Bush & a CIA Power Play
The CIA Old Boys were reeling. In the 1970s, exposure of their
dirty games and dirty tricks made the Cold Warriors look
sinister -- and silly. Then, President Carter ordered a
housecleaning that left scores of CIA men out in the cold.
In 1980, the CIA men wanted back in and their champion was
former CIA director George Bush. With Bush and Ronald Reagan in
power, the old spies could resume their work with a vengeance.
The temptation was to do to Jimmy Carter what the CIA had done
to countless other world leaders -- overthrow him, a frightening
chapter from the October Surprise X-Files
By Robert Parry
- October Surprise X-Files (Part 7): Bush & a CIA Power Play
WASHINGTON -- With little more than a week left in the 1980
campaign, Republican vice presidential nominee George Bush was
nervous. New polls put Ronald Reagan and Jimmy Carter in a dead
heat. Then, while going to campaign in Pittsburgh, Bush got an
unsettling message from former Texas Gov. John Connally.
Connally, a onetime-Democrat-turned-Republican, said the
oil-rich Middle East was buzzing with rumors that President
Carter had achieved his long-elusive goal of a pre-election
release of 52 American hostages held in Iran. If true, Ronald
Reagan's election was in trouble.
So, at 2:12 p.m., Oct. 27, 1980, George Bush called Richard
Allen, a senior Reagan foreign policy adviser who was keeping
tabs on Carter's hostage progress. Bush ordered Allen to find
out what he could about Connally's tip. Allen's notes, which I
discovered many years later in an obscure Capitol Hill storage
room, made clear that Bush was in charge.
"Geo Bush," Allen's notes began, "JBC [Connally] -- already made
deal. Israelis delivered last wk spare pts. via Amsterdam.
Hostages out this wk. Moderate Arabs upset. French have given
spares to Iraq and know of JC [Carter] deal w/Iran. JBC
[Connally] unsure what we should do. RVA [Allen] to act if true
In a still "secret" 1992 deposition to House investigators,
Allen explained the cryptic notes as meaning Connally had heard
that President Carter had ransomed the hostages' freedom with an
Israeli shipment of military spare parts to Iran. Allen said
Bush then instructed him to query Connally, who was in Houston,
and to pass on any new details to two of Bush's closest personal
The Blond Ghost
According to the notes, Allen was to relay the information to
"Ted Shacklee [sic] via Jennifer." The Jennifer was Bush's
longtime assistant, Jennifer Fitzgerald, Allen testified.
"Shacklee" was Theodore Shackley, the legendary CIA covert ops
specialist known as the "blond ghost."
During the Cold War, Shackley had run many of the CIA's most
controversial paramilitary operations, from Vietnam and Laos to
the JMWAVE operations against Fidel Castro's Cuba. When Bush
was CIA director in 1976, he appointed Shackley to a top
clandestine job, associate deputy director for operations.
But Shackley's CIA career ended in 1979, after three years of
battling Carter's CIA director, Stansfield Turner. Shackley
believed that Turner, by cleaning out hundreds of covert "old
boys," was destroying the agency -- as well as Shackley's career.
After retiring, Shackley went into business with another ex-CIA
man, Thomas Clines, a partner with Edwin Wilson, the rogue spy
who later would go to prison over shipments of terrorist
materials to Libya. Clines himself would be convicted of tax
fraud in the Iran-contra scandal, another controversy in which
Shackley's pale specter would hover in the background.
But in 1980, Shackley was set on putting his former boss, George
ush, in the White House and possibly securing the CIA
directorship for himself. Shackley volunteered his prodigious
skills to Bush in early 1980. Though that fact has come out
before, Shackley's involvement in the Iran hostage issue, the
so-called October Surprise controversy, has been a closely held
secret, until now.
In 1992, the House investigators should have jumped when they
saw the Shackley tie-in. The task force, which was examining
charges that Republicans sabotaged Carter's hostage talks,
already knew that other ex-CIA men were managing a 24-hour-a-day
"Operations Center" at Reagan-Bush campaign headquarters to
monitor Iran developments. Richard Allen had called the
ex-spies a "plane load of disgruntled CIA" officers "playing
cops and robbers."
Some House investigators wanted the behind-the-scenes CIA role
mentioned. A "secret" draft chapter of the House task force
report, which I also found in the storage room, stated that:
"Many of the [Operations Center's] staff members were former CIA
employees who had previously worked on the Bush campaign or were
otherwise loyal to George Bush." But that section was deleted
from the publicly released version.
Another task force discovery -- also dropped from the final
report -- was that conservative "journalist" Michael Ledeen,
another Shackley associate, was privately collaborating with the
Reagan-Bush campaign on the Iran hostage issue. The draft
chapter said Ledeen was an unofficial member of the campaign's
"October Surprise" group. A separate page of Allen's notes
revealed Ledeen joining campaign director, William J. Casey, in
a Sept. 16 meeting for what was called the "Persian Gulf
In 1980, Shackley had teamed up with Ledeen as paid consultants
to a "war game" for SISMI, the Italian intelligence service with
close ties to the secret international right-wing Masonic lodge,
P-2. As the 1980 campaign neared its end, Italian intelligence
leaked a damaging -- and questionable -- story to Ledeen about
President Carter's brother Billy and his business ties to Libya.
Ledeen wrote the story for The New Republic without mentioning
that he was working for SISMI or assisting the Reagan-Bush
campaign. (See David Corn's The Blond Ghost, p. 359.)
Shackley had strong bonds to many CIA officers still in the
government, too. Donald Gregg, who also has been linked to the
October Surprise allegations, served under Shackley's command in
Vietnam. In 1980, Gregg was the CIA liaison inside Carter's
National Security Council, making him privy to secrets about the
hostage talks. Gregg would later become national security
adviser to Vice President Bush and a secondary figure in the
A Paris Tale
But the pivotal October Surprise question still turned on
whether Reagan's campaign director Casey and vice presidential
nominee Bush met face-to-face with Iranian mullahs in 1980.
According to one set of allegations, the pair slipped off to
Paris for such a meeting on Oct. 19, 1980.
Four French intelligence officials, including France's spy chief
Alexandre deMarenches in statements to his biographer, placed
Casey at the Paris meeting. But two other witnesses, a pilot
named Heinrich Rupp and Israeli intelligence official Ari
Ben-Menashe, also claimed to have seen Bush in Paris that day.
Ben-Menashe testified that Casey and Bush were accompanied by
active-duty CIA officers.
Rupp, who says he flew Casey from National Airport to Paris,
recalled that the flight left very late on a rainy night. The
night of Oct. 18 indeed was rainy and sign-in sheets at the
Republican headquarters showed Casey stopping at the Operations
Center for a 10-minute visit at about 11:30 p.m. The
headquarters in Arlington, Va., was only a five-minute drive
from National Airport. Casey also had no credible alibi for his
whereabouts on that day. (See The Consortium, Feb. 14).
Bush, however, was a different story. He was under Secret
Service protection and those confidential records listed him as
taking a day off from the campaign at his home in Washington.
Yet, there were troubles with Bush's alibi. None of the Secret
Service agents could recall the two personal trips that Bush
supposedly took in the morning and afternoon of Oct. 19.
Then, the Bush administration blocked access to one family
friend listed as receiving a visit from the Bushes in the
afternoon. The name was blacked out in the records given to the
task force, and the investigators only got the name by promising
to keep it secret and to never question the family friend.
In a bipartisan spirit, eager to repudiate the disturbing Bush
charges, the House task force acquiesced to these unusual terms.
Amazingly, the purported alibi witness was never interviewed. In
its first public statement on July 1, 1992, the task force
That decision meant the investigators found no need to explain
another curious fact. At PBS FRONTLINE, we had discovered that
on Oct. 18, 1980, a Chicago Tribune reporter named John Maclean
told a U.S. foreign service officer, David Henderson, that a
Republican source had supplied a fascinating tip -- that Bush
was flying to Paris to discuss the hostages with Iranians.
That two strangers -- Maclean and Henderson -- would have
discussed a Bush trip to Paris at the precise time that others
would allege, years later, that Bush left the country should
have raised the task force's eyebrows. At least, the
investigators should have questioned the Bush family friend. But
they didn't. (Allen's notes for that week reveal a meeting with
Maclean, although the reporter has refused to divulge the name
of his source.)
To the task force, the possibility that former and current CIA
officers conspired with Republicans and foreign intelligence
services to unseat a President of the United States was
unthinkable. If true, it would have meant that elements of the
CIA mounted a silent coup d'etat that undermined American
democracy to put in place a President who would unleash the spy
But certainly what followed in the 1980s pleased the CIA's
hardliners. Under President Reagan's CIA director William
Casey, CIA covert operations proliferated. Dozens of cashiered
CIA officers were brought back on contract. Billions of
taxpayer dollars were poured into CIA projects. The CIA was
also spared Carter's nagging about human rights, as CIA-trained
units launched death-squad operations throughout Central America
A real politick Zeitgeist took hold in Washington. It tolerated
drug smuggling by CIA-connected groups, including the Nicaraguan
contras and the Afghan mujahadeen. It watched passively as CIA
associates plundered the world's banking system, most notably
through the corrupt Bank of Credit and Commerce International
(BCCI), which also had paid off a key Iranian in the October
Surprise mystery. (See The Consortium, Dec. 31)
Connally's False Alarm
Still, regardless of what did or didn't happen in Paris, Bush
was jittery on Oct. 27, 1980. If Connally was right, Carter
might have offered Iran a deal so sweet the mullahs couldn't
refuse. But as it turned out, Connally's news was garbled. It
was true that Israel had shipped military spare parts by air to
Iran a few days earlier. But the shipment had been in defiance
of Carter, not part of a solution to the hostage crisis.
In 1992, ex-President Carter told the congressional
investigators that Israel's Likud government had opposed his
re-election. According to other notes I found in the storage
room, Carter said that from April 1980, "I felt Israel cast
their lot with Reagan." Carter sensed a "lingering concern
[among] Jewish leaders that I was too friendly with Arabs."
But the House task force had little interest in pulling strings
that might unravel a nasty national security scandal. Luckily
for the CIA, the chief investigator, E. Lawrence Barcella Jr.
was a favorite of the intelligence community and had worked
closely with many of the figures implicated in the October
For instance, BCCI paid Barcella and his law firm more than $2
million to fend off charges of corruption and money-laundering.
At that time, Barcella's senior law partner was former Sen. Paul
Laxalt, Reagan's finance chairman in 1980 who allegedly had
covered up secret payments to the 1980 campaign from the
Philippines Ferdinand Marcos. (See The Consortium, Jan. 15)
Barcella was also close friends with Michael Ledeen. The two
men shared a housekeeper and socialized together. In 1982, when
Barcella was the lead prosecutor in the Edwin Wilson case,
Ledeen visited Barcella's home one night to urge that the
prosecutor drop Shackley from the investigation.
Neither Barcella nor Ledeen saw anything wrong with Ledeen's
out-of-channel contact. "He just wanted to add his two-cents
worth," Barcella told me. "This is a community in which people
help friends understand things," Ledeen explained. Shackley was
soon cleared of complicity in the unsavory Wilson matter.
In 1993, Barcella would also find "no credible evidence" to
support the October Surprise charges. But as we have shown in
the first six parts of this series, a wealth of evidence that
pointed in the opposite direction was left out of the final
For instance, there was no reference to BCCI's secret money
deliveries to October Surprise suspects, no mention of Ledeen,
Shackley or the other ex-CIA men assisting the Reagan-Bush
campaign on Iran, no word about Laxalt and the Marcos money -and
nothing about Bush's phone call.
(c) Copyright 1996
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