McFarlane drove to Bethesda Naval Hospital to present Kimche’s views to Reagan, who was recovering from a colon operation. The president had one question: Could Kimche ensure that Israel would keep the deal secret? A leak could harm U.S. relations with more moderate Arab states already fearful of the growing radicalism of Tehran. Kimche claims that McFarlane reassured Reagan that Israel would “batten down the hatches.” The deal was on. Kimche flew back to Israel. Two weeks later Kimche was back in Washington. Over dinner, he laid out his game plan to McFarlane. Kimche was to recall the conversation went like this:
“Do you want the good or bad news first?” Kimche asked McFarlane.
“The good.”
“We’ll ship the arms for you, using the same routes we used before.”
McFarlane said “no problem.”
Kimche’s method would ensure that the United States had no direct contact with Iran, and so the administration’s bellicose attitude about being tough on terrorism would not be compromised: the U.S. arms embargo on Iran would be intact and the hostages, when freed, would not have been directly exchanged for weapons.
“And the bad news?” McFarlane prompted.
Kimche said his own well-placed contacts in Iran were uncertain the mullahs could actually manage to procure the release of the Beirut hostages.
“The radicals there are getting beyond Tehran’s control,” he told his host.
If McFarlane was disappointed, he did not show it. The next day, Secretary of State George Shultz told Reagan, back in the Oval Office, the risks were too high. Supposing the Iranians took the arms and then revealed the deal to embarrass “the Great Satan,” the mullahs called the United States? Wouldn’t that draw Iraq further into the Soviet camp? And what about the hostages? They could be even worse off. All morning the arguments continued. By lunchtime Reagan was visibly tired. The decision, when it came, was sudden. The president agreed to support the proposition that the United States would replace all arms Israel sold to Iran. Once more Kimche returned home with a green light. Nevertheless, Shamir insisted that all possible steps should also be taken so that he “could deny any connection with the matter should there be a problem.”
To ensure this, Kimche assembled a colorful cast of characters to initiate the operation. There was Adnan Khashoggi, the Saudi petrobillionaire, with a habit of eating caviar by the pound and an eye for the current cover girls; Manacher Thorbanifer, a former agent in the shah’s notorious SAVAK secret service who still behaved like a spy, calling meetings for the middle of the night. There was the equally mysterious Yakov Nimrodi, who had run agents for Aman and had once been Israel’s military attaché in Iran during the shah’s regime. He was invariably accompanied by Al Schwimmer, the closemouthed founder of Israel Aircraft Industries.
Khashoggi brokered a deal that was to be a precursor for all that followed. He would head a consortium that would indemnify the United States if Iran failed to live up to its obligations, and would similarly protect Iran if the arms were not acceptable as specified. For these guarantees the consortium would receive a 10 percent fee from the purchase of all the arms with cash provided by the United States. In return it would also act as a buffer to ensure that plausible deniability would remain intact for both the Iranian and U.S. governments if anything went wrong. Everyone understood that the consortium would essentially be working outside any political control and would first and foremost be driven by the profit motive.
In late August 1985, the first planeload of arms landed in Tehran from Israel. On September 14, a U.S. hostage, the Reverend Benjamin Weir, was freed in Beirut. As the pace quickened, still more raffish players joined the consortium, including Miles Copeland, a former CIA officer who, on the eve of the shah falling from power in what was soon to be renamed the Islamic Republic of Iran, had sent CIA agents into Tehran souks distributing hundred-dollar bills to anyone who dared shout “Long live the shah!” Other shadowy figures also became involved, such as a former Special Air Services officer who ran a company in London that had once provided nonspecific services to Mossad. Meanwhile, the policymakers in Israel and Washington looked the other way. All that mattered was that the operation had taken off under the noses of an unsuspecting world—at least for the moment.
In all, Iran would receive 128 U.S. tanks; two hundred thousand Katysha rockets captured in south Lebanon; ten thousand tons of artillery shells of all calibers; three thousand air-to-air missiles; four thousand rifles; and close to fifty million rounds of ammunition.
