“Only one or two analysts believed Iranian support for terrorism was waning,” Gates wrote in articles that appeared in the Washington Post and Foreign Affairs magazine. “And no CIA publication asserted these things.”

However, a month earlier, an internal CIA review had found three reports from Nov. 22, 1985, to May 15, 1986, claiming that Iranian-sponsored terrorism had declined, according to a sworn statement from veteran CIA analyst Ray McGovern, who prepared the review for senior officials in the Directorate of Intelligence [DI].

“My findings uncovered an unexplained discontinuity,” McGovern’s affidavit said. “To wit on 22 November 1985, in an abrupt departure from the longstanding analytical line on Iranian support for terrorism, DI publications began to assert that Iranian-sponsored terrorism had ‘dropped off substantially’ in 1985. I recall being particularly struck by the fact that no evidence was adduced to support that important judgment.

“This new line was repeated in at least two additional DI publications, the last of which appeared on 15 May 1986. Again, no supporting evidence was cited. After May 1986, the analytical line changed, just as abruptly, back to the line that had characterized DI reporting on this subject up to November 1985 (with no mention of any substantial drop or other reduction in Iranian support for terrorist activity).”

The timing of CIA’s dubious reporting in 1985 about a decline in Iranian-backed terrorism is significant because the Reagan administration was then in the midst of secret Israeli-brokered arms shipments of U.S. weapons to Iran.

The shipments not only were politically sensitive, but also violated federal export laws – in part because Iran was officially designated a terrorist state. So, playing down Iran’s hand in terrorism worked for the White House whether supported by the facts or not.

At that time, Gates was deputy director in charge of the DI, putting him in a key bureaucratic position as the CIA worked to justify geopolitical openings to Iran. Even earlier, in spring 1985, Gates had overseen the production of a controversial National Intelligence Estimate that had warned of Soviet inroads in Iran and conjured up supposed moderates in the Iranian government.

That Gates, two years later, would make exculpatory claims about the CIA’s reporting – assertions contradicted by an internal DI report – suggests that he remained more interested in protecting the Reagan administration’s flanks than being straight with the American public.

In his affidavit, McGovern wrote that after Gates’s exculpatory articles in November 1987, “efforts to correct the record remained unsuccessful.”

[McGovern’s report to senior DI management about the Iran-terrorism issue was dated Oct. 30, 1987; his affidavit was signed Oct. 5, 1991, during Gates’s confirmation to be CIA director, but the sworn statement was not made public at that time.]

Iran Initiative

The dispute about Gates’s role in the Iran-Contra scandal and his contradicted denial about the CIA reporting on Iranian terrorism are relevant again today as the Senate considers Gates’s nomination to replace Donald Rumsfeld as Defense Secretary.

Gates’s honesty has long raised concerns among CIA colleagues, members of Congress and federal investigators who looked into the Iran-Contra scandal.

Although independent counsel Lawrence Walsh chose not to indict Gates over Iran-Contra, Walsh’s final report didn’t endorse Gates’s credibility either. After recounting discrepancies between Gates’s Iran-Contra recollections and those of other CIA officials, Walsh wrote:

“The statements of Gates often seemed scripted and less than candid. Nevertheless, given the complex nature of the activities and Gates’s apparent lack of direct participation, a jury could find the evidence left a reasonable doubt that Gates either obstructed official inquiries or that his two demonstrably incorrect statements were deliberate lies.”

For his part, Gates denied any wrongdoing in the Iran-Contra arms-for-hostage deal and expressed only one significant regret – that he acquiesced to the decision to withhold from Congress the Jan. 17, 1986, presidential intelligence “finding” that gave some legal cover to the Iran arms shipments.

Beyond that one admission Gates submitted what reads like carefully tailored denials of his involvement in the scandal. In 1991, when he was facing confirmation hearings to be CIA director under President George H.W. Bush, Gates said:

“As Deputy Director for Intelligence, I was not informed of the full scope of the Iran initiative until late January/early February 1986; I had no role in the November 1985 shipment of arms; I played no part in preparing any of the Findings; I had little knowledge of CIA’s operational role.”

Narrow Denial

Left out of that denial, however, was what exactly did Gates know about the Iran initiative prior to January 1986, particularly about several 1985 shipments that violated the Arms Export Control Act. Nor did he make clear whether he exerted any influence over the production of Iran-related intelligence reports, including the ones that downplayed Iran’s support for terrorism.

In 1985, Israel and some of its allies within the Reagan administration were pushing for permission to sell arms to Iran, which was then fighting a bloody border war with Iraq. Israel was seeking to expand its strategic influence in Iran, while suggesting to the White House that Iran might help gain the freedom of American hostages then held by Islamic extremists in Lebanon.

Gates’s DI set the stage for the Iran initiative by producing a special National Intelligence Estimate in May 1985 that laid out justifications for U.S. openings toward Iran, including fears of Soviet inroads in Iran if the United States did nothing.

In a Nov. 21, 2006, article for the Los Angeles Times, former CIA analyst Jennifer Glaudemans charged that the special NIE flipped the judgments of CIA Soviet specialists who saw little chance of Moscow making progress with Tehran.

“When we received the draft NIE, we were shocked to find that our contribution on Soviet relations with Iran had been completely reversed,” Glaudemans wrote. “Rather than stating that the prospects for improved Soviet-Iranian relations were negligible, the document indicated that Moscow assessed those prospects as quite good.

“What’s more, the national intelligence officer responsible for coordinating the estimate had already sent a personal memo to the White House stating that the race between the U.S. and USSR ‘for Tehran is on, and whoever gets there first wins all.’

“No one in my office believed this Cold War hyperbole. There was simply no evidence to support the notion that Moscow was optimistic about its prospects for improved relations with Iran. …

“We protested the conclusions of the NIE, citing evidence such as the Iranian government’s repression of the communist Tudeh Party, the expulsion of all Soviet economic advisors … and a continuing public rhetoric that chastised the ‘godless’ communist regime as the ‘Second Satan’ after the United States.

“Despite overwhelming evidence, our analysis was suppressed. At a coordinating meeting, we were told that Gates wanted the language to stay in as it was, presumably to help justify ‘improving’ our strained relations with Tehran through the Iran-Contra weapons sales.” [LAT, Nov. 21, 2006]

Bolstered by the NIE, Ronald Reagan’s national security adviser Robert McFarlane began circulating a draft presidential order in June 1985 proposing an overture to Iran.

After reading the draft, Defense Secretary Caspar Weinberger scribbled in the margins, “this is almost too absurd to comment on.” The plan also contradicted President Reagan’s public policy to “never make concessions to terrorists.”

Still, in July 1985, Weinberger, McFarlane and Weinberger’s military assistant, Gen. Colin Powell, met to discuss details for doing just that. Iran wanted 100 anti-tank TOW missiles that would be delivered through Israel, according to Weinberger’s notes.

Reagan gave his approval, but the White House wanted to keep the operation a closely held secret. The shipments were to be handled with “maximum compartmentalization,” the notes said. On Aug. 20, 1985, the Israelis delivered the first 96 missiles to Iran.

Pivotal Moment

It was a pivotal moment. With that missile shipment, the Reagan administration stepped over a legal line. The transfer violated the Arms Export Control Act’s requirement for congressional notification when U.S. weapons are trans-shipped and a prohibition on shipping arms to nations, like Iran, that had been designated a terrorist state.

On Sept. 14, 1985, Israel delivered a second shipment, 408 more missiles to Iran. The next day, one hostage, the Rev. Benjamin Weir, was released in Beirut. But other Americans were snatched in Lebanon, undermining a key rationale for the arms deals.

Word of the Iranian arms shipments also was spreading through the U.S. intelligence community. Top-secret intelligence intercepts in September and October 1985 revealed Iranians discussing the U.S. arms delivery.

The risk of exposure grew worse in November 1985 when a shipment of 80 HAWK anti-aircraft missiles ran into trouble while trying to transit through Portugal en route from Tel Aviv to Tehran. In a panic, White House aide Oliver North pulled in senior CIA officials and a CIA-owned airline to fly the missiles to Tehran on Nov. 24, 1985.

But one consequence of drawing the CIA directly into the operation was a demand from the CIA’s legal advisers that a presidential “finding’ be signed and congressional oversight committees be notified.

With the White House desperately looking for ways out of its worsening dilemma, the CIA’s Directorate of Intelligence – with Robert Gates at the helm – reported a substantial decline in Iran’s support for terrorism, according to McGovern’s affidavit.

By citing this alleged Iranian moderation, the CIA created some policy space for Reagan finally to formalize the arms shipments with an intelligence “finding,” signed on Jan. 17, 1986. But the authorization – and the Iran arms deals – were still kept hidden from Congress and even Pentagon officials.

A day after Reagan’s finding, Gen. Colin Powell instructed Gen. Max Thurman, then acting Army chief of staff, to prepare for a transfer of 4,000 TOW anti-tank missiles, but Powell made no mention that they were headed to Iran. “I gave him absolutely no indication of the destination of the missiles,” Powell testified later.

Though kept in the dark, Thurman began the process of transferring the TOWs to the CIA, the first step of the journey. Powell’s orders “bypassed the formal [covert procedures] on the ingress line,” Thurman acknowledged in later Iran-Contra testimony.

As Powell’s strange orders rippled through the top echelon of the Pentagon, Lt. Gen. Vincent M. Russo, the assistant deputy chief of staff for logistics, called Powell to ask about the operation. Powell immediately circumvented Russo’s inquiry. In effect, Powell  pulled rank by arranging for “executive instructions” commanding Russo to deliver the first 1,000 TOWs, no questions asked.

“It was a little unusual,” commented then Army chief of staff, Gen. John A. Wickham Jr. “All personal visit or secure phone call, nothing in writing – because normally through the [covert logistics office] a procedure is established so that records are kept in a much more formal process.”

Finally, Wickham demanded that a memo about the need for congressional notification be sent to Powell. “The chief wanted it in writing,” stated Army Lt. Gen. Arthur E. Brown, who delivered the memo to Powell on March 7, 1986.

Poindexter’s Safe

Five days later, Powell handed that memo to President Reagan’s national security adviser John Poindexter with the advice: “Handle it ... however you plan to do it,” Powell later testified.

Poindexter’s plan for “timely notification” was to tell Congress on the last day of the Reagan presidency, Jan. 20, 1989. Poindexter stuck the Pentagon memo into a White House safe, along with the secret “finding” on the Iran missile shipments.

When the Iran-Contra scandal finally broke into the open in November 1986, most participants in the operation tried to duck the consequences, especially for the 1985 shipments that violated the Arms Export Control Act, what Secretary Weinberger once warned President Reagan might constitute an impeachable offense.

For second-tier officials, such as Gates and Powell, admitting knowledge of or involvement in the 1985 shipments would amount to career suicide. So, Gates, Powell and most other administration operatives insisted they knew or recalled nothing.

Undercutting Gates’s claims of ignorance and innocence, however, is that his subordinates in the DI were pushing unsupported notions about why shipping arms to Iran made sense, according to Glaudemans and McGovern.

With Congress hoping for a new Defense Secretary who has both the guts and the clout to stand up to White House pressure, the senators who will evaluate Gates’s fitness for the job may want to look back at this troubling Iran-Contra episode.

[For more on Gates’s history, see Consortiumnews.com’s “The Secret World of Robert Gates.”]

Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq, can be ordered at secrecyandprivilege.com. It's also available at Amazon.com, as is his 1999 book, Lost History: Contras, Cocaine, the Press & 'Project Truth.'