Original subtitles

Previously on "Fiasco"...

when a new hostage crisis takes hold in Lebanon,

Ronald Reagan is determined to avoid the same mistakes

made by his predecessor, Jimmy Carter.

But as the crisis deepens, Reagan becomes consumed

with bringing his countrymen home.

Then National Security Advisor Robert McFarlane

presents a risky proposal to sell weapons to Iran

in exchange for the release of hostages.

Reagan eagerly signs off.

So far, we have been following the strands

of the Iran-Contra saga separately,

tracing each one from conception to execution,

as they wove, one by one,

through the mind of Oliver North

and the universe of room 392.

-The contras. - Kidnapped in Beirut.

Ayatollah Khomeini.

But this is the moment

when the strands come together

to form the surreal plot

we have come to know as the Iran-Contra scandal.

Iran was exporting its revolution

to wage war against Western interests

and conservative Arab interests.

Father Jenco from Illinois

is the fifth American to disappear

from the streets of West Beirut in the last ten months.

We had hostages that had been taken, in Lebanon.

Our responsibility is to try to get those hostages back home.

CIA officers have directed

and funded the war against Nicaragua.

CIA employees executing the more damaging attacks.

But Congress passed an amendment

which said you can't spend any money to support the Contras.

They were gonna die on a limb.

Hell of a mess.

How did Ronald Reagan's

ambitions in Central America

become fused with his priorities in the Middle East?

How did the money, the personnel, the logistics,

and the policy all get tangled together?

There was a major screwup.

I mean, you can just imagine today,

if the White House was caught selling arms to Iran,

- there would be outrage.

But then, to take the money from a Middle East operation

and give it to a group that's involved

in a civil war, it becomes diabolical.

From the beginning, there was one person

who could have predicted that Reagan would fall prey

to an out-of-control hostage crisis.

It was his national security advisor,

Robert "Bud" McFarlane.

He saw the risk clearly

during his first week in office back in 1983...

The count of American dead in today's terrorist attack

on the U.S. Marine compound in Beirut stands at 135.

...as the situation in Lebanon went from dangerous to deadly.

I didn't know what hit us.

You hear about 1,000 people, it seemed like, screaming,

"Help me. God help me."

Reagan was just shattered by it.

At the earliest opportunity,

he wanted to go to Camp Lejeune

and be consoling and whatever he could do, and he did.

If this country is to remain a force for good in the world,

we'll face times like these, times of sadness and loss.

Your fellow citizens know and appreciate

that Marines and their families are carrying a heavy burden.

I watched him,

and I became quite emotional too.

He was both embittered

and sorrowful for the survivors

and the parents who were there.

It was clear that Reagan

cared deeply about his fellow countrymen abroad.

But for Bud McFarlane,

the President's grief provoked a troubling thought.

That investment personally

of the time and effort to go and be there.

You couldn't deny this is vivid evidence

of how an enemy would see a vulnerability.

And it was in this vulnerability

that Iran, once again, saw an opportunity.

They could capitalize on it by coaxing Reagan

into risking everything

for the rescue of seven hostages.

I am Leon Neyfakh.

This is "

the Story of Iran-Contra."

When Reagan came into office, I was at the State Department,

and he wanted me to be his interlocutor

between the heads of state throughout the Middle East.

His secretary of state, he asked me,

"What do you think is the most important issue

that we must study hard?" And I said,

"Well, the wild card in the mix here is really Iran."

We've had a revolutionary figure emerge

as the leader of Iran.

At the geopolitical center

of the energy world on the planet,

this is a terribly important country,

and it is bound to be a target for the Soviet Union.

Iran was, in many ways, thought by Americans,

including those in the Reagan administration,

to be a new kind of face of anti-American evil.

The American Embassy in Tehran ceased operations

in November 1979

when it was taken over by militants,

and it has never opened since.

Inescapably, this story always comes back

to that year of revolution: 1979.

In early 1979, the Shah gave up,

and he left the country.

He never came back to Iran again,

and everything connected

with his regime soon completely collapsed.

The Iranian people are united, and they believe,

and all of them are behind Khomeini's leadership.

Khomeini and his forces really gain the upper hand

and begin establishing the institutions

that we see today, 40 years later,

in the Islamic Republic of Iran.

He was the one who understood and made real

how to combine Islam and politics.

Around the time the U.S. hostages taken

during the Carter administration returned home,

Ayatollah Khomeini consolidated his power over Iran

and hardened his stance towards the United States.

This was the first group of Americans

to leave the country

since the U.S. embassy said it could no longer guarantee

the safety of U.S. citizens in Iran.

Pan American Airlines brought a plane in

to take its people out

and opened the flight to a few other companies

and about 20 newsmen

who decided it was time to get out.

So how did we get

from being literally shut out of Iran

by our archenemy, Ayatollah Khomeini,

to selling his government deadly weapons

just six years later?

To understand that, we need to look next door

to the region's other reigning despot.

He likes to be called Saddam,

but some Arabs have other names for him.

The Butcher of Baghdad is one.

Remember him? Saddam Hussein.

A character from a completely different American fiasco.

Well, he plays a role here too.

Saddam Hussein al-Tikriti,

president in name for the past 14 months,

but Iraq's strongman for the past decade,

variously attired in Arab headdress

or in the uniform of a field marshal

although he was never a soldier.

But his favorite image:

the cuddly father figure.

Before he was a menace to Kuwait,

Saddam waged one of the longest and bloodiest wars

in modern Middle Eastern history.

It was against his neighbor,

the radical Muslim cleric

solidifying his power in Iran and posing a new challenge

to Saddam's aggressively secular dictatorship.

Saddam Hussein was a Sunni leader

who was running a majority Shiite country,

and he kept the Shiite community in check.

And Khomeini had a theocracy.

He had visions of having a government

based on religious power,

maybe emulated in other parts of the Arab world.

They were exact opposites.

The Arab Gulf countries were extremely nervous

about the kind of regime that emerged in Iran.

And there's this traditional rivalry

between Sunnis and Shia,

and they felt threatened.

What Saddam feared was that

the ethnicity of the Shia

and their loyalty to the Shia Imams

would trump their faith in the government of Iraq,

which was primarily Sunni

and which did very little to help the Shia majority.

So the ability of Khomeini

to threaten Saddam was quite profound.

In 1980,

in the wake of Iran's chaotic revolution,

Saddam Hussein saw an opportunity.

Saddam and his aides want to establish Iraq,

not Iran, as the major power in the area

and elevate Saddam as the leader of all Arabs.

And so Saddam did what dictators often do.

He attacked.

Basking in their nationalist identity,

Iranians flocked to the frontlines

to defend their country.

The men and boys who have responded wear headbands

that say simply, "Yes to Khomeini."

It means they have promised their lives to the revolution.

Women willingly offered up

their husbands and sons and even themselves.

But manpower was not enough.

This was modern warfare,

and weapons and technology

were going to determine the victor.

Iranian resistance crumbled in the early days

to the advancing Iraqis.

The first major territorial gain came last Wednesday

when Iraq claimed the capture of the town of Qasr-e Shirin

in the north.

Now the Islamic revolution has been replaced

by the ruthless Arab socialism of President Saddam Hussein.

We are just coming here to force them to recognize that

and to be reasonable enough to see that they cannot do

and they cannot have it their way all the time.

To most Americans,

the basic lesson of the Iranian hostage crisis

was that the Iranian Islamic Regime

of Ayatollah Khomeini

was dangerous and irrational,

impossible to deal with, inscrutable.

And so when Iraq invaded Iran,

the United States leaned on the side of Iraq.

In fact, America went further

than just siding with Iraq.

It struck up a tentative partnership

with Saddam Hussein,

and by 1983,

America was supplying Iraq with arms.

Saddam was enjoying the support of the West,

of the United States.

He was buying weaponry from them,

and he could do no wrong.

It was a convenient alliance.

The alliance was founded on one thing.

Iraq was sitting on a lot of oil.

They had reserves.

So vast are their reserves, that Iraqis say

that the last two barrels of oil

in the world will be theirs.

The U.S. didn't have alternatives at the time

to Saudi oil or Arab oil.

And oil prices were a matter of national interest

and very important to the economy of the U.S.

Iran felt that its back was against the wall.

The Iraqi Air Force was superior.

They didn't have the right kind of missiles

to defend themselves.

And a lot of young Iranian soldiers

died in the war.

Millions died. Many were taken prisoner.

By the summer of 1985, the bloody war

between Iran and Iraq had been raging for five years.

The Iranians seem to have no intention at all

of agreeing to a ceasefire, let alone peace negotiations.

The war will drag on, continuing instability

at the very heart of the oil world.

And many are wondering

how long Iran can stay in this fight

without American military assistance.

To make matters more complicated,

the White House feared that the Soviet Union

was jockeying for influence in Iran

or even planning to invade.

Iran, I thought, really was threatened.

They were a target.

The Cold War was raging during this time,

so it was crucial that we do whatever we could

to prevent an expansion

of Soviet influence in the Middle East.

It was against the backdrop

of the Iran-Iraq war

that in the summer of 1985, an Iranian arms dealer

by the name of Manucher Ghorbanifar

was introduced to Bud McFarlane.

Ghorbanifar claimed that there were moderate elements

within Khomeini's cabinet

who wanted to engage with the U.S.

McFarlane was very concerned

that America not miss an opportunity

to restore some semblance of normalcy

to our relationship with Iran.

Or at least stop the radicalization

and begin a process

that would move them more towards a centrist policy

and a restoration of the balance of power

and the Middle East order.

That was the long-term play.

In the short term,

Ghorbanifar was also promising to help Reagan

out of his hostage crisis.

Extremist Shiite militants in Lebanon,

who referred to themselves as Hezbollah,

had kidnapped seven Americans in Beirut.

As far as the White House was concerned,

Hezbollah answered to Ayatollah Khomeini.

There is sufficient evidence that radical Shia terrorists

are responsive to Iranian guidance

for us to hold Tehran responsible.

In the last three years,

Khomeini's fundamentalist message

has found many supporters

among the Shiites of the Lebanon.

Downtrodden for generations, many now believe

in an Islamic revolution against foreign influence.

Iranian leadership were using the Pasdaran

to train people to become martyrs.

We saw Shia unrest in Saudi Arabia.

We saw Shia unrest in Yemen.

Wherever there were Shiite communities,

they were typically the impoverished communities,

and they were looking to Iran for help.

Hezbollah had learned

from the Iranian hostage crisis

how to put pressure on the United States.

...for in this city,

a live hostage is worth a lot of money.

Ghorbanifar said that he could persuade

the Iranian government to pressure Hezbollah

into releasing the seven American hostages

being held in Lebanon.

It was this promise that would lead Bud McFarlane

to make a fateful decision.

He instructed Oliver North

to strike a deal with Ghorbanifar,

whereby Iran would broker the release of the hostages.

And in return,

the Ayatollah would get the one thing he really needed.

The Iranians needed weapons,

and they knew that

Saddam's supremacy in the skies

and with missiles and all kinds of weaponry

was because the West

was supplying these weapons to them.

There was one problem.

The White House had placed an embargo

on the sale of weapons to Iran.

There were plenty of laws broken

in the arms sales to Iran,

but if a President and his advisors decide that

"we're going to find a lawyer to write an interpretation

that says that we're within the law,"

they may or may not get away with it

in the long run,

but they clearly have the power to do it

in the short run.

To keep the deal secret,

the Israeli government agreed to act as a middleman.

It went like this.

The U.S. would sell the missiles to Israel,

and Israel would then ship them to Iran.

The plan was designed to avoid a direct sale

to a country that the Reagan administration

had designated a state sponsor of terrorism.

The president had

made the decision unequivocally.

He was profoundly focused

on securing the release of the hostages in Lebanon.

I reminded him again that, "Look, this may not work."

And he said, "Well, Bud, we don't know until we try."

On August 20, 1985,

a plane carrying 96 American TOW missiles

left Israel for Iran.

Right away,

after the President made the decision,

I began to hear a different story.

In a last-minute bait and switch,

Ghorbanifar was saying that Iran

wanted an additional 400 missiles.

Even worse, he said that only one hostage

instead of all seven would be freed in exchange.

McFarlane was furious.

You're being screwed here.

That was my reaction to it.

And I said, "Look, this is really unimpressive

"on their part and foolish on ours

if we can't get this straightened out."

Now ready to pull the plug on the whole deal,

McFarlane went back to the president.

It was very clear that that priority,

the safety of Americans,

is what drove him in decision-making.

He was an optimist

without thinking seriously about the downside risks here.

And so, on September 15th,

a second plane carrying 408 American missiles

arrived in Iran.

McFarlane had the terrible task of choosing

which one hostage would walk free.

While President Reagan was clearly touched

and wanted to bring about freedom for the hostages,

the one who he really cared about was Bill Buckley.

Clearly that's the one I favored,

just out of professional anguish.

Of all the hostages,

none hurt more than Buckley.

He was our own man.

He was someone who was doing public service

for the CIA in a very dangerous post.

People were very worried about what was being done to him.

The CIA reportedly spent a small fortune to try

and find William Buckley. After he was kidnapped,

Iranian gunmen took him to Tehran.

He reportedly was tortured there till he gave up secrets

and then sent back to his Lebanese captors

and forced to write a confession.

Earlier that year,

Hezbollah had released a video of William Buckley.

The video proved that Buckley was still alive,

but only just.

The situation was dire,

both in terms of Buckley's obviously ailing health

and the classified information

he could be giving up under torture.

But despite McFarland's pleas to release him first,

he was told that Buckley was too sick to travel.

McFarlane would have to pick someone else.

North said,

"Well, there's this pastor."

The pastor was Benjamin Weir.

Do you think the government has been doing

all it can to gain his release?

I think a special effort needs to be made now.

For months now,

his wife had been publicly calling on the U.S.

to resolve the hostage crisis.

Her husband had been in captivity

for almost 500 days,

far longer than the Iranian students

had held the U.S. embassy hostage.

If Buckley couldn't be freed,

then Weir was an obvious second choice.

Just hours after the second shipment

of American weapons landed in Tehran,

Weir was freed.

His release would mark the first successful

arms-for-hostages transaction

in what would come to be known as the Iran-Contra scandal.

So somewhat unexpectedly we were told

that my dad had been released.

We weren't really expecting that news.

We'd had no premonition that that was going to happen

in any way.

All of a sudden, there was a knock on the door,

and there was my dad.

Quite a shock.

I'm pleased to inform you, if you haven't heard,

that Reverend Benjamin Weir,

who was held hostage for 18 months in Lebanon,

- has now been released.

Today's news brought renewed hope for the families

of the six Americans still held hostage.

The heaviness of one's heart is lightened some.

I want to have a positive attitude,

and be optimistic, and think that this is

the first step in the release towards all of the people.

No one knew that Weir had been released

in an arms-for-hostages deal, not even Weir himself.

Because the six other hostages

have not yet been freed,

we do not intend to disclose any details

on how the Reverend Weir was freed.

However, I can assure you that no deal was made

and that our position

on no concessions to terrorists has not changed.

I asked Colonel North,

who was the only one who would know about this sort of thing,

and he just gave me his special grin

and the twinkle in his eye.

Which was his way of saying, "Yes, something's going on."

We went to Washington, D.C.,

and at the church's offices on Capitol Hill,

my father held a press conference.

For the first time,

he spoke to the press about what had happened.

I hardly need to say that I'm glad to be here.

Not least, but first of all,

I give credit and praise

to our Heavenly Father

for his tender, sustaining power

throughout this ordeal,

for my release

and for the hope that, by his grace,

freedom will come soon

to those who are still captive.

- Hi. How are you? - Well, thank you.

Weir's release

was a significant public victory for Reagan.

Behind the scenes, the administration was struggling

to secure the release of the remaining hostages.

We are continuing to hope

and continuing to do everything we can.

The families say you're not doing enough.

Well, unfortunately, we can't tell even the families

all the things that we are doing.

Fear for the hostages' lives

weighed heavily on Reagan and on the country.

They cohabitated with rodents and cockroaches.

They were moved from place to place.

They were wrapped like mummies with rags

stuffed into their mouths tied to radiators.

Many of them were beaten.

I mean, these men really suffered.

What was not yet known

was that William Buckley,

the CIA station chief, had been dead for months.

And of course, it turned out later,

long before anybody in the U.S. knew it,

he was horribly tortured and murdered.

The Post says that Buckley later died

from a lack of medical attention.

His body was never found.

The question now was what to do next?

Reagan wanted McFarlane to negotiate the release

of the remaining hostages,

but McFarlane no longer trusted Ghorbanifar to serve

as a reliable intermediary between the U.S. and Iran.

Unless you have absolute conviction

in the integrity

of the people you're dealing with,

a barter for hostages is just an open door

to encouraging more hostages being taken.

From the Iranian point of view,

if it works, let's do it again.

And so I was suspicious.

And I was candid with Reagan about that.

As it turned out,

McFarlane was right to be skeptical.

Ghorbanifar was, in fact,

something of a triple agent, if you like.

In his career, he had worked for the regime of the Shah.

He had worked for United States intelligence.

He had worked for Israeli intelligence.

And by the time we got to know him in the 1980s,

he was working for the Iranian revolutionary regime.

He was a classic international wheeler-dealer

who didn't care what side you were on.

All he wanted to do was make a deal.

The more I learned about Ghorbanifar,

it was very clear that he was neither a principal,

a decision-maker,

nor a person of particular influence

with the Iranian armed forces.

Nothing that he said really established his bona fides

apart from having a history

of being involved in arms trade.

During this same period,

McFarlane turned his attention away from Iran

and towards America's other global foe: the Soviet Union.

McFarlane was planning the first ever meeting

between Reagan and his Soviet counterpart,

Mikhail Gorbachev.

As the summit neared,

McFarlane handed full control of negotiations

with Ghorbanifar off to Oliver North.

He was North's problem now.

I had a challenging six months

planning the Soviet summit

to tee up both sides' understanding

of what was to be the outcome in Geneva.

The topic of these diplomatic negotiations,

ironically, was weapons reduction.

We go to Geneva with the sober realization

that nuclear weapons pose the greatest threat in human history

to the survival of the human race,

that the arms race must be stopped.

McFarlane spent months tutoring Reagan

on the details of arms control.

Ronald Reagan was never a detail man.

Not on foreign policy.

Not on domestic policy.

His aides would tell stories about his eyes glazing over.

It was revealed that

before his meetings with foreign leaders,

instead of a big binder of printed material of the kind

that the CIA would have customarily

given to a president before a summit,

the CIA had prepared a movie about Mikhail Gorbachev,

a mini documentary,

so that he could absorb the information that way.

And the President was delighted.

The November summit arrives,

and the world is watching closely

to see if the tensions

will remain as icy as the Geneva weather.

On November 19, 1985,

Reagan and Gorbachev met in Switzerland.

General Secretary Gorbachev and I

have held comprehensive discussions

covering all elements of our relationship.

I'm convinced that we are heading in the right direction.

Both men agreed

to consider reducing their stockpiles

of nuclear weapons,

but Reagan refused to compromise on his dream

of building a missile defense system in space.

Ultimately, no deal was signed.

Meanwhile, McFarlane was losing control of Oliver North

who was continuing to give in to Ghorbanifar's demands

for more and more weapons.

The Iranians wanted sophisticated

air-to-air missiles

before anyone else would be released.

Well, it was out of the question.

This was a particularly sophisticated system

that we weren't even selling to all of our allies,

let alone to an alien country like Iran.

This really was a marker

of the good faith being very much in doubt.

Nevertheless, with no oversight,

Oliver North persisted.

Iran was asking for 150 HAWK missiles

as well as 200 Sidewinder missiles

and 30 to 50 Phoenix missiles.

But this time, it was America that changed the terms.

A plane carrying just 18 Hawk missiles

touched down in Iran.

In addition to the drastically reduced number of weapons,

they weren't even the I-Hawks

capable of shooting down planes

at high altitudes the Iranians had ordered.

On top of that, about half the missiles

carried Israeli's Star of David markings,

which enraged the Iranians.

No hostages were released.

A week later, deflated from the Geneva summit

and from what looked increasingly

like dead-end negotiations with Iran,

McFarlane had had enough.

I was exhausted.

Their request for a much more sophisticated weapons system,

their lack of production of releasing a hostage

led me to formally ask for a meeting with the president.

I was reaching a point where, more for family reasons,

I wanted to retire.

His ability to weigh both sides of an issue

and to provide key advice has been invaluable.

And we had a long and rather emotional,

mutual sorrow to the point

of his being distraught at my leaving,

and he wanted me to reconsider.

I said, "I really can't do that.

I'm sorry to let you down."

At the end, he very clearly, reluctantly said, "All right."

McFarlane's parting wisdom

was that all negotiations

with Iranian arms dealers should cease.

The president was pursed lips all the way,

as was his way of showing his wish

to go in the opposite direction

that he thought it worth continuing.

But at the end, he said, "All right,"

and he directed me to go to London.

On December 7th, McFarlane flew to London

for what would be his final international mission

as national security advisor.

Ghorbanifar and Oliver North were there waiting for him.

I said,

"My government simply is not interested

"in pursuing what we think

is evidence of bad faith here on the Iranian side.

There would be no arms transfers at all."

Ghorbanifar was livid.

He stormed around.

Said, "You're foolish, you're crazy, you're misguided.

This is the opportunity of a lifetime."

I said, "Ollie, it's over. Let's get out of here."

And we left.

I have a statement I wish to read to you.

It's with deep regret and reluctance

that I have accepted the resignation of Bud McFarlane

as my assistant for National Security Affairs.

While Bud's departure is a cause

of deep regret for me,

I'm pleased to announce

that I have appointed Vice Admiral John M. Poindexter

to be the new assistant to the president

for National Security Affairs.

As McFarlane cleared out his office,

he feared that Reagan would turn his attention

back to Iran.

I knew that his preoccupation

with the safety of the hostages

would lead him to start this process up again.

I nonetheless tabled my resignation and left,

and I shouldn't have done it.

The only person that could have stopped it was me.

And I didn't do it.

McFarlane was right.

Negotiations between Oliver North

and Manucher Ghorbanifar resumed.

To North, the only downside

of further arms-for-hostages transactions

was a few weapons being sent to Iran with no results.

On the other hand, if the deals stopped,

the hostages could come to severe harm.

In January of 1986,

after I had become a national security advisor

in December, I convened an NSPG meeting

with the director of central intelligence,

Bill Casey.

And Bill Casey picked retired Air Force General Dick Secord

to be the contractor to manage the logistics

of getting the weapons from the U.S. to Iran.

Richard Secord was still buying weapons

and building an air fleet

with American money for the Contras in Nicaragua.

In his new role, he would also be in charge

of funneling U.S. weapons to Iran.

So they decided that I ought to take over

that whole operation, which was growing and growing.

Well, that was the last thing we needed.

But suddenly, we find ourselves involved

in the Iran part of this mess.

On January 22nd, North flew to London again

to turn up the heat on Ghorbanifar.

If negotiations were going to continue,

the hostages needed to be released and soon.

This meeting would later become publicly known as...

The bathroom story.

And that story goes something like this...

North and Ghorbanifar

and others were in London in a hotel room.

The negotiations were getting nowhere,

and according to North,

Ghorbanifar asked him to step into the bathroom...

and said, "There has to be "a way to make this deal work.

I can just write you a check for $1 million."

North recognized that he was, in effect,

being offered a bribe.

And North, in his accounting, bristled and said,

"No, I can't do anything like that."

At which point Ghorbanifar said,

"Well, what if I sent the money "to an account for the Contras?

Would that help?"

At which point, according to North,

he said, "Now, that's an interesting idea."

And thus was the diversion begun.

And so, as the story goes,

it was in a London bathroom

that North's two big missions became one.

And the twin-engine scandal,

now known as Iran-Contra, was born.

It became apparent to Ollie North

that he had just found a way to solve two problems, he thought.

One was getting the hostages out of Iran,

and the other was getting money to the Contras in Nicaragua.

I, at the time, thought that it was a really neat idea

to use Khomeini's money

to support the indigenous forces in Nicaragua

where we were trying

to roll back the Communist Marxist state.

The Iranian program was controversial.

I've often told people I specialize in controversies,

but I thought it made a lot of sense.

In the later retelling of Ollie North,

the idea of diverting money

from Iranian arms sales to the Contras

actually came from Ghorbanifar, the Iranian arms merchant.

The problem with that story, as charming as it is,

is that it is almost certainly untrue.

In fact, by the time North and Ghorbanifar

had their dubious bathroom conversation,

Secord had already diverted more than $850,000

from Iranian arms sales to Nicaragua,

a transaction Secord would jokingly refer

to as a Contra-bution.

We only had a small amount of money,

and we were eating it up very rapidly.

Air operations are very expensive.

And procuring these weapons was very expensive.

And buying and operating a ship,

that was pretty expensive.

You know, and we needed additional funds,

and this came along. We said, "Eh, how about this?

It's a good way. We'll tap into that," and did.

Now under Richard Secord's direction,

Operation Recovery was launched.

It was a complex order of operations

that was designed specifically to uphold one thing: secrecy.

And it went like this.

Ghorbanifar would deposit funds

into a Swiss bank account controlled by Secord.

Secord would then transfer a portion of that money

to the CIA,

which would purchase the missiles from the U.S. Army.

Secord would then charter a plane

to ferry the missiles from the U.S. to Israel.

Finally, an Israeli charter would carry the weapons

on their last leg to Iran.

A shipment of 500 TOW missiles arrived in Iran

on February 18th.

But once again, no hostages were released.

Just under two weeks later,

an additional 500 TOW missiles were delivered to Iran.

Again, no hostages were freed.

North had now overseen five shipments

of lethal weapons to Iran,

and it had been months since the first

and only hostage had been freed.

But in the meantime, as much as $20 million

had piled up in Secord's Swiss bank account.

The war in Nicaragua

was now just as dependent on Iran

as the fate of the hostages in Beirut.

It was time for a face-to-face meeting with the enemy.

McFarlane's visit to Tehran in May

was the point at which all of his illusions

about the possibilities of a deal with Iran

crashed into a brick wall of reality.

In the spring of 1986,

Reagan called Bud McFarlane out of retirement

to spearhead a top secret mission.

And I agreed to go

when I was asked by the president to go to Iran.

He would be traveling with a small team.

My name is George Cave, and I was in the CIA,

and I focused on the Middle East.

Howard Teicher

and Lieutenant Colonel Oliver North.

Ghorbanifar claimed that he had arranged

for McFarlane and his team to meet with men

in Khomeini's inner circle.

We hadn't had any diplomatic approach to Iran

up to that point.

And so it was momentous to decide to send a mission.

America hadn't sent a White House delegation to Iran

since the hostage crisis six years earlier.

Our hope was that we would actually sit down

with Speaker Rafsanjani, Mousavi, the prime minister.

This had always been McFarlane's goal--

to determine, once and for all,

if a relationship between Iran and the U.S. could be brokered.

He saw this as an important moment

to make a difference

in the course of American history

in the Middle East.

This could be McFarlane's Kissinger moment.

As for Reagan,

he was being promised what he had wanted all along,

the immediate release

of all remaining American hostages in Lebanon.

Everyone did not think this was a good idea.

This was a high-stakes gamble.

The trip was supported by the CIA,

and it was opposed by the State Department

and the Defense Department.

The operation was completely covert.

Not even Congress knew about it,

and just a handful of Iranians were aware

that an American delegation,

along with several tons of weapons parts,

were boarding a plane bound for Tehran.

We borrowed an airplane from Israel.

We went over every bit of that airplane,

and anything that would indicate

it was Israeli, Stars of David or whatever,

we got rid of it.

And we take off in this unmarked, white 707.

We had Irish passports, and we had an Irish story,

because we were going as an Irish trade delegation.

My Irish name was Tim McGann, from Dingle.

Determined to make a good impression

on the Iranians,

North decided to sweeten the deal.

Of course, the funny story on the plane

was Ollie pulling out this cake.

And I said, "What is this?"

It was a regular old chocolate cake

with a great, big brass key

pressed into the frosting, on top.

The key represents the opening of relations

between the two countries.

And indeed, there is a tradition among Persians

when families or individuals try to make up,

after some kind of fight,

they share pastries and cookies and cakes.

So it was an appropriate gift to bring

as a light-hearted

but, nonetheless, symbolic gesture on our part.

Unfortunately, when they arrived in Iran

and wanted to present this key to senior Iranian leaders,

they never got a chance,

because the young guards

providing security for them at their hotel suite

found the cake and ate it first.

That's a pretty good metaphor for the whole trip.

Reagan had also given the men a signed Bible

to take with them. It was a gesture to indicate

that they were representing the president

and that Reagan, too, was a man of God.

Well, I was very concerned that there be a plan

to rescue us if we were held hostage.

So I specifically

and repeatedly asked Oliver North,

"What is the plan for extricating us

"in the event that we can't just drive to the airport

and get on our airplane?"

And Ollie assured me that everything was taken care of.

What North meant but told no one

was that William Casey, using a classic CIA tactic,

had handed him cyanide pills

in the event that the mission went horribly wrong.

And before the American delegation had even landed,

it almost did

when Iranian control ops

picked up the jet's approach and radioed the pilot.

They said, you know,

"Either tell us what's going on,

or I'm gonna shoot you down." And so we explained,

and I gave them the name of the man

in the prime minister's office who they should contact.

And they apparently did,

because we were not threatened after that.

But that was only the beginning of their troubles.

From the moment we arrived,

the atmosphere was bizarre.

They had apparently changed their clocks,

and we didn't know it.

And they were expecting us at a different time.

And we were set off into some, uh,

I'd say, second-class VIP lounge.

And we stayed there for about an hour-plus

until Ghorbanifar showed up apologizing.

The logistics screw-up was disconcerting,

but it was a small price to pay

if the rest of the mission went well.

We said, "Well, have the hostages been freed?"

That was what we were told when we arrived.

And there was no news,

and so the main thing they were supposed to do

on arrival wasn't happening.

This was starting to feel

like a futile exercise, at best,

and a trap, at worst.

And then we piled into these old Oldsmobiles,

and we're driven from the airport

to the former Tehran Hilton,

now known as the Imperial Hotel.

There we were ensconced on the top-floor penthouse,

cut off from everyone.

And thus began

a strange and frustrating three days.

There was really no food in this hotel.

They'd come out with this big menu.

100 items on the menu. And you would say,

"Wow, this sounds great. I'll have this."

"We don't have it."

Turned out they had nothing on the menu.

They had a pancake.

The American envoy had shown up during Ramadan,

the month when devout Muslims

fast from sunrise till sundown.

So Ghorbanifar had, I believe,

his mother prepare a feast for us,

which we did enjoy. But, you know,

that was about the only thing that he delivered that he said

he was gonna deliver that was what he said it would be.

Holed up in the less-than-luxurious

confines of the Tehran Hilton,

they began negotiating.

McFarlane expected to be talking

to the most senior leaders.

He was there as a personal emissary of the United States.

He found himself talking to arms dealers and underlings

whose real connection to power wasn't clear at all.

Worse still, it was becoming clear

that the Iranians hadn't even contacted Hezbollah

to discuss the hostage release in Lebanon.

We were having substantive dialogue about our goals

and our interests,

and, you know,

where we thought we could possibly cooperate.

And what could be an opening to improvement?

And then we would suddenly, you know, say,

"But we're not gonna talk anymore

unless you release the hostages."

And then the Iranians would say,

"Well, we can't even try to influence them

until you deliver all the spare parts."

Because indeed, because of our mistrust

and their past failure to deliver,

we didn't bring all of the parts with us

that they wanted. Only some of them.

So it was a very frustrating experience

where McFarlane was increasingly fed up

and just ready to leave.

McFarlane would insist

they've gotta release hostages.

That was our instructions when we came here--

to make sure that the hostages get released

before you make any commitments.

And...

we never got that.

It was plain

that we had been misled by Ghorbanifar.

He had misled both parties

in an effort to create a situation

where a deal would happen.

And once we knew that Ghorbanifar had lied to us

and lied to the Iranians,

I knew this was a really bad idea.

I aborted the mission

before it was 48 hours old

when there was a breach of commitment

that they had made to deliver hostages.

On the morning of their third day in Tehran,

things went from bad to worse.

News that Americans were in town on a secret mission

had leaked to the public.

A couple of mullahs found out about it,

started spreading the word,

and that's when the mobs were formed.

A failed mission

suddenly became a life-threatening one.

They said, "Get everyone down here.

"We gotta get you out of here,

"because this mob's coming up the main highway.

It's blocked."

So we went over the backroads of Northern Tehran,

to get out of the way of these guys

that were coming to get us.

And we just got on the plane and left.

I think we were all kind of glad to get out alive.

The plane ride home was very quiet.

It was very quiet.

I recall saying to Bud that, while we failed,

you know, we did the right thing to try.

And he said, "Maybe."

The American delegation

had escaped with their lives,

but the fate of the hostages still hung in the balance.

And just six months later,

details of the Iran-Contra operation

would leak out into the open.

The consequences for the Reagan Administration

would be monumental.