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Probe of 1980 GOP Hostage Dealings Reveals Covert CIA Operation

November 24, 1992 GMT

WASHINGTON (AP) _ The CIA tried to funnel $500,000 to a candidate in Iran’s 1980 presidential election as the Carter administration worked to free Americans held hostage by Tehran, according to Senate investigators.

The secret operation was uncovered during a probe into whether the 1980 Reagan-Bush campaign struck a deal with Iran to delay release of the 52 Americans until after the U.S. presidential election.

In a report released Monday, the investigators concluded the GOP campaign probably did not strike a hostage deal with Iran but was on ″the outer limits of propriety″ in its dealings on the issue.


Reagan’s then-campaign director, the late William Casey, ″was intensely involved in the hostage crisis″ and probably ″conducted informal, clandestine and potentially dangerous efforts″ on the campaign’s behalf to monitor the hostage situation.

But the most remarkable disclosure in the report stems not from Casey’s hostage efforts, but those of the Carter administration.

The covert effort to influence Iran’s presidential election, details of which remain classified, arose when U.S. officials contacted a pair of Iranian arms dealers, Cyrus and Jamshid Hashemi, seeking avenues to free the hostages.

Charles Cogan, chief of the Near East and South Asia division of the CIA’s clandestine service, met with the Hashemi brothers on Jan. 5, 1980, at a hotel in New York City, according to the report by the Senate Foreign Relations subcommittee on the Near East.

The Hashemis had promised to put U.S. officials in touch with top officials in the Tehran government, including a family member of the Ayatollah Ruhollah Khomeini. At the same time, they asked for financial support for Admiral Ahmad Madani, who was running for the new post of president of the Islamic Republic, the report said.

Madani and a Khomeini ally, Abol Hassan Bani-Sadr, had emerged as the leading contenders for the post less than three weeks before the Jan. 25 election.

The CIA decided then to provide $500,000 in cash to the Hashemis for ″a sensitive covert operation in Iran,″ the Senate panel’s report said.

Sen. Jim Jeffords of Vermont, the senior Republican on the subcommittee, confirmed that the operation involved election support for Madani, as did intelligence sources.

Cogan, who used a pseudonym when dealing with the Hashemis, attempted to deliver the cash to them at the same New York hotel on Jan. 17. The two businessmen refused the cash and insisted on a wire transfer from a Swiss bank to a bank in London, the report said.

Bani-Sadr won the election in a landslide, and Cogan later determined that $100,000 or less of the money was used for its intended purpose. Cyrus Hashemi later wrote a check for about $290,000 in Iranian funds to Cogan, and delivered it to him at the office of Washington attorney J. Stanley Pottinger for return to the CIA, the report said.

On the investigation’s primary focus, the ″October surprise″ allegations, the panel found insufficient credible evidence to suggest that the campaign negotiated a delay in the hostages’ release to ensure Reagan’s election.

″The great weight of the evidence is that there was no such deal,″ concluded the report, which was the result of a limited seven-month investigation.

But the panel also found that Casey’s campaign team came dangerously close to improper interference in U.S. foreign policy in its monitoring of the situation.

″In so doing, they were operating on the outer limits of propriety, considering their status as private citizens without authority to interfere in the conduct of the foreign relations of the United States,″ the report said.

The subcommittee said numerous questions remain unanswered, including the extent of hostage dealings by Reagan operatives between the election and his inauguration. Reagan himself still has not cooperated fully with the investigation, and key documents of Casey, who later became the director of central intelligence and died in 1987, remain unaccounted for, it said.

The subcommittee chairman, Sen. Terry Sanford, D-N.C., said he hoped a House task force, scheduled to release its own report by year’s end, will get to the bottom of those and other questions.

Documents from Casey, including his passport, have not been found, for example, and circumstances ″suggest a willful effort to prevent″ investigators from having timely access to other papers, the report said.