Final Report of The Independent Counsel for Iran/Contra Matters
Volume I: Investigations and Prosecutions
Lawrence E. Walsh; Independent Counsel
August 4, 1993; Washington, D.C.

Chapter 24: The Investigation of State Department Officials: Shultz, Hill and Platt; Part 1

From the Reagan Administration's first suggestion in June 1985 that the United States should transfer arms to Iran through the final decision in December 1986 that arms shipments would cease, Department of State officials opposed these dealings for reasons of policy and status. Department officials argued that trading arms for hostages would only increase the value and therefore the number of hostages. They also believed that the Department, not the National Security Council staff or the Central Intelligence Agency, should establish counterterrorism policy, including dealings with Iran and efforts to free hostages in Lebanon.

During 1985 and 1986, senior State Department officials monitored the U.S. contacts with Iranians quite closely, with increasing consternation. At several points, department officials attempted to stop the arms-for-hostages initiative. At least twice, they attempted to circumvent it by opening other channels to Iran. After the arms-for-hostages story broke in November 1986, the department and Secretary of State George P. Shultz eventually used the revelations to regain control over counterterrorism policy. Following a strenuous bureaucratic struggle, Shultz persuaded President Reagan to prohibit further arms transfers to Iran and to announce that the Department of State would take the lead on such counterterrorism and diplomatic matters in the future.

During the congressional investigations in December 1986 and throughout 1987, Shultz testified -- to great effect -- about State Department efforts to oppose arms shipments to Iran and State's limited contemporaneous knowledge of the activities in this regard of the NSC staff. In contrast to other agencies, State Department officials appeared open and cooperative; they were the emerging heroes of the Iran/contra story and seemed to have nothing to hide.

In 1990 and 1991, however, Independent Counsel received new evidence, in the form of handwritten notes that had not been provided in response to previous document requests, suggesting for the first time that central aspects of Shultz's testimony were incorrect. Based on the notes, it appeared that Shultz and other senior Department of State officials had known significantly more about arms shipments to Iran than Shultz's testimony reflected. As a result of this new evidence, Independent Counsel conducted an investigation into whether Shultz or other department officials deliberately misled or withheld information from Iran/contra investigators.

Independent Counsel concluded that Shultz's testimony was incorrect, if not false, in significant respects and misleading, if literally true, in others, and that information had been withheld from investigators by Shultz's executive assistant, M. Charles Hill. Nevertheless, for reasons explained in this chapter, the investigation did not result in criminal charges.

Department of State Organization and Arms Shipments to Iran

During 1985 and 1986, Shultz was the secretary of state, John C. Whitehead was deputy secretary of state and Michael H. Armacost was under secretary of state for political affairs. These senior ranking officials met daily to keep each other informed of the department's activities and relevant domestic and international events.1  

Shultz and Whitehead were political appointees. Armacost was a career foreign service officer. During 1985 and 1986, two other senior foreign service officers occupied posts of importance in the department: Executive Secretary Nicholas Platt, and Shultz's executive assistant, M. Charles Hill.

Formally, the executive secretary was responsible for making sure that the secretary of state was adequately supported by the department bureaucracy: that matters were appropriately staffed, that deadlines were met and that appropriate guidance was given up and down the bureaucratic chain of command.2   To fulfill that role, Platt attended and made a detailed handwritten record during most of Shultz's meetings within the department.3   One of Platt's two deputies accompanied Shultz on all trips outside Washington, D.C., and reported back to Platt, who made notes of those reports. In addition, Platt had a close working relationship with Hill, who regularly reported to Platt what had occurred in Shultz's meetings outside the department; Platt also made notes of these reports. Platt also took notes in other meetings he attended and of significant information he acquired throughout the day. Platt created over 4,500 pages of daily handwritten notes from January 2, 1985, through February 12, 1987.4  

Hill had served as the department's executive secretary prior to Platt. Thereafter, as Shultz's executive assistant from summer 1984 until the end of the Reagan Administration in January 1989, Hill's formal role was to write speeches and keep a record of Shultz's activities. In practice, Hill was one of Shultz's closest advisers and his principal gatekeeper. Hill regularly traveled with Shultz and, with few exceptions, attended and kept a handwritten record of Shultz's meetings in the department. In addition, Shultz regularly reported to Hill significant information he received and meetings he attended outside of Hill's presence, both to get Hill's reaction to the information and to permit Hill to record it in his notebooks.5   Shultz, who characterized Hill's notes as a "remorselessly precise record and a vivid picture" after using them to write his recent memoirs,6   consistently stated that Hill's notes were accurate.7   During the period January 1984 through December 1987, Hill filled more than 50 stenographer's notebooks with detailed, often verbatim, daily notes of Shultz's meetings, statements and activities.

The two State Department components with primary responsibility for the Middle East and counterterrorism were the Bureau of Near Eastern and Asian Affairs (NEA) and the Office of Counterterrorism and Emergency Planning (S/CT). Throughout 1985 and 1986, Assistant Secretary of State Richard W. Murphy headed NEA and Arnold L. Raphel served as his principal deputy. Ambassador Robert B. Oakley headed the counterterrorism office during 1985 through September 1986; his principal deputy was Parker Borg.

These nine senior officials -- Shultz, Whitehead, Armacost, Platt, Hill, Murphy, Raphel, Oakley and Borg -- together with a very few assistants, appear to have been the only State Department officials with significant contemporaneous knowledge of U.S. and Israeli contacts with Iranians and arms shipments to Iran during 1985 and 1986. Among that group, Armacost, Raphel and Oakley constituted what one participant called a "floating directorate" that monitored this activity, principally through contacts outside the department, and reported any significant developments to Shultz, often through Platt and Hill.8  

Department of State Evidence of Iran Arms Shipments: The Notes

The best evidence of Department of State knowledge of U.S. dealings with Iran comes from Hill and Platt's notes. It was their job to bring important information to the attention of Shultz and to communicate to others his guidance and questions. Both Hill and Platt took minute-by-minute notes that document this exchange of information in remarkably detailed fashion.

Notes taken by three other department officials supplement Platt and Hill's notes. Platt's deputy Kenneth M. Quinn took detailed notes of information he received from or passed on to Platt. Christopher W.S. Ross, the principal deputy to Armacost, took detailed notes of information he received from or passed to Armacost. Arnold Raphel took less detailed, but still valuable, notes of significant information he received.

The notes of these five officials -- Hill, Platt, Quinn, Ross and Raphel -- were particularly important to Independent Counsel's investigation because State Department officials committed so little about the Iran arms transfers to formal documents.9   With the exception of a few cables and memoranda, almost everything significant that Independent Counsel was able to learn about the Department of State's role in the Iran initiative came from these handwritten notes.

The Department of State's Production of Evidence During 1986 and 1987

On November 28, 1986, Attorney General Edwin Meese III wrote a letter to Shultz requesting that department information "be segregated and held for review by and transmission to the Federal Bureau of Investigation (FBI) upon its request."10   Meese's request applied to

[a]ny and all material of any kind, type, or description, including, but not limited to, all memoranda, briefing materials, minutes, handwritten notes, diaries, telephone logs, . . . files and other documents of the . . . State Department, . . . from 1 January 1985 to the present, concerning the following:

1. All arms activities involving Iran;
2. All hostage negotiations or similar communications involving arms as an inducement;
3. All financial aid activities involving the Nicaraguan resistance movement which are related to Iran or Israel; [and]
4. All activities of Robert C. McFarlane, . . . Lt. Col. Oliver L. North, Vice Admiral John M. Poindexter . . . relating to 1-3 above.11  

In response to the Meese request, the Department of State's Legal Adviser Abraham D. Sofaer, and the Assistant Secretary of State for Administration Donald J. Bouchard sent a memorandum the next day to the senior official in each department component that potentially would possess relevant information, including Hill and Platt.12   The Sofaer/Bouchard memorandum, which the Department of Justice had reviewed and approved before it was issued at State,13   distributed a copy of Meese's letter to each of these persons, reported that the President had ordered the Department of Justice investigation and stated that "[t]he Secretary has pledged full Department cooperation. . . ." The memorandum stated that, with regard to the phrase "All arms activities involving Iran" in the Meese letter, the department was interpreting this request,

[b]ased upon consultation with the FBI, . . . to encompass any materials concerning allegations or evidence of U.S. or U.S.-authorized arms shipments to Iran, requests by Iran for arms or alleged offers by the U.S., Israel, or other parties allegedly acting on behalf of the U.S. to supply arms.14  

The memorandum also instructed that, with regard to named individuals such as McFarlane, North and Poindexter, "[y]ou should . . . provide information of any alleged activities [by them]. . . ."15   The memorandum, which stated twice that the Meese request covered handwritten notes,16   directed those addressed to transmit copies of responsive documents to the department's information coordinator by December 3, 1986, and to hold the original documents in their offices pending the conclusion of the investigation.17  

On December 3, Shultz took note of the document request in a letter to Meese:

Hill -- who had reviewed his notebooks after the revelations of early November 1986 and located numerous notes regarding Iran, hostages, McFarlane, North and possible arms shipments19   -- began to review his notebooks again after receiving the Meese request and the Sofaer/Bouchard memorandum.20   On December 2, 1986, Hill noted, in red pen, that "CH [Charles Hill] wkg [working] full-time on notebooks for FBI re Polecat,"21   a term used by Hill to describe arms-for-hostages deals with Iran.22   Hill also received a report that afternoon from Sofaer, who had met with the FBI to discuss the sensitivity of Hill's notes and how their production could be avoided:

R/O [Readout] g008Abe [Sofaer] g008= [meeting with] g008CH [Charles Hill] . . . Abe mtg w [meeting with] FBI.

* * *

On g008Polecat notes, I [Sofaer] sd [said] parts sensitive, + probl [problem] of coherence in context. (S) [Shultz] wd [would] prefer to meet w [with] Dir. Webs [FBI Director William Webster] + go thru story w him orally. They accepted that + will let us know tomorrow what Dir. [Director Webster] says.23  

Later that afternoon, Hill wrote, underlined and circled: "g008CH [Charles Hill] Reemerges from Notebook research on Polecat."24  

Hill continued his notebook review the next day. At the top of his first page of December 3 notes, Hill wrote and circled, "CH [Charles Hill] works on Notebook Research."25   Hill also received Sofaer's report that the FBI had determined that one agent would need to see Hill's notes:

Hill immediately reported this proposed arrangement to Shultz, who replied, "ok, good."27  

On Thursday, December 4, 1986, Hill provided the notes he had selected from his review to three FBI special agents who met at State with him and Michael G. Kozak, the principal deputy legal adviser.28   Hill told the agents that he had searched his handwritten notes and other records that were available to him in the secretary's office and located a set of documents pertinent to the Iran/contra arms controversy.29   Hill provided the agents a chronological set of 65 photocopied pages.30   The documents Hill provided consisted of excerpted entries (some of which also were partially redacted) from 32 pages of his own notebooks; three excerpted notes by Platt dated November 19, 1985; and cables and other Department of State documents.31   Hill did not state to the FBI agents that he had more relevant material, that he had not had time to review all of his notebooks, or that this production was the result of a partial review of the notebooks. FBI Special Agent Danny O. Coulson understood that Hill was providing everything he had that was relevant to Iran/contra within the parameters of Attorney General Meese's November 28, 1986, letter to Shultz.32  

Pursuant to Sofaer's discussion with FBI Director William H. Webster, Hill also met privately on December 4, 1986, with Coulson, who was the senior FBI agent assigned to the Iran/contra investigation.33   During this interview, Hill said that he possessed notes he had taken of his conversations with Shultz regarding arms sales to Iran. Hill stressed that these notes, which represented confidential conversations between Cabinet officers and the President, were extremely sensitive and asked Coulson to disseminate the notes only to individuals with an absolute "need to know." Hill then disclosed that these notes related in part to the December 7, 1985, meeting of President Reagan, Defense Secretary Caspar W. Weinberger, Shultz, White House Chief of Staff Donald T. Regan, former National Security Adviser Robert C. McFarlane, National Security Adviser John M. Poindexter and CIA Deputy Director John N. McMahon regarding selling arms to Iran.34   After walking Coulson through the documents, which contained explosive statements attributed to President Reagan,35   Hill provided copies of five photocopied pages to the FBI: one page of typed talking points that had been prepared for Shultz's use at the December 7, 1985, meeting; excerpted entries from three pages of Hill's December 7 notes; and one page with two excerpted notes by Platt dated December 7.36   In his own notes, Hill subsequently made this account of the interview:

g008CH [Charles Hill] g008= [meeting with] g008FBI

1030-1300Reads g008Polecat Record

• Parts on P [Presidential] conversations (Dec 6, 7, 1985) read to sr. [senior] agent only, who will discuss w the Director.
• Asked for nothing to take away.
• astounded at the detail of fact. Much that was new to them.
• said, personally, "g008if only the WH [White House] had taken the (S) [Secretary's] advice."37  

Later on the afternoon of December 4, 1986, Sofaer told Hill that the FBI wanted to take possession of his original notes regarding the Brunei solicitation,38   but added that Kozak would try to make alternative arrangements:

Webster wants orig [original] notes + wd [would] lock up for indep. counsel. Kozak will work for giving copies + CH [Charles Hill] showing originals on request.39  

Hill also wrote some reflections that day on the process of reviewing his notebooks in response to the Meese request and the Sofaer/Bouchard memorandum:

-- g008Polecat

Reviewing the notebooks for the 4th time

Like rereading g008Paradise Lost; each time something new seems to appear -- not new evidence, but new interpretations impress themselves on you. The impression now shining through is that the key figures were . . . [Michael Ledeen and North].

So 2 activists -- one policy driven, one operationally driven [ -- ] play on the flaws of 2 leaders: -- McF's [McFarlane's] megalomania -- P's [President Reagan's] humanitarian spirit40  

In April 1987, the OIC transmitted its omnibus document request to the Department of State. This request, which covered the period January 1, 1983, to the present, specifically called for the production of all "notes" prepared or maintained by Hill and Platt on subjects including the sale, shipment or transfer of military arms to Iran.41   On May 28, 1987, the Office of the Legal Adviser produced various photocopied documents in response to the OIC request. One set of documents, which includes a number of excerpted Hill notebook entries, was a slightly expanded version of the chronological set of document copies that Hill had provided to the FBI special agents on December 4, 1986: It included copies of excerpts from 34 pages of his own notebooks and five excerpted notes by Platt.42   A second set of documents consists of excerpted Platt notes, including 18 photocopied pages of excerpted notes regarding Iran that Platt had provided to Sofaer's office in December 1986.43  

In early 1988, the Department of State also provided to the OIC a copy of the set of Hill's November and December 1986 "post-revelation" notes, which had been provided to the Senate Select Iran/contra Committee in 1987.44  

OIC Acquires Additional Department of State Evidence During 1990 and 1991

In 1990, the OIC requested and received Hill's permission to review his original notebooks covering the period 1983 through the end of the Reagan Administration in January 1989, and to photocopy all entries relevant to the continuing Iran/contra investigation.45   At the time, Independent Counsel's investigation was focused on support for the Nicaraguan contras and the activities and statements of sub-Cabinet officials such as Elliott Abrams, Duane R. Clarridge, Alan D. Fiers, Jr. and Donald P. Gregg. Neither Shultz nor Hill was a subject of the OIC's investigation.

The 1990 review of Hill's notebooks resulted in the OIC keeping copies of a much greater volume of relevant notes than the Department of State had produced in response to OIC and congressional requests in 1986 and 1987.46   The OIC continued to assume the accuracy of Shultz's well-known testimony regarding his exclusion from information regarding arms shipments to Iran and his (and Hill's) seeming cooperation with each Iran/contra investigation. When Shultz and Hill were reinterviewed at the end of 1990, the OIC remained focused upon the subjects of its investigation at that time: Abrams, Clarridge and Gregg.

On April 5, 1991, the OIC also interviewed Nicholas Platt as part of its continuing investigations of Clarridge, Abrams and Gregg.47   Platt described his notetaking practices as executive secretary and said that, although he already had reviewed his notes for any relevant Iran/contra material and turned the relevant notes over to both Congress and the OIC, his complete notes were in a safe deposit box at a local bank, and the OIC was welcome to review them and duplicate them as necessary.48   The following Monday, an FBI special agent took custody of Platt's original notes for the period January 1985 through February 1987.49   In May 1991, after a brief review of Platt's original handwritten notes revealed that they were highly relevant to the continuing Iran/contra investigation, the OIC requested and obtained Platt's permission to copy his entire collection of notes.50   The OIC returned Platt's original notes later in 1991.51  

It was not until the summer and fall of 1991, in connection with the accelerating investigations of Abrams and several CIA officials, that the OIC realized that Hill's notes were inconsistent with Shultz's testimony. Further investigation revealed that Hill had not produced these notes in 1986 or 1987, and that Platt had not produced corresponding notes of many of the same events. The OIC later obtained notes from other Department of State officials that also had not been produced to Iran/contra investigators.52  

Shultz's "Three Phases" of Department of State Knowledge Regarding Arms Shipments to Iran

Starting with his earliest closed-session testimony before Congress on December 16, 1986, Shultz characterized his knowledge of the Iran arms shipments in three phases: from June to November 1985, when he said he knew arms sales were debated but was not informed that any took place; from December 1985 to May 1986, when he said he knew the United States was attempting to open a dialogue with Iran but was unwilling to sell arms; and from May 4 to November 3, 1986, when he received no information of arms transfers. In essence, Shultz's testimony centered more on what he did not know than on what he did; it laid the groundwork for the widely held misperception that he and other Department of State officials were largely ignorant of the Iran arms shipments. Shultz's testimony -- which was prepared by Hill and Sofaer, and reviewed by Platt -- specifically characterized the development of the Iran initiative, and his knowledge of the initiative, as follows:

The following chronology would fail to give the full picture as I saw it if I did not note at the outset that this year-and-a-half-long episode involving contacts with Iran seems to me in retrospect to have taken place in three phases: an initial period from June until November 1985 when arms transfers were periodically debated as part of an effort to improve relations with Iran and secure the release of our hostages -- during this period I learned of two proposed arms transfers, but was not informed that either was consummated; a middle period, from December '85 to May '86, during which I had strong evidence that we were trying to open a dialogue with Iran but were unwilling to sell arms; and a third phase, from May 4, 1986, when I heard of a discussion in London about arms transfers and protested to the White House, until the revelations in the media beginning November 3, 1986 -- during this period I received no information indicating that an arms transfer to Iran had occurred.53  

The evidence contained in contemporaneous notes supports the thesis that Shultz and others in the department opposed the initiative. But it does not support the commonly accepted corollary: that they were prevented from monitoring the initiative. In fact, Shultz and his senior officials did monitor the initiative. As a result, Shultz and other top department officials had a far better understanding of the initiative than their testimony suggests. Moreover, significant aspects of Shultz's testimony were incorrect: Shultz learned in "phase one" that arms had been shipped; Shultz repeatedly complained during "phase two" that arms were still on the table; and there is strong evidence that, during "phase three," Shultz learned in both late May and late July that arms had been shipped to Iran in exchange for the release of hostages. The evidence shows that Shultz's characterization of each of the three phases set out in his testimony was incorrect: Shultz and others in the department were substantially better informed during each of the three phases than he stated.

Phase One: "from June until November 1985 . . . I learned of two proposed arms transfers, but was not informed that either was consummated"

As Shultz told Congress, he learned during 1985 of two proposed transfers of U.S. arms to Iran: the Israeli TOW missile shipments planned for August and September, and the Israeli HAWK missile shipment planned for November. He did not admit knowledge that either was consummated.

Contemporaneous notes taken by both Platt and Hill show that Shultz and other senior Department officials received information indicating that the transfers had taken place. These notes corroborate McFarlane's contention that he had kept Shultz and others informed about the Iran initiative.

Hill's notes reflect that McFarlane informed Shultz (who was traveling in Australia) by a "back channel" cable transmitted on July 14, 1985, that he (McFarlane) had been advised by an Israeli emissary of contacts with Iranians who

were confident that they cld [could] achieve the release of the 7 hostg [hostages]. They sought some gain in return: 100 TOWS from Israel -- but the larger purpose wld [would] be the opening of the private dialogue w [with] a high level American official and a sustained discussion of US-Iranian relations[.]54  

Shultz directed Hill to "do a cautiously positive reply to say ok."55   Shultz, by cable transmitted later that day, told McFarlane that he (Shultz) agreed

that we should make a tentative show of interest without commitment. . . .

That being said, I further agree with you that this situation is loaded with "imponderables" that call for great caution on our part. . . . I would only underscore a couple of them: the fraud that seems to accompany so many deals involving arms and Iran. . . .

I suggest . . . that we give the emissary a positive but passive reply. That is tell him that he may convey to his Iranian contacts that the U.S. has been informed of the Iranian proposal and is receptive to the idea of a private dialogue involving a sustained discussion of U.S.-Iranian relations. In other words, we are willing to listen and seriously consider any statement on this topic they may wish to initiate. . . .56  

Shultz followed up after he returned to Washington on July 19, 1985.57   Hill made a note that Shultz should "check w[ith] Bud" McFarlane about

* "Emissary" from Israel re Israel-Iran contact to help w[ith] A. 7 hostages B. moderates in post-Khomeini Iran (Gorbanefar) [sic]58  

On August 6, Hill took detailed notes of Shultz's "read out," or recounting, of his conversation with McFarlane regarding the "Israel-Iran link:"

3 mtgs [meetings] betw [between] Israelis + 2 or 3 from Iran (Hamburg + Tel Aviv) Bud's contact is [Israeli official David] Kimche. Was in DC on weekend. Irans [Iranians] sees IR [Iran] in shambles. See new govt as inevitable. Mil [military] + people still pro-American. Want a dialogue w [with] Amers [Americans]. Want arms from us. Want 100 TOWS from Israel. All totally deniable. Say they can produce 4 or more of hostg [hostages]. Want a meeting somewhere. So Bud is pursuing it. Shamir told Kimche he wanted to know explicitly whether I informed. Kimche sd [said] Murf [Murphy] mtg [with Syria] scares them.59  

Hill also noted his own response to Shultz's report, and Shultz's ultimate response to McFarlane:

g008CH [Charles Hill] to (S) [Shultz]

We are being had. Isr [Israel] desperate for a big arms trade rel [relationship] w [with] Iran that US permits. They have finally hit on the way to do it.

(S): its a mistake. I sd [said] it had to be stopped60  

On September 4, 1985, Platt noted information -- which he labeled as a matter that had lots of "juice"61   -- about Shultz-McFarlane discussions and "equipment" shipments to Iran in exchange for hostages:

-- Juice -- O [Oliver North] -- Bud [McFarlane] -- Ledeen -- Back channels Israel-Iran -- would produce 7 hostages[.] Kimche. g722Israel Israelis g722produce said they could produce -- Because Iranians wanted equipment.

Past 2 days -- sidebar conversations w Bud + S [Shultz] -- How to move them -- numbers, etc. . . .

-- This AM Bud said to S -- Deal is -- They'll move seven hostages to beach . . .

-- Ollie North will go out + arrange. He needs a fake passport -- g722will get We have one.62  

On September 11, 1985, Hill noted his awareness that these exchanges would leave the United States with an obligation to replenish "arms" to Israel:

Bud [McFarlane] wkg [working] on 7 hstgs [hostages]. Don't stir it up. Its independent from Syrian effort. Iran-Israel. Shd [Should] be worked thru by end of week.

(Scam on us) They [Iran] giving us what wld [would] anyway [hostages] (for Atlit [prisoners in Israel]) + then give us a bill for arms for IR [Iran] from Israel.63  

On the evening of September 14, 1985, the balance of the Israeli TOW shipment went to Iran and Reverend Benjamin Weir was released. The next day, Platt made a note, based on a call from Oakley (who had just spoken with North) that "Polecat [is] beginning to Pay off -- Weir has been released. . . . Other things could happen."64   On September 16, Hill's first note of the day recorded his understanding of events:

Weir released + taken to CIA [facility] in Va. Secret because op. [operation] still going on. Oakley working w Ollie [North].

McF [McFarlane] + Ollie are getting us into deal where we will have to pay off Isr [Israel], IR [Iran] and Syr [Syria] for what we wd [would] get from Syria for nothing following Atlit release.65  

On September 17, 1985, Weir's release became public and both Platt and Hill's notes reflect numerous discussions about the release. They both noted an early morning telephone call between Hill and Reginald Bartholomew, the U.S. ambassador to Lebanon.66   Bartholomew, who had not been informed of any of the arms-for-hostages proposals leading up to Weir's release,67   told Hill that "all signs are we g008didn't get Weir from Syria. As for others (IR [Iran], Isr [Israel] etc) I have no info."68   Bartholomew, from his position outside the circle of knowledge in Washington, said it was his feeling that "Weir was let out to g722put bring letters + put pressure on us to release the Dawa prisoners [in Kuwait]."69   Since then, Shultz has used Bartholomew's uninformed speculation that Weir was released to deliver a message regarding the Dawa prisoners as proof that it was the reason for Weir's release and that Shultz, himself, was unaware of the arms transfers that preceded Weir's release.70   Contrary to Shultz's pretenses, Hill's notes from later in the day on September 17, 1985, show that Shultz did receive indications that arms were involved.

On the day that Weir's release was announced, NBC News had a story about an airplane that had run into trouble on its flight back to Israel after delivering arms to Iran. Hill noted on September 17, 1985:

NBC -- Isr. [Israeli] arms to g722arms Iran.

DC-8 flew from Iran to Isr [Israel]. Isr sd yes, but elec. + commo [electrical and communications] failure. Story is Iran Jews on board. Plane picking up spare parts. Kimche met in London in last month w [with] NSC official. + arrangements made. US interested in leverage w Iran mil. (ingratiating) over what comes after Khomeini.

(false) Kashoggi [sic] + Nimrodi.71  

Hill noted Shultz's reply: "Well, sometimes you have to try things." Hill's note indicates that he told Shultz The Washington Post had a story that Weir had been released. Hill observed that reporters "[h]ave not yet put the two [stories] together." In the margin of his notebook, he wrote: "Bud's folly is out."72  

On September 20, 1985, after it was clear that no additional hostages would be freed, Shultz stated that he was "uncomfortable with polecat operations."73   The next day, Shultz, Armacost and Whitehead discussed their concern for the U.S. Government position -- bargaining for hostage release while publicly denying a deal. Hill recorded their discussion in his notebook:

g008Weir + 6 Hostg [Hostages]

Arma [Armacost]: I have anxiety about

strange bargaining going on. Iran plane in Israel.

(S): I'm not comfortable, don't know what to do about it.

When Weir released, lot of people wanted

to take credit for it. But looks like they let him go just to propagandize their cause.

Arma -- They are being cute w [with] me.

Pdx [Poindexter] just says its v [very] confused.

I wd be concerned about bargaining w Iran while we say we not doing a deal.

(S): WH [White House] has taken control. When they want us to do something they will tell us.

JW [Whitehead]: do you tk [think] they tell the P [President]?

(S): Yes, But he doesn't appreciate the problems w [with] arms sales to Iran.74  

In 1993, Armacost acknowledged that during the period surrounding Weir's release, arrangements involving "giving something for hostages" were "going on," and Armacost understood that one major component was arms going to Iran.75   Armacost, although not recalling specific discussions, testified that the connection between Israel's dealings with Iran and Weir's release "surely" was something that he and Shultz discussed.76   Oakley, who was informed by North that an arms shipment produced Weir's release,77   generally kept Shultz informed by briefing Armacost and Platt.78   Oakley believed that Shultz knew everything that he knew about the Weir release because he had reported his information.79   McFarlane and Poindexter also testified that they informed Shultz about the Israeli shipments preceding the release.80  

Notes from November and December 1985 corroborate this testimony and reflect the working understanding within the Department of State that the Weir release had, in fact, involved arms transfers to Iran. A note taken by Raphel during a meeting with Armacost, Oakley, Borg and Ross on November 12, 1985, states that "Iranian/Israeli connection got Weir released."81  

An early morning Hill note from November 18 reflects the same understanding. It indicates that Hill and Shultz discussed:

McF [McFarlane] + Isr/IR [Israel/Iran] hostg [hostages]. That was attempt to see (S) [Shultz] last night. He thinks something's coming down in next week or so (not for the first time)

-- Nothing cld [could] be more

(S): its appropriate than a meeting

a bad betw [between] [a non-Iranian

deal intermediary] + Ollie North.

Looney Tunes.82  

The next day, Hill made another note regarding "Ollie North's hostg [hostage] caper. Ollie telling story (skewed) to Parker Borg. Using [non-Iranian intermediary] (witting) as cover."83   Hill later received a secure telephone call from Platt in Washington, D.C. Platt reported that North told Borg he (North) had stumbled on the Israelis sending arms to Iran as a result of his contra activities. North claimed he "went to Isr [Israel] + sd [said] we know yr [you're] doing this + we want something for it -- use yr [your] channel to IR [Iran] to get hstg [hostages] out. They thot [thought] all wd [would] come out w [with] Weir. Didn't. Now will try again."84   Hill responded to this account of North's story by stating, "I think Ollie is lying to try to make the arrangement sound more acceptable. We (he) didn't just stumble on this."85  

A memorandum from Oakley sent electronically to Shultz in Geneva on November 18, 1985, states that,

[t]hrough other sources and connections, those used for the release of Reverend Weir, there is an expectation of a possible break through on the hostages on November 20 or 21. [Non-Iranian intermediary] was informed of the possibility and urged to be present so he could take credit.86  

As Shultz has testified, McFarlane informed him in Geneva the next day (November 19, 1985) that the remaining hostages were about to be released following a shipment of 120 HAWKs from Israel to Iran. Oakley's memo and McFarlane's report together told Shultz that the Weir release had involved the same kind of arms-for-hostages deal. Oakley's memorandum stated the "sources and connections" who were developing the November 1985 activity were those used for the release of the Reverend Weir. McFarlane's report disclosed these "sources and connections" included the Israelis and their arms dealers. The inference from Oakley's memorandum and McFarlane's report, then, is that the Israelis were following the same pattern in November 1985 to obtain the release of the remaining hostages, as they had in obtaining the release of Weir.

Notes from discussions leading up to the December 7, 1985, White House meeting of the President with his national security advisers confirm Shultz's and other senior department officials' awareness of the Israeli arms transfers prior to the Weir release. Shultz spoke with Poindexter on December 5, 1985, first by unsecured telephone, then on secure. Shultz reported to Hill that during the first call he (Shultz) told Poindexter,

I think we shd [should] say g008stop[.] Syria has indicated to Murf [Assistant Secretary Richard W. Murphy] that Iran [is] playing a big role + they can't influence it much. We are signalling to Iran that they g008can kidnap people for profit.87  

Later, during the secure call, Shultz said, "This is paying for hostgs [hostages] -- so we have broken our principles."88   The only hostage who had been paid for at that point was Weir, and the only currency that had been discussed was arms.

Hill's notes of Shultz's report of the December 7, 1985, meeting state:

They [McFarlane and Poindexter] say Isr [Israel] sent 60 I-hawks [missiles] for release of Weir. Maybe thats why he released + maybe not. [Non-Iranian intermediary] sent back to Beirut so he can get credit for it.89  

Hill's note shows that Shultz was informed that arms transfers in fact had been consummated in connection with the release of Weir. Thus, although Shultz stated as recently as February 1992 that he still believed that Weir was released to bring pressure on Kuwait to release the Dawa prisoners, and not because of the Israeli arms shipments, he could not maintain that he was never informed that Israel made arms shipments at or before the time of the Weir release.

Before the Select Committees in 1987, Shultz testified that McFarlane had informed Shultz and President Reagan on August 6, 1985, of an Israeli proposal to sell 100 U.S.-supplied TOWs to Iran in return for the release of four Americans held hostage in Beirut.90   Shultz testified that he objected and heard nothing indicating that the transfer had taken place.91  

Regarding the November 1985 HAWK shipment, numerous notes reflect that Shultz and other senior department officials were informed contemporaneously of many of its details, including discussions prior to the Geneva summit of President Reagan and Soviet Leader Mikhail Gorbachev, the flight plan, the need for overflight clearances, the delay in the shipment and the reasons the Iranians eventually returned the missiles.

With regard to the November 1985 shipment of HAWKs, Shultz testified to Congress that he knew the shipment was planned, but that he believed that it was never consummated. At first, he believed no arms were actually sent. Later, he understood the shipment had been unsatisfactory and therefore returned. He said:

I learned about the -- I learned about the proposed shipment in connection with the hostages, as I described it, in the telephone call in Geneva. But since no hostages were released, I assumed that no arms were sent. I later learned, as I testified, that a shipment went from Israel to Iran but was rejected by Iran and presumably sent back; so as of that time, as far as I knew, no arms had been shipped.92  

The shipment was not in fact sent back to Israel until February 1986. No contemporaneous State Department records indicate a belief that the shipment was immediately "sent back."93  

Phase Two: "from December '85 to May '86, during which I had strong evidence that we were trying to open a dialogue with Iran but were unwilling to sell arms"

Shultz's position on phase two was that during this period he "had strong evidence that we were trying to open a dialogue with Iran but were unwilling to sell arms."94   The notes of Hill, Platt and others, however, reflect Shultz's awareness of ongoing arms-for-hostages negotiations during nearly this entire period.

Both Platt and Hill took notes of a meeting between Shultz and Armacost on January 4, 1986, in which they discussed the Iran initiative. Shultz told Armacost that Israeli counterterrorism adviser Amiram Nir had met with Poindexter "to revive hostg [hostage] idea." The new deal would involve trading "3300 TOWS for hostg [hostages]." Shultz reported that he told Poindexter that the new proposal raised "all [the] same probls [problems] as before. A payment. Blows our policy." Shultz complained to Armacost, "[s]o its not dead. [Israeli Prime Minister Shimon] Peres comes to me on some things + to the NSC [staff] on others."95  

Following a January 7, 1986, meeting at the White House, Shultz made a brief report to Hill. Hill's note of the report, under the caption "Iran Polecat," states: "P [President Reagan] decided to go ahead. Only Cap [Weinberger] + I opposed. I won't debf [debrief] anybody about it. (TOWS for hostages)."96   Then, on January 14, Hill noted that Armacost reported to Shultz that "g008Hostg [hostage] dealing still going on." Shultz's response was "WH [White House] is running this. No comment[.]"97  

Three days later, on January 17, 1986, there was another meeting at the White House to discuss the initiative. Platt noted Shultz's report of that meeting as follows: "[l]ong discussion of Polecat at lunch. He [Shultz] half shut his eyes -- Want it to be recorded as[:] A[.] unwise [and] B[.] illegal."98  

News of the new arms transactions circulated through Shultz's inner circle. Armacost's deputy Ross on January 23 noted that Quinn reported that Raphel had heard that the arms-for-hostages effort had been reactivated, that this might indicate the Iranians had come back to us, that a reported hostage-relief initiative involving New York Cardinal John O'Connor might simply be a cover,99   and that Shultz had said the department should stay out of the activity but attempt to keep itself informed:

1/23 g0081100 KQ [Quinn]

* * *

(2) AR [Raphel] info of Sat meeting

reactivating Arms for hostages.

Iranians came back?

GPS [Shultz]: let's stay out, just keep

informed. No control or

involvement.100  

On January 24, 1986, Platt noted: "Polecat lives."101  

On February 6, the U.S. Embassy in Paris sent a "No Distribution" (NODIS) cable to Shultz reporting that the "Embassy has been approached by a French, Swiss-based arms dealer . . . with a written prospectus alleging ongoing negotiations between the government of Iran and U.S. middlemen toward exchange of 10,000 TOW missiles for release of six U.S. hostages in Lebanon."102   Hill noted the cable in his notebook as follows: "g008Polecat? NODIS from g008Paris. Its spreading around[.]"103  

On February 11, Shultz attended a "family group" lunch with Poindexter, Weinberger and Casey.104   Weinberger took extensive notes of the discussion, which revolved around the arms-for-hostages arrangements.105   Weinberger's notes record a timeline for the anticipated hostage release that included 1,000 TOW missiles being transferred from Kelly Air Force Base in Texas to Israel on February 15.106   According to the timeline, 500 of the TOW missiles were to be delivered to Bandar Abbas in Iran on February 16, and the second 500 TOWs would be delivered on February 19, with the U.S. hostages to be released on February 23.107   Appearing after the timeline in Weinberger's notes is a statement attributed to Shultz: "Try to find pattern of various connections between a number of countries -- ours with Iran, French with Iraq, South Africa, etc. etc."108   The latter note indicates that Shultz was present for the entire lunch, including the recitation of the timeline.

The next family group lunch took place February 21, 1986. Afterward, Shultz reported to Hill and Platt that the "hostg [hostage] deal getting screwed up. [syndicated columnist] Jack Anderson is on to it." Shultz also reported that the hostage "[t]urnover supposed to be g008this g008weekend [as would be expected based on the timeline laid out at the February 11 Family Group lunch]. I pleaded w [with] Pdx [Poindexter] that if not pls [please] shut it down. Fr [French] got stung. Spaniards too." Shultz added, "I think we have already turned over some wpns [weapons]" -- again, as would be expected based on the timeline. In fact, 1,000 TOW missiles had been delivered to Iran between February 15 and 17, 1986. Shultz concluded by stating that "at F4 [family group] we agreed no comment on any Qs [questions]. But we will get crucified."109  

Platt's corresponding notes are similar:

The next development came in March, when Department officials learned that one of the Iranian negotiators was going to come to Washington, D.C., in April. Raphel reported to Quinn that a DoD component wanted to tap the Iranian's phone while he was in Washington and that the visit indicated that the initiative "was back on."110  

Iranian arms broker Manucher Ghorbanifar did visit Washington in April 1986. On April 3, Shultz reported to Hill and Platt that he had talked to Poindexter about the visit, and about a possible meeting between McFarlane and high-level Iranians. Hill's notes state:

g008Polecat VI[ 111] Money man in town w111  

[with] $ [money] to pay

for TOWS. If he pays, They'll

set the McF [McFarlane] mtg [meeting].

During that mtg our hostg [hostages] supposed to be released. I [Shultz] sd [said] this all has me horrified. Region petrified that Iran will win + we are helping them. He [Poindexter] said TOWS are defensive wpns [weapons]. I sd [said] "so's yr [your] old man."112  

Platt's notes are to the same effect.

Hill's notes from April 15 indicate he told Shultz that the "plans are for Bud [McFarlane] to go to Tehran 4/25 w [with] Ollie [North] to work on hostages for arms. To see Rafsanjani[.]"113   On April 21, Armacost reported to Shultz, as reflected in Hill's notes, that "Bud [McFarlane] may show up in Tehran on Wednesday [April 23, 1986]." The danger in this planned mission was apparent: Hill asked, "How much will we pay to get McF [McFarlane] back?" and called it "all disastrous."114 The next day, Shultz told Hill (who labeled his note "g008Polecat 15") that "Ir [Iran] keeps haggling. P [President Reagan] g722says has said here's the deal + that's it, Pdx [Poindexter] says. -- McF [McFarlane] [is] in town today, so wont be in Tehran tomorrow."115

Later that day, April 22, Armacost and Shultz discussed a Customs Department sting operation in Bermuda that had resulted in the arrest of six Israelis, charged with selling arms to Iran in violation of U.S. law. According to Hill's notes (which, in a pun on "Polecat," he labeled "Poledog"), Armacost worried aloud to Shultz that, "[i]f it breaks, Isr [Israel] may blow whistle on g008Polecat."116   On April 24, Hill noted that, as a result of the "g008Isr [Israel] + arms to Iran sting," Poindexter had "put Bud's [McFarlane's] trip [to Iran] on ice."117  

It was in May 1986 that McFarlane's trip to Tehran finally took place. State Department notes reflect discussions about the trip in advance, knowledge that weapons parts were transferred to Iran during the trip, and, subsequently, the mission's failure to obtain the release of the hostages.

The month of May began with a leak similar to that reported in the February 1986 Paris cable, but this time word of U.S. arms sales to Iran surfaced in London. U.S. Ambassador Charles Price called home and demanded to know what was going on. Price's call prompted Shultz, who was at a presidential economic summit in Tokyo, to confront White House Chief of Staff Regan and Poindexter and demand that the operation be stopped.

Shultz later testified that, following this confrontation, Poindexter assured him in late May that the initiative was over.118   No contemporaneous notes record such assurances. Platt and Hill's notes suggest that, in early May at least, Poindexter gave Shultz a more equivocal response. Hill's May 4 notes state that Shultz said,

Pdx [Poindexter] sd [said] he told Price [that there was] no more than smidgn [smidgeon] of reality to it. I [Shultz] went thru my feelings. He [Poindexter] doesnt share it. Says we g008not dealing w these people. g008He has great decision-making g008equanimity. But I sd to him he has the P [President] very exposed.119  

Platt's subsequent note regarding a Shultz-Poindexter exchange reads as follows:

S [Shultz] made strong personal effort to turn off Polecat tues [Tuesday] AM [May 6, 1986]. Saw Regan + Pdx [Poindexter]. unloaded. D R [Regan] said he'd raise it w Pres [President Reagan]. PDX then muddied waters. . . . S did it again. g7220 No insulation between this operation + Pres. This is wrong + illegal + Pres is way overexposed. Nothing will happen CH [Hill] thinks.120  

On May 13, Weinberger called Shultz about a specific intelligence report he had just received. The report described an "arrangement to pay for items being provided to Iran by U.S."121   That afternoon, Weinberger brought the report to a White House meeting and showed it to Shultz. Weinberger's notes state that Shultz was "appalled" at the report that, among other things, a U.S. delegation was going to Iran and that "240 types of spare parts" Iran wanted "would be available when the delegation arrives."122   A Hill note of May 19 appears to refer to this discussion between Shultz and Weinberger. The note indicates that Hill discussed the following information with Shultz:

Iran at F4 [family group] last Friday [May 16, 1986]? Wbgr [Weinberger] told S [Shultz] about [intelligence report] that Bud [McFarlane] wd [would] get arms there + g008then they see about hostg [hostages]. More + more elusive. Parts for [HAWK] anti-missile system. But we believe sys [system -- Iran's HAWK missile batteries] wont work.123  

The question of Department of State access to these intelligence reports became an issue during the Select Committees investigation. Shultz consistently testified that he was denied access to the intelligence reports. (E.g. Shultz, Select Committees Testimony, 7/23/87, pp. 75-77.) Although there is no evidence that Shultz generally saw the intelligence reports that were distributed to Executive branch officials, Shultz was at least intermittently given the gist of significant developments contained in them. He had several sources of this information. The director of the Defense Department component that produced these reports, Armacost and his deputy Ross all stated, and Hill's notes reflect, that the defense official regularly called Armacost to report significant developments from the intelligence reports. (Armacost, FBI 302, 1/22/87; Armacost, Grand Jury, 3/13/92, p. 95; Ross, FBI 302, 3/11/92, pp. 3-4.) In addition, Assistant Secretary of Defense Richard Armitage, who was shown some of these reports by Weinberger and Powell, testified that he spoke to Raphel on a daily basis and informed him of significant developments from the intelligence reports; Raphel's handwritten notes reflect these discussions. (Armitage, Grand Jury, 4/29/92, p. 42.) Finally, as Weinberger's diary and meeting notes reflect, Shultz had opportunities during 1985 and 1986 to learn about the intelligence from the people who were receiving hard copies, including Weinberger, Casey, McFarlane and Poindexter.

In the May 13, 1986, instance discussed in the text, Weinberger called Shultz and told him about an intelligence report.

On May 22, Hill reported to Shultz that North was bringing a non-Iranian intermediary to Cyprus, and that Catholic Relief Services was donating $10 million to poor Shias in Lebanon. Shultz responded, "This is to be [the] cover story for our shipment of TOWs to Iranians."124   Two days later, May 24, Raphel recorded in his notes that Quinn had told him about a "transfer today -- arms to Iran today."125   Hill's notes from May 27 indicate that he told Shultz that Poindexter had told Weinberger "[d]eliveries g008are being made of our mil [military] equip [equipment] -- may see action today on release." Hill also told Shultz that "[the non-Iranian intermediary] is in Beirut with 10m [$10 million]. We have commo [communications] to him from ships (the cover)."126  

As Hill understood at the time, of course, this information corresponded to real, ongoing activities. On May 28, 1986, Hill accurately reported to Shultz and Platt the unsuccessful conclusion of McFarlane's trip to Iran with a cargo of HAWK missile battery parts:

g008Polecat died. M.O. [McFarlane127  ] to Tehran. Talks broke down + on way back. [Non-Iranian intermediary] has left Lebanon.128  

Phase Three: "from May 4, 1986, . . . until the revelations in the media beginning November 3, 1986 -- during this period I received no information indicating that an arms transfer to Iran had occurred"

Shultz's testimony that "during this period I received no information indicating that an arms transfer to Iran had taken place" is most clearly incorrect with respect to the information about arms transfers he received in May. Shultz was warned by Armacost, Oakley and Raphel that the arms-for-hostages initiative had not been abandoned after McFarlane's failed trip to Tehran. There also is strong evidence that Shultz received information indicating arms transfers had taken place in connection with the release of Father Lawrence Jenco in July 1986.

On or about May 28, British counterterrorism counterparts confronted Oakley with the accusation that the United States was violating its "no concessions [to terrorists] policy."129   Following this confrontation, Oakley wrote to Platt what appears to be the first official State Department document complaining about the ongoing Iran initiative. Oakley's June 2, 1986, memorandum, which followed up on Armacost's May 30 report to Shultz,130   states that "there is no doubt as to what was going on during the last ten days in May" and complains that it "was in direct blatant violation of basic hostage policy approved, reapproved, stated and restated by the President and the Secretary of State." Oakley warned that the negotiations were continuing, they would eventually leak, the Administration would be damaged and he, therefore, urged the department had to stop the initiative.131   Oakley expected that Platt, a good friend, would deliver the memorandum to Shultz,132   but no contemporaneous record confirms that this occurred.133   Oakley recalled that he received no feedback regarding his memorandum and said that, in sending it, he effectively resigned from the Department of State.134  

Raphel next warned Shultz. On June 12, he asked Quinn to report up the chain to Shultz three significant new pieces of information: First, Armitage told Raphel about an intelligence report showing that the negotiations were continuing; second, Poindexter had just told Weinberger to "implement the tilt (toward Iran)," which would mean even more weapons sales would follow; third, Assistant Secretary Richard W. Murphy had been given a cryptic message via his counterpart in a third country from Rafsanjani, the speaker of the Iranian parliament, that indicated that the initiative was continuing. Raphel was convinced that the operation would become public and embarrass the President. Quinn's notes state that Raphel requested his views be passed on. He said: "Put [it] all together. Secretary of State must go back to President."135   Quinn passed Raphel's report to Platt.136   Hill's notes show that Platt reported it to Hill, who reported it to Shultz.137  

Armacost formally warned Shultz about the continuing arms-for-hostages negotiations in an "eyes only" memorandum dated July 2, 1986. Armacost's memorandum, transmitted through Platt, told Shultz that the National Security Council was engaged in "sub rosa provision of arms" to Iran, that "a usually detached (and heretofore skeptical[)] source" was "upbeat" about the prospects for a hostage release in Lebanon the next day, and that word of this deal was getting out, through Israeli official Amiram Nir, to arms dealers who were involved as middlemen, to officials of another government and to newspaper columnist Jack Anderson.138   Like Oakley and Raphel, Armacost warned Shultz about both the wrongness of the policy and the inevitability of public disclosure.

Clearly, as of early July 1986, Shultz was on notice that the initiative was not over, regardless of what Poindexter may have told him, and that future arms transfers to Iran were likely. Hill's notes of July 2, 1986 -- the same day as Armacost's memorandum -- show that Hill and Shultz discussed a report of an impending hostage release:

g008Polecat moves again?

1800 EDT delivery of hostg [hostage] in Beirut set for Thursday

(119th such prediction)139  

Shultz later told Hill that the

Iran business [is] very uncomfortable. No one mentions it to me -- my own fault. I sd [said] if I didnt need to know dont tell me. Casey said it was dead. Its not.140  

Shortly after Shultz received these warnings, Jenco was released on July 25. Notes from Hill, Platt, Raphel, Quinn and Ross all reflect an understanding that the release was part of an arms deal. The notes show that North told Oakley as much, and that the director of a Defense Department intelligence component called Armacost and told him about intelligence reports that indicated Jenco was released in return for arms. On July 26, the day they received this news, Platt and Armacost each had several conversations with Shultz, some by secure phone.141   And Platt reported the news to Hill on Monday, July 28, 1986.142  

The Aftermath: State Responds to the November 1986 Exposure of Arms Sales to Iran

Shortly after the news of the Iran initiative broke in early November 1986, senior State Department officials began a two-part response. The first, led by Shultz and Hill, was a reexamination of what the department had known and done about the arms sales. The second, led by Shultz and L. Paul Bremer, the new ambassador-at-large for counterterrorism, was an effort to stop any further sales to Iran and to take control of counterterrorism policy from the NSC staff.

Yet no Department of State official would say that he told Shultz about the arms deal for Jenco's release. Platt and Armacost testified in 1992 that, although it is certainly likely that they told Shultz, neither could recall whether in fact they had done so. Hill, on the other hand, stated that he did not tell Shultz because he did not believe that the reports were true.143   Hill's notes indicate that Hill regarded the reports as an interesting item; they do not in any way indicate that Hill doubted their accuracy.144   But Hill's notes are replete with rumors that he reported to Shultz. Armacost, Platt, Quinn and Oakley each testified that any rumor or other indication that Jenco was released in return for arms would have been, and in fact was, very significant at the time, particularly given the warnings these officials had given Shultz in June and early July. On the eve of Shultz's congressional testimony in December 1986, they discussed Jenco as one the "[a]reas of greatest vulnerability."145   Yet, Platt and Hill did not provide their notes concerning the Jenco release to the Department's legal adviser or investigators.

According to Hill, Shultz and others at the State Department were surprised to learn in November 1986 that the White House intended to continue its arms-for-hostages efforts even after the 1985 and 1986 sales had been reported in the press.146   Shultz was determined to try to persuade President Reagan to order an end to further sales.147  

But from early November onward, it became clear that few if any other senior Administration officials shared Shultz's views on how to respond to the growing criticism of the Iran arms sales. While Shultz called for a full public disclosure of the facts, Weinberger and Poindexter advocated saying as little as possible.148  

At a meeting on November 10, 1986, attended by Reagan, Bush, Shultz, Weinberger, Attorney General Edwin Meese III, Regan, Poindexter, Casey and Poindexter's deputy Alton Keel, the rift between Shultz and the others widened. Shultz pressed for assurances that no more arms would be sent to Iran; Reagan in response insisted that all present support his Iran policy and refrain from making public statements.149   Shultz replied that he supported the President, but could not support the policy.150   In light of Shultz's position, a press release issued by the White House that day described only "unanimous support for the President."151  

Shultz's opposition to additional arms sales continued throughout November 1986. Hill prepared a set of talking points for Shultz to use in an attempt to persuade President Reagan to discontinue the sales.152   Though Shultz could not remember precisely when he used these talking points with President Reagan, he remembers that talking points of this sort were his "preoccupation" in his efforts to convince Reagan that the shipments were a bad idea.153  

Shultz appeared on CBS-TV's "Face the Nation" on Sunday, November 16, 1986. When questioned about the Iran arms sales, Shultz voiced his opposition to any further transactions. Asked whether he could speak for the entire Administration on this point, Shultz replied that he could not.154  

On November 20, 1986, Shultz met with President Reagan to go over a list of erroneous assertions Reagan had made during a nationally televised press conference the previous evening. With Regan present, Shultz tried to convince the President that the public saw the Iran arms sales as arms-for-hostages exchanges. Shultz specifically mentioned the November 1985 HAWK shipment, which McFarlane had described to Shultz as arms-for-hostages at the time the shipment took place. Reagan replied that he knew about the November 1985 transaction, but that it was not an arms-for-hostages deal.155  

That same day, Sofaer took action to remove what he believed to be a false statement regarding the November 1985 HAWK shipment from the testimony that Casey was to give to the intelligence committees on Friday, November 21, 1986. By late afternoon on November 20, the draft testimony stated that no one in the U.S. Government knew until early 1986 that the November 1985 flight carried missiles instead of oil-drilling equipment.156   Sofaer knew this was false based on Hill's note of McFarlane's November 19, 1985, call to Shultz in Geneva, during which McFarlane outlined the upcoming shipment of HAWK missiles.157   Through a series of phone calls to senior Justice Department officials, Sofaer alerted the attorney general to Hill's November 19, 1985, note, which was written proof that Casey's draft testimony contained a false statement about the November 1985 HAWK shipment.158   Late in the evening on November 20, 1986, Sofaer received confirmation from Assistant Attorney General Charles Cooper that the false statement in Casey's testimony regarding November 1985 had been corrected.159  

On Friday, November 21, 1986, the day of Casey's testimony, President Reagan asked Meese to conduct an inquiry into the Iran arms sales and to report his findings at a senior advisers' meeting scheduled for Monday, November 24, 1986.160   As part of this inquiry, Meese and Cooper interviewed Shultz on Saturday morning, November 22, with Hill present. Hill and Cooper took extensive notes of the interview.161   The November 1985 shipment was high on the list of items discussed. Shultz told Meese that President Reagan had recently acknowledged to Shultz that he (Reagan) knew about the November 1985 shipment.162   Meese asserted later in the same interview that President Reagan had not known about the November 1985 HAWKs shipment, and that if Reagan had known and had not told Congress, it would be a violation of law.163  

Shultz's effort to get control of the Iran initiative seemingly failed in a senior advisers' meeting on November 24, attended by President Reagan, Vice President Bush, Regan, Shultz, Weinberger, Casey, Poindexter and Meese. At this meeting, Meese denied Reagan's knowledge of the 1985 HAWK shipment. According to Weinberger's notes of the meeting, Meese advised the group that the November 1985 HAWK shipment was "[n]ot legal because no finding," but "President g008not informed."164  

Events and revelations overtook the internal Administration debate on continuing the arms sales. On Tuesday, November 25, 1986, Meese announced during a nationally televised press conference that proceeds from the Iran arms sales had been siphoned off to supply weapons for the contras. The furor over this diversion of funds became the focus of congressional investigators. In the aftermath of the disclosure of the diversion, President Reagan handed over to Shultz and the State Department the responsibility for future dealings with Iran.165  

Other matters required Shultz's attention during this period. He learned on December 6, 1986, that U.S. Ambassador to Lebanon John Kelly had circumvented the State Department chain of authority by having multiple unreported contacts with McFarlane and North during the second half of 1986. In August 1986, Kelly had met with McFarlane, who briefed him on the Iran arms sales. Then, between October 30 and November 4, 1986, Kelly had numerous conversations with North and retired Air Force Maj. Gen. Richard V. Secord on hostage-related arrangements with Iran. During the same period, Kelly sent and received several "back channel" messages to and from Poindexter at the White House. After discussing the matter with President Reagan, Shultz summoned Kelly back to Washington and ordered him to follow the chain of authority at all times in the future.166  

Despite the public uproar over secret U.S. dealings with Iran, contacts with representatives of Iran continued on December 13, 1986, with Shultz's knowledge. CIA operative, George Cave, accompanied by Charles Dunbar of the State Department, met with Iranian representatives in Frankfurt, West Germany. Shultz allowed the meeting to proceed with the understanding that the Iranians would be told that American hostages must be released unconditionally and that no more weapons could be sold until it negotiated an end to its war with Iraq and stopped supporting terrorism.167  

Dunbar called Shultz after the meeting, however, to report that the Iranians -- with Cave's apparent agreement -- were insisting on adhering to a formal but unsigned nine-point plan worked out earlier by North, Secord and Albert Hakim.168   In return for the eventual release of all American hostages in Lebanon, the plan envisioned more arms shipments to Iran, as well as U.S. efforts to cause the release of the Dawa prisoners held by Kuwait.169   Shultz alerted President Reagan to the still-extant nine-point plan. Reagan authorized Shultz to ignore "any unauthorized understandings that may have been reached," and to proceed according to Shultz's understanding outlined in the preceding paragraph.170  

How Shultz's Incorrect Testimony Was Prepared

The admirable role that Shultz and others in the department (particularly Bremer and Sofaer) played in November 1986, both in stopping the initiative and in urging disclosure of the events of 1985 and 1986, makes the misstatements in Shultz's testimony difficult to understand. Unlike the false testimony of Poindexter, Casey and Weinberger, the misstatements in Shultz's testimony do not fit neatly into the framework of protecting the President. To the contrary, on perhaps the most significant subject on which the others gave false testimony to protect the President -- the November 1985 HAWK shipment -- Shultz openly admitted being informed in advance and suffered the wrath of Administration loyalists as a result.

Shultz's December 1986 Testimony

Shultz gave his first comprehensive testimony about his role in the Iran initiative to the Senate Select Committee on Intelligence in closed session on December 16, 1986. Hill prepared the first draft of an opening statement to be used in the testimony, based on a chronology binder he had assembled. Hill then gave the draft statement and the binder to Sofaer for review. Shultz read the prepared statement.171  

Shortly before this testimony by Shultz, Hill had given a copy of the documents in the binder to the FBI. Both Sofaer and the FBI agent who received the copy understood that the binder included all of the entries in Hill's notebooks that related to the Iran initiative.

They were wrong. In putting the chronological binder together, Hill omitted more Iran-related notes than he included. Among the omitted notes are nearly every one of his notes referred to in this chapter, as itemized above. Hill's omissions were consistent with Shultz's incorrect testimony in December 1986 and thereafter.

There is strong evidence that Hill intended to mislead. First, Sofaer and the senior FBI agent independently understood that the documents they received from Hill included all of his notebook entries regarding the Iran initiative.172  

Second, the FBI agent who interviewed Hill and received his documents, pursuant to the attorney general's request on December 4, 1986, was, by arrangement of the director of the FBI, the senior agent on the Iran/contra investigation. The agent was working on a criminal investigation of the highest levels of Government that potentially implicated the survival of the Reagan presidency. The agent met with Hill to receive his documents, because Hill insisted on dealing with the senior FBI agent involved. Hill made no statement suggesting that he had more relevant material than he was producing, or that for any reason his production was incomplete. If Hill had indicated in any way that he had not produced all of his relevant material, the agent would have demanded compliance and, if necessary, deployed assisting agents to review Hill's notes in their entirety.173  

Third, Sofaer and other State Department attorneys spent a significant amount of time preparing Shultz to testify to Congress in 1986 and again in 1987. Frequently they worked with Shultz in Hill's presence. If they had received any indication that there might be additional relevant notes in Hill notebooks, they would have done whatever work it took to find them.

Fourth, the Department of State attorneys who worked most closely with Shultz, Sofaer and Hill in preparing Shultz to testify stated that, throughout their preparation process, they all -- including Hill -- treated the binder as "the Bible" of Shultz's knowledge about the Iran initiative.174   Thus, Hill well knew and perpetuated their misperception that the binder was comprehensive.

Fifth, when Shultz was first interviewed in February 1992 after being advised of his status as a "subject" of the OIC investigation, and before he was confronted with the evidence that his testimony was wrong, Shultz defended that testimony by asserting that he was confident that it was correct because Hill had gone over and over the notebooks, pulled out everything about the Iran initiative, and given it to Sofaer and the FBI.175  

Finally, there is significant evidence, discussed separately below, that Platt and Hill colluded to withhold information from investigators and Sofaer. This evidence indicates a deceptive intent by Hill in his dealings with the FBI and Sofaer.

Both Hill and Shultz attempted to blame Sofaer and the Office of the Legal Adviser for Shultz's erroneous testimony. This attempt to lay the blame elsewhere is unworthy. Shultz and Hill, not Sofaer, had reason to know what Hill's notes would contain. They formulated the "three phases" characterization of Shultz's arms sales knowledge in the chronology that became his prepared statement.176   On December 7, 1986, it was Hill who objected that Sofaer had, upon reviewing Hill's draft of the opening statement that Shultz was to make the next day before the House Committee on Foreign Affairs, "expanded your [Shultz's] record to include [what Sofaer believed to be] virtually all the facts." Hill's own notes document his argument with Sofaer that Shultz's testimony should contain "characterizations and statements on behalf of Shultz:"

(CH -- Abe [Sofaer] is depriving (S) [Shultz] of the ability to make a stmt [statement] saying how he saw the scene that in any way defends his own interest.

i.e[.] Abe -- and (S) -- both saying that anythg [anything] explanatory is exculpatory + so shdnt [shouldn't] be used.

-- Abe is playing to g008(S)'s weakness like ON [Oliver North] played to g722Reag P [President Reagan's] weakness and Ledeen played to McF's [McFarlane's]

-- So (S) can be induced to make g008no stmt [statement] in his own behalf.

* * *

CH [Charles Hill] yells -- gets

characterizations +

stmts in g722behaf

behalf of g722self (S)177  

Shultz's July 1987 Testimony to the Select Committees

Sofaer and his staff prepared Shultz's July 1987 testimony before the Select Committees with an eye toward the "whole picture" of Iran/contra -- not to a more narrow view such as Shultz's role or what Shultz knew.178   An attorney on Sofaer's staff, Elizabeth Keefer, collected and organized documents from other agencies relating to both the Iran arms sales and the contras.179   Keefer created back-up briefing books containing chronologies relating to both the arms sales and the contras.180  

Keefer was certain she spoke with Hill about these chronologies, which she recalled were cleared by Shultz's office prior to being released.181   Keefer viewed the chronologies as important: They were a list of events that were stipulated to by Congress and the State Department, and were designed both to facilitate and limit the questioning of Shultz by committee members.182  

Keefer and others met with Shultz on several occasions to go over his upcoming testimony. These meetings were attended by Shultz, Hill, Sofaer, Kozak and Keefer. Hill's notes were relied upon as Shultz's memory of events.183   They were "the Bible."184  

Sofaer confirmed Keefer's recollection that the preparation of Shultz's July 1987 testimony was intended to be thorough and definitive. Sofaer stated:

[T]he most comprehensive collection of information that we engaged in was the last one for the joint committee. . . . That was the last and I think most authoritative. . . . [I]n those answers there would be reflected every bit of information that was brought to our attention.185  

Sofaer's staff took a team approach to preparing sample answers for Shultz:

It wouldn't be just one person. Everybody -- this was like institutional testimony. [Keefer] worked on it, [Kozak] worked on it, everybody went over every answer and compared it to the documents so that the answer would be accurate.186  

Sofaer confirmed Hill's significant participation.187  

Possible Collusion by Platt and Hill

Several of the most obviously significant notebook entries that Hill did not produce correspond directly to particular entries Platt also failed to include in the set of relevant notes he compiled in early December 1986 at the request of the legal adviser's office. It is unlikely that Platt and Hill each, acting independently, would have omitted notes containing the same significant information.

The parallel omissions of Hill and Platt are the best evidence that the two acted together. Foremost among the joint omissions are Platt and Hill's July 1986 notes stating that the Jenco release "was [a] result of Polecat."188  

First, on the same page of notes about Jenco that Platt did provide to the legal adviser, he redacted (that is, photocopied his full note and then cut off before recopying) the following passage: "release of Hostages Jenco. Result of Polecat negotiations."189   He did not provide any part of the next page in his notes, which contains the following statement:

-- Price: ITOW, side winders, 155 mm ammo. Weir was earnest money. . . .

-- Armacost calls [Head of Defense Department component] -- real negotiation had been whether it was 1 or 2. 24 million -- 4 mil [million] laundered through Israel -- rest is equipment, for which, he implied, they are paying.190  

Second, by the time Hill on November 8, 1986, began reviewing his 1985 and 1986 notebooks for information, he was aware of press reports alleging that Jenco had been released as part of a U.S. arms deal with Iran.191  

Third, on a notebook page dated November 10, 1986, Hill referred back to his July 1986 note about Jenco's release:

g008from CH [Charles Hill] notebooks

7/28 g008Jenco release (July) was Polecat $24 m[illion] in wpns [weapons] next will be [Terry] Anderson

8/11 Jack Anderson on it.

9/16 Ledeen = CH [Charles Hill] -- wants to tell (S) [Shultz] what's going on at Casey's request

9/17 Casey = (S) Nephew of Rafsj [Rafsanjani] will be brought in. Has infor [information] on Iran. Only P [President Reagan] knows192  

Hill, after the public revelations had begun, located the note he had made several months earlier, and then withheld the note and the summary.193   The note showed that he had been told at the time of the Jenco release in July 1986 that it had been part of a large weapons deal, and that he regarded this entry as particularly noteworthy. Hill's November 10 note suggests that he made an affirmative decision not to include the July 28, 1986, Jenco note in the chronological binder of relevant documents that he was compiling.

-- Involved at outset with the Israeli (Kimche) approach on getting us into rel. [relationship] w[ith] Iran. -- for intel [intelligence], then for hostg [hostages]. McF [McFarlane] picked up on it.

-- (S) [Shultz] opposed Polecat op [operation] + told P [President Reagan] -- so didnt want to be part of it or informed about it. This all at the very start.

The awareness of Anderson's column, the full substance of Ledeen's call to Hill and Casey's report to Shultz regarding the so-called second channel also were not addressed by Shultz in his December 16, 1986, testimony before the Senate Select Committee on Intelligence, or in the "Iran Chronology I" that he presented to the Select Committees in July 1987.

There is more to this Hill note. In 1987, Iran/contra investigators asked the department for a complete set of Hill's November-December 1986 "post-revelation" notes. Hill supposedly complied with this request by giving the Office of the Legal Adviser a set of photocopies that Hill described as his complete notes for November 3-December 31, 1986, and the legal adviser provided the copies to Independent Counsel and the Select Committees. Although this set of Hill's unnumbered notebook pages included 24 pages of notes that he had created on November 10, 1986, the set did not include the above-quoted single page, which referred back to Hill's July 28, 1986, note regarding an arms-for-Jenco deal. In other words, Hill failed to produce the page that might have revealed that his chronology binder was not the comprehensive set of notes that the FBI and the legal adviser believed it to be.

On December 15, 1986, the eve of Shultz's testimony before the Senate Select Committee on Intelligence, there is a Platt note that shows that he and Hill discussed their concerns about the Jenco issue.194   By then, Platt and Hill had gone back through their notes to identify relevant material. The note shows that they discussed the July 1986 Jenco release as one of the "[a]reas of greatest vulnerability."195   They knew Shultz was going to -- and did -- testify that, from May to November 1986, he had no indications that any arms were shipped to Iran, yet both Platt and Hill's notes showed that they and Armacost, who spoke with Shultz on a daily basis, had been told about a weapons deal that produced the Jenco release.

The Platt notebook entry appears at the end of the day on December 15, 1986. Hill's notebook shows that, at 7:00 p.m. that evening, he and Platt were discussing Iran/contra events.196   Both sets of notes show that they discussed Congress's request for testimony from Kelly, the ambassador to Lebanon.197   Platt's notes then continue as follows:

Areas of greatest vulnerability.

-- Jenco -- released well before Jacobsen. How did he think that had occurred.

What did you think.

-- Why did you avert your gaze.198  

The notes appear to reflect concerns about possible questions Shultz might confront in the next day's testimony before SSCI. But Hill and Platt each professed not to remember this conversation when they were shown Platt's contemporaneous note.199   Neither attempted to offer an innocent explanation. Hill, who was the first to be confronted about the conversation and had never seen the Platt note, was visibly shaken. Platt, who had spoken to Hill and reviewed the note privately before he was questioned about it by the OIC,200   simply stated, "I have no explanation for this."201  

Platt and Hill made other significant parallel omissions in their note productions to investigators. Contrary to Shultz's repeated testimony that he was not told about a proposed trade of HAWK missiles for hostages until McFarlane told him in Geneva on November 18 or 19, 1985, when it was too late to stop it,202   Platt and Hill's notes show that Shultz was informed on November 14, 1985, before he left from Washington. Platt's note recorded the basic information:

-- Small mtg [meeting] -- P [Armacost],

D [Whitehead], CH [Hill], S [Shultz]

-- 600 hawks 200 phoenix missiles for

Iran -- Bud [McFarlane] asks Cap

[Weinberger].203  

Hill's note, which he marked with a star and his symbol for "interesting" information, recorded:

g008after

g008Arma [Armacost] = [meeting with] (S) [Shultz] in last few days Bud [McFarlane] asked Cap [Weinberger] how to get 600 Hawks + 200 Phoenix to Iran. Its highly illegal. Cap wont do it Im sure. Purpose not clear. Another sign of funny stuff on Iran issue. PDX [Poindexter] not levelling w [with] me. Framed in term of long-term rel. [relations] w mod. [moderate] els [elements] in Iran.204  

Second, Platt and Hill also failed to produce their respective notes of January 4, 1986, which show that Poindexter briefed Shultz on a January 2, 1986, meeting with Israeli counterterrorism adviser Amiram Nir and the latest proposal to trade arms for hostages. Platt's note reads:

Mtg [Meeting] II w [with] S [Shultz] 1140.

Another issue. Israeli -- Iranians -- issue not dead. Peres has 2 track approach -- comes to me on some issues -- goes to NSC for others.205  

Hill's note recorded the detailed discussion that occurred:

g008(S) [Shultz] = Arma [Armacost] POLECAT

Pdx [Poindexter] sd [said] NiR came to see him to revive hostg [hostage] idea. Wd [Would] id [identify] Hizbollah prisoners held by Lahad who not bloody + offer to release -- and 3000 TOWS for hostg [hostages].

I sd [said] all same probls [problems] as before. A payment. Blows our policy. Isr [Israel] has an interest in leaking such a deal.

So its not dead. Peres [Shimon Peres, Israeli Prime Minister] comes to me on some things + to NSC on others.

g722Neww Newsweek had the McF [McFarlane]-Kimche meetings but didnt run it. Kimche seems to have leaked it deliberately.

I think Pdx [Poindexter] was negative twd [toward] Nir.206  

Platt and Hill also did not produce their respective notes of February 21, 1986, which show Shultz's knowledge of an impending arms-for-hostages trade and his belief that weapons had previously been delivered to Iran. Each set of notes is lengthy and detailed. Platt wrote the following:

Hostage deal. Have not wanted to know much. Getting g722fuc screwed up to a fare the [sic] well

• Israelis have screwed up
• Jack Anderson has wind
• g008turnover to take place this weekend
• French have paid penalty -- have not gotten people out. Spaniards got a deal.
• Asked PDX [Poindexter] to shut it down if it doesn't work.
• Agreed that in respect to Qs [questions] CT [State's Office of Counterterrorism] et al stonewall, but we will get g722crucifiee crucified.207  

Hill's notes, which correspond exactly, identify Shultz as the speaker and document his belief that weapons had been delivered by February 1986 in an effort to free the hostages in Lebanon:

g008(S) [Shultz] = CH [Hill], NP [Platt]

(S) -- hostage deal getting screwed up. Jack Anderson is on to it. Turnover supposed to be g008this weekend. I pleaded w [with] Pdx [Poindexter] that if not pls [please] shut it down. Fr [France] got stung. Spaniards too. I think we have already turned over some wpns [weapons].

At F4 [the family group lunch] we agreed no comment on any Qs [questions]. But we will get crucified.208  

Platt and Hill also did not produce their respective notes of April 3, 1986, which show that Poindexter told Shultz that an Iranian intermediary (Ghorbanifar) was in the United States at that time to buy TOW missiles, and of the expectation that the hostages would be released during McFarlane's trip to Iran. Platt recorded much of the detail until his notetaking stopped in mid-sentence:

-- Asked PDX [Poindexter] about Iranian caper -- man he dealing with is in town today -- supposed to have money up front for tows -- if they get the money -- will next go McF [McFarlane] mtg [meeting] w [with] inside Iranians -- + hostages will be released during mtg.

S [Shultz] g722Said horrified -- said he horrified -- everyone petrified of Iran. If it leaks out that we helping -- there'l [sic]209  

Hill's note, which appears at the top of a notebook page, is consistent:

g008Polecat VI Money man in town w

[with] $ [money] to pay

for TOWS. If he pays, They'll

set the McF [McFarlane] mtg [meeting]. During that mtg our hostg [hostages] supposed to be released. I [Shultz] sd [said] this all has me horrified. Region petrified that Iran will win + we are helping them. He [Poindexter] said TOWS are defensive wpns [weapons]. I sd [said] "so's yr [your] old man."210  

Unlike Hill, Platt's position was that he meant to provide all relevant notes to the legal adviser. Platt explained the omissions as the result of innocent oversight. Hill, on the other hand, explained that he never made a comprehensive review of his notes and that he cannot understand why so many people -- Shultz, Sofaer, other Department of State lawyers, the senior FBI agent and Iran/contra investigators -- had such a wrong idea. He only went through his notes, he explained, to find the notes that documented the things that Shultz independently remembered in early November 1986. He did not go through the notes, he said, to find things that Shultz did not remember.