Part I - Dollar Machine

excerpted from the book

Profits of War

Inside the Secret U.S.-Israeli Arms Network

by Ari Ben-Menashe

Sheridan Square Press, 1992, hardcover


As a result of the establishment of diplomatic relations in t e late 1960s between Iran and Israel, the Iranians had a full embassy in Ramat Gan with a SAVAK representative, a military attaché, a commercial attaché, a consul, and an ambassador. But it wasn't officially designated as an embassy and it did not have a sign on the door or a flagpole. Officially, the Iranians had an interests section in the Swiss Embassy in Tel Aviv, but it didn't really exist, and callers to the Swiss Embassy who asked for it would be referred to the unofficial Iranian Embassy in Ramat Gan.

Israel had the same unofficial status in Tehran. The building on Kakh Avenue had no sign oh the door, but everyone knew what it was. The reason for this elaborate charade was the Shah's concern that his relationship with Arab nations would be disrupted. They were fully aware of the unofficial arrangement, but this ruse allowed the Arabs to turn a blind eye.

The intellectuals and the middle class in Teheran were fed up. There was extreme corruption in higher circles, prices were skyrocketing, and food production in Iran, which had been the bread basket of the Middle East, had come to a halt as a result of the Shah's White Revolution, breaking up the feudal system. He had distributed land to the peasants to keep them happy, but he had destroyed their life-support systems. In times past, the feudal lords had provided villagers with seeds, a marketing system, transportation, water, and so on, but after these lords had been dispossessed and the land divided up, the peasants' infrastructure was destroyed. Who was to take care of their marketing?

The Shah wasn't interested-his attention was on the military, not food production. As a result, food production in Iran came almost to a standstill, and by 1978 most supplies were being imported. The peasants managed because they found ways of providing for themselves. The rich were all right, too, because they could afford to buy the high-priced imported foodstuffs. The people who suffered were those caught in the middle, the intellectuals and the middle class.

They were battling extremely high food prices, and on top of that the infrastructure of the city of Tehran was not capable of handling the traffic, which came to a standstill. Even my superiors laughed at me when I wrote that the traffic might be one of the reasons the Shah would be overthrown. But it was true. It was quite clear that people were fed up with taking hours to get to work and back.

The middle classes spearheaded the revolution, but the Shi'lte fundamentalists quickly jumped on the bandwagon.

Despite the volatile situation in Iran, my controllers in the External Relations Department decided they could use me in an entirely different part of the world-Central and South America. Apart from Iran, Israel's main military exports were going to those two regions.

The leftwing movement [in Nicaragua] had not forgotten Somoza's father's act of treachery in 1934 when, as head of the National Guard, he had invited Augusto Sandino, the revolutionary patriot after whom the movement is named, to a banquet and then murdered him. But now, with 500,000 homeless, a death toll of more than 30,000 from the political fighting between the Somoza government and the Sandinistas, and an economy that was in ruins, everyone knew it would not be long before Somoza was overthrown.

FSLN representative Marie Fernanda

"I don't understand you people. You Israelis and the Jews who have suffered so much are now helping this Nazi Somoza. You don't care about what he has done to the Nicaraguan people."

There wasn't much I could say. It was true we were supplying Somoza.

She had not finished: "It's very bad that your country that was created on a socialist-egalitarian basis has turned into a fascist state which helps the Nazi dictators of South America."

... My assignment was to find out what the Sandinista policies might be when they came to power and try to establish lines of communications.

FSLN commander

"We identify with the Jewish plight because we are facing the same type of Hitler in our country. We have faced him for many years. It's too bad that your government is aiding him and selling him arms."

Israel was selling arms to Somoza in a big way: artillery, machine guns, mortars, and soon it would be helicopters. I could have given him the usual spiel that Israel wasn't to blame, that independent arms brokers were the real culprits. That was the accepted Israeli line, but I suspected that my hosts knew better.

FSLN commander

The Sandinistas are a very democratic movement, from the social democrats down to supporters of Soviet communism," the commander continued as we sipped sweet tea. "When we take over, there will be democratic elections. We are spearheading the revolution for the people of Nicaragua. We are not against a free market, but we don't believe the peasants should be starved out."

The commander was drawing a picture of a socialist country with freedom of the press, freedom of speech, free education, and good health and welfare system.

At 12:30 P.M. on January 16, 1979, four helicopters had lifted off from the grounds of Tehran's Niavaran Palace, their rotors sweeping aside the snow. There was nothing to indicate to a would-be assassin which aircraft carried His Imperial Majesty Mohammad Reza Pahlavi Aryamehr, Shahanshah of Iran, King of Kings, Shadow of the Almighty, Center of the Universe.

The Shah's departure from Iran would bring about a tumultuous upheaval in the Middle East. It would also lead to a new threat to the existence of Israel, and ultimately bring my country into fierce conflict with the United States. As I studied the intelligence reports of the Shah's last minutes in the country he had ruled for nearly 40 years, I could be sure of one thing: When the Shah and his Empress stepped from their helicopter at Mehrabad Airport and two officers of his Royal Guard fell to their knees and tried to kiss his feet, it was the end. He would never return.

Israel decided to act fast to protect its interests. On board one the last flights that E A made into Tehran before the airport was closed were 48 Israeli aircrews, all wearing civilian clothes.

A few days later, with the full cooperation of the commander of the Iranian Air Force-who was later executed-48 F-14 jets were flown out of Iran to an air force base in northern Sinai. (They were later sold by Israel to the Taiwanese.) As proof of the Carter administration's blindness, the US. had delivered these planes to the Shah in September 1978, even before the U.S. Air Force was supplied with its own. The Shah, whose regime was crumbling around him, had paid through the nose for them. The U.S. was relieved that the F- 14s had not fallen into the "wrong hands." The Israelis had corrected the situation.

On February 1, 1979, Ayatollah Ruhollah Khomeini arrived in Iran from Paris... There was a complete breakdown in relations between Israel and Iran, although the American Embassy in Tehran continued operating... Khomeini won a landslide victory in a national referendum, and on April 1, he declared Iran an Islamic republic.

As early as September 1979, Israeli intelligence reports from Baghdad had warned that Iraq was preparing for a full-scale invasion of southern Iran. Baghdad's aim was to annex the oil-rich Iranian province of Khuzistan, which runs along the Persian Gulf to Iraq. And Baghdad had reason to be confident - it saw the Iranian military in a state of complete disintegration. Most of the generals and admirals had either escaped Iran or been executed. For the time being, all the American-trained pilots of the Iranian Air Force were in jail-every single one of them. The charge: They had not been diligent and had allowed the F-14 jets, commandeered by Israeli pilots, to fly away from the Iranian base.

... When reports of Iraqi preparations to invade Iran started arriving in Tel Aviv, we became extremely concerned. We believed the Iranian military could not withstand an Iraqi attack, and the idea of a Greater Iraq with the largest known oil reserves in the world-bigger than those of the Soviet Union and of Saudi Arabia-sent shivers through both the Israeli intelligence community and the political leadership.

Prime Minister Begin personally relayed our intelligence reports to President Carter, though he had little faith it would do much good. Begin still loathed Carter for the peace agreement forced upon him at Camp David. As Begin saw it, the agreement took Sinai away from Israel, did not create a comprehensive peace, and left the Palestinian issue hanging on Israel's back. He had signed it only because of Carter's pressure and because Defense Minister Ezer Weizman and Foreign Minister Moshe Dayan, both of whom wanted to ingratiate themselves with the Americans, had urged him to. In addition, while Begin accepted that the downfall of the Shah had been inevitable, he considered the disorderly fall of Iran into the hands of Shi'ite extremists to be a direct result of Carter's ineptitude. Begin had always been convinced that a regime friendly to the West could have been established instead.

As Israeli fears of an imminent Iraqi attack on Iran grew, Begin made it clear to Carter that the U.S. urgently needed to throw its support behind the government of Mehdi Bazargan, who was up against Iran's extremist Shi'ite groups. Bazargan was willing to negotiate with the Americans and was prepared to accept help in reorganizing his military. But Carter and his administration, in particular National Security Adviser Zbigniew Brzezinski, dismissed outright Begin's suggestions that the U.S. support Bazargan. While we were stressing the urgency of the situation, the wrong-headed US. view, from the administration down to the CIA and DIA analysts, was that Iran should be allowed to slowly disintegrate from within until a real leader emerged, supported by the Americans.

On November 4, 1979, the axe fell. The U.S. had not come to [Iranian Prime Minister] Bazargan's aid, and the extremist faction in Iran prevailed. ln a desperate attempt to draw attention to themselves, the extremists unleashed a number of radical "students" who took over the U.S. Embassy and held the staff hostage. In exchange for the release of the hostages, they demanded the immediate return of the Shah to Iran to face trial. The following day, Bazargan resigned.

Instead of trying to play down the issue, Carter personally took responsibility for the negotiations over the captives, leaving the radicals with no question as to the hostages' high value as bargaining chips. It was his greatest mistake. By making the hostages the biggest national and international subject on his agenda, Carter had himself become a captive.

He immediately announced a full embargo on trade with Iran. He froze all money belonging to the Iranian government in US. banks, and he made a very public issue of the crisis. His desperate actions humiliated his own country, fueled the contempt the Iranians already felt for the U.S., and gave them more ammunition against the Carter administration.

Carter's inept handling of the situation enraged some intelligence experts outside the administration. In December 1979, a well-known retired CIA officer, Miles Copeland, gathered a group of CIA-connected officers and their associates who had been purged from the agency by Adm. Turner and were very unhappy with the Carter administration and the CIA leadership. Copeland had helped Kermit Roosevelt and the Iranian military restore the Shah of Iran to power in 1953, after the Shah had been overthrown by Mohammed Mossadegh during the turmoil that followed the nationalization of Iranian oil. After mobilizing the Iranian military against Mossadegh, CIA officers had flown to Iran with bags full of $100 bills. They walked through the bazaar handing out money to whoever shouted: "Long live the Shah." A good friend of the late Egyptian President Gamal Abdel Nasser, Copeland was known for his anti-Israel stand. Israeli intelligence believed him to be the man responsible for the U.S. pressure put on Israel, Britain, and France in 1956 to pull out of the Suez Canal area. He was also thought to have been the man behind the push for the Israelis to withdraw from the Sinai. While the United States was pressuring the Israelis over the Sinai, the Soviet Union invaded Hungary without U.S. reaction. Copeland was criticized for this. Nevertheless, he was still highly regarded for his analytical abilities.

Besides the purged group gathered around Copeland, William Casey, a former intelligence officer and close associate of Republican presidential candidate Ronald Reagan, came into the fold. The group also included Robert McFarlane, a former Marine colonel who had served in Vietnam, and a number of others with CIA connections. They decided that the U.S. administration under Carter was incapable of dealing with the Iran issue. They also saw eye to eye with Israel on the strategic situation in Iran. The Copeland group and the Israeli government both wanted to make sure the Iranians were not defeated in the Khuzistan if and when Iraq attacked, and to make sure that President Carter's blunders were not repeated.

... The Israelis and the Copeland group came up with a two-pronged plan to use quiet diplomacy with the Iranians and to draw up a scheme for military action against Iran that would not jeopardize the lives of the hostages, who, following the release of 14, now numbered 52.

In March [1980], the first meeting between the Iranian Supreme Council's Mehdi Karrubi and Reagan associate William Casey had taken place in Madrid's Ritz Hotel.

... [Robert] McFarlane reported that Casey had met separately with [Israeli] opposition leader Shimon Peres to discuss his willingness to provide military equipment to Iran.

... That first Madrid meeting, as reported by Robert McFarlane to Rafi Eitan, was arranged to explore future relations between the United States and Iran and to discuss supplying arms to Iran against the imminent Iraqi threat. Also discussed was the release of all Iranian monies frozen in U.S. banks and the influence the Iranian government would exert over the radical students to release the hostages. Iran, it was made clear, would make moves to normalize its relations with the United States. Karrubi emphasized how impossible it was to deal with the Carter administration and indicated that he and the Supreme Council were more than happy to deal quietly with the Republicans.

Khosro Fakhrieh, a close aide to Iran Supreme Council member Ayatollah Hashemi

"It's quite clear to us, as it must be to you, that the embarrassment Iran has caused him will cost Carter the election later this year. With that in mind, we're willing to make a secret deal with the Republicans - and the CIA."

I asked him what he had in mind, knowing that what he told me would be the official Iranian line.

"America gets back their people, our money is freed from U.S. banks, and we also get our arms from Israel, with the blessing of your U.S. masters.

Israeli intelligence received reports on the second Madrid meeting from Kashani, McFarlane, and Brian. At this meeting, as reported to me by Kashani, it was made clear to the Americans that in return for a promise that they would release frozen Iranian monies after the Republicans took office in January 1981, and that Israel would not be castigated by the Republicans or Congress for selling arms to Iran, the hostages would be released right away.

"You want to know something, An?" said Kashani. "These Americans don't want their people released yet. They've now come up with another proposal that a very high official of the future U.S. administration should meet with Hojjat El-Islam Karubi and work out the details of the deal with Iran. It's obvious these guys are procrastinating."

The reason was obvious, too. Even though steps could be taken immediately to free the hostages, Carter, as president, would get all the credit. Indeed, we also learned that the Hashemi brothers, on behalf of the Carter administration, had made contact with some Iranian officials at about the same time. Since they could not promise major arms sales through the Israelis, though, they got nowhere..

"Why don't they just come straight out and say they don't want their people released before January?" Kashani wondered.

So we knew as early as May 1980 that the Iranians were prepared to talk seriously about freeing the hostages. If they could receive U.S.-made equipment through Israel, the captives would be freed. Although they didn't want to deal directly with Carter, they would be happy to use the CIA as an intermediary. And yet Kashani and I had no doubt that the Republicans and their unofficial CIA friends were going to keep Carter in the dark and continue their negotiations at a pace that suited them.

About two weeks after Reagan and Bush officially won the Republican nominations for president and vice president in mid-July 1980, the third Madrid meeting took place. Parallel meetings between the Iranians and the Hashemis, representing the Carter administration, also occurred. The same issues were discussed, along with future U.S.-Iranian relations under a Reagan-Bush administration. If it was not clear beforehand, the cards were now on the table: The Americans would not commit themselves to any deal regarding the hostages before January 20, 1981, when the new president would be sworn in. They said they could not let Israel sell arms to the Iranians, despite the pleas from Tehran, until the Republicans were in power.

"Fine. These guys want to be popular with the American people," Kashani told me in a phone call from Europe. "Why not get the prisoners released after the November elections?"

"How do I know?" I said. "Ask your American friends." But the answer was obvious. The Republicans were going to wait until they could take all the credit.

The delay until after January 20, 1981, in getting U.S.-approved military aid to Iran worried a great many people at the highest levels of the Israeli government. If Iran was going to defend itself against Iraq's invasion, it needed weapons immediately. Saddam Hussein loomed as an expansionist presence in the Arab world the single most dangerous threat to Israel's existence. From Israel's point of view, he had to be stopped.

... The rationale for helping the Khomeini government was straightforward. If the Iranians fought the Iraqis, their soldiers would be killed instead of ours. Moreover, the war not only diverted Arab attention away from Israel, but also drained the Arab countries of money. From Likud's point of view, since Camp David, Israel had lost its edge as a strategic asset to the U.S. in the Middle East. The "moderate" Arab countries-Egypt, Saudi Arabia, Jordan-were still anti-Israel, but they were accepted by the United States. Israel was becoming increasingly isolated. So as we now saw it, the rise of Khomeini was one of the best things that had happened to us in years. He was radical, anti-American, and anti-Arab. He was doing our job, and we believed it was in our national security interest to support him.

... In December 1980, I received an important assignment. Sa] called me into his office. I guessed that the urgent summons would have something to do with Israel's covert dealings with Iran. But his first words surprised me: "An, I'm giving you the enviable task of picking up $52 million."

Before I could say anything, he added: "What I'm going to ask of you is not part of the committee work-it's part of a deal we've arranged with the Americans over the release of the hostages. In simple terms, $52 million has to be delivered to the Iranians before the new president's inauguration on January 20."

"That's fine," I said. 'And which bank do I collect it from?"

Sagi paused and paced up and down the office for a while. "It's actually not that simple. You're going to have to take a trip to Guatemala. There, the Saudi ambassador will hand over to you $56 million...

"$52 million."

"No, $56 million. An extra payment has to be made."

The extra $4 million, I was instructed, was to be deposited in the Valley National Bank of Arizona at its main branch in Phoenix on Camelback Road. I was given a bank account number. The name of the account holder was Earl Brian. The remainder of the money, $52 million, was to be handed over to Kashani in Europe.

I couldn't help wondering: Why Guatemala? ... Why the Saudis? ... Why Earl Brian?

The director looked hard at me. "I don't have to spell out for you how most of the payment has been worked out," he answered. "You were present when the Iranians made it clear that their radical leadership had to be paid $52 million. Ayatollah Khomeini is not totally in control, and they don't want a political confrontation in Iran. The Americans cannot arrange the money from the U.S. budget because the Americans we're dealing with are not in the government-yet. So they've asked their Saudi friends to help them."

"Is this Saudi money?"

"No, it's CIA-connected. But the Saudis helped arrange for the banking of it."

Pieces of the jigsaw began to fall into place. I, like many others, was aware of a band of former Israeli intelligence officers who were running a drug- and arms-smuggling operation in Central America, backed by the CIA.

"Is this drug profit money from Central America?"

Don't ask too many questions, my friend."

On January 20, 1981, the world turned on its TV sets to watch the inauguration of Ronald Reagan and George Bush as president and vice president of the United States. Just as Reagan was being sworn in, there was a flash announcement from Associated Press. I was one of the few who felt no emotion or surprise at the news that the hostages in Tehran had been released.

Between 1975 and 1977, [Ariel] Sharon was a private citizen who was trying to build a fortune dealing in arms in Central America.

... Sharon's network had been able to provide military equipment from Israel to various Central American countries, including El Salvador, Guatemala, Panama, Costa Rica, and even Mexico. This was never official Israeli government policy, and it was owned upon by the cabinet itself, but Sharon was too wild a goose for anybody to handle. So Sharon's private network bought their weapons from Israeli government factories and got their export licenses from the Israeli government.

... It was in 1981 that they started supplying a secret army in Central America, the contras, who were trying to destabilize and eventually bring about the downfall of the Sandinista government of Nicaragua, which had come to power in 1979. Sharon, with all his power, could not force the prime minister or the leaders of the Israeli intelligence community to pay for weapons from the slush fund that had grown out of the Iran arms sales. So, with the backing of Gates and the CIA, some members of the group created their own fund. They did this by transporting cocaine from South America to the United States via Central America. A major player was Manuel Noriega, who had known George Bush since he had been the CIA chief in the mid-1970s. Hundreds of tons of cocaine poured into the United States, and another handy slush fund was created.

To avoid placing all the golden eggs in one basket, 200 bank accounts were opened in 27 reputable banks around the world, but at any given time only about a quarter of these accounts were active. Accountants in Vienna, London, Sydney, New York, and Tel Aviv had the power to shift these monies from account to account once every few months, but they had no power to draw money. This was a safeguard to ensure that funds did not go astray and end up in an account that nobody else knew about-it was insurance against the individual accountants, who were changed within their firm from time to time. Anyone on the track of the money would have trouble keeping up.

By 1983 the slush fund was running like a well-oiled machine. Once a year the 200 numbered accounts in Europe would be changed, and the names of the paper companies would be altered. The only name that was never changed was that of the holding group, Ora.

The unwritten rule we operated under was that Israel would not go directly to the arms manufacturers or the weapons industries. Whenever we deemed it necessary to buy American equipment from the United States, either from the manufacturers or from stocks held by the U.S. military, we would approach the designated CIA people. They in turn would purchase the arms and place them at the ready for our collection in warehouses. These were usually at Marana, a CIA airbase near Tucson, Arizona. The first batch of weapons was flown out of there in October 1981. If, on the other hand, we were buying U.S. materiel from NATO stocks in Europe, the hand-over would be at Liege, Belgium. Israel would fly in chartered cargo planes to pick up the materiel, and then the aircraft would return to Tel Aviv. From there they would either fly directly to Tehran or to a second country before carrying the weapons on to Iran Sometimes a third country would be used. In 1983, for example, to cover our tracks - and as a lesson learned from the downing of one of our planes - aircraft loaded with arms landed in Western Australia, en route to Tehran, with the permission of the Australian Security Intelligence Organization, which knew what was on board.

Other favorite countries used in the smokescreen were Guatemala, Peru, Kenya, Paraguay, and South Africa. If Paraguay was used, the planes flew on to South Africa-the same route normally taken by the CIA when shipping arms to South Africa. So Paraguayan officials who were aware of the South African trade assumed that an aircraft landing in Asunción and filled with weapons was on its way to South Africa, when in fact its final destination was Iran.

Britain was also involved, but Margaret Thatcher's government had a slightly different way of carrying these things out. Unknown to the British people, their government had been supplying military equipment to the South Africans for years. Mossad files are full of incidents of Liberian-registered ships leaving Southampton loaded with artillery shells and electronics for South African fighter aircraft. Prime Minister Thatcher allowed the use of the same channels to supply materiel for Iran.

As far as the world was concerned, Israel-and the Americans-had clean hands, but on the war front, the reality was that the Iranians were blasting the Iraqis with U. S.-made TOWs. Once they got through the first 4,000, another 4,000 were to come from NATO stocks in Europe, followed by a further 4,000 from the US., coming through Guatemala and Australia - 12,000 TOWs in all up to 1987.

While our slush funds grew steadily, unusual overhead costs diminished the profits. True, we were selling weapons to the Iranians with a 50 percent to 400 percent mark-up on the exfactory price, but the actual cost of procuring and delivering them was high, too. There was a huge network of arms brokers to be paid, money to be handed over to those involved in "smokescreen" deals, bribes to be paid to politicians and civil servants, campaign "donations" to be made around the world, and other expenses. The "donations" sometimes cost more than the weapons themselves.

Contributions were even made from the slush fund, albeit indirectly, to U.S. politicians, including Democrats on the IranContra panel. This may be one reason that the full story behind the Iran-contra scandal never materialized. Even though Israel leaked details about some of Oliver North's activities, the Democrats, many of whom were well aware of what was going on, kept quiet about the huge flood of arms that had been running to Iran through Israel. Tel Aviv, not wanting its own arms deals with Tehran to be exposed, had paid them off through various, often convoluted, contributions to the American Israel Public Affairs Committee (AIPAC). I don't know who at AIPAC knew the ultimate source of these contributions, but it was clear someone did.

In Britain our committee passed money in the same fashion to the Jewish Reform Movement, confident that this money would be channeled to the Conservative Party. Because of the friendship with Britain, the Mossad European operations headquarters was moved in 1982 from Paris to London and set up in a building on Bayswater Road.

A further example of the very special friendship that Israel established with Britain came when the Falklands war erupted. Israel froze the sale of weapons to Argentina, despite existing contracts for Kfir aircraft. As a result, the British government, covertly but officially, reimbursed Israel for its losses on the contracts. Of course it was known throughout the intelligence community that Israel was also keeping British politicians happy through the Jewish Reform Movement's Torah Fund.

The third and last main purpose for the slush-fund money was to finance the housing projects in the West Bank and Gaza Strip for Jewish settlers who had been taking over Palestinian land there. Since many members of the U.S. Congress saw these housing projects as a provocation that would impede peace in the Middle East, a lot of US. aid to Israel prohibited the use of the money for building in the West Bank. As part of the coalition, the Labor Party, keen to participate in a peace conference, was also against a government project for West Bank housing.

The answer, as far as Likud was concerned, was to draw on the slush fund. Tens of millions of dollars were used in the West Bank and the Gaza Strip to help build the foundations for new Jewish settlements and to buy the land from the Arabs. Although much land was simply confiscated and more taken through condemnation for government purposes, many Arabs, forbidden by the PLO to sell land to the Jews in the West Bank, nevertheless did so at inflated prices, even though they were putting their lives at risk should they be caught.

What they did was sell to various foreign Jewish front companies that were actually financed by the joint Committee. Many West Bank Arabs became wealthy selling their land, taking the money and emigrating to other countries. As far as Likud was concerned, it was money well spent, because it was encouraging the Arabs to emigrate, while leaving land for the Jews to move onto. Their houses would also be subsidized by the slush fund.

Whenever money was to be disbursed in a big way for the West Bank, the aid of Rabbi Menachem Schneerson, the Lubavicher Rebbe, whose court is in Brooklyn, New York, was enlisted. He gave his blessing, and through his financial institutions, large amounts of money were funneled to Drexel Burnham, the now bankrupt brokerage house where crooked stockbroker Michael Milken built his junk-bond fortune. At times, billions of dollars paid out by the Iranians for arms they were going to receive - along with profits from earlier deals waiting to be disbursed - were held at various interest rates by Drexel on behalf of our front companies after they were funneled through American banks.

From March 1981 to the end of 1987 Iran spent the incredible sum of more than $82 billion on equipment sent from the United States, Israel, Europe, South America (especially Brazil and Argentina), and South Africa. The Iranians gratefully received it all - old tanks, aircraft (including old French Mirages from Argentina), TOWs, electronics, radar systems, small arms, artillery, Hawk air-to-ground missiles, Chinese Silkworm missiles, North Korean Scud missiles, Katusha shells captured in Lebanon by Israel, cannons-hundreds of thousands of tons of weaponry, whether it came straight from the factory or was the remnant of some long-dead war. Vast profits were made by the middlemen. Iran, maintaining an army of approximately 800,000 men, faced a formidable Iraqi military force which was adding to its already well-equipped arsenal from the Soviet Union and France. Iraq was soaking up sophisticated weapons - MiG fighters, SU fighters, and French Mirage 2000s. Like the Iranians, they too were spending a fortune. As arms suppliers, the Western world and the Soviet Union could rub their hands together in glee. As someone has pointed out, if a question had been put to a computer about what needed to be done to: 1) get the Arabs off Israel's back; 2) part the Arabs from their money; 3) keep the Iranians contained-and part them from their money; 4) keep the oil flowing; 5) make sure the world recycled its old military equipment; 6) keep the Soviets happy; and 7) make a lot of arms dealers and defense contractors rich, it could not have come up with a better solution than the Iraq-Iran war.

The frightening story of the Promis program begins in the United States in the late 1960s when communications expert William Hamilton, who had spent time in Vietnam during the war setting up listening posts to monitor the communist forces, was assigned to a research and development unit of the U.S. National Security Agency. Fluent in Vietnamese, Hamilton helped create a computerized Vietnamese-English dictionary for the intelligence agency. While working there, Hamilton also started work on an extremely sophisticated database program that could interface with data banks in other computers. By the early 1970s, he was well on the way with his research and realized he had a keg of dynamite in his hands.

The program he was developing would have the ability to track the movements of vast numbers of people around the world. Dissidents or citizens who needed to be kept under watch would be hard put to move freely again without Big Brother keeping an eye on their activities.

... It would work like this: A nation's spy organization would buy Promis and have it installed in its computers at headquarters. Using a modem, the spy network would then tap into the computers of such services as the telephone company, the water board, other utility commissions, credit card companies, etc. Promis would then search for specific information. For example, if a person suddenly started using more water and more electricity and making more phone calls than usual, it might be suspected he had guests staying with him. Promis would then start searching for the records of his friends and associates, and if it was found that one had stopped using electricity and water, it might be assumed, based on other records stored in Promis, that the missing person was staying with the subject of the investigation. This would be enough to have him watched if, for example, he had been involved in previous conspiracies. Promis would search through its records and produce details of those conspiracies, even though the person might have been operating under a different name in the past-the program was sophisticated enough to find a detail that would reveal his true identity.

This information might also be of interest to Israel, which is where the trap door would come into play. By dialing into the central computer of any foreign intelligence agency using Promis, an Israeli agent with a modem need only type in certain secret code words to gain access. Then he could ask for information on the person and get it all on his computer screen.

According to computer experts I have spoken to in Israel, the trap door is undetectable. Nations receiving Promis might wonder if there was any trickery by Israel, but they would not be able to find anything-especially as it was experts provided by Israel who installed the program.

In 1985 Guatemala started to be used heavily as a drug transit point to the United States from South America. MejIa, the Chief of the Nation, was, in fact, a much bigger drug boss than Noriega. Massive amounts of drugs were shipped into the United States, and part of the revenue went back to Guatemala to help finance the Promis operation. This would all have been impossible without the wink and the nod that the CIA gave.

In Transkei, Degem was of immense help to the white South African regime. Promis was trap-doored because the Israelis were interested in a number of people in South Africa. Promis, in effect, was a killing machine used against black revolutionary groups, including the African National Congress. Almost 12,000 activists were affected by the beginning of 1986-picked up, disappeared, or maimed in "black-on-black" violence. "Kushi kills Kushi" became a well-known term in Israeli intelligence circles with Chief Gatsha Buthelesi's black death squads doing the dirty work.

It was a simple operation: As a result of Maxwell buying Degem, Promis was installed in the Transkei. It pulled in information on dissidents, and death lists were drawn up and handed over to Buthelesi and his group, who went out on the rampage to finish them off.

On November 3, 1986, a small Lebanese paper, Al Shiraa, published an article detailing Oliver North's secret deals with Iran.

... In February 1987, while [Senator John] Tower was investigating a minor part of the sales to Iran, the Joint Israel-Iran Committee, together with Robert Gates, ran the biggest-ever arms supply operation to Iran. The official inquiry was better than any smokescreen we, with all our skills at such things, could have dreamed up.

Under the noses of the American people, 4,000 TOW missiles were flown out of Marana Base in Arizona to Guatemala and were shipped through Australia, where they were temporarily parked in the western part of that country. But there was a great deal more on the move. Apart from the TOWs, radar and electronic materiel, and Hawk surface-to-air missiles from the U.S., this is what was sent to Iran-while Congress and the rest of the world remained ignorant:

* From Israel: 128 U.S. tanks; 200,000 Israeli-made Katusha rockets said to have been "captured" from the PLO in Lebanon; 122mm artillery shells; 105mm artillery shells; 61mm rockets; 51mm rockets; air-to-air missiles; small arms; tens of millions of rounds of ammunition.

* Poland and Bulgaria: 8,000 SAM-7 surface-to-air missiles; 100,000 AK-47s; millions of rounds of ammunition.

* China: Silkworm sea-to-sea missiles; armored cars; amphibious personnel carriers. China helped Iran because the Iraqis weren't happy with Chinese light tanks-which suited Beijing because Saddam Hussein had developed a reputation as an unreliable business partner.

* North Korea and Vietnam: artillery shells; self-propelled rockets.

* Sweden: 105mm artillery barrels.

* Belgium: Air-to-air missiles.

Israel became very good at copying weapons and alleging that they had been captured in Lebanon, while the reality was they had come out of Tel Aviv factories. As for the Silkworm sea-to-sea missiles from China, they were brokered for Israel by Saul Eisenberg, who is not related to the Eisenbergs arrested in the Bermuda sting.

One of the richest men in the world, Eisenberg at present runs his private arms-dealing operation from an office building at 4 Weizman Street, Tel Aviv-the same block on which the CIA "cutout" company, GeoMiliTech, was housed. Eisenberg was able to sell Chinese weapons because he was married to a South Korean woman who had connections with Mao Zedong and Zhou Enlai back in the 1950s. Because of his strong links, all Israel's business relations with China have to be conducted through him. When a member of the Joint Committee asked him to broker weapons for Iran, he readily agreed and even helped arrange for "parking" temporarily in a third country-Australia. Once again, although certain government officials in Western Australia and members of the Australian Security Intelligence Organization knew about the operation, the general public was kept in dark.

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