrid could sound like a professor at a left-wing think tank, preaching nonintervention and claiming that U.S. actions radicalized the Sandinistas. This, Casey felt, was standard left-leaning crap that was always hard to take, but even harder from a close neighbor and supposed ally. Casey ordered stepped-up intelligence-gathering on Mexico and de la Madrid that produced a flood of data.
Casey had argued that the Nicaragua operation was in part about protecting Mexico. If Nicaragua was allowed to exist as a model leftist state, the revolutionary fires could sweep north. The leftist push currently was in El Salvador, but after that there were only Honduras and Guatemala. Immigration would get out of hand—hordes always fled Communism, “feet people,” Casey called them.
A sensitive top-secret report from the President’s Foreign Intelligence Advisory Board had been sent to him. The five-page report charged that the CIA had its analytical head buried in the sand and didn’t know what was going on in Mexico. Among those behind the report was Anne Armstrong, the chairman of the PFIAB, former ambassador to Great Britain, who lived on a sprawling cattle ranch in Armstrong, Texas, in the southern-tip of the state near the Mexican border. Other board members were pushing the view that it was an unfriendly act for the Mexicans to let the Soviets run so much anti-U.S. espionage out of the Soviet Embassy in Mexico. The board had hired a former CIA Mexico expert from the late 1970s as a consultant, and he had recommended that the CIA station in Mexico City be strengthened.
The report forecast leftist activity, particularly around Acapulco. It attacked de la Madrid, calling him a technocrat. Damaging anecdotes and rumors provided by businessmen were reported as fact. The report reflected some rather primitive attitudes about Mexico and its people.
Casey asked the DO to see whether any of it was true. Even though the report was not “intelligence,” Casey had to take it seriously. The facts and the method were off the wall, but the conclusion could be right.
Menges had, a year earlier, started working on an intelligence estimate on Mexico, but it had bogged down in the press of more urgent Central American issues. No Mexico estimate had been done for several years. Casey had told Menges’ replacement, John Horton, who was a former Mexico City station chief, that one of his first tasks would be the Mexico estimate but over the months the Director had seen little progress, and he began the sniping to get the damn thing written.
“I don’t see why it takes you so long,” Casey snapped at Horton one day. “I could dash this off in an hour.”
Horton assigned analyst Brian Latell to write the first draft. Latell, a Ph.D. in history, was the kind of high diver that Casey liked. He had done an intelligence paper on Fidel Castro that had knocked Casey’s socks off. He had described Castro as a man on the ropes going through a delayed midlife crisis, unable to handle his unrealized revolution, insecure about his place in history. The Cuban experts had dismissed Latell’s paper, charging that he had produced psychofiction, a parody of intelligence work.
Latell went to Mexico for about a week to obtain a first-hand look—a new perk for the analysts, affordable because of the Casey budget increases.
When the draft, “Mexico Under De La Madrid,” was completed, Latell carried it in to Horton.
“Casey thinks this is okay,” he said.
Horton went into a slow burn. Casey was supposed to get the estimate drafts at the same time as the heads of the other intelligence agencies, not before, but Latell had broken the chain of command. Casey’s influence could be out of proportion to his knowledge. He could distort the process with a casual remark. Nor was he reluctant to do so. Casey’s prejudices could drive the estimate.
Casey got so worked up at times that he would thump a finger into someone’s chest and yell, “False! False!” if he didn’t agree. Horton wanted the hard information—and nothing more—steering the course.
Horton read the god-awful thick estimate. It described Mexico as perilously close to revolution. There was urban unrest, peasant unrest, alarming potential for capital flight—investors and businesses were leaving in a panic, there was little business-community confidence in the government, there was widespread corruption. A senior executive of a major defense contractor who had been raised in Mexico had expressed his views and they were reported as “intelligence.”
Anyone who read Latell’s draft, the President or the Secretary of State, could not help but get a strong impression that there was dangerous instability to the south. The draft hinted that there could be rioting and that the Mexican Army might have to be called in to suppress it. Echoes of Iran.
Not only had Horton been sidestepped, he knew that the intelligence information in the files did not support the draft’s intimations. Horton agreed there was corruption, unrest and unemployment. The report seemed to assume that Americans in the same spot as the Mexicans would become revolutionary or radical. An amateur’s mistake, Horton felt. There was no evidence that the Mexicans would behave like Americans.
The most alarming implication in the draft was that the Soviets and the Cubans were quietly organizing in Mexico. Or soon would be.
Horton knew that Casey wanted a frightening document that would get the White House and the PFIAB off his back. He wanted to show that Mexico was weak. Casey and his followers did not understand Mexico’s historic belief in noninterference in the affairs of other countries. No Mexican President was likely to support the United States on the contras.
“You are interested in conventional wisdom,” Casey argued after Horton voiced his concerns. “You’re giving the conventional-wisdom argument.”
These conclusions—in general and in their parts—are not substantiated by intelligence, Horton replied; they should come out of the estimate. The estimate was a contortion.
Wait, Casey said, some of the views should be included.
Rumors and anecdotes, Horton said; the thoughts of some businessman who had passed through Mexico City or had vacationed in Acapulco were not informed intelligence, not even “soft” intelligence.
Casey said that Horton wanted to suppress evidence.
Horton stiffened. That was a most serious accusation and he resented it.
“Mexico could be the next Iran,” Casey said defiantly.
Thus began a series of almost daily discussions and rows between Casey and Horton as they transacted normal business. Horton was determined to remove anything from the draft that was not well sourced. Maybe the Reagan Administration chose to make policy on the basis of subjective “feel” and “talk,” stray conversations from Republican clubs and fund-raisers, but Horton was not going to let such elements work their way into intelligence estimates.
Horton got a long, single-spaced memo from Casey trying to feed some material back into the evolving estimate. Then there was a second Casey memo, which Horton was sure had been authored by Menges. It was a standard Casey tactic to show the draft of a paper or report he didn’t like to an informal panel of conservative advisers and ask for a memo. If he liked the memo, he forwarded it over his own name.
The memos cited information on rural dissatisfaction, unrest in the slum sections of Mexico, a Cuban-sponsored group in a remote area. Much of it was unsourced, and Horton was not convinced that there was any reason to change his mind.
The intelligence deputy Bob Gates tried to point to a middle ground, but Horton didn’t think a middle ground was sufficient. It was a matter of how one dealt with hard-won intelligence information. Either it had weight or it was distorted by gossip and surmise. And Horton saw a further complication. Casey was interpreting Horton’s defiance as if he were recommending another policy. The overriding policy concern for Casey was the Nicaragua operation. Trouble in Mexico fit neatly. A forecast that did not promise trouble did not fit Casey’s scenario. It implied that de la Madrid would be around for a long time. If a wave of Communism and consequent immigration was only a remote concern, it gave less urgency to the contra cause.
With each mention of the estimate, Casey grew more annoyed. The estimates came out in his name; the other intelligence agencies could voice objections. That was enough. One analyst, even a respected senior NIO like Horton, could block the road only so long.
For the moment Horton had control of the draft and he wouldn’t go with anything that was not backed up. To get something on the table before the NFIB meeting of the intelligence chiefs, Casey agreed finally to circulate a draft that Horton had reworked.
Herb Meyer, one of Casey’s aides and vice-chairman of the National Intelligence Council that was now supervising the estimates, called all the intelligence agency chiefs to tell them a draft was coming. Having heard from their representatives that Horton and Casey were about to murder each other, they were extremely interested.
The meeting was held in early April (at about the same time as trouble was blowing up in the Senate over the mining of Nicaraguan ports) at the F Street intelligence community headquarters, a stark, unattached building a block from the Old Executive Office Building. Horton presented an oral summary: there was crisis but no real sign of collapse.
Casey said that the draft took a complacent view. And I’m annoyed, he added, that the draft doesn’t contain the probabilities. I want our best estimate of the chances that Mexico will collapse. He made it clear that he thought Mexico was on the verge.
The State Department representative was concerned that they ought to be looking at other Latin American nations, such as Argentina and Brazil, which had heavy foreign debts. They were as much a cause for concern.
The FBI assistant director focused on the active operations of the Soviets in Mexico. The KGB residency in Mexico was the major launching pad of espionage operations into the United States; Mexico was virtually an espionage free-fire zone from which the KGB operated easily. There was new information that the CIA had identified some Soviet agents working in the Mexican Foreign Office, and the Mexicans had not shown proper concern.
One of the NFIB members remarked that this had nothing to do with Mexico’s instability, the topic of the estimate.
Someone pointed out that it showed that Soviet influence was increasing.
The representative from the Commerce Department, a CIA analyst on temporary duty there, seemed ready to fall at Casey’s feet. Horton found it an oily performance.
Treasury also had a bleak view, due largely to concern about the debt crisis. American banks were on the hook to Mexico for billions.
The military intelligence agencies—the NSA, the DIA, the Army, the Air Force and the Marine Corps—voiced only moderate concern about Mexico. With armed forces totaling about 120,000, the Mexican military was not of much strategic interest.
Except for the FBI, Commerce and Treasury—the least-important intelligence agencies—Casey was almost alone. He decided to force the issue.
“I want to have a vote on the chances of complete chaos,” he said, striking the table. He personally thought that there was a 50-50 chance of collapse. Circling the table again, Casey got support only from the same three agencies.
“I take it you feel that it’s about a one-in-five chance,” Casey said, plunging for middle ground.
No one replied.
I want this redone, Casey ordered, and those numbers—a 20 percent chance of collapse—in the estimate. There was no way he was submitting an estimate to the President that did not raise the possibility.
Horton was sure that the professional opinion was on his side. It was going 20 percent Casey’s way because he sat at the head of the table.
After the meeting, Casey uttered an obscenity to Horton and directed Herb Meyer to rewrite the key judgments.
Horton complained to Gates. Gates promised to watch for the Meyer draft. But Horton himself was soon dipping into Meyer’s version, correcting historical mistakes, toning down the more drastic statements. The estimate was not going to become the “Doomsday Scenario” that Casey wanted. The final draft ended up more or less a gurgle. Several of the military intelligence services noted their disagreement in a prominent footnote on the front page. It stated that the intelligence would not support the judgment that Mexico ran a 20 percent chance of a revolution.
The final version, classified secret, went to several hundred officials and was likely read by only a handful, and Horton was left to wonder what it all meant. One concrete result was that more CIA operations officers would be assigned to Mexico City to deal with the Soviets, a matter that the estimate had not really been designed to address. But at the least, Horton felt, the process had been kept honest. Still, the more he thought about it, the more he was troubled. It had all been done at a great personal price. Casey had apologized after the NFIB meeting, but their relationship was finished. Casey suspected him. He suspected Casey.
Shellshocked from Iran, the agency thought it could protect itself by predicting revolution, collapse and disaster. That way it would never be “wrong.” But it would also never be “right” with estimates that cried wolf.
Iran had left a terrible scar, worse than Horton at first thought. He had heard Casey warn the Latin American station chiefs, “Look for the Ayatollah—a man coming up who could lead the angry masses.” This thinking still infested the agency too much.
Horton had other grievances against Casey. General Paul F. Gorman, the U.S. southern commander in Panama, had reported that events in El Salvador were looking up, as President Duarte was giving commands to honest officers with honorable human-rights records.
“Why isn’t our intelligence showing that?” Casey asked Horton, who was ordered to check. He returned to tell Casey that the information was in the National Intelligence Daily that circulated to top officials.
“No one reads that garbage,” Casey snapped. He meant that the President, the Secretaries of State and Defense, and the national-security adviser—those who really counted—didn’t pay much attention to the NID. It was a careless remark, as if the top-secret NID intelligence was merely an aside in the flow of intelligence. Certainly it was possible that Casey hadn’t meant what he said. He was the one who was always trying to restrict access to the NID, to prevent photocopying, and complaining when bits from the NID appeared in the news. But the remark reflected his insensitivity and a tendency to vent his daily pique. Casey’s people worked hard on the NID. If the Director had offhandedly called it “garbage,” more than likely he had said it other times. And this view would have got back to those who broke their backs each day on the NID.
Horton had felt uncomfortable about some of the other intelligence efforts in the year he had been the Latin America NIO. Casey wanted an assessment of the opposition to Castro inside Cuba. Horton wasn’t able to come up with much hard intelligence, because it didn’t exist. CIA sources in Cuba were meager, it was true, but Horton concluded that it was also possible that Castro didn’t have much internal opposition. That didn’t sit well with Casey and he responded suspiciously, as if his contempt for Communists was universal and of course Castro must have opponents. But Casey’s hardheaded, self-confident intuitions were no substitute for real information.
It was an intellectual trap. Casey showed joy and relish only when someone brought him intelligence that supported his preconceptions or Administration policy.
Just before the election in Argentina the year before, Horton had undertaken a Special National Intelligence Estimate to forecast the election. Looks like this guy Raúl Alfonsín, a center-left lawyer who heads a party called the Radical Civic Union, is going to win, Horton told Casey. Casey grumbled a question, and Horton said that it looked as though Alfonsín’s victory was going to be good for Argentina after eight years of military dictatorship, but that, given his left-of-center position, it probably wasn’t going to be so good for the United States.
Casey gazed at Horton and asked, “Is he a Marxist-Leninist?”
Horton wondered why that was the only question from the DCI.
Alfonsín won.
Several days after the Mexico estimate was circulated, Horton went to Gates and said he was going to quit and would stay only until they found a replacement. But nothing happened, no replacement appeared. So Horton went back to Gates and said, “Look, my contract date is the end of May—why don’t I just plan to leave then.” Gates said okay.
Horton felt sour. Perhaps it was unfair, but he found a metaphor that he thought apt: Casey was like the new chief executive officer of a large corporation who came in to milk the corporation for what he could get out of it before throwing it to one side. Sure, Casey saw himself as an old OSS operator and had a sentimental feeling about intelligence work, but if any cans were going to get hung around any neck for Central America, it wouldn’t be Reagan’s or Casey’s. Those cans would go around the CIA. The seeds for a gigantic backlash, a repeat of the Church and Pike investigations, were being planted.
Horton knew that Casey had to be credited with keeping in touch with many people, but almost all shared his world view, as Mexico demonstrated. Horton had spent hours sitting in Casey’s office, before his desk, dragged in for one matter or another. Casey was too rough on people, on Horton.
He thought that Casey was not attached enough to the CIA and its need for independence. The CIA had become once again a tool of an Administration bent on forcing its view on the world. The distortions and ploys were many. Some were subtle. Horton felt he could stand stubbornly at the gate only for so long. He didn’t want to be a martyr. It was personal. Somebody else could have handled Casey much more smoothly. Gates did it. For him, a few or even many compromises on paper maybe didn’t add up to much.
There was another factor in Horton’s decision to leave. It was hard for him to evaluate the significance of this, but it wasn’t that he just didn’t get along with Casey. The DCI was a bully.
Ten days after the briefing which had left me wondering whether I had been “fed” by the CIA on Qaddafi, I flew to Tripoli. Like most visitors, I waited days for my appointment with the Libyan leader. Finally, one of his translators moved into a room next to mine on the twelfth floor of the Bab el-Bahar Hotel on the Mediterranean. We stayed up most of the night chatting, reading, waiting. Fatigue loosened everyone up. When we took a wake-up walk outside in the cool air by the sea, the translator, a tall, powerful man, said he was particularly distraught about a crackdown on internal dissent. He said a total of twenty-three students and dissidents had been publicly hanged that month. He added that there were thousands of political prisoners who had spoken out against the revolution or Qaddafi.
Come on, I said, how could there be thousands?
“Thousands,” he said emphatically, “I tell you thousands. The country is in turmoil. We expect something.”
I told him that I had sent in a story about the hanging of two Libyan students at Tripoli University. Gallows had been erected in a university courtyard, and thousands of students had been commanded to watch, many vomiting and running off shrieking.
About 5 A.M. I was told there would be no interview that night. We waited most of the next day. My patience held only because Qaddafi’s translator was being kept with me virtually incommunicado.
In the room next door, the translator seemed as upset as I. He took me down the hall.
“I wish you would see him,” the translator shouted, ragging about Qaddafi. “You’d see how small, out of it, he is—how crazy!” He pointed his index finger to his temple to indicate that Qaddafi was deranged.
Crazy, I said.
“Insane,” he said, and then took his index finger and thumb, bringing them an eighth of an inch apart. “A pinhead!” he said, as if to parade his grasp of slang.
He said that Qaddafi took sleeping pills and other drugs. He described Qaddafi’s unpredictable life, hermit and demigod.
It was a carbon of the picture that had been painted for me by the CIA operations officer. It was not only the words, the reference to sleeping pills, all the rest of the description, but the attitude of derision and scorn on one hand, and wonder and grudging respect on the other. It was as if the translator, who had spent hundreds of hours with Qaddafi, and the CIA official, who had spent hours studying him, had had the identical experience.
I considered the possibilities that the translator was a CIA asset, that this was a setup, or that both the CIA and the translator had it right.
But a copy of my story about the public hangings arrived at the Foreign Ministry, and I was whisked to the airport and sent back to the States so fast that it bordered on an expulsion.
Back in Washington, we published a long story about Libya. The translator’s information about the sleeping pills and that of the CIA were tied together. The story ran that Sunday under the headline “Qaddafi’s Authority Said to Be Weakening.”
On May 8, two weeks after I had left Libya, I was at the Post when urgent wire service reports started coming out of Libya, reporting a coup attempt against Qaddafi, including an attack on his “Splendid Gate” barracks. Reports said a pitched battle in the downtown area had lasted for hours. One said, inaccurately, that Qaddafi had been killed.
After the reports were sorted out at Langley, it was clear that it had been the largest coup attempt inside Libya in the fifteen years Qaddafi had been in power. And, for the first time, anti-Qaddafi forces outside Libya and inside apparently had linked up. The attempt was foiled when three plotters were caught at the Tunisian border. They had been tortured and had led Qaddafi’s forces to about fifteen rebels holed up in Tripoli preparing to attack Qaddafi.
The support provided to the plotters by Sudan’s Nimeri had at least helped get something off the ground, even though it was thwarted.
Casey concluded, “It proves for the first time Libyans are willing to die to get rid of this bastard.” He ordered an immediate assessment on Qaddafi’s vulnerabilities. It was time to do more.
Casey was concerned that he was about to suffer another public inquisition on his personal finances. The Internal Revenue Service was after him in its unfriendly and bureaucratic way with a slow drumbeat of letters and notices. The IRS was claiming back taxes on some business deductions that Casey had taken in the late 1970s before coming to the CIA. Normally, such disputes were confidential between the taxpayer and the IRS. But some of Casey’s partners were challenging the IRS claims in tax court, dragging his name into the open.
This was the area of public criticism that most infuriated Casey. Most people just didn’t understand the capitalist system. Like many things, this understanding went back to the OSS and World War II. Then OSS had set up an important but simple intelligence-gathering operation. U.S. citizens had been asked to send in their vacation photos taken in Europe, especially at ports and beaches. One OSSer had reduced the photos to microfilm and had them pasted on computer cards. It was all done by hand with paste and scissors, but the files had provided a ready reference to any beach or port, so the Allied troops at least had something to go on before an agent drop, a commando raid, a landing or a bombing. During the war a businessman had planted the seed with Casey that there would be endless commercial applications for this microfilm organization system.
After the war, the businessman came back to Casey and put up the money. Casey hired an engineering firm in Boston to make a machine that would do the cut-and-paste work. A company called Film Sort was formed, and Casey began selling the machine and the technique to land title companies around the country. In 1949 the company was sold. Casey’s share was several hundred thousand dollars, an extraordinary fortune in those postwar days. It was the first real money he had made. He took $50,000 and bought Mayknoll.
Since then Casey had placed great premium on seeing the future, finding applications and connections that others did not. He could have dumped his money with the big stock exchange corporations and been safe, free of any management role, disputes or lawsuits. Instead he had placed money in a minisubmarine venture to hunt for sunken treasure off Key West, a firm importing Yugoslavian and Belgian rugs, a computerized tax return program, an estate-planning firm and a racquetball partnership.
One of his investment groups was set up to develop a pen that transferred handwriting directly into a computer. Casey had put up $95 for a 1 percent share. The group, called Pen Verter Partners, had bought confidential technology from another firm for $4 million, but only $100,000 of that had been laid out in cash. The other $3.9 million was in notes that would be paid only if the pen was developed and marketed. Using such techniques, PenVerter had losses of $6 million over four years. As a 1 percent partner, for his $95 Casey had taken $60,000 in tax deductions—all of which the IRS was disallowing.
The incident was potentially explosive—the CIA Director getting 600 times his investment in tax deductions. The Attorney General, William French Smith, had just been publicly raked over the coals for taking a deduction only four times his investment.
On May 10, Casey phoned me about an inquiry that Chuck Babcock, one of the reporters assigned to my staff at the Post, was conducting into his IRS troubles. Yes, Casey conceded, he might owe $100,000 in back taxes. That was nothing, he said, and he’d be happy to pay, and could afford it.
Babcock wrote a long story about Casey’s tax and investment troubles, headlined “CIA Director Disputes IRS Claim to $100,000 in Back Taxes.”
At a later tax court hearing in New York, Casey testified, taking the offensive and disputing the IRS attorney’s claim that he had signed up with those in the business of “selling tax deductions.”
“I would like to take exception to any notion that I purchased a tax deduction,” he said, “I purchased their future…. But to say I purchased tax deductions is an outrageous distortion.” He noted that he had written the first book on tax shelters, the 1952 Tax Sheltered Investments. “I started the whole thing,” he said, smiling, adding in terms of Catholic atonement, “When I became chairman of the SEC, I redeemed my sins.”
No one in Congress or anyone else in the media had the stomach for another look into the thicket of Casey’s personal finances. Casey was surprised. A little openness and candor had gone a long way.
Though Congress was balking at the Administration’s request for $21 million more for the contras, Casey felt that no elected official, particularly a Democrat in the age of popular Republican Reagan, wanted what Casey called the “black eye” that would accompany abandoning the resistance movement. He pressed this theme whenever he could, and urged the President and McFarlane to play that political card. Yet he knew that Congress could do anything, and that delay was likely. The Administration needed a backup plan. He wrote an “Eyes Only” memo to McFarlane on March 27, 1984: “In view of possible difficulties in obtaining supplemental appropriations to carry out the Nicaraguan covert action project through the remainder of this year, I am in full agreement that you should explore funding alternative with the Saudis, Israelis and others.
“Finally, after examining legalities, you might consider finding an appropriate private US citizen to establish a foundation” that would receive nongovernment funds.
He signed the memo with a large “C,” hand-carried it to McFarlane at the White House, and asked the national-security adviser to return his copy when he was finished. There should be no copies, no distribution to others.
Casey knew that McFarlane was no great believer in the contra covert operation; he pursued it to the extent the President insisted. McFarlane was just another player, no umpire, no leader. Casey would pursue his own avenues.
On the way back to Langley, he called the office and said he wanted the key Nicaragua people in his office when he arrived. After hanging up his coat and hat, he sat down quietly in his blue swivel chair, grabbed a paper clip and began untwisting it.
“You know, boys,” he finally began, “the White House is going to be making some decisions about the contras. What have we got going on this?”
A few operational details from the field were offered, some analytic points about Sandinista activity.
“What the hell are we,” he said, “some kind of goddamn think tank? I tell you that the contras will be at the top of the agenda…. Now, let’s figure out what the President’s going to need, and then figure out how to do it.”
Chuck Cogan, the operations division chief for the Near East, was called “Mr. Hathaway Shirt.” Tall, thin, with a perfectly trimmed mustache, he sported everything but the eye patch.
At fifty-six, Cogan had previous CIA service as an operations officer in India, the Congo, Sudan, and Morocco, where he had been station chief. A 1949 graduate of Harvard, he had come to the agency in the second wave in the 1950s Cold War period. He had a chilly, all-business handshake, and eyes like a detective. A modest, barely noticeable scar down one side of his face heightened the effect.
For a division chief, duty at Langley headquarters was not all cable reading and dispatching orders to stations. It included important liaison work with the embassies in Washington—pipelines of good intelligence and political data. These bonds could be as important as any that were developed in the field.
One of Cogan’s back-channel relationships was with the Saudi ambassador to the United States, Prince Bandar. A flashy, handsome man-about-town Bandar, the thirty-five-year-old son of the powerful Saudi Defense Minister, exemplified the new breed of ambassador—activist, charming, profane. The former air force pilot was a kind of Arab Gatsby who waved Cuban cigars around, laughed boisterously, and served his favorite McDonald’s Big Mac hamburgers to guests on sterling-silver trays in his private office.
During the Carter Administration, before he had been appointed ambassador, Bandar had developed and nurtured connections with the White House through presidential assistant Hamilton Jordan. He could always get a hearing for Saudi Arabia through Jordan. Now under Reagan it was different. Bandar perceived that authority was diffused throughout the departments and among various White House factions. Given the pro-Israeli tilt of the Reagan Administration policy, especially from Secretary of State Shultz, the unofficial connection through Cogan was important.
As ambassador, Bandar had unusual maneuvering room. He had access to vast wealth. Under the Saudi monarchy, there were no legislatures, courts or oversight committees with power to second-guess. The State Department, well aware of this, could go to the Saudis for military or economic help when it wanted something that the Congress might resist. If the operations were in line with Saudi foreign policy, they often got that help. The Saudis got credit with the country they might be helping and with the United States. Their dollars did double duty.
The opportunities in the intelligence field for such arrangements were tantalizing. For example, the Saudis were helping the resistance to the Marxist government in Ethiopia. This was a natural for the Saudis, who didn’t like extreme leftists or Communists, especially those just across the Red Sea. Casey and the CIA were grateful.
Relations between the CIA and the Saudi intelligence service were generally good, going back to the days when the legendary and enormously wealthy Kamal Adham had been its head. In 1970, the Saudis had provided then Egyptian Vice-President Sadat with a regular income. It was impossible to determine where Saudi interests in these arrangements ended and American CIA interests began.
Now, in the spring of 1984, Cogan was leaving the Near East division. In a farewell conversation with Bandar, he almost offhandedly raised the matter of the difficulty Casey was having getting money for the contras. Cogan recalled an article in the Post the previous month in which it was suggested that Saudi Arabia might send some money to the contras. Did you place that story, Cogan asked Bandar, was the Saudi Embassy the source?
No, Bandar said.
It might be a trial balloon, Cogan said. Someone over here or elsewhere was hinting an interest. It sure would be helpful. The contras just need $20 million to $30 million. “Peanuts,” Cogan added. He mentioned that the goodwill-to-dollars ratio would be the highest possible.
Bandar said he had heard of no suggestion beyond the Post article, which certainly sounded as if it had come out of the agency or the Administration. In fact, the article had said that Casey was considering whether to ask another country such as Saudi Arabia, hadn’t it?
Cogan said that the CIA was not asking.
Bandar got the drift. He said he would check at the top in Riyadh to see whether there was any interest. “Let’s get an official response,” he said.
Within days, Ambassador Bandar received a negative reply from Riyadh. These reasons were given:
Bandar passed the word to the CIA that it couldn’t be done. But the CIA and Bandar agreed that, since all this was exploratory and unofficial, the CIA had never asked and the Saudis hadn’t said no.
Bandar received other emissaries on the contras. Two chief executive officers of major American corporations asked him to contribute. Bandar said no. An assistant to retired Air Force Major General Richard V. Secord came and asked whether the Saudis could help. Secord, a veteran of the covert war in Laos, ran a private network for transporting arms. Bandar said, “Can you pass a message directly to him?” He thought Secord an arrogant man. The assistant assured the ambassador that he could. “Tell him to go fuck himself.”
The groundwork for a denial was carefully laid. Bandar spent lots of time with McFarlane. Earlier they had traveled together on secret missions to the Middle East, and every several months they met to review areas of mutual interest. McFarlane clearly had an inferiority complex as national-security adviser, operating in the shadow of Kissinger and suffering the endless unfavorable comparisons, Bandar concluded. But with the intense loyalty of a former Marine, McFarlane was the President’s man, a protector of Reagan, and the closest thing to a real channel to the President.
One night the two met alone over drinks in the greenhouse room in the back of Bandar’s vast residence in McLean, Virginia. McFarlane said that the contras were in trouble, running out of funds. The result was going to be an immense political loss for the President. U.S. friends in the region, Honduras, Costa Rica, El Salvador, would be let down. Latin America could unravel.
Bandar agreed. He wondered at the inconstancy of American foreign policy. Why were commitments like the one to the contras made when they could not be sustained?
As they talked, McFarlane felt that Bandar was volunteering to help. Bandar was sure he was being solicited. Nonetheless, it was an opportunity neither could pass up. They almost fell into each other’s arms, and they quickly agreed that the Saudis would contribute $8-$10 million to the contras at the rate of $1 million a month. But it would have to be done in the greatest secrecy and be one of those things between nations and its leaders that would remain hidden forever, no matter what the circumstances.
Bandar was aware of the capabilities of the NSA to intercept his diplomatic traffic, and he sent a message to King Fahd by courier.
That month Iran was increasingly threatening oil shipping in the Persian Gulf, and Bandar went to see Shultz. Soon President Reagan dispatched a letter to King Fahd affirming support for the Saudis in any confrontation with Iran. Fahd and Bandar also wanted several hundred advanced antiaircraft Stinger missiles, but in the course of negotiations the United States placed some restrictions on the sale. Fahd forwarded a secret seven-page letter to Bandar with strict instructions for his ambassador to take it directly to the President. At the White House, Reagan read it, then looked up and said, “We don’t put conditions on friends.”
The President then invoked emergency procedures to bypass the Congress on a weapons sale, and over the Memorial Day weekend four hundred Stingers were flown secretly to Saudi Arabia.
Bandar then traveled to Saudi Arabia and, with the King’s approval, obtained a Saudi government check for $8 million for the covert aid to the contras. McFarlane obtained a contra bank account number for his NSC staff assistant Lieutenant Colonel North. It was account number 541-48 at the BAC International Bank in the Cayman Islands. On Friday, June 22, McFarlane and Bandar met at the White House and McFarlane handed the ambassador a typed card with the account number. To insure secrecy, Bandar said he was going personally to Geneva, Switzerland, where he had a house, to set up the transfer through a Swiss bank. They agreed that as soon as the money was on its way, Bandar would send word. If they had to mention the operation on the telephone, they also agreed on a code word and would refer to the delivery of “cigarettes.”
Bandar arrived in Geneva on June 27 and requested that an official from the Swiss Bank Corporation come to his home, where he handed over the $8 million Saudi check and the Cayman account number into which he said he wanted $1 million a month disbursed. He directed that the $8 million be deposited in the Swiss Bank Corporation’s general account and sent from there, so its origin could not be traced.
Meanwhile, McFarlane was concerned about the delay. He reached Bandar by phone. “My friend did not get his cigarettes,” he said, “and he’s a heavy smoker.”
It took the Swiss Bank Corporation more than a week to clear the Saudi check, and the first $1 million was transferred on July 6.
McFarlane sent a card to the President informing him that the Saudis were now secretly funding the contras. The President expressed his deep appreciation. Over the next eight months, the Saudis funneled the $8 million to the contras. It was the difference between their life and death.
After discussions with Casey and Clarridge about the immediate operational and logistic needs of the contras, North sent a SECRET memo to McFarlane asking for permission to go to Central America. McFarlane initialed “RCM” under approve and wrote in: “Exercise absolute ‘stealth.’ No visible meeting. No press awareness of your presence in area.”
Casey had leverage with Israel. He had given the Israelis broader access to U.S. satellite reconnaissance photos than they had previously enjoyed. Israel was suitably grateful. Its intelligence agencies were always on the lookout for cost-effective favors that might be returned to Casey and the U.S. Its embassy in Washington, tuned in to public and political opinion, noted that there was often more coverage of Nicaragua in the news media than of the Soviet Union.
Officially, Israel had already denied it was helping the contras. But reports persisted. No country buries its intelligence and other secrets better than Israel. It was clear that Israel was getting credit within the Congress and the Administration for finding ways to slip several million dollars in arms or money to the contras—perhaps through a South American intermediary. But getting credit was short of proof that they were actually doing something.
As I made the rounds, I finally found a very well placed Israeli source who said yes, it was happening, “Yes, of course” it was happening. It was too fine an opportunity—golden, clean and cheap. And, the source added, the United States would find some way to repay Israel in the current $2.5 billion annual military-and economic-aid package. If the repayment was not in money, given the “technical” problem that Congress might have, it could come in one of many other forms. The source referred only to what he said some called “Casey’s gift.” This was not merely the satellite photos but an array of intelligence. Israel was still not receiving real-time transmissions from the advanced KH-11 satellite, nor was any block of time allocated to Israel on the U.S. satellites as had been requested.
The U.S. did not have a sense of the real meaning of timely tactical intelligence, the source noted. Israel, which was surrounded by enemies, did. To Israel, intelligence-sharing was as or more important than the normal diplomatic, foreign ministry-to-State Department corridor.
Any help to the contras would be concealed, he said. Too much success, or visible success, was failure. The CIA and Casey might not see the peril of exposure. Like the private matters that can take place between two individuals, there are things, shadowy, unreadable, that can and do take place between two nations that remain out of view. It defies interpretation and will not stand illumination. But it was true, though there could be no details. He did not know the details himself.
How could he say it was true?
There are truths that need no details, he said. For example, Israel sells arms to Honduras, the country from which the contras operate. The answer could be there.
Was it?
I doubt it, he said. The answer would be more roundabout, circumventing the obvious. Cutouts, he said, people in between who may not know whom they work for, or for whom they are picking up arms or money, or to whom they are making deliveries.
I placed a call to Casey. He called back shortly, and I said I had been reliably told about the approach the CIA had made to the Saudis for contra money.
“Totally unauthorized.”
How about the Israelis?
“Lots of conversations,” Casey said. “But nothing of that character that was official.”
What about Israeli General Saguy, the former head of military intelligence, and those satellite photos?
“A good guy,” Casey said, “knew him well.”
The photos?
“Those relationships…I’m not going to talk about.”
Where were the contras getting money? Last month there had been desperation, now there was all this confidence.
“Not our desperation,” he said. The contras “don’t want to quit.”
That’s no substitute for money.
“Lots of scrounging around.”
How? Where?
“We aren’t supposed to know.” He didn’t have any more to say.
Will they get by? Will you? Everyone was desperate last month.
“It’s an exaggeration to say ‘desperate,’” Casey said.
How could Casey say that? The CIA had identified the Sunday when the money would be gone.
“Human nature,” he replied, and provided his crisis theory. When there is a problem or bad news, people overreact, often do too much. After some time, they focus on solutions. “They calm down, deal with the problem—it’s a psychological change, nothing external.” He seemed to be applying this both to himself and to the contras.
Will you get the money from the Congress, the $21 million?
He said he was confident, hopeful. “The Democrats don’t want to take responsibility,” he said. It was “the unspoken factor on the chessboard.”
One such factor, Casey said, is political fear. Only yesterday, the Democrats had tried a compromise route—“a bailout fund,” a kind of severance pay of several million for an orderly and humanitarian withdrawal, and for the resettlement of the contras. The Administration and the CIA were not going along. He reintroduced his line about the coming “fall offensive” in El Salvador; indications were that it would be “very strong” and “early.”
There was a story the next morning, May 19, on the front page of the Post (“CIA Sought Third-Country Contra Aid”) that pedaled softly but raised the possibility that the Saudis and Israelis were giving contra assistance. A strong denial from a senior Israeli official was included in the third paragraph: “We have not supplied any money to the contras, either directly or indirectly. We are not consciously or with knowledge passing anything to the contras…. We are not a surrogate for the United States.”
The official who had spoken to me phoned. He was delighted, almost elated. The story was fair. Obviously I had accurately reported some things that people were saying. He seemed to be winking over the phone. The story was perfect for the Israelis. They got both credit and denial—emphasizing one or the other to their pro-contra and anti-contra allies in Congress and the Administration.
The CIA spokesman George Lauder called. He was all happiness, too, but just wanted, in the friendliest of ways, of course, to pass on something about the story. It was wrong. “We didn’t do it,” he said. The CIA had done nothing of the kind, they weren’t out approaching Saudis and Israelis, or anyone else, either officially or unofficially. “It just didn’t happen.” The CIA wasn’t issuing a statement and didn’t want anything printed. He just wanted to pass this “fact” along.
I was not surprised that Lauder might not know what Cogan and Casey were doing. I did not want to mention that I had talked with Casey. I told Lauder that I was sure of my sources.
He said it just couldn’t be. He had checked thoroughly, talked to everyone, gone way up, including “the man.” The big guy, Lauder said.
Who?
John McMahon, Lauder said reluctantly, suggesting that he had top authority.
Had Lauder spoken with anyone else?
Why would he have to check further?
Quickly, I tried to steer it away from Casey, too late.
Oh, okay, Lauder said, catching himself. By his silence, he seemed to be saying that he realized he had a runaway DCI.
So Casey was not only running the contra operation out of his office, as well as some of the fund-raising efforts, he was running his own public-affairs office. He wasn’t even telling McMahon what he was up to.
A few days later, May 24, Casey met President Reagan’s helicopter at the Langley headquarters. It was a bright spring day, and a beaming Casey escorted Reagan to a crowd of some 2,000 agency workers who sat on a sunny hillside, Casey’s 219-acre “campus.”
The President had arrived for the ground-breaking ceremony for a new $190 million addition to the headquarters, often called the “Casey Memorial Wing.” Growth, especially the need for more computers and data storage, required a seven-story addition. Wielding shovels, Reagan, Bush and Casey turned the symbolic earth.
At the ground-breaking, Reagan told the crowd, “Your work, the work of your Director, the other top officials, have been an inspiration to your fellow Americans and to people everywhere.”
Casey was irritated by the continuing pressure from the Senate committee for a formal written surrender on the Nicaragua mining operation, which was still being treated as a major felony. The committee was pressing for an agreement by which the DCI would inform it in advance of any activity in an ongoing major or sensitive covert operation or of anything approved by the President. With Moynihan as the driving force, the agreement said that the CIA would:
Goldwater and Moynihan signed the agreement on June 6, and they wanted Casey’s signature at once. Both senators wanted to be informed if Casey’s signature was not obtained that day. Committee counsel Gary Chase, who had previously served as an associate general counsel at the CIA, was dispatched to Langley about 4 P.M. to obtain the signature. The task was certain to be unpleasant. It was suggested to Chase that he get the signature and go on home and have a drink.
At Langley, Chase went to the lobby and called Casey, who wouldn’t let him come up. “I’ve got a good mind to tell you to get the hell out of my building,” the DCI said.
“You don’t want me to call the Chairman and Vice-Chairman back with that,” Chase replied. He explained that the document had been negotiated out fully at the staff level, and that a signature would be routine.
Casey said he would check with his staff, but meanwhile Chase could wait—in the lobby. Chase called the Senate committee and was told to wait it out.
Upstairs, Casey was sore. The agreement effectively gave the committee a peephole into his office; they might as well tap his phone and assign someone to sit in his office and travel around with him, taking notes, rummaging through his desk drawers and files. It was a kind of straw-boss monitoring that went far beyond what the White House did, or anything that was done anywhere else in the executive branch. The committee was usurping. He checked and found that his staff had agreed. Those were the terms of continuing business. If Casey didn’t see Chase, the senatorial demons might be unleashed again.
After an hour, the Director called down and told Chase to come up.
“What’s this?” Casey asked, glancing at the agreement.
Chase explained that nothing in it went beyond the current oversight legislation or detracted from the constitutional role of the President. It did not give away any of the President’s powers.
Since Casey’s staff had agreed orally, they discussed whether Casey’s signature would make any difference. Chase said that the Chairman and Vice-Chairman would like it signed, just to make it clear. After more than twenty minutes, Casey finally took the document, scrawled his name and handed it over.
Instead of returning home for a drink, Chase went back to the committee offices. Several staff members cheered him, and he raised the document in the air. One staffer was reminded of Neville Chamberlain—peace in our time. Chase had everything but the umbrella.