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PROFITS OF WAR -- INSIDE THE SECRET U.S.-ISRAELI ARMS NETWORK |
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7. The First Billion THE REPUBLICANS RENEGED on the deal to release all Iranian monies frozen in the U.S., and I was among the first to hear of Tehran's anger through my long-time friend Sayeed Mehdi Kashani. He rang me from Vienna in late January 1981. "We were swindled out of the prisoners," he complained. "The Americans have let a lot of our money go, but they're sitting on $11 billion of Iranian government funds in the Chase Manhattan Bank." "Hold on," I said. "How can you be swindled out of something you had no right to?" We both laughed. But then he said, "I hope you Israelis will keep your word. We need that equipment." "We promised to help, and we will. Don't put us in the same bed as the Americans. A decision about the subject was made at the highest levels of the Israeli government." At the beginning of February 1981, I flew to Vienna for an arms-supply conference with Kashani and Omshei. In the wake of the hostages being freed and the money being paid to the "students," the Iranians were eager to get down to the serious business of arms supply. Acting on instructions from the Joint Committee for Iran-Israel Relations, I put a proposal to the two Iranians on what we could sell them from our stockpiles. They could receive existing F-4 electronics and spare parts; 300,000 122mm artillery shells; 51mm mortars and rockets to be carried by infantry soldiers; 100,000 Kalashnikov AK-47s with ammunition; and air-to-surface missiles. They also wanted engines for their British-made Chieftain tanks. In stock, Israel had 1,000 German- made engines that would fit the tanks. This is where we were to make our greatest profit. The engines were worth between $30,000 and $40,000 each. We offered them to the Iranians at the outrageous take-it-or-leave-it price of $450,000 each. They were also interested in buying fighter aircraft which we could not sell to them at the time, but we offered them ten old C-130 Hercules aircraft for $12 million each. Their national airline, Iran Air, which was flying 747s and 707s, was also in desperate straits, I was told. The 747s were already grounded for lack of spare parts because the U.S. embargo against Iran covered even commercial engines. The embargo had not been lifted, but now, to boost the airline, the Iranians were not only looking for spare parts for the old fleet but hoping to buy British Tristars. I added up the bill. The grand total was one billion dollars, give or take a million. Israel's profit -- 50 percent. The slush fund looked like it was going to do very well. The Iranians screwed up their faces at the price. They knew Israel was ripping them off. But they had little choice. They said they would take the offer back to Tehran. "But you must come to Tehran, too," said Kashani. "The Defense Ministry will certainly want to talk to you about the details." *** My first trip to post-revolutionary Tehran took place in late February 1981. Some colleagues were worried because there were extremist factions in the country who despised the Israelis. I felt there wouldn't be any problem because I had been told that Ayatollah Ali Reza Hashemi of the Supreme Council had assured my safe passage. Besides, Ari Ben-Menashe was to change his identity. Wearing an English-made suit, with a borrowed Rolex watch on my wrist, I arrived at Vienna airport under the guise of Canadian businessman William Grace. Immigrants to Canada had their origins in numerous countries, and there was nothing to connect me with my true identity or to suggest that I was an Israeli ... no nametags on my clothes, no Israeli-made socks or shoes, and definitely no Ari Ben-Menashe passport or credit cards. "William Grace's" Canadian passport had been prepared for me by Mossad. I carried no luggage. As arranged with the Iranians, I booked an Austrian Airlines flight that was due to leave Vienna for London at the same time that an Iran Air flight was due to depart for Tehran. Accompanied by a Mossad agent who was playing the part of my traveling companion, I collected my boarding pass and went through to the transit area. Vienna had been specially chosen -- it was an airport where incoming and outgoing transit passengers mingled. Omshei was waiting for me. I gave my companion my used ticket and the boarding pass, along with my passport. From Omshei I collected a boarding card for the Iran Air flight. He also gave me Iranian travel papers identifying me as William Grace, which would see me safely through immigration in Tehran. We couldn't risk any officials tipping off the radicals that an Israeli -- even under Canadian guise -- had arrived in Tehran. On the other hand, it had been easy enough for Omshei to obtain a boarding pass for me -- after all, Iran Air was the government airline. We had put a complete smokescreen over the movements of Ari Ben-Menashe, alias William Grace. Omshei was delighted that I was on the way to Tehran. He and the Supreme Council felt that it would not be long now before they had their weapons, as long, he said, as a minor obstacle could be overcome. He didn't tell me what it was. As we approached Tehran, all the women passengers, who were on the left side of the 707, started wiping off their lipstick and bringing out their body-shrouding chadors. Some headed toward the toilet clutching dark stockings. Goodbye Western decadence for the time being. My travel documents weren't necessary. Waiting on the tarmac when the plane landed was a Ministry of Defense car. It took us straight out, bypassing customs and immigration. I was driven to the former Hilton Hotel where a suite had been reserved for me. I had an early night. I didn't want to risk walking around the streets of Tehran. Accompanied by Kashani and Omshei, I was driven the following morning to the Office for Purchase of Military Equipment in the Ministry of Defense building. Eight men sat around a conference table. The air was thick with smoke. I made my presentation, outlining the equipment on offer. "It's far too much money," snapped one of the officials. This was obviously the "minor problem" Omshei had warned me about. "But we're taking an enormous risk," I protested. "The problems for Israel are immense, as I'm sure you all understand." "The charges are outrageous." However, the officials agreed to present the Israeli bill to the Supreme Council. They also asked about the logistics of getting the equipment to Tehran. I suggested that they get over their first hurdle and obtain the Supreme Council's ratification of the deal. I was asked to wait another couple of days. On the way back to the hotel, Omshei said he would pick me up at 5:00 P.M. for dinner, but at about 3:30 he called and said a very important issue had arisen. The commander of the air force wanted to see me right away. We met in the hotel restaurant. "Iran has a particular problem with the Iraqis," said the commander. "On the outskirts of Baghdad they have installed a nuclear reactor. It's worrying us." I knew all about the reactor, referred to as Tammuz 17. For some months in 1979, when relations with Iran were on hold, I'd worked on the Signals Intelligence exchange desk of the External Relations Department. Part of my job had been to review and disseminate KH-11 satellite intelligence about Tammuz 17 that came from the U.S. as a result of the Camp David agreement. The reactor had been given to Iraq by the French to start bomb-grade metal enrichment, and, according to Israeli intelligence, the Iraqis were well on the way to setting it up for military purposes. "We've tried to hit it twice -- once in September and then again a week ago -- and we've failed," the commander told me. "What do you want from Israel?" "Intelligence -- technical information about that reactor. We know you've been collecting data about it. We're well aware of Mossad's activities in France to try to stop the building of this reactor because you're obviously as worried about it as we are. We need all you can give us." I started taking notes. The commander bit into his food. "We believe that sometime by the end of this year, around November or December, it's going to be activated, and any bombing of the site after that will be a nuclear disaster. It must be taken out before the end of this year." He gave me the name of an official at the Iranian Embassy in Paris to whom information could be passed. "Remember," said the commander, "that by helping us, you will also be helping Israel, the Middle East, and the rest of the world. If Iraq gets the nuclear bomb, God help us all." He didn't have to emphasize his concerns to me. We knew that Saddam Hussein was desperate for Middle East supremacy, and he was already stockpiling deadly chemicals and working furiously on his own nuclear bomb. Early the next morning, Omshei and Kashani came for breakfast and told me that in the afternoon we would be meeting the chief of the air force again. Omshei suggested that in the meantime we take a ride around Tehran. He had an old grey Citroen. We drove through the teeming streets, where shrouded women hurried by with shopping baskets, to the northern suburb of Shemran, where we stopped for the delicious ice cream I remembered fondly from my childhood. I've tasted ice cream all around the world, and the Iranian product seemed to me second to none. As we drove further north, the car's radiator boiled over. Omshei was petrified. Here he was with a broken-down car at the side of the road with an undercover Israeli intelligence official whose presence, if discovered, would have outraged the masses, and he was responsible for my safety. He loved his car, and he was worried about me. He didn't want to leave it, or me, alone. Trucks rumbled by as Omshei paced up and down, considering what for him was apparently a maddening situation. "All we need is a carload of radicals to pull up and start asking questions and we're both in trouble," he repeated again and again during the next 15 minutes. Finally I persuaded him to accompany me on foot to a shop that had a telephone. He called the Defense Ministry. Two hours later, with Omshei now in a state of absolute panic, a tow truck arrived. We then took a taxi to the hotel. I was left in no doubt that the Iranians in power were extremely concerned about my safety -- and that of their cars. During the afternoon meeting with the air force commander, he asked for air and satellite photos of the Iraqi reactor building and neighboring structures. The next morning, I was told, I would be seeing Ayatollah Hashemi, as well as the new defense minister and Hojjat El-Islam Karrubi -- the man who had attended the top-secret meeting with George Bush in Paris four months earlier. The three men were all smiles when I bade them good morning in a small room in the Parliament building. It was all systems go, they announced. The Supreme Council had given their assent to pay Israel the fortune being asked for the military equipment. "How would you like the payments made?" asked Karrubi. "Please put your one billion dollars in a numbered account in Austria." "Just like that?" asked the defense minister. "Can we trust you?" "You can trust us. But it must be cash. Letters of credit are troublesome." "We'd prefer to pay you cash on delivery." I smiled and shook my head. "We can't deliver until we get the money," I explained. "We have to buy the materiel from the industries." The defense minister laughed and clapped his hands together in mock applause. "You Israelis have an answer for everything," he said. But he promised that in four days Omshei would call me in Israel and give me the account numbers and the withdrawal codes for the money. "You understand that we have no other choice but to pay this high price," said Karrubi. "But I hope you will look into the air force request concerning the reactor." It was agreed that included in their $1 billion would be insurance, war risk coverage, and transportation costs. Now came the question of logistics. I proposed that Israel should charter cargo aircraft from an Argentinean company that would fly to Tel Aviv. These would then be loaded with the weaponry and equipment and flown to Tehran, but only after the pilots had given a flight plan to the Tel Aviv tower that would indicate they were flying to Portugal. Over Cyprus they would change the flight plan and give the Cyprus tower a new routing -- to Tehran. The secrecy of the missions would be so high that even Israel's own flight controllers could not know the destination of the cargo planes. I returned to Israel, using the same trick at the Vienna airport as before, only this time in reverse. In the transit lounge, I was met by a Mossad man who gave me back my passport. I handed it in to immigration and walked out into the main terminal, where I checked in for a flight to Tel Aviv. The money from the Iranians was paid almost immediately. It was placed in five different numbered accounts, each holding $200 million, in the Girozentrale Bank in Vienna. Military Intelligence Director Sagi was delighted that the deal had been completed. He instructed the deputy director general of the Ministry of Defense to start getting the equipment together. It was decided that all the materiel would be put in a warehouse in a military hangar at Ben-Gurion International Airport. The logistics people at IDF/MI arranged for the charter flights and for insurance with Lloyd's of London. They would pay high insurance rates for agricultural and "other" equipment flying from Portugal to Tehran. The coverage was 110 percent and applied only from the time the aircraft were over Cyprus to when they landed in Tehran. This hid the contents and the takeoff point. *** While the mechanics of the airlifts were being sorted out, Sagi, deciding to act on the Iranian request for information on the Iraqi reactor, ordered a photo reconnaissance flight. It was a dangerous proposition. If anything went wrong, Israel risked detection and could be accused of taking sides with the Iranians. Four days later we were studying the aerial photos. They were excellent, clearly identifying the location and the buildings. Copies were made for the Iranians and sent to the Israeli military attache in Paris. He, in turn, handed them over to STEN -- our code name for Iranian Military Intelligence -- through Simon Gabbay, the Israeli contact with the Iranians in Paris. But a question arose. Did we really want to risk leaving the attack on the reactor to the Iranians? They'd already tried to destroy it and failed. Yet it would be in Israel's interests for the complex to be destroyed. There was one simple answer, and it came straight from Prime Minister Begin's office: We would do the job ourselves. Israel Aircraft Industries set to work building a number of piercing bombs, with a sharp nose that could tear through a building's exterior a fraction of a second before exploding. It would also be a "smart" bomb, designed to lock onto a homing device inside the reactor. Mossad was in charge of planting this device, at first a seemingly impossible task, but money opened many doors. For the right kind of fee, some people, including French technicians working in the nuclear reactor in Iraq, would be more than happy to plant a homing device on Israel's behalf. And when you are a trusted employee, it's not so difficult to bypass security. There was one loose end to tie up. Israeli jets would need landing rights in Iran should they be crippled in a dogfight or start to run low on fuel. To obtain this kind of permission meant further delicate negotiations with the Iranians. With the help of Omshei, Kashani, and the commander of the Iranian Air Force, a meeting was arranged in mid-March 1981 between President Abol Hassan Bani-Sadr of Iran, who was also commander-in-chief of the Iranian forces, and Professor Moshe Arens, Israel's ambassador to the United States and a close confidant of Prime Minister Begin. The meeting took place in southern France. Arens flew in on Pan Am direct from Kennedy Airport to Nice. Bani-Sadr flew by private plane from Tehran to Paris and down to the south. The two men met for six hours in their hotel, and the date for the attack on the reactor was fixed: June 7. The air force base designated for landing rights was just south of Tabriz in northern Iran. The pilot chosen by the Israeli Air Force to lead the strike team was Col. Yoram Eitan, son of Lt. Gen. Rafael Eitan, chief of the general staff of the Israeli Defense Forces (no relation to Rafi Eitan in intelligence). Israel built a dummy reactor in the Negev Desert to practice the strike. On the morning of May 4, a Sunday, one of the rehearsing planes came down, killing the pilot instantly. The news was broken to Gen. Eitan. He'd lost his son. The lead pilot chosen in his place was Yair Shamir, also a colonel in the air force and the son of the man who was to become prime minister, Yitzhak Shamir. Three days before the planned raid, the Mossad network in Baghdad informed headquarters that the homing device had been put in place. At 5:30 P.M. on June 7, 1981, six F-15 jets carrying the bombs and eight F-16 escorts took off from Ramat David Airfield and headed east. Six bombs were dropped. Two failed to explode, but that didn't matter -- only one direct hit was necessary. The reactor was destroyed. There were no signs of enemy aircraft, no dogfights. It was not necessary to land in Iran. On the return flight the jubilant pilots were met over Jordan by refueling aircraft, but refueling was also not necessary. The operation had been perfect in every respect. Israeli intelligence had recommended to the prime minister and the government not to admit publicly that Israel was responsible for the attack, in order to give Saddam Hussein an out. Without such a public admission, he would not have been forced to commit himself publicly to retaliation. But Menachem Begin, who had scheduled early elections for June 30, made the announcement because he believed it would stand him in good stead with the Israeli public. The Iranians were, of course, ecstatic. The commander of the Iranian Air Force was connected to Begin through a Paris operator and personally thanked him. For diplomatic purposes, President Bani-Sadr issued a loosely worded condemnation saying Israel had violated the sovereignty of another nation. He kept the lid on his private jubilation. *** Meanwhile, the weapons flights from Ben-Gurion Airport to Tehran, which had started in early March 1981, were going well, even though at the start we had come up against an enormous logistical problem -- how to transport the bulky shells. Finally it was decided to ship them by freighter directly from the Port of Ashdod in Israel to Bandar Abbas in southern Iran. The rest of the equipment went by air. Between March and August some 40 Argentinean-registered cargo flights left Tel Aviv. At the end of June we heard from the KGB. The Soviet Union's security and intelligence service, through its representative in Israel, presented a formal letter of inquiry to the chief of staff of the director of Military Intelligence, originating from the Directorate of Foreign Relations of the KGB. The letter demanded explanations from Israel about flights originating in Tel Aviv and flying close to the Turkish-Soviet border and down to Tehran. Sagi's chief of staff handed the letter to me, and I presented it to the Joint IDF/MI-Mossad Committee for Israel-Iran Relations. I believed that an explanation should be given to the Soviets. However, Israeli arrogance came into play. The prevailing opinion, without consulting the Prime Minister's Office, was to answer the letter by stating that the government of Israel does not discuss its foreign and security policies. The Soviets were basically told to get lost. It was an abrupt, stupid answer. Signed by the chief of External Relations of IDF/MI, it was handed to the Soviet representative in Israel in the first week of July. On July 18 the Soviet reply came back. One of the cargo planes was downed, killing the three Argentinean crew members. F-4 parts were scattered all along the Armenian-Turkish border. So the Soviets found out what was on the planes. The Soviets took great pride in announcing to the world that the plane had been carrying American weapons systems to Iran. Israel denied all knowledge of this. The flights continued, but this time further below the border, after Robert Gates had made sure there would be no Turkish objections. By mid-August 1981, this stage of the shiploads and flights was completed.
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