Profits of War: Inside the Secret U.S.-Israeli Arms Network

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17. "Agricultural Project"

THE FOLLOWING MORNING I flew with one of the bodyguards to Frankfurt and then, leaving him in Germany, flew from there to Paraguay's capital, Asuncion. An official request had been made to the president of Paraguay for a meeting on a "very urgent matter." I took a cab from the Alfredo Stroessner International Airport to the Excelsior Hotel, where a large portrait of the president peered down into the lobby.

President Stroessner had been put in power in 1954 by the CIA to protect Nazi intelligence officers and German scientists with whom the U.S. government had made deals after World War II. At the end of the war, the Office of Strategic Services did not see the Nazis as the enemy; they regarded the Soviet Union under Stalin as the real threat. So they actually recruited Nazi intelligence officers and weapons experts to glean intelligence on the Soviet Union and signed agreements allowing some of these people to live in the United States and others, with changes of identity, to go to South America. President Stroessner, with his German background and connections with the Nazi Party during the war, was an excellent candidate for the CIA to put in power. Indirectly he would be serving the United States.

The link between the Israeli government and Paraguay went back to the days when Golda Meir was foreign minister. She was instrumental in pushing for the exchange of diplomatic relations between Israel and Germany in the late 1950s when it was an extremely delicate subject in Israel. She was also instrumental in opening relations with Paraguay. President Stroessner agreed to open his embassy in Jerusalem when even the U.S. did not recognize the old biblical city as the capital of Israel and preferred instead to keep its embassy in Tel Aviv, where it remains today.

Israel's connection with Paraguay was not exactly a consistent relationship. Mossad agents continued to track Nazi groups through the 1950s and 1960s, resulting in the deaths of at least two Israelis. A truce was called, and Stroessner tried very hard to blot out his Nazi-loving reputation by promising full cooperation with the State of Israel, though he didn't end up doing much to help on the Nazi issue.

Israel, however, did take advantage of Paraguay's willingness to turn a blind eye to arms passing through its airport. Huge numbers of illegal weapons shipments to Israel from various countries were flown to Paraguay in the 1960s, and then on to Tel Aviv. Paraguay also became one of the conduits for smuggling materiel from South Africa for the nuclear reactor at Dimona -- an unlikely route. The connections with Israel were so strong that even today Paraguay Airlines has a 707 flight once a month from Asuncion to Tel Aviv. Each month a different aircraft is used and remains for two weeks in Israel for maintenance by Israel Aircraft Industries. When Prime Minister Begin took over in 1977, relations did not change, but neither were they nurtured. The ambassadors to Paraguay were generally Labor Party people, even under the Begin administration.

It was against this background that I received a message the evening of my arrival in Asuncion in September 1988 to call a local number. It was the home of the Israeli ambassador, who told me that Avi Pazner wanted to speak to me on a secure phone at the embassy. I picked up the tightness in the ambassador's voice.

"Can you tell me who you are?" he asked.

I told him simply that I worked for the Prime Minister's Office.

"Why wasn't I informed you were coming?"

"Sir," I said, giving him the most gentle of hints, "let it go."

But he didn't. "The office of the president of Paraguay has called me asking for details about you and informing me you have a meeting with him. I insist that I be present at the meeting. Otherwise I will alert the foreign minister about it.

"We cannot harm the relations with President Stroessner that we have been working on for many years," he continued. "We cannot allow this relationship to be upset by the Likud."

And all this on the unsecure telephone.

"Sir, if you don't let go, you'll hear from the Prime Minister's Office," I said.

"What are you saying?" he demanded.

"I'm saying that you may not be holding your job for very much longer."

He hung up.

That same evening I went to the embassy to call Israel. The ambassador was not there, fortunately. I wasn't ready for another verbal war. When I got through to Israel, Pazner told me, "We've just received proof that Cardoen's chemical plant in Paraguay is their main facility."

Pazner explained we had just got hold of air photos of the Paraguay plant from "our friends," the Argentineans. It was my task to do everything in my power to persuade Stroessner to shut it down.

Before going to sleep that night, I called Ora and told her I was in Paraguay and that I was okay. It was the first I'd let her know where I was because I didn't want to risk telling anyone in advance where I was going.

The next morning my car was waiting -- a black stretch Mercury, an official embassy vehicle with a flag and diplomatic plates, which I'd requested during my tense conversation with the ambassador the day before. I sat in the back seat. A bodyguard assigned to me sat in the front passenger seat.

I was driven along El Paraguayo Independiente to the Presidential Palace, which overlooks Asuncion Bay. Set on spacious grounds behind a high brick wall, it was, of course, heavily guarded, but the metal gates swung open as we approached. The car followed the drive to the office wing of the building. A uniformed presidential guard opened the door, and I was escorted in by a secretary.

At the end of a high-ceilinged hall illuminated by chandeliers, an enormous portrait of the president gazed at me. The secretary led me down the long hall over a maroon carpet and then up a curved stairway and into an elegantly furnished office.

"The president will see you in his study," I was told.

Within minutes I was standing before the man who had been in power for 34 years. A man in his mid-70s, with thinning white hair which had brown stripes, President Stroessner shook my hand warmly and told me how much he had looked forward to the meeting. It was the first time, he said in good English, he had received anyone dispatched directly by Prime Minister Shamir.

"I didn't even ask about the subject," he said, "but because of the urgency implied, I assumed it was extremely important. I have canceled other appointments to meet you." He would not have bothered, perhaps, had he known what was on my mind.

"Your Excellency," I began, "I have come to see you on the most urgent of matters. Everything you hear from me, you can assume you are hearing from Prime Minister Shamir himself. We need your help."

I told him about Cardoen Industries, giving him the background of what it did and its exports to Iraq and what this could mean to Israel. "They have a plant in Paraguay."

He nodded slowly. "Yes, I know. But they don't produce gas or chemicals. If you can prove otherwise, I will call my friend Gen. Pinochet and ask him why they are producing gas in my country."

"Your Excellency, we are asking you to close down the plant altogether. It will be in the interests of your good country to do that. Quite simply, we cannot let Nazi history repeat itself and see our people gassed."

It was time to dangle the carrot. "The prime minister of Israel has authorized me to offer your country an aid package of $30 million worth of credits for military equipment." We were offering him a fortune in guns for free. Any other requests would be favorably considered, I added.

Without saying another word to me, Stroessner used an intercom to call in one of his aides. He told him, "I would like you to arrange for Mr. Ben-Menashe to go on a tour of the Cardoen Industries plant, along with a military inspection team. Arrange it for tomorrow."

I wanted more than an inspection tour. "Your Excellency," I said, "Prime Minister Shamir expects a message back from you, telling him that you are willing to do as we request -- and close down the plant."

He asked if Israel would be willing to train for him a special antiterrorist unit among the Presidential Guard, and not the military. I told him I was sure it could be arranged.

Smiling, the elderly president rose. He invited me to come to his home for dinner the following evening after my inspection tour. I thanked him for his time. I had made some progress. And the following day I would find out for sure just what Cardoen was up to in Paraguay.

***

Back at the hotel, a message was waiting for me from the office of the head of the military school, Gen. Andres Rodriguez, about whom the world was to hear a great deal very soon. The name was familiar to me. There had been some gossip about his daughter Marta, a woman in her early 30s, who was married to President Stroessner's second son.

The president's oldest son was an air force officer known for being gay. Because of the stigma, he couldn't succeed his father as president. As a result, Gen. Rodriguez and President Stroessner reached an agreement that in the 1991 elections Stroessner would finally give way and let Rodriguez run as the candidate of the Colorado Party -- the only political party of note in town.

But there was strife between Rodriguez and Stroessner's second son, a cocaine addict, over the candidacy. Marta Stroessner had become sick and tired of her drugged-out husband, and was having an affair with the second son of Anastasio Somoza, the overthrown president of Nicaragua, who was living in Asuncion at the time. He had stayed on after his exiled father had been killed by a TOW missile fired at his car, allegedly by a Sandinista agent, in 1980.

I returned the call from Gen. Rodriguez, and the man who answered identified himself as the chief of staff for the head of the military school. It was another dinner invitation. Gen. Rodriguez would be honored if I would join him that evening at his home. I accepted, wondering what line would be dropped on me this time.

A black Mercedes arrived at 7:00 P.M. Two men, immaculately dressed, came forward and greeted me as "Senor Ambassador," and I stepped into the vehicle. I was driven to a hacienda in a wealthy part of the city. The general stood between the pillars on the veranda. A stocky man in his early 60s, dressed informally, he asked me to regard Paraguay as my second home. I had heard it all before at other dinner parties in other cities. I was beginning to think I could write the forthcoming script.

It was an ostentatious house. Plush rugs were scattered over Italian marble floors. The furniture was heavy and expensive. He introduced me to his wife and the daughter about whom I had heard so much, Marta, a very pretty woman.

"Come," he said, "let's have dinner."

It was obviously going to be a private affair. Leaving the women behind, we went into another room, where a square table had been set for two. He dismissed a servant who was standing in a corner. But he quickly called her back when he found out I was a vegetarian. Tendering his apologies for not finding out beforehand, he told me his staff would prepare the best pasta possible.

"I understand," he began, "that the president has arranged a military inspection of the Cardoen Industries plant. I don't understand why you Israelis are so interested in this."

Before I could say anything, he added, "By the way, I understand you have met Mr. Cardoen in Chile, and that you have also had dinner with my good friend Gen. Stange."

It was clear that he had good intelligence on my movements.

"The president isn't informed about everything, you know," he continued. "He's too busy a man to look at what goes on in every factory in this country. He has too many state affairs to handle. After he ordered this inspection, we took a look and found it was just a simple agricultural project."

I sat quietly, listening to him. He was obviously trying to tell me not to bother to inspect the plant. And I was left in little doubt that he had been making phone calls either to Cardoen or to Stange.

I wasn't in the mood to start arguing. Now that I had established the reasons for his inviting me to his house, I wanted to be out of there. I ate my dinner as quickly as was politely possible.

"Sir, it's a very simple thing," I said. "Your president has agreed that I can see the plant, and I have conveyed to the Israeli Prime Minister's Office that his excellency is happy to have us shown around. So I would like to take him up on his offer."

He looked at me for a moment. "Do you have any suspicions about this plant?"

"General, I'd like to see it, if possible."

"But if you think there is something not good going on there, just tell us, and we will act on it."

I was not to be dissuaded. He reluctantly agreed to have me picked up at 7:00 A.M.

Back at the hotel, I phoned the ambassador, who was more friendly than usual. I soon established why. Avi Pazner had been on top of him, ordering him to cooperate with me. I asked what he could tell me about Gen. Rodriguez.

"After Stroessner, he's the most powerful man in town. First of all, he is thought to be a CIA agent. He has an exclusive on importing American cigarettes to Paraguay, and we don't understand how he can sell them for such a low price and still make a profit. It makes you wonder how cheap he's getting them in the first place."

"Is he known for his connections anywhere ... Chile, for example?"

"Yes, Stroessner is a good friend of Pinochet, and Rodriguez is a good friend of Stange."

Later I spoke to Pazner. He told me what to look for at the chemical plant: large tanks containing liquid that gave off a sulphur smell, like the aroma of bad eggs. That was an indication of chemical weapon production. There might be other chemicals around, too, but that was the easiest to detect.

***

In the morning I was driven in a green military car to an airfield some 15 minutes away. A uniformed officer was waiting by a small two-man Bell helicopter. He introduced himself as Col. Jose Rodriguez -- no relation to the general -- and he was to be my pilot.

I looked around for the rest of the military inspection team. "There is no one else," he said. "I will be flying you to the plant, and you will be free to go wherever you wish to go." It was almost like being offered a joyride.

Landlocked Paraguay has very few highways other than the circular route surrounding the capital, Asuncion. Getting out of what was once the old colonial capital of southern South America without a helicopter or a plane is difficult. The country outside Asuncion is basically divided into ranches, where the Indian workers remain at the mercy of their Spanish or German masters.

With its lush vegetation and plains, Paraguay remains an ideal place to hide -- or to operate a secret factory such as a chemical production plant. God only knows what happens on the infamous ranches and land tracts. The country is a black market paradise where anything goes. Marlboro cigarettes are brought in for less than their cost ex-factory. Brand new Mercedes cars, probably stolen from Brazil and driven along some secret path, can be bought for about $10,000, complete with Paraguayan license plates. Many of the goods to be found in Asuncion are the spoils of blatant theft or con jobs from around the world. The biggest money launderer in India, known in financial circles only as "the Swami from Madras," had a representative in Asuncion. Even military equipment being flown from the United States to South Africa would be flown via Paraguay, a perfect smokescreen.

As we took off, I looked at the compass to make sure we were going in the direction in which I knew the plant was located. I was expecting barren terrain, but instead we flew for miles over a lush forest. We traveled for some half an hour over the deep green carpet, and then suddenly I saw a clearing ahead. In the middle was the plant, four rows of flat, barracks-like buildings, with a water tower and a communications structure. A small airstrip had been carved out nearby. It was like a Hollywood set from a James Bond film.

"How many people work here?" I asked as we fluttered down.

Col. Rodriguez told me 50 or 60, most of them engineers. The director, he explained, was brought in by helicopter every day from Asuncion, while the engineers were brought in by bus from nearby ranches. We landed beside a small building. From there we were driven by one of the workers to the first main building.

A man in his 50s in a tie and suit greeted me. He sported a blond goatee and spoke English with a German accent. He introduced himself as Hans Mayers. I will never forget him.

"Welcome, we were expecting you, Mr. Ben-Menashe," he said. "It is wonderful that you are interested in our agricultural project. We have a very good insecticide plant here. Would you like some coffee?"

I declined. We started the inspection tour.

He took me into the first building, where people were working with grey overalls and white masks around their faces. It was a large warehouse-style building at the far end of which were large tanks. This, I was told, was where the barrels were filled for air spraying. There was a bad smell ... the telltale stench of rotten eggs.

"Would you like a mask?" Mayers asked.

I glared at him. "Nothing less than a gas mask will do," I said. "What do you do with this stuff -- spray people?"

"Oh, people shouldn't stand in the fields when we spray," he replied glibly.

I asked where the material was flown to. He told me it was sent to Chile. His employer, Carlos Cardoen, he said, had agricultural projects in Iraq. Some of the insecticide would be sent there via Iraqi Airways 747 cargo planes from Santiago.

"We try to help the Middle East, Mr. Ben-Menashe," said Mayers, as we strolled around the storage tanks. "The Iraqis need food, and our company in Chile is helping them with their agricultural projects."

"Is Mr. Barbouti involved in this?" I asked, referring to Cardoen's Florida-based contact.

He looked at me, surprised. "Do you know him?"

"I know of him," I said.

"He has an interest in this plant, yes. It's a joint venture. We get some of our materials from Florida and Texas."

It was suggested I not go to the other buildings. The smell was worse, said my guide.

I spent only 15 minutes there. I had seen -- and heard -- enough.

On the way back to Asuncion I asked the colonel what he thought about the building. "I have nothing to say," he replied. "I was only asked to fly you here."

I asked him if he thought the manufactured product was only insecticides.

"I know only what they tell me."

"Oh, so that's how you got to be a colonel."

He didn't like that, and the rest of the journey was completed in silence. I was back at the hotel by mid-morning.

I made a call to Pazner and told him what I had seen. He said simply, "It has to be closed down."

I asked if it was possible to arrange for a phone call between Prime Minister Shamir and President Stroessner. I believed that a call from Shamir might move the Paraguayan president to action. Meanwhile, I asked Pazner to mention to Shamir that I would be seeing Stroessner that evening. "And if you can manage to arrange for Shamir to talk to Stroessner before I get there, so much the better."

It was another private dinner, the same as before, in Stroessner's private reception suite at the palace. "We have prepared a vegetarian meal for you," he said. Then he informed me that he had spoken to Prime Minister Shamir at noon -- about an hour after I had talked to Pazner.

"The prime minister and I have agreed that this plant has to be closed, even though people try to tell me it is an insecticide plant. I am well aware, of course, that such plants may be used as chemical weapons plants. I will give the appropriate orders to close it by the end of February 1989. We have agreed that Israel will train an antiterrorist unit for the Presidential Guard. And we also agreed on $30 million of credit."

I realized that Pazner had briefed Prime Minister Shamir very closely before the call had been made to Asuncion.

"I will reach an agreement with Gen. Rodriguez. He will be financially compensated," said the president.

This baffled me. "Sir, what do you mean?"

"I don't know the details, but I understand he has an interest in Cardoen Industries."

"I'd like to know more details," I pressed.

He told me not to worry. It was an internal matter, and the plant would be taken care of very quickly. "If gas is being produced, the hand that is producing it will be cut off."

After our meal, I thanked Stroessner for his cooperation. I felt somewhat friendly toward this man -- despite his Nazi background and the miserable conditions in his country. I had been left in no doubt from what he said that there was an internal power struggle between him and Rodriguez. And my presence had exacerbated the conflict between these two powerful men.

***

Back at the hotel, I called Pazner at his home, at three o'clock in the morning his time. I told him I needed a man to come to Paraguay right away and follow up on the president's promise. Meanwhile, I had to get back to Chile. There was a two- week deadline I had to deal with -- the time limit I had personally delivered to Cardoen.

"But mark my words," I told Pazner, "there's a power struggle here, and it's going to explode at any moment."

Pazner told me that the chief of Mossad station in Buenos Aires, the second secretary in the Israeli Embassy there, would move in. I said I would leave only after I had briefed him. This man, the most senior Israeli intelligence officer in South America, was no stranger to me. He had been the Mossad comptroller for all the years I worked with the Joint Committee. He had overseen all our expenditures. By early 1988, after the Joint Committee disbanded, he had been sent to Argentina.

The next morning the phone woke me very early. It was he, telling me he would be in at noon. Later that afternoon, we went for a walk through the city. I briefed him on what I had seen and heard.

"You know," he said, "Rodriguez is on the CIA payroll and is a close friend of a man called Clair George, assistant deputy director of the CIA for operations. We also think Rodriguez gets a retainer from Cardoen, and is a close friend of Stange's. Rodriguez and Stange both have presidential aspirations, you know."

Yes, I knew.

He confirmed several other conclusions I'd reached: "There's a power struggle between Stroessner and Rodriguez. I'm going to try to line up a number of people we know about who are closer to the president than to Rodriguez. We can expect trouble later. But remember that the CIA is on Rodriguez's side. They don't want Stroessner's son to have any chance of becoming president because he's a coke addict and he doesn't like the United States. He's been pushing for an independent line."

We smiled at each other. We had found ourselves -- and Cardoen's plant -- in the middle of a bitter battle.

"By the way," he added, "Rodriguez also knows Mr. Earl Brian, the head of UPI." And a man with CIA connections, of course.

I told him I'd like to leave for Santiago the following day. But first he wanted me to make contact for him with the president's office. I spoke to President Stroessner by telephone and set up a meeting for the following day.

***

With everything in place in Paraguay, I flew back to Chile. It was September 18, 1988. Despite President Stroessner's promises, I could not shake off a feeling that a major crisis was developing. It hung heavily in the air.

I went straight to the apartment. Barbara was working on her computer, writing a story on Chile for the Financial Times. I didn't tell her I had gone to Paraguay. I'd led her to believe I'd gone to Israel, but she wanted to know why I hadn't bothered to call her. The whole journey had taken about ten days -- two days in Israel, two days in Europe with Gerald Bull, and some three days in Paraguay. The rest of the time I was flying.

I didn't say anything in reply to her question, but instead asked her if she'd like to come on a trip for a weekend break to Puerto Montt, a quaint town of timber-built houses in the Lake District, some 700 kilometers to the south, for a weekend break. It was a ten-hour drive, and I suggested leaving at midnight. She pointed out we wouldn't see much scenery, so we decided to leave at three or four in the morning. All the planning turned out to be fruitless.

Around ten that night, I received a phone call from Carlos Cardoen.

"Oh, Mr. Ben-Menashe, you're back in town. Why didn't you call me? Anyway, I'm calling you with an invitation. How would you like to go for a drive to Puerto Montt?"

How curious, I thought. The man had read my thoughts. Or ... I had a mental picture of the apartment's maid bustling around as Barbara and I were making our plans. And if it wasn't the maid, somebody else had been listening.

"That's a great idea," I said. "I'd love to come. Let's use your blood money."

"Ari, don't be like that," he said. "I'll come and pick you up at six in the morning."

I really wanted to get away from these guys for a day or two. But here they were, on my back.

I relayed the phone conversation to Barbara. "This fucking apartment," she fumed, her trip canceled. "It's like a fucking radio antenna."

Cardoen came by on time in a burgundy Mercedes 230E. He was dressed in jeans and a white shirt. We headed out of town, just the two of us. We stopped for breakfast and then changed over the driving.

The southern region of Chile is a beautiful place. Once you get out of Santiago, you are greeted by a stunning landscape, hilly and very green, with areas much prettier than Switzerland. The people reminded me of Romanian peasants, short and square. We were on the only highway, a two-lane north-south road riddled with potholes. If President Pinochet was so concerned about Chile and its infrastructure, I thought, as we got stuck behind yet another fume-belching truck, this was the first thing he should have attended to: build a six-or eight-lane highway.

Cardoen told me how great life was in Chile and what a wonderful man Pinochet was. I reminded him that only a few days earlier he was panning "the old man" in Stange's home.

"Oh, sure, there are problems, but overall it's okay." Then he asked, "How much do you make? How much is the Israeli government paying you? You spend all your life working for them, and what are you getting out of it personally?"

I stared out the window, gazing at the low-lying homes of yet another village. I found Cardoen's approach amusing.

"Have you thought about resigning from your job?" he continued. "You could work as my director of sales, or, if you like, there's an offer from the government to be national security adviser to the president. In any case, he'll be in power until at least March 1990. They'll give you a great salary. You could work for Cardoen Industries by setting up a balance of terror, making the Arab countries strong enough to threaten Israel and forcing your government to sign a peace treaty."

Yes, I thought. This was a familiar theme. I couldn't help thinking that he had been fed this line by his CIA masters.

Our drive was punctuated by Carabineros' roadblocks, where officers checked licenses and I.D. cards. It was impossible to drive for more than half an hour without being stopped by the green-uniformed officials.

Cardoen made it clear that if I wanted to work in Chile, Cardoen Industries would provide a house, a car, an office, and a very big salary. "And of course we could immediately provide you with a Chilean passport and Chilean citizenship."

On reaching the beautiful Lake District, we turned off the main road and parked by the shores of Lake Villarrica. Across the water, a snow-covered volcano breathed out white smoke.

"By the way," said Cardoen, "I understand you were in Paraguay recently, and that you paid a visit to my agricultural plant."

"Sure," I said, "but tell me, do you consider Jews to be insects? And I'll quote the Iraqi commander of the southern front in one of his interviews to the media after a battle with the Iranians. He said, 'We flitted them away.'"

There was a problem with this man's mentality. He thought that everything was for sale, and that everybody had a price. Yes, people may have a price, but it is not always money. I was not that hungry. Never a material-oriented person, money to me had just been a means to an end. But now I was asking for something else -- a promise that the chemical trade to Iraq would stop -- and perhaps the only price I would have to pay would be my life.

"Just imagine in ten years' time," I said, staring out across the mirror surface of the lake. "If you guys have your way, there'll be a nuclear reactor on this side of the water and a missile site on the other."

By seven in the evening, we had reached Puerto Montt. If it hadn't been for the company, the drive would have been rather pleasant. We checked into the best hotel in town -- tourist class by international standards. This didn't deter a busload of Japanese tourists with their cameras.

Over dinner at a plain, but decent restaurant, Cardoen drank heavily. He downed a few cocktails, followed by wine. He started to get tipsy, slurring his words. But I couldn't be sure whether he was overdoing it deliberately.

"Do you like girls, Ari?" he asked. "I have some lady friends in Puerto Montt. If you like, I can call them. We could have some fun."

I thanked him for the offer, but told him I was too tired.

Before he left to go to his room, he said very precisely, "You know, Ari, nobody on earth will stop me."

He showed no signs of a hangover when he picked me up in the morning. We drove to the ferry terminal and sailed across to the large island of Chiloe, a popular holiday destination for Chileans. We strolled around the old fort town of Ancud, and ate in a small cafe. But you could never escape the knowledge that you were in Chile -- the police and the military were everywhere.

"Don't worry about them," said Cardoen. "They're only looking for communist terrorists."

Early that afternoon we headed back for Santiago. En route Cardoen laid all his cards on the table. "Ari, I'll be straight with you. You either accept my offer or we'll finish you off. We're not going to do any deals with your fascist Israel Military Industries."

I didn't know whether he was making a personal threat or one against Israel -- in either case, it was ugly.

"You must remember," he added, "I'm being backed by the Americans. You know that. You met Gates here with me. Gates supports us. You met John Tower here with me, too ..."

"Tower was there on behalf of us, not the Americans."

"What do you mean?"

"Prime Minister Shamir personally intervened with his employer, the publisher Robert Maxwell, and told him that if Tower didn't go down to Chile in 1986, then he was going to have a problem."

"Are you trying to tell me Maxwell works for you guys?"

"You're a smart guy. You figure it out."

I was saying this so he understood that the rope was closing around his neck. But I had to be careful just how far I went. I had to be mindful of Israel's relationship with the United States, with Chile, and with South Africa.

Darkness had descended. The headlights of oncoming trucks lit up our faces. I saw the anger in his.

"You don't know what you're dealing with," he said. "We have a huge operation and nothing, particularly you guys, can stop us. We get all our technology directly from the CIA through Gates's office. Our equipment comes to us directly from the U.S. It's flown by Faucett from Miami to Iquitos in Peru and from Iquitos to Santiago. We have an agreement with the U.S. government. Ihsan Barbouti is the link. What the fuck else do you want to know, hey, man? If you want to fucking know it, I'll give it to you. I have investors from Australia -- Alan Bond, who owns the phone company here. And investors from Britain, too. If you guys don't leave us alone, we'll finish you off. I have the backing of the Chilean government and the Americans. Just leave us alone and get the fuck out of here."

I said nothing. But Cardoen's suppressed anger was bubbling over. His driving was erratic.

"You know Richard Babayan," he went on. "He's your friend. You know Richard Secord; he shares an office with Babayan. You know Alan Sanders. You met all these guys when you bought the cluster bombs -- where the fuck do you think they came from? Just leave us alone. If you have a gripe, go and see your American friends. Go and see Prime Minister Thatcher."

"Thatcher?"

"Yes, my friend. In fact, I'll save you a lot of time and trouble. I'll arrange for you to be introduced to her son this week. Perhaps that might convince you about the people who are behind me and why Israel should get its big nose out of our affairs."

He didn't allow me much time to think about this before asking, "How much did you pay Stroessner?"

It was obvious he was furious that I had obtained permission to visit his factory in Paraguay.

"You Jews never understood how the world works, Mr. Ben-Menashe." No more "Ari" "You guys think you have the monopoly on arms dealing in the world. But you're the ones who kill Palestinian children."

Suddenly he had become a big sympathizer with the Palestinian cause. His blood was boiling, he had become like a crazy man. He jammed his foot on the accelerator, and almost killed us as we tried to overtake a diesel-belching truck in the path of another smoking giant. It scared me. But he didn't even notice our narrow escape.

"I'm a private company and nobody, especially the Israelis, is going to touch my plants in Paraguay -- or anywhere else. I'm going to make sure of that. My friends wouldn't allow it to happen."

He wasn't going to let up. "You dumb fucking Israelis gave nuclear technology to South Africa, and now this technology is finding its way to Iraq. Just ask my friend Gerald Bull. He talked to me the other day. He said he'd had a visit from you. You guys are throwing your weight around. But you'd better remember there are forces greater than Israel in this world."

I knew what he was going to come up with. But I let him have his say. "The Russians are also helping the Iraqis."

"Sure," I said. "But they aren't giving them chemical weapons. Or nuclear weapons."

We drove on in silence. As we entered the dimly lit outskirts of Santiago and made our way through now-quiet streets toward the apartment, I said, "Why don't you give me a call when you're ready to introduce me to your friend, Mr. Thatcher?" As I stepped out of the vehicle, I added, "I seem to remember giving you a two-week deadline. It must be almost up."

He roared away into the night.

Barbara was in an ugly mood, having been left on her own for the weekend. She complained I hadn't been there for nearly two weeks, and I'd gone off again.

"I've been spooked out here," she stormed. "I've been getting phone calls with people hanging up on me. I went out for a run, and I fell and bruised my knee. All my friends have been away. There's been no one to keep me company. I don't give a shit what you guys have to say about me. I've had enough, Ari."

"Fine," I said. "Go and find another place and live happily ever after."

"I've been staying with you out of pure conscience. I don't know what you're up to, even if you do." She turned and marched off to bed.

***

The following morning I went downtown and called Avi Pazner and repeated what Cardoen had told me on our trip. I gave him my thoughts about Paraguay, that Stroessner was going to go along with us. Pazner, confirming that the deadline I had set with Cardoen was virtually up, said he would get a cabinet decision to stop all military equipment to Chile from Israel. There would be an official statement to this effect to the Chilean Embassy in Tel Aviv.

"Ari," Pazner continued, "you have to call the Iranian defense minister in connection with the C-130s deal."

I'd already received two messages from Nick Davies saying that Col. Jalali's aide urgently needed to talk to me. I'd put them off, but now, from the post office, I called Jalali's aide in Tehran. When I got through, I was asked to call the defense minister at home. Jalali had bad news. Despite all the efforts we had made, some U.S. hostages would be released, but not the three Israelis ... yet. He was sorry.

I told him I wouldn't be able to sell this to Prime Minister Shamir.

"We can't do anything about it," he said. "We don't have ultimate control over the Hezbollah in Lebanon."

I was overcome with gloom. There I was standing in a phone booth in faraway South America and feeling my whole body going numb. One of the young soldiers in Lebanon was the son of an orthodox Yemenite Jewish immigrant family from Petach Tikva, named Al Sheik. On the weekend that I had been in Israel, I had gone to visit the family and promised them we were doing our best to bring their son home from Lebanon. I felt I was letting them down. For me, it wasn't a political issue -- it was personal.

I told Jalali that if the deal didn't go through, Israel would return the $36 million the Iranians had already paid. But Jalali had not given up hope. He said, "You keep the money. We still want the planes."

I explained I'd have to consult with my superiors in Israel and assured him I'd call him back. I called Pazner again, and when I told him only U.S. hostages were going to be released, he was filled with despair. "Shit, how am I going to repeat this to Shamir? He'll blow his top. He wants our boys back. You know, Ari, I'm afraid to tell him this."

"Put me on to him, Avi."

"I'll line him up. Call back in half an hour."

I told him I couldn't talk from my apartment phone and explained how Cardoen had suggested visiting Puerto Montt shortly after I had made plans to take Barbara there. Pazner said he would send a "sweeper" -- a highly trained "bug" searcher -- from the Buenos Aires embassy.

Half an hour later, after I called again, I was connected to the prime minister. I explained what had happened with the Iranians. His decision was instant.

"There will be no deals," he said. "The American hostages have nothing to do with us. We need to get our boys out. Until that happens, the Iranians will not get our C-130s." Publicly, of course, Israel was on record that it would never trade arms for hostages, but in secret negotiations, the reality was quite different.

We had papered the deal through an American company, Geo-MiliTech (GMT), using one of its employees, Mike Timpani, who was to leave the company shortly thereafter. GMT was the same CIA-financed company that the Israelis, through me, had helped in its efforts to get Polish equipment for the contras in 1985. In return, the Poles had asked for U.S. equipment from GMT to hand over to Soviet intelligence. In relation to the C-130s, we had papered a deal through a company to be designated by GMT, which would get a profit of $6 million for their help. The deal had been arranged through GMT because we did not want any problems with the U.S. government accusing Israel of selling military equipment to Iran without authorization. This method of trade became a practice after the 1986 Iran-contra scandal.

Shamir said, "I don't care about any problems this may cause with the Americans. My planes aren't going to be used to get Americans out of Lebanon. I want my boys out. My planes will not be leaving without that assurance."

He slammed the phone down. The whole thing had become a real mess. The Iranians had paid their money for the planes, and I believed that if the deal still went through, they would continue their efforts to free the soldiers. But my boss, the prime minister of Israel, had changed his mind, after earlier giving his blessing. Of course, he had not foreseen that only Americans would be freed. I could understand his point of view-- but he couldn't see mine.

I placed another call to Col. Jalali and explained the problem. It looked, I said, as if we would have to return their money.

"I will tell you again, Mr. Ben-Menashe," he said, "we don't want our $36 million back. We want those C-130s."

I called Nick Davies in London, explained the plane issue, and asked him to call Mike Timpani and tell him there would be no deal. I realized that the GMT people were going to be very upset because Timpani was slated to make a personal profit of $2 million, Barbara Studley and her partner in GMT, John Singlaub, would make $2 million between them, and the final $2 million would go into the company. Nick Davies said the money was already in place, but I told him that made no difference.

Frustrated, I returned to the apartment, and for the next two days did nothing. Then all hell broke loose. The Israeli ambassador was summoned by the Chilean Foreign Ministry and given a dressing-down over the fact that Israel had officially cut all supplies of military equipment to Chile. This, the ambassador was told in no uncertain terms, would have a disastrous effect on Chilean-Israeli relations. Neither the ambassador nor the Foreign Ministry had been fully briefed about the reasons for this action.

At the same time, Israel was cutting off military supplies to the South African government as well-- and for the same reasons. My counterpart from the Israeli Prime Minister's Office had been present in South Africa doing the same thing I was doing in Chile -- trying to stop the supply of technology to Iraq. Apparently he had a worse temper than I, and he threatened Gen. Pieter Van Der Westhuizen personally, telling him that if he didn't stop exporting missile technology to Iraq through ARMSCOR, which had in turn been given technology on a platter by Gates's people, the general would be in serious trouble. I should point out that a frequent visitor to South Africa from CIA headquarters at Langley, Virginia, was Clair George, Gates's deputy.

The cutoff by Israel against South Africa and Chile had finally come, after three years of asking, then pleading with the two countries to stop their deadly trade, carried out on behalf of the CIA. In the United States, the powerful American Israeli Public Affairs Committee had been lobbying in Congress. As for Britain, Prime Minister Thatcher had been sent a letter by Prime Minister Shamir -- a very friendly letter not mentioning her son, but pointing out to her that British nationals were involved in exporting high-tech material to the Iraqi government with the authorization of the U.S. government. In fact, Israeli intelligence knew that Mark Thatcher, who was already an established arms dealer in Chile, had begun to do business with South Africa in 1983. And he was the one who had introduced his friend Gerald Bull to the South Africans.

The Americans were determined that Prime Minister Shamir was not going to have it all his way and started a campaign against him. The press was fed information from the CIA and the White House claiming that the prime minister of Israel was a warmonger who was determined to stop the peace process in the Middle East. However, the Americans had a problem. The 1988 election campaign was under way at the time, and George Bush, mindful of Jewish voters, was anxious to show how friendly he was with Israel. So there were two tunes being played by the White House -- one, a newspaper campaign against Shamir; the other, telling how much Bush loved Israel and what he would do for the state if he were elected.

One thing positive emerged from all this. Toward the end of September 1988, within a week of my phone conversation with Prime Minister Shamir, a grey-haired man flew out of Washington for Santiago. Deputy CIA Director Robert Gates had arranged a secret meeting, curiously with Stange, not Pinochet.

Our information on Gates's trip was being fed to us from the U.S. by a man I didn't know, who operated under the code name Margarita. [1] His reports to Israeli intelligence were handled by Tsomet, Mossad's human intelligence section.

We established from Margarita that there were orders to stop the flow of arms to Iraq until after the elections in the United States. The orders came directly from the vice president's office to Gates's office, completely bypassing CIA Director William Webster. It seemed that Webster, who was appointed in 1987 after William Casey's sudden death and after Gates's nomination was withdrawn, was not aware of the arms flow from Chile and South Africa to Iraq.

When the Israelis inquired about Gates's meeting with Stange, the answer came back that its purpose was to explore the relationship between the U.S. and a new Chile -- President Pinochet was quite likely to lose the upcoming plebiscite, and the Bush administration was equally likely to take over in the U.S. Pinochet, in fact, was very worried. He didn't want his involvement in international arms deals to be exposed just before the plebiscite.

Whatever actually happened at the secret meeting, Gen. Stange told me shortly afterwards that the sales from Chile to Iraq had stopped. The Prime Minister's Office was not exactly elated. We all realized the sales to Iraq might resume after the U.S. elections. There was too much money at stake, and there were too many players for Israel to be guaranteed that everything had now stopped for good.

One of the key players was the Australian businessman, Alan Bond. At about the same time that Gates was talking to Stange, an intelligence officer from the Israeli Embassy in Canberra paid a visit to the head of Australian Security and Intelligence Services (ASIS), and briefed him about Bond's activities in Chile.

According to an Israeli intelligence informant inside Cardoen's company, Bond had been involved in joint ventures with Cardoen. Having obtained loans from various banks in Australia, Bond invested them in Cardoen's construction company in Iraq, which was to build a vast "agricultural complex" outside Baghdad. Cardoen did not really need foreign investors, but he got involved with foreigners of stature to lend more legitimacy to his activities.

It had always been a mystery to the Israelis how Alan Bond initially got involved with Pinochet, and how he convinced the president to sell the Chilean phone company to him for approximately $300 million. In fact, he made promises to Pinochet that once he bought the phone company, he would make great improvements in it. Bond was obviously not aware that phone companies need a very big initial investment plus a lot of high-tech know-how. After Bond bought the company, it went downhill, falling into worse shape than it had been in before he acquired it. Finally, he just wasn't willing to invest the money and effort necessary to improve and maintain it.

After the intelligence officer's visit to ASIS and the assurance that Bond's activities would be drawn to the attention of Prime Minister Robert Hawke, who was friendly with both Bond and Israel, Bond almost immediately pulled out of Cardoen Industries, and later out of Chile altogether.

Had Bond remained with Cardoen, we would have known exactly what he was up to in any case. Mossad had been able to buy the services of two workers in Cardoen's company, and these employees were handing over to an agent in Santiago photocopies of documents about Cardoen's activities. They were each paid half a million dollars into two separate numbered accounts in Europe. One of these men, to this very day, works for Cardoen. The other has disappeared.

***

The "sweeper" who came to check the apartment for bugs was a balding man in his 50s, who greeted me in formal Hebrew. He carried a small suitcase. Before I could say anything to him, he put a finger to his lips. He took his job seriously.

The first thing he did was go to the telephone. Unscrewing the earpiece, he brought out a plastic object about the size of a little fingernail.

"This isn't Chilean," he said, after deactivating it. "This is what the Americans use -- a CIA product. And it's not just a phone bug. It covers the whole room."

"Where would they be listening to this?" I asked him.

"It has a 50-meter range, so they must be in one of the adjoining apartments."

From his suitcase he brought out a kind of miniature metal detector with a rectangular head. He swept it around the apartment and found a second bug -- in the base of the intercom phone on the wall.

"This must be Chilean," he said, after pulling out another plastic gadget and rendering it useless. "It's an old German model made in the 1970s. It also has a range of 50 meters. It wouldn't have been planted by the same people. There's another team out there somewhere."

Using his equipment, he checked the phone line. "This is bugged too."

He asked the maid for coffee. While she was in the kitchen, he said, "If I were you, I'd get rid of her, too."

He swept around again. "I can give you a signed guarantee that everything is okay, except the phone line, which I can't do anything about."

Later that day, after firing the maid and giving her enough money to keep her going for three months, I received a phone call inviting me to Cardoen's office the next morning. I traded in my car because I had a feeling that if they could bug the apartment, they could also bug the car. I rented another vehicle.

***

I turned up at Cardoen's building as arranged. A secretary led me into his office, where the head of Cardoen Industries was sitting behind his desk under the portraits of Pinochet and Saddam Hussein. There was somebody already there, a young man with his back toward me. He turned around, stood up, and stared at me.

"Mr. Ben-Menashe," Carlos Cardoen said, "I'd like you to meet a friend of mine." The young man reached out his hand. I took it. Cardoen laughed.

"I don't believe you've met Mr. Mark Thatcher," he said.

I recognized the prime minister's son from photographs I had seen. His featureless gaze changed into a smile as he shook my hand. But I wasn't going to give him the pleasure of hearing me say that his face was familiar to me.

In any case, Cardoen hadn't finished his introduction.

"Mr. Ben-Menashe works for the Israeli Prime Minister's Office, and we've been talking business together," he said. Then, looking toward me, he added: "Mr. Thatcher is an associate, and we also do business together."

"Oh yes?" I said. "What kind of business is that?"

"I'm just a private businessman," said Thatcher.

"Do you have any connection with the British government?" I inquired.

He seemed surprised by my question.

"Well, you know it's sometimes not very good to be related to a famous person," he said. I gathered he wanted to assume that I really knew who he was. "I'm a private businessman. My mother has her job, and I have my own work."

I decided to drop the pretense. "I certainly know all about you from your driving." Thatcher had gotten lost during a highly publicized car race in North Africa. "I've read about you in magazines and the newspapers. How did you get lost in the desert?"

He laughed. "That ... ! Yes, a lot of people talk about it. But I do like rally driving."

He asked me if I'd been to Britain. I told him I'd been there many times and had family members living there. We touched on the subject of royalty in Britain.

"The sovereign is a woman, the prime minister is a woman," I said. "And is it true the queen is going to abdicate in favor of her son, Prince Charles?"

His smile disappeared. It was instantly obvious he had contempt for the royal family. Yet he could not resist identifying himself with Prince Charles.

"He has his mother, the queen, and I have mine," he pointed out. "We have our similarities. But I also have to make a living, you know. Charles doesn't. Royal families remain in place, but leaders come and go."

As Cardoen sat behind his desk and Thatcher and I sat on the other side, we moved on to politics. Thatcher spoke of how much he admired Pinochet as a leader. He glanced up at the president's portrait as he spoke.

"I don't understand why the Americans knock Pinochet for human rights abuses. Why do they do that? I haven't seen or heard of any atrocities."

I asked him about the Falklands war. "Chile was a great friend to Britain during that war," he said.

I was well aware that Pinochet had allowed the British landing rights in Chile, which was crucial to the British war effort. After the war, President Pinochet and Prime Minister Thatcher had struck up quite a friendship -- and Thatcher's son, not coincidentally, had sold 48 Chieftain tanks to Chile.

It was obvious Mark Thatcher did not like my line of questioning. He stood up. "I hope you'll excuse me, " he said, "I have to go." Turning to Cardoen, he said, "We'll meet again this evening."

He bade me goodbye and left. Cardoen, now standing, smiled at me. He lifted his hands and let them drop.

"See?" he said.

I had seen what he wanted me to see -- that Mark Thatcher and his mother were on his side. Nothing else whatsoever had taken place at this meeting.

_______________

Notes:

1. Israel has repeatedly pledged that it does not spy on the United States, even after the Pollard case. But, if further proof is needed, this incident alone makes clear that this is untrue.

[admin]

18. Coup D'Etat

THE CHILEAN GOVERNMENT was furious with the Israelis over the ban on arms, and in early November, after the plebiscite, I spent two weeks in Israel with my family. I then headed off for a meeting in South Africa with Gen. Van Der Westhuizen.

The South Africans wanted to appear to be cooperating with us. At our meeting, the general was most gracious and told me that in that month South Africa had put an outright stop to all the technology flow to Iraq. He pointed out that CIA cutouts, such as Gamma of Massachusetts, had been providing materiel and technology that had been smuggled by the CIA through South Africa before being shipped on to Iraq.

I asked for a list of companies that Cardoen used, and the general provided it. He also gave me the names of Iraqi agents and the identity of a Texas company owned by Mark Thatcher that was moving equipment to Iraq directly from Britain. Another name that came up was John Knight, of the Dynavest company in London, which was providing parts to Iraq. Knight was familiar to us, having worked with the Tony Pearson-Nick Davies group since the late I970s. But I was given other company names in Britain, Belgium, and Luxembourg that were new to Israel. All of them were financed by the CIA through Cardoen, and all of them were supplying Iraq with equipment to be used for nuclear and chemical warfare capability.

Gen. Van Der Westhuizen then dropped a shocker: The Scud missiles the Iraqis had were being used in experiments with dud nuclear warheads.

"We would like Israel to know that we South Africans have nothing to do with all this," said the general.

He also confirmed that Mark Thatcher did business with South Africa, and had been doing so for a long time.

In my Pretoria hotel room I met my Israeli counterpart in South Africa. He told me that the South Africans really had made the decision to stop the flow of technology to Iraq because they were interested in going back to nuclear cooperation with Israel. Basically, he said, they were pulling the rug from under the feet of those who were helping the Iraqis. The South African government, he said, was considering dismissing Van Der Westhuizen from all official positions.

"We see an honest attempt to stop the flow to Iraq," said my Israeli colleague. "But I'm afraid it's too late. Saddam Hussein has enough technology and scientists, especially German, working in Iraq on developing nuclear warheads. The CIA has actually used South Africa's ARMSCOR to do this. The chemicals are coming from Chile, and the nuclear technology has come from South Africa. As for the personnel, that's being provided to the Iraqis through European firms."

***

I returned to Israel with my colleague for a top-level meeting in the Prime Minister's Office with the heads of Mossad Tsomet and Mossad Operations. It was agreed the "problem" had to be dealt with in a very personal way. We were asked to draw up lists of people involved in the whole situation -- Chileans, Americans, Australians, Germans, and Britons.

In the following weeks, eight German scientists hired by Ihsan Barbouti's company in Miami who were traveling back and forth to Iraq were eliminated. Also killed were two Pakistani scientists, who happened to be in Europe. Then another German was killed in a bad car "accident" outside Munich while on a visit. His name was Hans Mayers, the man I had met at Cardoen's "insecticide" plant in Paraguay. In Britain, four Iraqi businessmen died. Three Egyptians and a Frenchman followed -- a total of 19.

All were eliminated in late 1988. Four Mossad hit squads were assigned to carry out the executions. The squads were something of a novelty-- they were all made up of Palestinians. Unwitting, they thought they were carrying out the killings for a Sicilian don, who was actually someone working for Mossad. Israel used unsuspecting Palestinians for one compelling reason -- if any of them were killed or caught, it would be obvious they were not Israelis.

The deaths of the 19 were the start of a hit campaign by my government. Their masters had been warned.

***

In late November 1988, with a team of bodyguards, I traveled to see Gerald Bull again. By now the killings in Europe had already started. In fact, two of the Germans who had already been killed were working for Bull. I met him this time in his well-appointed apartment in Brussels. His face was grey. He had heard the news. I offered him $5 million to scrap his supergun project.

He said, "I'll think about it. Let's talk tomorrow."

I returned the following day. "I'm not going to accept your money," he said.

"I'm sorry to hear it," I told him. "As you know, Israel is very concerned that many of its people are going to die unless drastic action is taken. Warnings are being given. By the way, have you heard about all the terrible accidents that are happening to various people?"

"Yes," he said, "I've heard."

Then he showed me to the door.

***

I flew to London and visited Amiram Nir, Shimon Peres's former antiterrorist adviser, who had been involved with Oliver North in the Iran-contra affair. A man of about my age, in his late 30s or early 40s, he was due to be a major witness in North's forthcoming trial, and his testimony was expected to embarrass both former Prime Minister Peres and President Reagan. Because Nir knew a great deal about Barbouti's chemical operation in Miami, I wanted to find out more from him.

A shock was in store for me when I visited his St. John's Wood apartment, not far from my sister's. Having left his millionaire wife behind in Israel, he was now living with an attractive, dark-haired woman. I stared at her. Nir introduced her to me as a Canadian, Adriana Stanton, but I knew her from before -- and though Nir didn't know it, Adriana Stanton wasn't her real name.

"Have we met somewhere?" I asked.

"I don't think so," she said and made an excuse to leave the apartment.

"Be very careful of that woman," I warned Nir. He laughed and said she posed no danger to him. He promised to come to see me in Chile. He knew Cardoen and Barbouti well and would be more than happy to help me.

***

Accompanied by two bodyguards, I returned to Chile late in November. Although they weren't armed during the flight, the watchdogs drew two Berettas from the Israeli Embassy in Santiago. I was well aware that the government I represented posed a big threat to the powerbrokers in this city. I also knew that word would have gotten back to Cardoen about the deaths of his scientists and that he would have little doubt who had killed them.

On November 30, four days before my 37th birthday in 1988, Amiram Nir was due to arrive in Chile to meet me as arranged. The phone rang in the apartment, and I thought it was Nir, telling me his flight arrival time. Instead, it was Ora, calling from Jerusalem.

"Ari, there's terrible news," she said. "Amiram Nir was killed yesterday in a plane crash in Mexico."

I felt my blood run cold.

Nir had reportedly been flying in a chartered Cessna T210 to inspect an avocado investment when the plane went down 110 miles west of Mexico City. There have been various inaccurate reports about the incident. According to some newspaper accounts, Nir and the pilot were killed, but three other passengers, including the woman I had met in his flat, had escaped with slight injuries.

One widely accepted report claimed he had chartered the plane under the alias Pat Weber and had died when the plane crashed. The report said that a mysterious Argentinean who worked for Nir had identified the body and obtained custody of it.

Prime Minister Shamir ordered an investigation by Israeli intelligence, which reported back to him with a very different version of Nir's death. According to their report, it is certain Nir was shot by his woman friend. His body was never recovered by his family.

Who was behind it? Israeli intelligence has always believed it was a well-executed CIA operation. Nir's death ensured there would be no embarrassment for Peres, Reagan, or Bush at the North trial. In fact, while in London, Nir was getting bored and unhappy. He had started talking about writing a book. He even sounded out a journalist and told him some of his conversations with U.S. officials.

On December 2, just three days after Nir's death, I was leaving the post office when a window I was walking past shattered. Then something smashed into the metal custom-built briefcase I was carrying. The two bodyguards and I dived to the floor, realizing that someone was shooting at us.

The police pounced on two men. Although I was asked to go to headquarters to make a statement, I heard nothing more of the matter. I was left guessing whether it was a serious attempt on my life, or an effort to scare me -- and wondering who was behind it.

Since Gen. Pinochet had lost the plebiscite, elections were to be called in Chile. In the meantime two members of the ruling junta, Gen. Stange and Gen. Fernando Matthei Aubel, chief of the air force, made it known to Israel that they were willing to come to an "arrangement" on the question of future sales to Iraq. Gen. Matthei had seen Pinochet's defeat in the plebiscite as an opportunity to further his own career, and he was already running for president.

I met Gen. Stange in his office at the Carabineros headquarters in Santiago. "We will help you put a permanent stop to this craziness and all exports, just as the South Africans did," he said. "But we need some help. We want the arms supplies from Israel to Chile to resume, and we also need to sell some of our equipment to Iran."

"Are you putting forward a proposal to stop your sales of weapons to Iraq?" I asked.

"Exactly," he said. "We have old American equipment, which we'd like you to sell to the Iranians. In exchange, we'd like to buy new equipment for Chile from Israel. As a result of the plebiscite, which was clean and fair, there are other governments that are now selling equipment to us, including the British. In addition, we promise to do all we can to stop future military exports to Iraq. We will do all in our power to stop the contraband."

I promised to relay everything back to Israel. Two days later a meeting was arranged with Gen. Stange, Gen. Matthei, and his chief of staff, Col. Mario Vila Godoy. They told me they had a number of old Northrop F-5E Tiger-2 aircraft that they wanted to sell. They didn't know where they would end up, but they had to go.

I turned to Stange. "I was under the impression that you didn't mind them going to Iran."

"Yes, yes," he said. "We've talked to Robert Gates, and he has authorized the sale to Iran. But we cannot be seen by the U.S. Congress to be making this sale. What we could do, though, is sell them to Singapore. Where they go from there is not our business. But we're aware that you could refurbish them in Israel before they are sent on to Singapore."

Details of the deal, he said, would have to be worked out with Gen. Vega, deputy commander of the Chilean Air Force, and Gen. Clark, the chief of logistics of the Chilean Air Force. Stange said he would convey to everyone involved that the American government had given the okay to the deal. (We found out later that the Chileans were lying about the U.S. government's okay. At this time the U.S. was selling to Iraq but not Iran.)

"We will assure you," said Gen. Stange, "that if we can offload these planes to Iran through Singapore, and Israel then sells us new equipment, none of the chemicals from Cardoen's plant will go to Iraq -- even though the Chilean government isn't involved in this trade."

***

My next step was to call Joseph O'Toole, a former U.S. Air Force colonel, whose last job had been in procurement, which included much liaison with the CIA. Some years after his retirement in 1978, he became managing director of the aircraft sales division of a company called FXC International in Santa Ana, California.

FXC had produced parachutes for civilian purposes until Frank Chevrier, a French-Canadian who had arrived in California virtually penniless, came onto the scene. He started working as a laborer in this company, and the original proprietor, who had no children, liked Frank and made him director. Slowly but surely Chevrier took control of the company, and when the proprietor died, he willed the whole company to him. On taking over, Chevrier was approached by the Israeli government, as a result of which he started manufacturing, with Israeli technology, parachutes for military purposes.

The company had associates in Singapore, Australia, and other parts of the world. After Chevrier's fortunes changed and FXC became a big company, he was approached by the CIA with the idea of opening an aircraft division, through which FXC could broker secret sales of aircraft around the world on behalf of the U.S. government. Since the Israelis already had relations with FXC, it was one of the companies used to paper American equipment in what might have been perceived as illegal sales. Israeli intelligence presumed that one of the reasons the American government became involved with FXC was to keep an eye on Israel's dealings. Any sales of U.S. equipment through FXC could be closely monitored.

I explained to O'Toole that the Chilean government was interested in selling the F-5Es to Iran through Singapore and, believing the Chileans at the time, I said such a sale had authorization from the U.S. government, meaning Robert Gates himself had assured the Chileans it was all right. I told O'Toole that I wanted FXC to act as broker and buy the planes from Chile on behalf of Israel. This would put an American stamp of approval on the deal. O'Toole said it sounded good to him.

Next I called Avi Pazner and sounded him out on the sale of Israeli Kfir jet fighters to Chile as a tit-for-tat for the stopping of the sale of arms and chemicals to Iraq. The Kfir was originally developed by Israel Aircraft Industries as a copy of the Mirage jet fighter. In 1968 and 1969, blueprints of the Mirage-III were stolen from its Swiss manufacturers by Alfred Frauenknecht, a senior engineer, who received several hundred thousand dollars for his year-long efforts. The operation was exposed near its conclusion, and Frauenknecht was arrested. He spent only about two and a half years in a Swiss prison, partly because of an Israeli request for leniency. In fact, he was released in time to visit Israel for the maiden flight of the Kfir, which he had made possible.

Since Pazner had no objections to the sale of the Kfirs to Chile, I followed this call with separate meetings with Gen. Vega and Gen. Clark, the two officers designated to handle the details for Chile. Present at the meeting with Vega was Col. Guillermo Aird, who was Vega's chief of staff. They basically asked me to draw up a proposal on the deals.

Gen. Clark also agreed on the deal, but for the time being there were reports coming from our informants in Cardoen's company that the sales of chemicals to Iraq were resuming without any indication they were going to stop. It was a troubling situation, but I could only hope that once I had the F-5E deal worked out, the sales would halt.

Gen. Clark had one further request in addition to the Kfir jets from Israel -- he desperately needed spare-part kits for T37s, small spotter aircraft. I felt at this point we were going forward very well and that the Israelis would be happy to negotiate this deal. After the conversations with Stange, Matthei, Vega, Clark, and their chiefs of staff, I decided not to talk to Cardoen. President Stroessner had promised the Mossad officer and me that he would close the Cardoen plant in Paraguay by the end of February 1989. It was reasonable to believe that the Americans would not interfere because President-elect Bush and others were extremely sensitive to congressional criticism.

In mid-December 1988, I decided to fly to Israel to lay out the whole scenario to Pazner. He in turn arranged for papering the sale of the F-5Es with the Singapore government through his contact, Gen. Winston Choo, who was chief of staff of the Singapore Armed Forces. I was to meet in Europe with the Iranian defense minister, and another Israeli representative would go out to Southeast Asia and sew up a deal with Singapore, which was acting as a conduit and would have to produce an end-user certificate for the Chilean government. But as for the sale of Kfir aircraft to Chile, the subject had to be taken up with the director general of the Ministry of Defense, Maj. Gen. David Ivry.

On being called to the Prime Minister's Office, Ivry pointed out that the advanced Kfirs had U.S. engines, and we would risk upsetting Congress if they were sold to the Chileans. The Israelis decided to offer the advanced Kfir to Chile, but with engines that had been developed by Bet Shemesh Engines, with the aid of South African money before the row with Pretoria over Iraq.

***

I spent most of the rest of December in Israel with Ora and our five-month-old daughter, Shira. But the respite was brief. Accompanied by my two bodyguards, I flew to Frankfurt on January 5, 1989, and greeted the Iranian defense minister in his suite in the airport hotel that evening. It was a warm meeting, but the first thing Col. Jalali pointed out was that he would not talk about the three C-130s. It was simply expected they would come to Iran despite Shamir's earlier refusal, and the money involved with them was a separate issue from the planes which would be coming from Chile. Jalali asked for a price for these F-5Es.

In the late 1960s when they were manufactured, they would have been worth $8 million each, but they would have been "stripped down" -- without any electronics, such as bomb control and infra-red "night scope" equipment. They would just have had standard take-off and landing radar.

Israel was going to pay the Chileans $6 million apiece, although they were now not worth more than half a million dollars each. The Iranians, on the other hand, would pay $14 million for each plane. This included the price Israel had to pay, refurbishing costs of close to $1 million each, transport, insurance, parking in Singapore, and unseen additional costs.

The discussions with Col. Jalali continued in his suite at ten o'clock the following morning. While it was worked out that the total that Iran had to pay for each plane was $14 million, Tehran had to pay $6 million each to the Chileans in advance. The rest of the money would be cash on delivery.

Col. Jalali shrugged. "Whatever the cost, we need this stuff. We have to defend ourselves." He was quick to point out that although the war with Iraq was now over, they could not afford to take any chances.

I pushed him to agree to the payment to Chile and also asked him to send a representative to Santiago because we wanted to leak to the press that Iran was now in business with Santiago. He was happy to go along because he was very much in favor of what we were doing against the Iraqis.

I was doing all this in the hope of arranging a meeting in Chile for an Iranian representative with Israeli Maj. Gen. Ivry, Chilean Gens. Vega and Clark, and, perhaps, Matthei, as well as Joseph O'Toole, and -- with any luck -- Robert Gates thrown in for good measure. The more the merrier, because word would certainly get back to Iraq and cause concern to Saddam Hussein.

I flew to Santiago on January 6, 1989, and asked for a meeting with Gen. Matthei. But I was told he was on holiday in Switzerland, and Gen. Vega was standing in for him. Vega received me, and I asked him if he would meet an Iranian emissary, as well as Ivry and Gates. He agreed if Gates did.

I called Gates from Chile and asked if he would come to discuss the sale of the F-5Es. He politely said that he knew nothing about any F-5Es, and he had never okayed any sale.

Ivry came to Santiago. By this time Matthei was back in town. We met him, Vega, and Clark, and an agreement was signed between the parties that Israel would sell to Chile 12 advanced Kfirs with Israeli-made engines for the price of $14 million each. An agreement was also signed that Israel would purchase 13 F-5Es from Chile in their present condition at a price of $6 million each, to be refurbished and sent onward without specifying the final destination. Letters were provided, however, that Singapore was interested in purchasing these aircraft. Israel would buy these aircraft through the U.S. company FXC, which would act as broker. FXC would also be used to forward the aircraft after their refurbishment in Israel.

For their part, FXC was to receive $200,000 for the purchase of each aircraft and another $200,000 for each sale. It was also made clear there would be no exports of military equipment from Chile to Iraq. It was also emphasized by the Chileans that the United States government had given its approval for the sale of the F-5Es to Iran -- something we knew to be untrue -- and that the person who had given the okay was Robert Gates, also untrue. Gen. Stange was not at this meeting, even though he was invited. He had tendered an apology.

Ivry left Chile after these meetings, and a day later Dr. Ahmed Omshei, the Iranian arms negotiator, was sent to Santiago after the sale had been coordinated by my London contact, Nick Davies. Omshei was the aide to the Iranian Ministry of Defense who had been present at the 1980 Paris meetings to discuss the delay in the release of the U.S. hostages.

After meeting with Vega, Omshei opened a letter of credit, good for 90 days, for the Chilean government with the Bank of Luxembourg for the amount of $78 million, the total that Israel had to pay Chile for the F-5Es. The conditions for the release of this letter of credit were that the 13 F-5Es would leave Chile and be shipped to Israel by FXC. The Chilean government was to pay $1,300,000 to FXC, half its fee. The Israelis agreed to pay the other $1,300,000. The Chilean government also promised to open a letter of credit for the Israeli government in the amount of $168 million for the Kfir fighters.

***

The call from the Mossad chief of station in Buenos Aires was urgent. "The situation in Paraguay is grave," he said. "We have to meet immediately." He arrived in Santiago later that same day in late January 1989 and came straight to the apartment.

"We have intelligence information that Gen. Rodriguez is about to stage a coup d'etat against Gen. Stroessner," he said. "The Americans are involved too. Earl Brian, a close associate of Gates, and Clair George, the assistant deputy for operations in the CIA, have been visiting Paraguay recently and meeting with Gen. Rodriguez."

Would the CIA go as far as overthrowing a government in order to keep Cardoen in business? President Stroessner had promised to close down the plant -- and Rodriguez was power-hungry. It all seemed to fit. Nevertheless, it was incredible. I asked how reliable the information was.

"The best," he said. "Rodriguez has been spotted at the U.S. ambassador's residence several times, and there's word from colonels who are friendly with Israel that there's about to be a coup with the military taking over. The closing of the Cardoen plant is one of the issues, and it's being used as the catalyst to bring the power struggle between Rodriguez and Stroessner to a head."

I called Israel, where Pazner was very unhappy. He had already heard about the plotted coup, which was due to take place during the evening of February 2.

"Our man in Buenos Aires has told me the Americans are stabbing us in the back. There will be no Kfir deal, there will be no F-5E deal, and the chemicals to Iraq will continue. They're going as far as helping Rodriguez in planning the coup. From what we've established, there are some 10 to 15 new CIA officers in the U.S. Embassy in Paraguay."

I hung up and managed to get a call through to Stroessner himself. I guessed he already knew about the impending coup, but it wouldn't hurt to be sure.

"Yes, I know about it," he said.

I gathered from our conversation that the Presidential Guard, which, as opposed to the military, was completely loyal to Stroessner, had been put on full alert around the president. Stroessner was trying to negotiate with Rodriguez, but I couldn't see what hope he had. The Americans were clearly determined to see him overthrown.

It had been decided that I should stay where I was while the Mossad man immediately flew to Paraguay. But on February 1, he called me from Asuncion. "You'd better come here, Ari. There's a possibility that Gen. Stroessner might survive because he's pulled two generals on to his side. And if he does pull through, you have to be here to massage his ego and make sure he closes the Cardoen plant right away."

I left Santiago for Asuncion on February 2, arriving in the early afternoon. My colleague was waiting for me in the airport, and we drove to see Stroessner. Life was continuing in its own hectic way in the city. No one, it seemed, had got wind of the trouble, even though the guard around the palace had been strengthened.

Stroessner looked worried when he received us in his office, but he assured us he had "neutralized" Rodriguez and that there would be no move that night against him. By the morning, Rodriguez would be arrested.

"That's good news, Your Excellency," I said. "If Rodriguez had won this power struggle, it would mean big trouble for Israel. But what we'd like is your assurance that the Cardoen plant will be closed this week."

"You can take it from me it will be done," said President Stroessner. "I have already received $12 million worth of small arms since our first meeting, out of the $30 million in credits I was promised."

I seized on this to emphasize that Israel was completing its part of the bargain, and that it was now up to him to carry through his.

He smiled and raised a hand of acknowledgment. "Gentlemen," he" said, "please come and see me at six o'clock tomorrow evening, when it is all over with Rodriguez." There was confidence in his voice, but I read worry in his eyes.

We were staying at the Excelsior Hotel, where guests are mainly Europeans and Americans. We each made calls to Israel and to the Israeli ambassador, who had not been fed the Mossad information. He was warned that "something was cooking" and that he should make sure his staff was in a safe place.

"If this is the case, do you need any protection?" he asked me.

"No, thank you," I said. "I have my two 'boys' with me." They weren't carrying weapons, but they knew how to take care of us and themselves.

The four of us set out for an early dinner about six that evening, planning to eat at an Arab restaurant within walking distance of the hotel. As we walked, we saw trucks of soldiers moving into the city and taking up positions on street corners. I wondered where their loyalty lay. People stopped to stare in astonishment. A buzz of conversation was in the air, but no panic.

On our way back to the hotel after dinner, the scene had changed dramatically. The city was now full of soldiers, and the streets had emptied of civilians. Soldiers were standing in the hotel lobby, but guests were free to come and go. Rich locals mingled among the guests, ordering drinks from the lobby bar. We sat in the lobby, too, waiting for the action that now seemed inevitable. But was it Stroessner's action against Rodriguez -- or vice versa? Whatever happened here tonight, we realized, also affected the security of Israel.

At about 11 :00 P.M. the boom of artillery shook the hotel. We went up to my room and stared out the window at a deadly display. From the army tank base in the middle of Asuncion, artillery was being fired toward the presidential palace. At least we knew whose side they were on.

The sight and sound of battle went on all night. It wasn't until we ventured out into the street in the silence of dawn and saw the bodies lying around that we were able to find out what had happened.

The military generals had assured Stroessner they would back him, but Rodriguez, who was commander of the military school, together with the commander of the tank unit, had decided to make the coup attempt anyway. All 2,000 soldiers in the military school had been trucked into Asuncion. Command had been given to fire on the palace -- the six tanks kept at a small base downtown were used to take over the city. When Stroessner had given orders for other military units to come to his aid, they refused, unwilling to come face to face with the tanks and units holding the central part of the city.

Stroessner had held out with the Presidential Guard, also totaling some 2,000. As a response, 1,000 Presidential Guard with Israeli Uzi machine guns were trucked into the city. A fierce gun battle had erupted around the tank base. Six hundred Presidential Guard were mowed down from machine-gun towers around the tank base. At 2:00 A.M., Stroessner had given up.

"Well, that's the end of that," said my friend as we walked among the mangled bodies. It was a horrifying sight. "We tried to tell him what would happen."

"And we still have our problem with Cardoen," I said. "This means, of course, that all deals are off. We're back to square one."

On returning to the hotel, we were met by military officers, who assumed we were tourists and told us not to worry. We sat in the lobby and watched them bring down Stroessner's big portrait.

The phones from the hotel were working, and I called Ora to assure her I was all right.

"What the hell are you doing there?" she demanded. "I've been watching it all on TV. I called yesterday, and they told me you were in Paraguay, and now I see there's a coup. Wherever there's trouble, you seem to be in the thick of it."

* * *

That afternoon, we decided to make contact with Gen. Rodriguez to congratulate him. We had nothing to lose. We phoned the palace. I explained I was a special emissary from Prime Minister Shamir and I would like to speak to Gen. Rodriguez.

They told me he was very busy, but they would pass on the message. Half an hour later, I had a phone call from Rodriguez's chief of staff. He was very polite, saying he did not realize we were in the city.

"We hope you were not inconvenienced by last night's events," he said, as someone might explain away a noisy party.

I asked if it was possible to see the general. "You mean the president," he said. Of course.

Half an hour later he called back again. He said the president was concerned about my personal safety and that if I was not accredited diplomatically to Paraguay, it was better for my own well-being to try to leave the country as soon as the airport was opened again that evening. Meaning, "Get your ass out of here, troublemaker."

The Mossad man and I agreed that Rodriguez wasn't going to close the plant and that it was probably wise to take the new president's advice. As the day went by and we waited for the airport to open, into the lobby of the hotel came a number of Americans. One of them I knew from before -- a white-haired, distinguished-looking man, smartly dressed in a suit. His name was George Cave, the very same man who had been right in the middle of the Iran-contra affair.

I marched straight up to him. "Hello, George," I said. "How're you doing?"

He stared at me in astonishment. "What are you doing here?" he finally asked.

"I'm on government business."

"I didn't know you fellows were involved."

"I guess we're on opposing sides."

"I'm not on any side. I was here on personal business, and I got caught up in the coup."

"Sure," I said. "And what about Earl Brian? I haven't seen him, but doesn't he go everywhere with you?"

He produced a nervous laugh. "Earl should be here. UPI would be interested in all of this."

I didn't bother to reply. I was so sick about the whole damn business that I didn't know whether to laugh or cry.

As he moved away, my words seemed to sink in. He found some adrenaline, and turned on me. "Let me say that if anyone tries to interfere with what we're doing, we'll stop them."

At noon the next day, I flew out of Paraguay. There was nothing more I could do. I looked down over the city. At the cluster of houses, at the military vehicles I could still make out. We'd failed. The whole thing stank. I closed my eyes and wondered what I did from here.

***

I was met at the airport in Santiago by Joseph O'Toole, the man from FXC, who'd flown in shortly before I left for Paraguay. On February 6, two days later, we had a meeting with Gen. Clark. We hoped to press on with the aircraft deal, despite the fact that it had been made clear to us the Americans were not going to sanction it. Joe O'Toole was now acting as a private businessman, and did not care about his U.S. government masters.

Gen. Clark's message confirmed our fears. "The Chilean government has decided it will not sell its F-5Es and will not break international law at the urging of the Israeli government," he said. "We don't want Kfir aircraft -- we're going to go for Mirage 2000s. We won't be opening a letter of credit for Israel, and the letter of credit opened by Dr. Omshei for the Chilean government will be left to expire."

I sensed by his firmness that a power struggle was building up among factions in the Chilean ruling junta. Pinochet was pitted against Matthei and Stange, each of whom had his own presidential aspirations. As chief of logistics in the air force, Gen. Clark should have been on the side of his commanding officer, Gen. Matthei. But Clark was a Pinochet appointee, and he was more loyal to Pinochet than to Matthei or Stange.

At an opportune moment, I asked for a meeting with Matthei, without O'Toole present. It was quickly arranged, and Matthei was able to explain the background, pointing out that he did not "agree with the politics."

It was clear to him now, he said, that the Americans weren't going to support him in his ambitions to become president of Chile following Pinochet's defeat in the plebiscite. So he had tried to oppose the U.S.'s policies. With the backing of Adm. Jose Merino Castro, head of the navy, Gen. Matthei was going to try to stop the arms sales to Iraq and win over the U.S. Congress. He was attempting to hire as a consultant Edmund Muskie, a Democrat who had served as secretary of state. Muskie later turned him down, and someone in his office leaked word of Matthei's plan, but at the time, Matthei said they were still negotiating with him in the hope of setting up a Chilean lobby in the U.S. Congress.

I was encouraged by his words. He was still hoping to push the F-5E deal through and also stop the chemical trade to Iraq. It was unclear who would prevail in the Chilean political battle ahead, but if Matthei emerged the victor, perhaps our mission could still be accomplished.

My happiness was to be short-lived.

***

It was Robert Gates himself who telephoned Nachum Admoni, the Mossad chief, [1] early in February 1989, and told him the U.S. was not happy about the trouble the Israelis were stirring up in Chile. Word of Matthei's plans had apparently leaked out to the Bush administration, and Gates had been designated to take care of the potential problem. Gates asked Admoni if he was aware of what had happened in Paraguay and reminded him that the U.S. could protect its interests in whatever way it liked. Gates was also angry about my activities. He complained to Admoni that I'd arranged for accusations to be made about Cardoen in the Financial Times.

This was quite true. To help get world opinion on our side, I had been the source for Barbara Durr's story in the Financial Times exposing Cardoen's sales of chemical weapons to Iraq. Published on November 11, 1988, it was the first of such stories to make it into print. Subsequently, exposes of Cardoen's illegal activities were published in the Times and the Independent in London, and over the international wire services. But at the time, Barbara's was the only story published, and Gates didn't like it one bit. Even if what it said was true, he told Admoni, it had nothing to do with the Americans.

Admoni told me later that his reply to Gates was cool. The article was about Cardoen's chemical sales to Iraq, but didn't mention U.S. involvement. Admoni quoted a Hebrew saying that translates, "The hat on the thief's head is burning." He meant, more or less, that the Americans had a guilty conscience.

Gates replied that the Chileans -- meaning the faction led by Gen. Matthei -- were listening too much to Israel and would have to be taught a lesson.

The threatened lesson came shortly, when three grapes, out of the whole Chilean fruit harvest exported to the U.S., worth $850 million to $900 million annually, were found to be laced with cyanide. Three tiny grapes out of millions upon millions. It was an astonishing example of diligence by the U.S. Food and Drug Administration.

The FDA announced that all Chilean food imports into the United States -- potentially lethal foodstuffs -- would be banned. Shops and supermarkets across the nation withdrew Chilean foods. Empty shelves carried explanations that because of the danger of contamination of Chilean imports, certain articles had been removed for customers' safety.

The impact was catastrophic for Chile's economy. I was still in Chile when the effect was felt. It was tragic to watch tearful Chilean farmers trucking their grapes into Santiago and giving away carton-loads of grapes to the population. It was a demonstration of anger and frustration directed against the United States -- and their own government. They were so frustrated they didn't know what to do. It was a bizarre change of scene in the streets. Instead of the Carabineros throwing gas canisters to break up demonstrations against Pinochet, it was peasants and farmers throwing grapes everywhere. Supermarkets were giving away boxes of them -- in contrast to the empty shelves in the U.S. Food prices in Chile crashed, threatening to send the whole economy over the cliff. And all because of three grapes.

The American FDA tried to convince the Europeans to put a ban on Chilean exports, but it did not catch on.

Adm. Merino, one of the four members of the ruling junta, with responsibility for economics, made a nationwide telecast and calmed the Chileans down, assuring them the government would try to find the cause of the problem. He added it had not been Chile's fault -- the country did not produce contaminated food, particularly fruits laced with poison.

I got an emergency call to come to Matthei's office, and he asked me what I knew about it. I gave him a full rundown of the Gates-Admoni conversation. He smiled wistfully. "I thought so," he said. Clearly, he had lost the power struggle.

Chile immediately announced to the Americans that they would not be selling their F-5Es to Iran. This meant, of course, that they would go along with the Americans and continue the trade with Iraq. The effect was almost instantaneous. Suddenly there was no problem with Chilean food in the U.S. All bans were lifted. Chilean foodstuffs appeared back on the supermarket shelves.

One for the CIA. And for Carlos Cardoen.

***

I called Jerusalem and said, "What do you want me to do? Go on a one-man campaign and blow up Cardoen's plants?"

"Come on home, Ari," said Pazner.

"I've failed completely," I told him.

"You've got some very useful addresses of people who are dealing with Cardoen," said Pazner. "And let's not forget that the South Africans have stopped dealing with Iraq."

I shook my head. There was something I hadn't told him over the phone. After returning to Santiago in the wake of the coup in Paraguay, I had wandered into the pool area of the Sheraton San Cristobal Hotel and spotted two men sitting together: Gen. Van Der Westhuizen and Mark Thatcher. They were at a white metal table next to the bar with a couple of glasses in front of them. I was left in little doubt by the way they were laughing that they were the best of friends.

My suspicions were to be proved correct. While the South Africans were not dealing with Iraq, they were involved with Chile, which was just as bad. Israeli intelligence reports and assessments from other intelligence agencies confirmed that Mark Thatcher was continuing to provide military equipment through Cardoen to the Iraqis. All the nuclear missile projects that were continuing in Iraq were going through the Cardoen network, which had a joint venture with Ihsan Barbouti's projects in that country. Thatcher was very well connected with Barbouti. Working with Barbouti was Sarcis Sargalian, an American arms dealer of Lebanese-Armenian extraction. Also on the project for the U.S. government was the Armenian-Iranian, Richard Babayan, my old schoolmate. Based in Washington, D.C., Babayan controlled a large network of people providing equipment for Iraq. "I'm an Iranian patriot trying to get rid of the Khomeini regime," he often used to tell me.

The Israeli government was extremely concerned about the continued trade. What could we do? Pazner said I would have to make a presentation at a meeting of present and former chiefs of intelligence organizations in Israel. They operated as a committee, with the power to deliberate and set down guidelines for execution of cabinet decisions with respect to intelligence affairs. A watchdog group of professionals, the committee also had the power of life and death. It was this secret group that decided which individuals posed a threat to the State of Israel -- and decided who should live and who should die.

At these high-level meetings, who says what is not recorded. Only the final decision of the whole committee is recorded in top-secret form. In this manner, no one person can be held responsible for the decision to execute anyone. This committee included all the former and present heads of SHABAK, Mossad, Military Intelligence, and Police Intelligence. They are not all present at all times, but they need a quorum of six.

In March 1989, I made my presentation about the situation in Chile at a committee meeting at the Mossad villa near the Tel Aviv Country Club. Although we had not coordinated our reports, a Mossad analyst who was also present had drawn the same conclusions about Cardoen and Iraq.

Among the people named as enemies of the state was as prominent a figure as Robert Gates. There were also Richard Babayan, Gerald Bull, Ihsan Barbouti, Carlos Cardoen, Rodolfo Stange, Clair George, Earl Brian, George Cave, Andres Rodriguez, Bruce Rappaport, a number of Cardoen bankers in the United States, and a group of German scientists working with Bull in Iraq. Some of these Germans were new on the scene, others were the "survivors" from the first rampage in Europe.

I was not a party to the life-and-death decision-making. I had simply been asked to make a presentation. When the final deliberations took place, the other analysts and I were asked to leave.

Two days later I was called back to a reconvened meeting of the committee at the Mossad villa, for a more detailed presentation. It was later decided by the committee that the Egyptian-born U.S. resident, Ihsan Barbouti, and Gerald Bull, the supergun developer who was still living in Belgium, would be on the execution list, along with 12 others, mostly European scientists. It had been decided to go to the heart of the technology, as well as to some of the merchants. Carlos Cardoen was spared, however, presumably because of his closeness to the Chilean junta, and because his death would have created an uproar.

Although the committee agreed to go ahead with the executions right away, Prime Minister Shamir, fearing reprisals from the U.S., intervened. He wanted them put on hold -- and he was horrified when told that Gates and Rappaport had been originally listed as enemies of the state.

***

In early April 1989 I made a final trip to Chile to wrap up my affairs. While I was there, Joseph O'Toole called from Santa Ana, California, to say that the three C-130s could still be sold to Tehran. An Iranian agent, explained O'Toole, had been brought into the deal by Richard St. Francis, who worked for TransCapital, a Connecticut firm licensed to sell computer hardware used for the Promis program, and by Mike Timpani, who by now was no longer working for GMT.

I said there would be no deal. Because the Iranians had not been able to secure the release of the three Israeli soldiers, Prime Minister Shamir was not going to release the aircraft, even if the Iranians had paid money up front for them.

The planes were being held by Israel, but the U.S. was claiming jurisdiction over them because they were fitted with U.S. technology. The Israeli government, of course, had discretion on resale of U.S. equipment more than 20 years old. U.S. jurisdiction was not clear in this case, because Israel had bought 85 of the planes -- war booty -- from Vietnam in 1985 and 1986, paying $200,000 each for them.

O'Toole also wanted to buy 12 more C-130s parked in Canada, but owned by the Israeli government. They were being refurbished by Northwest Industries in Edmonton, Alberta. At first he didn't make it clear which customer wanted them. Finally he mentioned a person called Lettner, who was apparently very keen to make the purchase on behalf of Iran. There would be no harm, said O'Toole, at least in my talking to Lettner. I told O'Toole that I doubted that Prime Minister Shamir was going to allow the sale -- and we knew of no Iranian representative called Lettner.

O'Toole continued to urge me to meet this man, saying that the U.S. had given the nod for the sale of the planes. I phoned Israel, and a senior official in the Ministry of Defense told me that O'Toole had been in Israel in December 1988 talking to "the other side" -- to the Labor Party people -- and to the Defense Ministry. This was a surprise to me. In fact, I smelled a rat.

I called Iranian Defense Minister Jalali from Santiago to ask whether he knew anything about Lettner or about any deal with the U.S. No, Jalali had never heard of the man and knew nothing about a plan to sell C-130s to Tehran apart from those that Iran was trying to buy from Israel through me.

On the afternoon of April 20, 1989, I was scheduled to meet Robert Gates at a house in Paramus, New Jersey. This was arranged through the Prime Minister's Office to make a last-ditch plea about the Iraqi sales. On the suggestion of Pazner, who said he was intrigued to know what was going on, I also arranged with O'Toole to meet the mystery man Lettner at Kennedy Airport at 10:30 A.M., shortly after my arrival from Chile with my two bodyguards.

At the appointed time, I was approached in the main terminal by a grey-haired man in his late 40s, dressed in an elegant European-cut suit. I'd never met him before, but he introduced himself as the Connecticut businessman Richard St. Francis. He asked me to go to the upstairs coffee shop where we would soon be joined by Lettner, supposedly representing the Iranians. Sure enough, after we ordered coffee in the crowded shop, a huge man came over. He held out a hand that could have crushed an iron bar. This guy was no Sunday school teacher.

I looked him straight in the eyes. "Fine," I said. "But who are you really? And what do you want? I've called the Iranian defense minister, and he's never heard of you."

"That's crazy," he said. "I've just returned from visiting him in Tehran."

I told him that if there were to be a sale of C-130s to Iran, the U.S. and the Israeli governments each had to authorize it. Not only that, Israel didn't need any false end-user certificates. I told him that the governments would authorize the final use of the planes.

I was convinced this man was an undercover agent and that I was being taped. [2] It was obvious he was here to set me up. My activities in South America had clearly upset too many people, including Robert Gates. I was careful to make the comment that I was going to see Gates later that day. [3]

I told "Lettner" that if he was a representative of another country and he was lying, he had better watch out. If he wanted this deal to go through to Iran, he had to prove his identity, and the prime minister of Israel also had to approve the deal.

I stood up and left the coffeeshop. I took a limousine to Newark Airport and left the two bodyguards and my luggage there. It wasn't far to Paramus. I took a taxi, arriving at the house as arranged at two in the afternoon. It was a regular middle- class home with a small flower garden in front and a larger garden at the rear.

I rang the bell, and Robert Gates opened the door. It was a warm spring day, and he was dressed in a white short-sleeved shirt, open neck, blue trousers. Over his shirt he wore a light-brown vest. He ushered me into the living room. A smell of freshly made coffee wafted from the kitchen. He poured us a cup each. It didn't seem to be his home, but he was comfortable enough in it. I started talking about the man I had met that morning and my suspicions about him.

"Oh, don't worry about it," he said.

"But I do worry about it. It smelled of an attempt to set me up trying to get me to agree on tape to the illegal sale of aircraft to Iran."

He brushed my comment aside with a wave of his hand, giving me the impression that it was an irrelevant incident that had already been forgotten. I decided to drop the subject. But I wasn't going to forget the purpose of this meeting and once again raised the topic of the chemical sales to Iraq.

I talked to Robert Gates for more than two hours, recounting for him what we knew about Cardoen, and the threat that Iraq held for Israel. He had heard it all before, of course. He sat patiently listening, but remained noncommittal. At 4:30 P.M. I told him I had to leave. I knew I had gotten nowhere. He called a taxi for me, and I went back to Newark Airport.

The only flight to London was on Virgin Atlantic. We had made reservations, but when we got to the counter two hours ahead of time, we were told that somebody had canceled them. It was looking as if we weren't expected to take that flight to London. I pointed out we had okayed tickets. The supervisor was called, and we were able to get our seats. I spent a few days in London and returned to Israel.

The Chile chapter in my life was over. At the time, I felt I had failed. Still, if it hadn't been for the pressure Israel applied, the Iraqi arsenal would have been much deadlier.

As it was, Iraq's Scuds used during the Gulf War of 1991 were unable to carry heavy payloads of chemicals precisely because the scientists who could have helped Saddam Hussein to that end had been eliminated before they could finish their mission. Among them was Gerald Bull, killed by the Israelis; his body had been found at his Brussels apartment in March 1990.

_______________

Notes:

1. In 1989, Admoni left Mossad. He was the first chief of the intelligence agency whose resignation was reported in the international press, which happened because of misunderstandings with the Prime Minister's Office. Despite an argument with Shamir over the disposal of the arms-sales profits and his vehement opposition to Robert Maxwell's role as a money- launderer, he remained an unofficial adviser to Shamir, while taking a management position in a public company.

2. As he was later to admit in court, he was actually a U.S. Customs Service undercover agent, John Lisica.

3. This comment was not in the tapes played at my trial. There was, Lettner admitted, a gap in the recording, which he said was due to his inability, at a certain point, to flip the tape over without being observed.

[admin]

19. Mission to Colombo

ISRAEL'S SLUSH FUND fortune of $600 million plus interest remained safely tucked away in the East Bloc. In addition, there was also the CIA slush fund of another $600 million plus interest, which was sitting in various banks outside the U.S. A cool $1.2 billion. It was money the Americans would never be able to admit to owning, and when they started to feel vulnerable in 1987, after the failure of Robert Gates to be confirmed as CIA director, those in power in Washington decided to distance themselves from the illegal money.

A deal was cut with Prime Minister Shamir's office in which control of the CIA money was passed to Israel. It would remain U.S. money, but Israel would become its guardian. Because of the way things had been structured when I was a member of the Joint Israel-Iran Committee, I remained a signatory to the Israeli funds, and now the CIA money. The two other signatories at this time were Nachum Admoni and another member of Mossad.

I was more than happy to have this control. I was worried that the Americans were determined to "close me down" personally because of the problems I had caused them in South America. The last thing they wanted was for me to expose the deceits in the sale of Promis around the world -- something I'd threatened to do as a way of stopping the chemical sales to Iraq. But while I had some control over their money, I wondered what they could do to me. They had already tried something, using my newfound friend Lettner.

A lot of money moved around in 1988. It was in that year that Robert Maxwell approached Yitzhak Shamir and asked for a loan guarantee to expand his publishing empire. Shamir was happy to use the U.S. funds as a guarantee, as long as the Americans agreed. The man who personally gave Shamir the permission, according to Avi Pazner, was John Tower.

With a guaranteed backing of nearly $1 billion, Maxwell was able to borrow hundreds of millions from banks. And with the money, he went on a huge spending spree in 1988 and 1989. He bought a communications company in Japan. He bought a controlling interest in the Ma'ariv newspaper in Israel. He looked forward to the launch of The European. He tried to buy The Age newspaper in Melbourne for $750 million Australian, and he offered $230 million for a controlling stake in the West Australian newspaper, moves that were thwarted only by the Australian Labor government's foreign ownership policy.

Maxwell serviced the huge loans from the commissions he made from numerous business arrangements he had set up with the Israelis, including what he was getting from the sale of Promis. For the time being, everything looked rosy for the British businessman who claimed to have been born in Czechoslovakia. But he was in a precarious position. The guarantees were for renewable three-month periods; upon each renewal, we usually moved the funds to different banks. The three of us who held control over the accounts could close Maxwell down at any time by refusing to renew the guarantees, signing a piece of paper, and moving the $1 billion. But such thoughts weren't on our minds ... yet.

As I relaxed at home with Ora and our daughter Shira one evening in mid-1989, I reflected on the astonishing events of the past few years. I had an uneasy feeling that the past was catching up with the present, and the future was going to be bleak. I knew only too well what some of my "colleagues" were capable of doing. Hundreds of millions of dollars were involved, a fortune that had grown out of a small hush-hush sale of aircraft tires. No one realized when that first under-the-counter sale was made what it would all blow up to -- least of all me.

I'd started as a naive, ambitious 29-year-old thrilled to be playing in the big leagues with the elite of Israeli intelligence. At first the international jetting around had been exciting, the amounts of money I was handling had been dizzying -- and it was all to serve the interests of Israel, in which I deeply believed. I felt I was at the center, making important things happen in the world. But by 1985 or 1986, I realized I was merely implementing other people's policies. The initial excitement had faded, and I was tired of the job. In the arms trade, I'd had to deal with too many difficult, sleazy people, including Robert Maxwell, Rodolfo Stange, and Carlos Cardoen. When I learned of Israel's involvement with South Africa, I became further disillusioned. All this put together weighed on me. I felt like a rubber band that had been pulled on for too long, losing elasticity, and aware that sooner or later I would tear completely.

I wondered whether I shouldn't just throw in the job, forget about the money over which I had a one-third control, and take up something safe. On the other hand, I couldn't really escape. I had been up to my neck in an international bluff, and I couldn't just walk away from it. I knew too much.

***

For all his public image, Prime Minister Yitzhak Shamir was a very private man. Having fought underground against the British and then having spent the rest of his life in Mossad, rising to operations chief for Europe, he had learned not to trust people. He carried this mistrust into his position as prime minister, and there were a number of decisions he made that he refused to share even with his own party members. Many of his secrets were learned only on a need-to-know basis. Some of his secrets were known only by trusted advisers, of whom I was one. I knew, for example, about the bank account, held by Shamir's son, Yair, which had been started up after Admoni, I, and others had taken some profits in 1987. I knew how often Shamir would get things he believed were in Israel's interest done without cabinet consent -- such as sending me to Peru to collect the nuclear substances.

And I was also well aware of Shamir's closeness to the Soviets. As early as 1984 Shamir had authorized intelligence exchanges with the Soviets, including sanitized American intelligence reports about nuclear issues and evaluations of Soviet nuclear technology. These reports were obtained in part through Rafi Eitan's U.S. spy network. One intelligence exchange meeting took place in New Delhi between the KGB, Mossad, and Indian intelligence to discuss the Pakistani nuclear reactor and India's desire to destroy it. The three nations were all afraid of President Zia el Haq's nuclear project, which was known to the U.S. but overlooked as his prize for backing the Mujahedin in Afghanistan. Shamir saw the Libyan-financed project, known as the Islamic Bomb, as a direct threat to Israel, just like the Iraqi nuclear program. It was bizarre, but on nuclear issues our American allies and their friends such as Pakistan and Iraq were aligned against Israel, forcing Shamir to find support from the Soviet Union.

In 1986, after Chebrikov and Shamir reached an agreement on the immigration of Soviet Jews, the flow of Israeli intelligence to the Soviet Union expanded even more. Israel began regularly exchanging intelligence with the Soviets on the capabilities of the pro-American Arab countries -- Saudi Arabia, Jordan, Egypt, and even Iraq, although the Soviets were also arming the Iraqis. For their part, the Soviets, as late as 1989, were handing over information to Israel from their network in Iraq about the Iraqi nuclear and chemical arsenals. They were also reporting about U.S. and other nations' relations with the Iraqis.

It was altogether a very friendly affair, particularly after the Israelis had transferred so much of the slush fund into Soviet repositories. Shamir became very chummy with Chebrikov, as did other members of the Joint Committee. As a result of these relationships with the East Bloc, I was later accused of being a Soviet sympathizer.

***

One of Shamir's best-kept secrets was his clandestine attempt to negotiate a solution of his own to the Palestinian situation with the PLO.

Despite Israel's generally perceived enmity with the Palestine Liberation Organization, Shamir and some of the PLO leadership shared a common belief that peace in the Middle East would come not by Israel's giving up the West Bank and the Gaza Strip, but by allowing the Palestinians to establish their own nation in what is now Jordan.

Jordan was created as the result of a feud between the sons of the Saudi King Saud bin Abdul-Aziz over who was to succeed him. The British, who controlled the area, came to a compromise and carved out a piece of Palestine and a piece of the Arabian peninsula and made a new kingdom so all the brothers would be happy. While the new Jordan had an almost 70 percent Palestinian population, the Bedouins were in control of the army, the king's power base.

Before the 1967 war between the Arabs and Israel, the ruling Labor Party never saw the Palestinians as any real threat to Israel. The PLO was considered a bunch of cutthroat terrorists who posed no political danger, so Labor never tried to deal with the broader Palestinian issue. After the war, when the Gaza Strip and the West Bank of the River Jordan fell into the hands of Israel, a million and a half Palestinians came under Israeli military rule.

One of the few people in the Labor Party who was conscious of the problems of holding these territories was the then prime minister of Israel, Levi Eshkol. He realized that some type of accommodation that included the settlement of refugees had to be reached with the Arab countries, and especially the Palestinians.

Eshkol offered to start negotiations with President Garnal Abdel Nasser of Egypt for an all-encompassing peace treaty between Israel and the Arab countries, including settlement of the Palestinian question. He even met with Nasser secretly on two occasions to discuss the notion. But both men died within a year of each other. Nasser purportedly collapsed with a stroke while he was giving a speech; Eshkol was reported to have died of a heart attack while visiting his home kibbutz, Degania.

Nasser's successor, Anwar Sadat, believed the best way to deal with Israel was to offer peace without really settling the Palestinian question. Eshkol's successor in Israel was former Foreign Minister Golda Meir, whose perspective was very limited -- she could not see beyond immediate goals. In 1948 she had struck up a friendship with King Abdullah of Jordan. They both believed the Palestinian problem would one day just go away.

But as a result of his friendship with Israel, King Abdullah was stabbed to death in 1948 in the El Aqsa Mosque in East Jerusalem, which was then under Jordanian control. After his death, his son, Talal, was made king for a few months, but he was found to be mentally disturbed and was sent off to an asylum in Switzerland where he eventually died in peace. Talal's son, Hussein, then became king of Jordan. He and his advisers began talks with the Labor Party, including Golda Meir, and once again they all believed that the Palestinian issue would go away.

King Hussein became an American favorite. As long as he ruled Jordan and there was no Palestinian state there, militant Palestinians would be no threat to America's oil supply in neighboring Saudi Arabia. Golda Meir and other Labor leaders, following America's lead, were not interested in dethroning King Hussein.

In the meantime, after the 1967 war, the PLO and other Palestinian groups moved out of the West Bank and the Gaza Strip into Jordan. Hussein thought wrongly that he would be able to contain them. The PLO with its forces became a state within a state, and the king lost complete control of large portions of his country. The PLO began hijacking civilian airliners and bringing them to Jordan. The situation reached a crisis in 1970 when the PLO landed three commercial planes in Az-Zarqa, Jordan, ordered the passengers off, and then blew the aircraft up, with the king unable to do a thing about it.

Realizing how little power he had over the Palestinians, King Hussein decided to unleash his army against them. He achieved some success until the Syrians decided, in 1970, to intervene on behalf of the Palestinians. At issue was the very existence of the king -- or the establishment of a Palestinian state in Jordan. It was then that Israeli Prime Minister Golda Meir arguably made the worst political mistake in the history of Israel. She ordered the Israel Defense Forces to be mobilized against the Syrians. In doing so, she prevented the establishment of a Palestinian state in Jordan, and she kept the king in power. The threat by militant Palestinians to Saudi oilfields was prevented, which made the Americans happy, but as far as Israel's longterm strategic interest was concerned, any hopes of creating a Palestinian state in Jordan had received a major setback. Ultimately the price of this decision could still be the very existence of Israel.

As a result of Golda Meir's decision, King Hussein was able to maneuver his army within Jordan, massacre some 20,000 Palestinians, and throw all the PLO people out of Jordan. As the PLO moved into Lebanon, many Palestinian fighters came to the Jordan-Israel border and surrendered to Israeli troops rather than fall into the hands of the Bedouin army, which had a reputation for not taking prisoners.

After Likud took power in Israel in 1977, Prime Minister Menachem Begin and Egypt's President Sadat came up with a face-saving formula over the Palestinian issue and talked about autonomy in the West Bank. Begin gave the Sinai back, and Sadat let go of the West Bank and the Palestinian issue. All Sadat was interested in was getting back the Sinai. The Gaza Strip, which had been under Egyptian control before 1967, had no appeal for him because it had a large Palestinian population. For Begin, the West Bank and Gaza Strip were important for Israel to retain both for historical and strategic reasons.

After the Camp David agreements, and after the Republicans had taken over in 1981, the U.S. and the "moderate" Arab countries started pressing for a mini-Palestinian state in the Gaza Strip and the West Bank, which would not threaten U.S. oil interests, as would a Palestinian state in Jordan, which Likud wanted. Likud believed that Israel could work closely with a Palestinian state established in Jordan, but nothing was done about it. The 1984 election resulted in a hung parliament and the formation of the famous Likud-Labor coalition. Then Shimon Peres, who was prime minister from late 1984 to late 1986, agreed to consider some type of international conference to discuss the issue of a Palestinian entity in the West Bank and Gaza Strip, conforming with U.S. policy. But Likud, a major partner in the coalition, blocked the whole initiative and thus accelerated the U.S. tilt toward Iraq.

With Shamir back in power after 1986, secret attempts were made to talk to the Palestinian leadership, including the PLO, even though to this day the organization is not publicly or officially recognized by the Israeli government, especially Likud. The talks involved a plan to get rid of the king of Jordan and take over his country as a Palestinian state. The population was 70 percent Palestinian anyway. Such a plan would have outraged the Labor Party in Israel, the U.S. Republican administration, the king of Jordan, and the Saudis, if any of them found out about it. However, various Palestinian circles, especially what was known as the radical camp, along with the Syrians and the Soviet Union, were happy to go along with it.

The Soviets believed a Palestinian state sandwiched in the West Bank between Jordan and Israel would just cause more trouble in the Middle East, reducing Israel's standing as a balancing power in the region. Even though publicly the Soviet policy was anti-Israel, privately the Soviets wanted what Shamir wanted -- a Palestinian state in place of Jordan. At a secret meeting in 1986, Shamir and Chebrikov agreed that there would be no negotiations with the PLO over the West Bank as such. There would be an attempt for an overall solution in the Middle East. And the cold solution would be to "do away" with King Hussein of Jordan.

The deal between Chebrikov and Shamir was that if the Likud Party held out against a Palestinian state in the West Bank and Gaza Strip and against an American-dictated "peace treaty," the Soviets would help Israel. They would do this by helping Israel populate the West Bank with Jews, not only from their country but also with immigrants from Soviet-backed Ethiopia.

As events were to prove, the agreement was kept to the letter. By 1991 more than 250,000 Soviet Jews had emigrated to Israel with another 30,000 Ethiopian Jews airlifted from Addis Ababa.

The bond that developed between Israel and the Soviet Union was far stronger than anyone realized. Since Israel did not have diplomatic representation in the Soviet Union, the Jews were getting exit visas to Austria and Italy and then waiting. They would apply to leave the Soviet Union saying they wanted to go to their homeland, but in Vienna and Rome they would apply for immigration visas to the U.S. This was limited by opening an Israeli consular section in Moscow through which the Israeli government would grant visas to enter Israel for Soviet Jews. All paperwork was completed in Moscow, so emigrants would not go rushing off to the U.S. They had to go directly to Israel, where they were needed to populate the West Bank, thereby taking up the land and spoiling any U.S. plans to grant it to the Palestinians.

The Palestinian issue came to a head after the outbreak of the Intifada in the West Bank and Gaza Strip in 1987. The U.S. was talking about a peace conference with the Palestinians and had officially sanctioned a dialogue between the U.S. ambassador in Tunis and the PLO leadership. Shamir, instead of bowing to pressure and accepting the American proposals, announced he would come up with a peace plan of his own.

That peace plan, which essentially would create a Palestinian state in Jordan, was not made public. But Shamir discussed it with his advisers. In this period of time, Yasser Arafat was beating the wardrums against Jordan. It was risky, but risks had to be taken because U.S. pressure on Shamir was enormous.

It was against this background that Shamir decided that several of his advisers should meet PLO leaders around the world with a view to developing the "Jordanian option." Orders were given to one of the advisers to travel to Tunis, to PLO headquarters, and meet Yasser Arafat. It was in late June 1989, and that meeting was the first of three with the PLO leader, on behalf of Shamir.

The feasibility and theoretical scenarios of starting a war against Jordan, with Israel supporting an all-out Palestinian uprising against the king, were discussed. This was an important part of Shamir's secret plan to resolve the Palestinian situation. Surprising as it may seem, this secret was shared with Arafat.

After these discussions with Arafat, a deputy minister in the Prime Minister's Office, Ehud Ulmart, who was very close to Shamir, met the PLO leader, in a private home in Tunis City, where further discussions were held about the Jordanian option.

Based on these discussions, Prime Minister Shamir had a new secret mission for me. It was a complex plan, but if successful, it would have a twofold effect -- it would free the three Israeli soldiers who were being held in Lebanon, and it would bring us closer to the PLO in our talks with them. It would require my presence in Sri Lanka.

***

As I flew to Colombo early in July 1989, I went over the plan, which could be likened to a political chess game in which one side moves forward but is careful to protect its interests. And at any time something could go wrong.

Despite Shamir's earlier decision that the C-130 deal was off, he decided to try again to negotiate the sale of the planes in return for Tehran's help in securing the release of the soldiers. This time we were to try to enlist the aid of the PLO, which had a representative in Sri Lanka. If Iran could find out where the soldiers were, the PLO might be able to get them freed from the clutches of the Shi'ites, who were holding them.

Sri Lanka had been chosen because it was a different "smokescreen" country to send the aircraft through, and the PLO had a man there I could talk to. Naturally, the PLO wanted a slice of the cake. The demands that Arafat had laid down during the secret meetings in Tunis were that, in exchange for their help, Israel should make a donation to the Sri Lankan Tamil guerrillas, the LTTE, who would then use the money to buy weapons from the PLO.

So we would be using the Sri Lankan government as a conduit for our aircraft to Iran -- and we'd be using the LTTE as a cover for putting money into the hands of the PLO for their cooperation. It was a crazy situation. Israel had advisers helping the Sri Lankan Army in its fight against the rebels, yet here was I, acting on behalf of the Israeli government, arranging payment to the rebels so they could buy weapons to fight the army.

I checked into the Ramada hotel in downtown Colombo and, later in the evening, wandered down to the lobby, where I ordered a welcome dish of ice cream. I struck up a friendly conversation with a man who introduced himself as the Egyptian charge d'affaires. As we chatted, neither of us could help but notice a Western man in his late 60s, with a white beard, dancing alone to the small band.

"Just look at that crazy guy," said my Egyptian companion. "He either loves dancing alone, or he can't find himself a woman."

We were soon to discover who he was. The music finished, and he flopped down in the lounge seat beside me, flapping his shirt against his chest. "That was good exercise, " he said.

He reached into his shirt pocket and produced a business card. It portrayed planets circling the earth. It read:

One Universe
A Non-Profit Alliance
Leon Siff, Chief Organizer
National Food Relief -- Homes for the Homeless
Counseling Without Walls -- Advocates for the Homeless

Siff extended a hand, explaining he was a retired probation officer from Los Angeles, who was now involved with charitable work. The full name of his organization, although his card didn't say it, was Friends of the Universe, set up, he said, to help the homeless living in and around Venice Beach in Los Angeles.

The American explained that he was Jewish and was in Sri Lanka to visit his son, who had become a Buddhist monk. I was to see a lot more of Siff during my stay in the steamy city.

Later I called the PLO representative, as previously arranged, and he was delighted to see me. We spoke in Hebrew. He had been in an Israeli jail for 12 years after trying to plant a bomb in the town of Afula. It had blown up prematurely and almost killed him.

My next meeting, also arranged beforehand, was with the Sri Lankan minister of information, at his home. As a confidant of President Ranasinghe Premadasa, he was my stepping stone. I explained to him over dinner that my prime minister would be most grateful, and would ensure increased military assistance to his army, if Sri Lanka would agree to act as the conduit for the C-130s. The minister arranged for me to meet Premadasa at the presidential palace the next day. The first step of my mission had been accomplished.

The next morning I had a low-key breakfast meeting with the PLO representative. Israel, I said, was willing to pay the Tamils $8 million if the PLO would help Iran to get the three captured soldiers out of the hands of the Shi'ite groups in Lebanon. Officially, the money was to be used by the Tamils for "humanitarian purposes," although we were both aware it would go to the purchase of weapons from the PLO.

Back at the hotel that evening, I spotted Leon Siff dancing on his own again. When he saw me, he left the dance floor and made his way over. He asked how my day had been and where I had gone, but I dodged the topic. Then he turned the subject around to money.

"Ari," he said, "my group needs all the support it can get. I know you can help. I'd like you to come to the U.S. some time and see what we do. How about it?"

"Sure," I said, "if I'm in Los Angeles, I'll look you up."

In the next 48 hours I met the president, the commander of the Sri Lankan Air Force, and the PLO representative, nudging them all along toward the execution of the Israeli plan to sell the C-130s in exchange for the three soldiers. I still had to meet the Tamils, even though contact had been made with their London office, to arrange their payment. Of course, this part of the deal was unknown to the Sri Lankan government.

My journey to Jaffna was not the most relaxed. I had decided to drive myself because I didn't want any witnesses to my movements or negotiations. The narrow road took me through numerous roadblocks set up by either the Sri Lankan Army or the Indian Army. The Indians were highly suspicious of a "tourist" heading north to Jaffna at a time when the rebels were active. But after a great deal of argument they allowed me to proceed, even though the area north had been designated as a military operations zone.

That night, as previously arranged through the PLO representative, I was picked up at the Subhi Hotel in Jaffna and driven to a Tamil village. My guide took me to a large house where teenage boys stood guard, each holding a Kalashnikov rifle. I was ushered inside, where a number of men were waiting in the stark light of a propane lamp. Their leader, whose codename was Tiger One, spoke reasonably good English and introduced himself and his compatriots. I was a sitting duck for their propaganda, but it had to be done.

Tiger One, a middle-aged, short, chubby, dark-complexioned man, paced the room as he informed me there were 50 million Tamils on the Indian mainland in Tamil Nadu, and they were all very unhappy with the way they had been treated by Rajiv Gandhi and his Congress Party. Gandhi had created a pro-Indian front in Sri Lanka, and he wanted to annex the Tamil areas in Sri Lanka to India.

"He has become a bully," Tiger One snapped. "He even wants the top part of Sri Lanka -- our homeland. Well, let us tell you that Rajiv Gandhi will pay for his heavy-handedness. We will continue our struggle for independence to the last man. We will fight whatever and whomever they throw at us."

I explained that I was there to make a contribution to their cause. The Tamil leader was quick to point out that the Israeli government might well be offering them $8 million, but the Israelis were also assisting the Sri Lankan Army against the Tamils. They conceded, however, they needed the money. I explained it was ransom for the three soldiers, but I didn't tell them about the C-130s that were going to Iran as well.

My hosts and I struck a deal. They would accept the money from Israel, and they would contact the PLO mission in Colombo informing them of the arrangement. Hopefully, we could then expect PLO assistance in trying to secure the release of our soldiers.

The return journey to Colombo was horrendous. Inevitably, the car broke down, and I ended up being towed, sleeping in the car, and finding myself at the point of a gun as a gang of Tamil road bandits demanded money.

Back in the capital, I phoned Nick Davies and told him to go ahead. This was our prearranged signal for him to make the $8 million payment to the Tamils through their London office. Naturally, the money came out of a slush-fund account.

***

I flew back to Israel, right into a storm. The talks with the PLO had been leaked, I found out, by Rabbi Ovadia Yusef, leader of the Shas Party, who had himself had discussions about the Palestinian question with Arab leaders. Some coalition members were furious. Shamir was on the receiving end of their anger, and he realized he had to be seen to be backing out of his commitment. He needed scapegoats.

I guessed what was coming and decided to stay one step ahead. I consulted the other two signatories to the slush-fund accounts, and persuaded them that for the physical and financial protection of everyone who'd been on the Joint Committee, we should move the CIA money now controlled by Israel to the East Bloc.

The CIA money, by now up to $710 million, went into the East on a series of straightforward transfers, without using Maxwell's companies as a conduit. The move left Maxwell dangling. The banks that had lent him money in 1988 no longer had their guarantees. Shamir was furious that his friend had been left in such a vulnerable position, and he had to conduct a swift public relations exercise with the banks to ensure they continued to shore Maxwell up.

In early fall 1989, Shamir called me into his office. He was sitting behind his desk, his tiny body dwarfed in the large leather chair. I stood in silence, staring into his severe face. This was to be the showdown.

"You have got too close to our enemies," he said.

"If you're talking about the PLO contacts, you know I was only following orders. And we couldn't back off anyway. I have personally promised the families of those soldiers that we will do all we can to help them."

"You exceeded your authority." His face was like a stone, cold and grey. "And what about the money?" he asked. "Are you stealing it?"

An old Hebrew saying came into my head. "Ganav mi ganav patur," I said. "A thief from a thief is off the hook."

He glared at me for a moment. Then with a flick of his hand he dismissed me. "Lecht -- Go!" he ordered. I went. I knew him well enough to know that this was not the end of the affair.

***

Shamir's 1989 secret peace plan, from which he was now trying to extricate himself, never got anywhere. Infighting in the cabinet effectively ended any contact between the PLO and Shamir's office. King Hussein, through his own intelligence network, heard about the plan to unseat him and took precautionary steps. He aligned himself even more closely with Saddam Hussein and extracted a promise that the Iraqi leader would help the king if there were an uprising in Jordan.

The Americans, meanwhile, kept up the pressure on Shamir. They joined in full chorus with Egypt, Jordan, and Iraq, and insisted that the West Bank and Gaza Strip should be the new Palestinian state. The king of Jordan had also officially relinquished any responsibility for the Palestinians or for the West Bank and said he would no longer be interested in any negotiations over a Jordanian-Palestinian federation. This was the situation when the U.S. finally fell out with Saddam Hussein in August 1990 and decided it needed to establish its own military presence in the region.

When Saddam Hussein clashed with the U.S. in early 1991, the Palestinian populace all over the world suddenly started seeing him as their hero. Here was an Arab leader fighting singlehandedly against U.S. imperialism. Arafat had no choice but to show public support for Iraq against the United States. The king of Jordan, whose loyalties were divided, did not know where to turn at first, but then decided to lean toward Saddam Hussein and show the Palestinians that he was also a protector of the Arab cause. The Syrians, however, who were anti-Saddam Hussein, suddenly changed sides and went to the Americans.

As events were to prove, when the Gulf War ended in Iraq's defeat and the loss of tens of thousands of Iraqi soldiers, Arafat lost his standing. His money sources from Saudi Arabia and other Gulf states were cut off, and what little credibility he'd built up in the West was nullified. The king of Jordan, even though he had backed Saddam Hussein in the Gulf War, quickly returned to the U.S. fold. The Syrians, for their cooperation in the Gulf War, were given control over Lebanon. Israel found itself back in one of the most difficult diplomatic situations possible, in which the Americans were saying the "moderate" Palestinians and not the PLO were to be involved in negotiations with Israel over the West Bank and Gaza Strip.

All the covert negotiations between Likud and the PLO leadership in 1988 and 1989 went down the drain. A real attempt to solve the Palestinian question, without threatening the existence of the State of Israel, was again aborted by the Americans and their friends.

[admin]

20. Means of War

IN OCTOBER 1989, a couple of weeks after my confrontation with Shamir, Avi Pazner suggested I take a leave of absence. I welcomed the idea. It had been a hectic year, during which I could have been killed or arrested at any moment. I needed a break.

I asked Ora if she'd like to vacation for a couple of weeks in Sydney, a city I had fallen in love with on earlier visits. I promised to show her and Shira the opera house and take them out on a ferry across the harbor. Ora said she thought it was a wonderful idea.

The day before we were to leave, the phone rang. It was the travel agent through whom government employees like myself made arrangements. Our reservations on the computer had inexplicably disappeared, but the difficulty had been overcome, and the tickets would be waiting for us. Later that evening there was another call.

"Ari? It's Leon Siff. Remember me?"

How could I forget Leon Siff, the famous Sri Lankan dancer?

"Hey, this is just a contact call. You promised to look in on me some time. I'm still waiting. I'd like you to see my Friends of the Universe operation."

Leon's sense of timing was extraordinary. I suspected it was some type of operation, and my curiosity was piqued. I told him I would call him back.

I expected Ora to be pretty upset if I went to Los Angeles and let her and Shira find their own way to Sydney, but to my surprise she didn't mind at all.

"I'm not interested in what your friend has to show you, but that doesn't matter. You go see him, and Shira and I will meet up with you later."

So we left it at that. I changed the routing of my flight to Sydney, to go via Los Angeles.

I arrived in Los Angeles on Saturday, October 28, after spending two days with John de Laroque in southern France. Leon Siff was waiting. He was delighted to see me. And even though I had booked into a hotel, he would hear nothing of it -- I was to be his guest at his home. The house in Hollywood had the same address as on his card for the Friends of the Universe.

"It'll be my pleasure to show you around for a few days," he said.

"That's fine, but I'm leaving on Tuesday."

Mock horror spread over his face. "You can't leave on Tuesday. I've arranged a party in your honor."

He was so insistent that I relented again and agreed to spend the whole week there. I called Ora. Again she surprised me, quickly agreeing to wait a few more days in Israel and then meet me in Sydney the following Monday.

Leon drove me around Los Angeles, taking me to Venice Beach where the homeless were sleeping. He talked about land he hoped to buy in Sri Lanka for his organization.

I was still waiting for the pitch.

On Tuesday evening Leon's friends arrived, a mixed bunch of pseudo-intellectuals and hippies of all ages who gathered in the front room. I strolled among them, the guest of honor, a little bemused by the purpose of the gathering. Suddenly a face I recognized stood out in the crowd. I was taken aback. It was my old friend Joseph O'Toole, the man who had arranged for me and Richard St. Francis to meet Lettner at Kennedy Airport several months earlier. Something was seriously wrong.

As O'Toole approached to say hello, I turned on Leon Siff. "How do you two know each other?" I asked as casually as my voice would allow.

"Oh, I heard you were in town and dropped by to say hello," said O'Toole. I had an uneasy feeling. Siff and O'Toole were obviously acquaintances. O'Toole brought the conversation around to the three C-130s.

"My company had that deal all set up," he said. "We were going to be the go-between for Israel and Iran, but you guys cut us out. You wanted to deal through Sri Lanka without involving us."

I didn't remind him that the Iranians had never heard of his associate Lettner. I didn't remind him of anything. I just didn't want to talk to the man.

Later I hit Leon Siff with one big question: "What the hell's going on?"

He shrugged and said he didn't know what I was talking about. I knew a showdown of some sort was coming. My instincts told me that if something was going to happen, it might as well happen here.

Three days later, on Friday, November 3, 1989, the day before I was due to leave, I was taking a shower in Siff's bathroom. It was noon. Allowing for time differences, I would be in Sydney on Monday. I was looking forward to it. Suddenly the bathroom door swung open. Through the steam I saw a group of people in blue uniforms -- with guns, all pointing at me.

A man in a suit stepped forward.

"What's going on?" I demanded.

"Please step out of the shower and get dressed," he said. They kept their guns on me as I walked past them. There was a woman among them. I was later to learn her name was Elaine Banar, a case manager for the strategic unit of the U.S. Customs Service, and in charge of the arrest.

As I made my way to the bedroom, Leon Siff didn't protest. He didn't say a word. He just stood and watched.

They confiscated my briefcase, which contained all my papers, address book, passport, money, and credit cards. Then they let me dress, pulled my arms behind me, and clicked on handcuffs. I glared at Siff.

"Thanks, Leon," I said.

I turned to my captors. "What are you arresting me for?"

The answer shocked me. Conspiracy to sell three U.S.-built C-130s to Iran in contravention of the U.S. Arms Export Control Act. The evidence against me, I was told, emerged from that meeting with Lettner in the Kennedy Airport coffee shop.

They led me out to a car, and I was pushed into the front seat. Elaine Banar sat in the rear. There were cars behind and cars in front, all filled with special agents. The man at the wheel of the car I was in, Special Agent Staudinger, said into the radio, "We need to start an extradition hearing to New York's Southern District for an extremely violent and dangerous criminal we've just captured."

Later, in the federal magistrate's court in Los Angeles, I acted as my own attorney and made a deal with the judge waiving my extradition to New York in return for a quick transfer there -- I had heard horror stories of three-month prison bus trips from Los Angeles to New York.

The magistrate ordered that I be flown to the Southern District of New York within ten days. Then they took me, with chains around my feet and hands, to the Metropolitan Detention Center where I was to spend the next three days. International calls were not permitted and I had no address book, so all I could do was make a collect call to Leon Siff. He refused to admit having any part in my arrest and said he was looking for a lawyer for me.

He told me that Ann Magori had phoned from Israel -- I'd left Leon's number as a way to contact me -- and was on her way to see me. Ann was a real estate agent whom Ora and I had met while hunting for an apartment. A close relationship had developed among the three of us, and Ann was planning to join us on our vacation in Australia. She was an American-born orthodox woman. But why was she coming to Los Angeles instead of Ora?

"What about my wife?" I asked Siff.

He didn't know whether Ora had even been told about my arrest.

I was visited at the detention center by the lawyer Siff had found. He introduced himself as Harry Weiss. He was still looking into my case, he said, but he was confident of striking a deal. It was necessary, however, for me to go to New York first.

When Ann Magori arrived, she visited me in jail and told me, "There's something very wrong. I've been talking all day to Leon Siff, and I think he and his friends are all involved with the American government. Just be careful."

At around 3:00 A.M. November 9, a Thursday, I was chained and taken out to a bus filled with other prisoners. It was a nightmare scene from the Dark Ages in which grey-faced men shuffled along to the rattle of their chains. Many of them were hardened criminals. There were to be no special privileges for a man who had done nothing more than serve his government to the best of his ability. Indeed, the opposite was true.

We were driven to an airfield, herded off the bus, and told to form a line. A circle of U.S. marshals with shotguns surrounded us, illuminated by distant lighting. And there we waited for an hour until an old 737, painted completely white, landed. It was now about four or five in the morning, but because they had taken my watch I couldn't be sure.

Struggling up the steps in our chains, we made our way onto the aircraft, a special Bureau of Prisons flight that transported prisoners around the U.S. The in-flight service was nothing to speak of. One of the prisoners asked for water and when told there was none on board complained this was unconstitutional. He demanded the name of the marshal who had refused him. The marshal told him to wait for a moment. A few seconds later he came from the rear of the plane with three others, who then began to slap the unfortunate prisoner around and call him a smartass.

The plane landed to offload some prisoners, and others were brought on, this time some women too. Then it would land at another place, and the same procedure would be played out. Men and women came out of the toilet with their clothing stained, finding it difficult to manipulate their chains in the cramped space. Our only refreshments as we hopscotched east across the U.S. were a sweet drink, a chocolate bar, and an apple.

At 10:00 P.M. we landed at Oklahoma City. My name was called along with others, and we were herded off, to be met by more shotgun-wielding marshals. I was taken to El Reno Federal Penitentiary and led down metal stairs to an underground cellblock. You could almost touch the sides of the cell with your arms spread out. On one side was a metal bunkbed. Someone had spilled sugar on it, and it was crawling with cockroaches. The concrete floor was wet. In a corner was an aluminum toilet with a sink attached. The toilet worked, but the sink didn't.

They kept me there for two days, in what I later learned were among the worst prison conditions in the U.S. It was illegal to hold anyone that long without allowing them out for exercise, but they didn't care. I had been marked as dangerous, and that was that.

My only reprieve was that they allowed me to use the phone, and I called Leon Siff collect.

"I don't want to talk to you," he said. "You're a criminal. Your friend Ann is here, she'd like to talk to you."

Her words cut me dead: "I hope you rot in jail."

I got through to Harry Weiss and asked him to connect me on a three-way line with Ora in Israel. I knew that government agents would be listening in, but at least Ora would confirm that I had been working for Israel.

When Ora came on the line, my hopes collapsed. "I don't know how I can help you, Ari," she said.

"You can help by coming here instantly and finding me a lawyer. And by telling them who I am."

"I can't do it. I've been talking to people in the government and I can't come. I can't leave. I can't do anything."

"My God, Ora. Have they gotten to you, too?"

She didn't answer. I hung up.

My world was shaken. For more than a decade I'd dealt with the slimiest, least trustworthy people on earth, who had made me cynical far beyond my years. And, of course, my marriage to Ora had been built on a foundation of distrust from the start. She had been helping the Americans. And I had certainly done my share of betraying her trust by sleeping around. Still, somewhere in my deepest soul, I wanted to believe that husband and wife were there for each other in a crisis. When her distant voice told me it wasn't so, my heart sank.

In the next hour or so, as I sat on the bed in my cell, I realized how profoundly alone I was.

On that second day I was presented with a cellmate. Although he was wearing prison khakis like the rest of us, he was tanned, clean-shaven, and, unlike any other prisoner, wearing a watch. Almost immediately he began to tell me his sob story of how he owned copper mines and the "federal government bastards" had come down heavily on him for taxes and thrown him into this jail. Suddenly he asked, "And why are you here?"

I guessed that the man was wired, so I shrugged and said nothing. I lay back on my bed and decided to wait it out.

He got nowhere with me. And I could see that the stench of that dank cell and my silence were getting to him. Suddenly he yelled to a guard, "You mother-fucking bastards, why are you keeping me here?"

The guards understood the cue. Shortly afterwards they came and took him away -- I believe to freedom.

***

I finally arrived in New York after 12 days, not the ten that had been ordered. I knew they were trying to break me down, trying to get me to confess to a "crime" of which I knew I was innocent. It was a frightening experience, to be away from your country, your family, your friends. And I began to wonder just who were my friends. I also wondered about Ora; had they really brainwashed her about me? Had they threatened her and Shira? Or did she already know what was going to happen before I left Israel? After all, she had worked for Israeli intelligence. And she had been strangely agreeable about all my last-minute changes in travel plans. Had Ora betrayed me? I didn't want to believe that one. I forced that thought from my mind -- or at least tried to.

In the prison van from the airport to the Metropolitan Correctional Center in Manhattan I sat next to a Latino man who had been flown from Miami to Oklahoma and from there to New York.

"Comrade criminal," he said, "the machine we call society has just spit you out ... it's just spit you out."

At the correctional center I was segregated from the rest of those who had arrived with me. Everyone else was given brown jumpsuits. I was ordered to put on an orange uniform. I had been classified as dangerous. They were really determined to break me.

Two days later during a brief court hearing I asked the magistrate why I was classified as dangerous. The assistant U.S. attorney for the Southern District of New York, Baruch Weiss, immediately exclaimed: "That was a mistake, your honor."

One for me. I was declassified to the status of regular prisoner.

The lawyer Harry Weiss had found to represent me, Don Sonterelli, came up with a fascinating proposition. He and his partner, he said, had flown in specially from Taiwan to see me, and they wanted to hear about my North Korean adventures. I told them that was quite irrelevant to the charge I suspected they were going to throw at me -- of arms dealing -- and asked why they were so interested. They said they had another client who knew about C-130 aircraft in North Korea and Vietnam. I told them I wouldn't discuss it further.

"Look, it's very simple," Sonterelli persisted. "You pay our fee before you're indicted, then all you have to do is plead guilty and home you go. We'll be able to work out a deal with the prosecutor."

"Oh yes," I said. "And what is your fee?"

"$125,000."

"I'll make no deals," I said.

They were urging me to admit to a crime I hadn't committed. I was going to fight this all the way. They said goodbye, leaving me fully aware of the long fight that lay ahead.

That wasn't the only approach made to me behind the scenes. Leonard Joy, of the Legal Aid Society of New York, visited me one day in the holding pen after a bail hearing and offered his services "on the house" to plead me guilty and get me a deal to go back to Israel. I asked him how he knew about the case, and his mumbling reply left me unsatisfied. I thanked him for his interest in my welfare and bade him goodbye.

Next I was sitting in a common area at MCC when I was told an attorney was there to see me. I went down to the attorney conference room, and a very well-known lawyer shook my hand and introduced himself.

"You, you have come to see me?" I asked. "Are you looking after my welfare also?"

He half-smiled and said he was representing the Israeli government. He explained that I should plead guilty and go home to Israel. I politely told him no.

A second lawyer acting for the Israeli government then visited and asked me about the funds that were tucked away in the East Bloc. He pressed so hard that I told him if he didn't back off, I'd tell the world about Robert Maxwell's involvement.

Still, he pressed. "You'll be a young, retired, well-to-do man," he said.

This really made me angry. They wanted to send me to live in "Jerusalem, Alabama," somewhere out in the boonies, and never be heard from again. Use me, betray me, spit me out. How could I trust these guys? If I did what they asked, I'd probably be dead in a couple of months, like Amiram Nir. I sent this second Israeli lawyer packing.

Then Michael Foster, a special agent of the FBI and the chief investigator for Iran-contra Special Prosecutor Lawrence Walsh, came to see me in jail. He asked about Robert McFarlane. I offered him a deal -- get my case dismissed, and I'd give him McFarlane on a platter. He asked me to tell him what I knew first. I said no. He said he'd get back to me, but when he did, he wasn't willing to meet my terms.

The one deal I was willing to make was with the prosecutor, Baruch Weiss. I signed an agreement with him that I would talk to him without a lawyer present on the condition that I be granted immunity on anything we talked about. I agreed to this for one simple reason: I wanted everyone I'd ever worked with to know that I was willing to blow them all into the public eye. I assumed that Weiss, with whom I spent approximately 40 hours in presumably taped conversations, would pass the message on to those who needed to know it. And he did.

At one point I talked to Maxwell and Davies from jail, arranged by Weiss's office, and asked for their help. Both of them told me, "You're history."

My phone conversation with Nick Davies, monitored by the authorities, was most illuminating.

"Nick," I said, "why don't you tell them the truth?"

"I don't know what you're talking about," he said. "I'm only a journalist."

After that, Baruch Weiss told me that all contact with Maxwell's Mirror group should go through its attorney, David Zornow.

That name rang some bells. Zornow had prosecuted Oliver North as part of Lawrence Walsh's team. This time he was representing some interesting -- and interested -- clients: Maxwell, Davies, and John Tower. As time was to prove, he did a good job. Although he did not appear, he was able to negotiate with the prosecution to ensure that their names did not come out in open court.

I tried phoning Ora again to convince her to help me, but the call only made me angrier. She wasn't coming to America.

I was unable to hire a lawyer, because foreign currency control authorities in Israel, against Israeli law that makes exceptions for citizens in legal trouble abroad, would not allow my mother to transfer money from Israel. Yet the prosecutor objected in court to the judge's suggestion of a court-appointed attorney, because I was not indigent.

On January 18, 1990, after 75 days in jail, Baruch Weiss finally told me what would be in my indictment. The magistrate assigned me an attorney pursuant to the Criminal justice Act. It was to be the start of a friendship. Although Thomas F.X. Dunn, a New York-born, Irish-Catholic lawyer, possessed little knowledge of the Middle East, Israel, or the international intelligence scene, he was willing to learn.

***

It was quite plain to me that Israel was as much to blame for my arrest as the U.S., and with Tom Dunn, who had no connections to Israel, I felt that I was in good hands.

One day Dunn broke some news to me. The U.S. attorney was going to indict Joseph O'Toole and Richard St. Francis, the man who had brought the mysterious Lettner to Kennedy Airport.

"But that's impossible," I said. "O'Toole works for the U.S. government. He was the one who set me up at the airport." I could not understand why he was being indicted.

Tom was not acquainted with the details of my case -- he didn't even know what a C-130 was at first. But he asked me to fill him in. When he heard about the roles of O'Toole and St. Francis, he agreed things were looking very odd.

My hope of getting bail was disappearing. The prosecutor wanted property worth at least $130,000 as security, and it had to be located in the United States. I couldn't bring cash into the country because the Israeli government continued not to allow it.

"This is their way of keeping you in jail," said Tom.

On Thursday, February 1, 1990, I was indicted and then taken back to jail. O'Toole and St. Francis, it turned out, had been arrested before me, in April 1989, although I had not known this, and released on bail, but they were not indicted until March 1990.

***

The charges were not lengthy. In essence, they claimed that St. Francis, O'Toole, and I had conspired to defraud the United States, to cover up illegal dealings, and to try to sell three planes to Iran in violation of federal laws.

They claimed we were acting as intermediaries between an Israeli seller and an Iranian buyer to sell three C-130 military cargo aircraft; that we conspired to obtain a false letter of intent from a Brazilian company stating that it would be the recipient of the planes; and that we intended to conceal from the Department of State's Office of Munitions Control that the ultimate destination was Iran, not Brazil.

We could each get up to five years in jail and a fine of $250,000, depending on the determination of the degree of sophistication of the aircraft.

My trial did not begin until more than eleven months after my arrest, one of the most frustrating experiences in my life. I was locked up in jail, trying to explain a very complicated situation to a court-appointed lawyer who, though he meant well, was having a hard time understanding me.

With some reason. For one thing, the Israeli government was denying it had ever heard of me, most particularly that I had ever worked for it.

Dunn wanted witnesses, people who would show that I was working for the Israeli government and with the knowledge of the U.S. government. This turned out to be impossible. No one I had worked with would even talk to us, much less confirm anything. Dunn spent months trying to get my employment records from Israel. Originally, he was stonewalled. Four letters of recommendation from my superiors that had been sent by my mother and given to the prosecutor were described by the Israeli government as forgeries. But after Robert Parry, who was working for Newsweek at the time, confirmed their authenticity with the signatories, the Israeli government changed its story. Now it claimed I had worked for the government, but only as a low-level Farsi translator. According to the government's scenario, I had apparently gone into business for myself, illegally selling arms.

Since the Israelis were now saying I had been a translator, there had to be some records. Of course, I knew the records would have to be forged, since I hadn't been a translator, but I hoped there might be some clue in whatever they came up with. It was only in the middle of my trial that the "records" arrived, and I discovered then that somewhere, somehow, I still had at least one, anonymous friend at my old office.

But before that pleasant surprise, Dunn finally reached the one and only person who was to be a witness for me at the trial. In the many conversations we had, trying to decide who could show that I was involved in high-level Israeli government activities, I remembered Raji Samghabadi, the Time magazine reporter. After all, I had told him all about the Iran-contra affair long before the information ever appeared anywhere. That ought to have some effect on the jury.

Samghabadi was not eager to be a witness for me. He was on medical leave from Time, suffering from a terrible case of frayed nerves, and he considered me one of the causes of his nervous condition. But, faced with the prospect of a subpoena if he did not agree, he said he would testify.

***

The trial began on October 17 in the United States District Courthouse in lower Manhattan, before District Judge Louis Stanton. I sat next to the straight-laced Connecticut businessman Richard St. Francis. O'Toole's case had been severed from ours, at our request, because he had cooperated with the government in setting me up. Later he was accused, falsely, of illegally trying to sell Stinger missiles from Israel to an unidentified nation. The few friends I had left in the Israeli government helped set him up, forcing the U.S. to indict him. So now O'Toole and I were even.

As I listened to the prosecutor, Baruch Weiss, outline the charges against St. Francis and me, describing in great detail the one conversation at Kennedy Airport that included me, I wondered how much longer I would remain behind bars.

Not long, it turned out. Four days into the trial, most of which was spent describing the government's investigation and beginning a review of the transcripts of the conversations, Judge Stanton ordered me released on $30,000 bail. He had finally read the complete transcript of the supposedly damning conversations taped by Lettner (the undercover Customs agent is actually named John Lisica, but I continue to think of him as Lettner) and said he did not find it particularly incriminating. I was out of jail, after 11 months and three weeks.

The bulk of the government's case against me was the tape of the Kennedy Airport conversation. Although my own memory of it was no longer crystal clear, I knew I had tried to be truthful, and it was clear, I thought, to anyone reviewing the transcript, that I was acting officially.

Weiss, of course, having been advised by Shamir's office, insisted I was only a former military translator out to make a personal profit. "It was a business," he said.

But the tapes supported my defense that I was acting on behalf of my government. For one thing, right at the outset, Lettner tried to entice me by suggesting that, if this deal went through, there would be "a good chance of talking them into taking something else." I replied, "Forget the something else." This is not what Mr. Weiss's businessman would have said.

I also kept insisting that Lettner identify himself and his principal contact in Iran positively (neither of which he ever did), and I demanded the name of someone in Tehran who could verify that he was authorized to make this purchase for the Iranians. He never provided that either.

Also, although a part of the government's charges against us was a conspiracy to prepare and use a fraudulent end-user certificate, I remarked to Lettner, "I understand that you wanted an EUC. I don't know why." Only a government representative, not a private businessman, would be unconcerned about an end-user certificate. I also reminded Lettner the planes could be flown out by Israeli pilots.

Shortly after, the most significant part of the conversation took place. Lettner said, "Let's face it, nobody wants to have any undue publicity or anything coming back directly."

I replied, "I will be open with you about another subject, the people here said go ahead."

Lettner: "I beg your pardon?"

Me: "The people here said go ahead." I was referring to the U.S. government.

Lettner: "Uh huh."

Me: "They'll deny that they said that."

Lettner: "Of course."

Me: "But we would not do anything without some type of agreement."

Lettner: "Uh huh."

Me: "Nobody is going to check it out, no politician in Israel."

Lettner: "Of course not."

Weiss had a hell of a time explaining this to the jury. This was the clearest indication, from the government's own exhibit, that I had explained that my activities were authorized by both the U.S. and the Israeli governments.

One other item gave Weiss a bit of a problem, and let Dunn have some fun in his summation -- my last passports. I did not have all my old passports, but I had three of them, and they showed some of my travels from 1985 to 1989. (My passports were usually canceled before their expiration dates and new ones issued, because I rapidly filled up the visa pages.)

The passports showed constant travels, to France, England, Guatemala, the United States, Israel, El Salvador, Peru, Jamaica, Australia, Paraguay, Argentina, Sri Lanka, Austria, and Chile, with many repeat entries and exits. There must have been 70 or 80 trips to different countries in just a few years, most of them in the Western Hemisphere. As Dunn pointed out to the jury with excruciating detail, this was a rather bizarre itinerary for a low-level Farsi translator. Weiss actually suggested they were all private vacations, which would have made me one of the highest-paid low-level translators in the world.

It was during the prosecution's case that I learned I had a friend back at my old office. After the Israelis had admitted I had been in Military Intelligence, Weiss had asked for my employment records, to introduce them in evidence to bolster the argument that I had been, at most, this low-level translator. When they arrived in an official, sealed package from Israel, Weiss had to introduce the whole thing into evidence, including performance reports and the four letters of recommendation written when I was leaving Military Intelligence, the very letters Weiss had previously said were forgeries. (They had been written before I went over to the Prime Minister's Office, but no one was admitting that.)

The employment records had, as I assumed, been altered. They all said I was a translator, and all but two did not give any unit. But those two were the ones on which my unknown friend had left the entry in. The English translation introduced into evidence said: "Staff Officer, Means of War."

This was something Baruch Weiss could not explain. Means of war -- armaments, military equipment -- this is what I had said all along was my field of work. And "staff officer," that did not sound like a low-level translator.

The letters of recommendation -- another present from my anonymous friend -- were the icing on the cake. The first, from Col. Pesah Melowany, said, in part:

"Mr. Ari Ben-Menashe has served in the Israel Defense Forces External Relations Department in key positions. As such, Mr. Ben-Menashe was responsible for a variety of complex and sensitive assignments which demanded exceptional analytical and executive capabilities. From my acquaintance with him in the Department, I came to know Mr. Ben-Menashe and admire his proficiency and devotion. He fulfills his assignments in a very efficient and reliable manner."

Another, from Col. Arieh Shur, noted:

"During Mr. Ben-Menashe's service in the department, he was in charge of a task which demanded considerable analytical and executive skills. Mr. Ben-Menashe carried out his task with understanding, skill, and determination, managing to adapt himself to changing situations."

The other two were similar, referring to "key positions" and "great responsibility."

The prosecutor's case was finished, and the low-level translator story was dead in the water.

As we took a break before Tom Dunn was to begin my defense, my co-defendant Richard St. Francis, who'd been caught up in this whole mess unwittingly, had finally reached the boiling point and was talking to any reporter who'd listen. He insisted that he'd been set up by TransCapital, the Connecticut company he'd worked for. The reason, he explained with growing impatience, was that he'd been talking publicly about TransCapital's role in the sale of computer hardware abroad.

Finally, court reconvened, and it was our turn. Tom Dunn called our only witness, the Time magazine correspondent Raji Samghabadi. A heavyset, excitable Iranian, Raji was in a state, and the judge had to calm him down several times. When he was asked about his life in Iran, he started to rant about the communists and the fundamentalists, from whom he had, in fact, narrowly escaped. He had even been the subject of a mock execution.

When he was asked to describe his relations with me, he replied, "Prickly, difficult, dangerous, sometimes intolerable, almost intolerable, but I had to do a job." Once, he referred to me as "that bozo." On redirect examination, apropos of nothing, he said to Dunn, "You know, I don't have much respect for your client, by the way." Then, as the judge was asking him to take a moment or two to "just walk around and compose yourself," he shouted:

"Your honor, two million people crippled and killed, and we put that shrimp there in order to cover up for George Bush and Mr. Shamir? I can't tolerate that."

Some witness for the defense.

Weiss spent most of his cross-examination trying to get Raji to admit that he had only my own word for it that I was connected with Israeli intelligence, that I might well have been a low-level translator for all he knew. But when Dunn asked him if I had ever referred to myself as a translator, he blurted out, "A translator does not smoke opium with Iranian cabinet officers." The judge instructed the jury to disregard the remark, but I'm not sure they could.

The bottom line, still and all, was that Raji confirmed under oath that several months before the famous story appeared in Al Shiraa I had told him all about the Iran-contra weapons sales.

Thomas Francis Xavier Dunn, a tall, thin, criminal lawyer with a thick blond moustache, was now ready to address the jury in the most important case of his career. He was confident he had what he needed for his summation. A year earlier he had had nothing, he hardly understood me. Now he had developed a deep and powerful understanding of the intricate web in which he had been placed. He told the jury:

"What we have sitting right here is another victim, an Israeli victim, a victim of a number of different parties, a victim of the U.S. Customs Service, a victim of the United States government, and, in the end, a victim of his own government, the Israelis, who have left him out high and dry.... The Americans are stonewalling, the Israelis are stonewalling, and now this man has been left out in the cold to swing...."

He explained, "Mr. Ari Ben-Menashe had no intent to violate any American laws. He was working for the Israeli government. There was State Department approval [CIA, actually], although no one is going to admit it. And if you remember these political officials with Watergate -- 'We're going to stonewall, we're going to deny'; Irangate -- 'No, we would never do that.' Then they have to admit it eventually. It's the same story here."

Tom asked the jury to reflect on Raji's testimony. "If that man [me] had kept his mouth shut, you and I and everyone else in this country may not know about Iran-contra to this day. You don't think they're [the U.S. government] ticked off about that? You don't think they want the guy to pay?"

Tom went over the passport entries one by one. He went over the letters of recommendation and the efficiency reports word by word.

The jury retired to consider their verdict. What were they making of it all, I wondered, as I sat in the courtroom chatting to journalists and others who had listened in on the case. I could only pray that they realized that the evidence they had heard in my defense had been the truth -- because then the only verdict would have to be not guilty. After two-and-a-half hours, there was a fuss; they were returning ... But no, they simply wanted to have the airport tape replayed to them.

It was only 30 minutes later that they returned to the court. After six weeks of evidence, the moment I had both longed for and feared -- knowing I was innocent but worried that the decision would come down against me -- had arrived. My heart pounded as I tried to read the decision in their faces. I had always believed I could read people well. This time I was failing. I closed my eyes. I wanted to shut out this whole courtroom and disappear into a big black hole.

"Not guilty!" The words reverberated through my mind. My eyes snapped open. They were looking at me, smiling. I sat back in my seat. St. Francis, who had also been found not guilty, was grinning all over his face. You never win federal cases, everyone had told me. You just hoped to receive a lenient sentence.

Tom reached out a hand of congratulations. It was over.

I was innocent. A free man.

It was November 28, 1991 -- ten years to the day since I had been appointed to the secret arms-to-Iran committee.

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Afterword

A LOT HAS HAPPENED since I was acquitted. A number of journalists have investigated some of the events I've described, and at least part of the story is now emerging.

PBS's Frontline, in two first-rate documentaries produced by Robert Parry, delved into various aspects of the arms-for- hostages deal. Gary Sick, a former Carter administration adviser on Iran, published his important book October Surprise, which systematically sifts through the evidence that convinced him the Reagan camp and Khomeini did actually make a secret deal. Seymour Hersh's excellent book The Samson Option, caused an enormous stir with its revelations about Israel's nuclear program and about Robert Maxwell. British journalist Patrick Seale's recent book, Abu Nidal: A Gun for Hire, speculates about the Palestinian terrorist's ties to the Israelis. And a few enterprising newspaper and magazine reporters are now exploring Carlos Cardoen's American-backed sales of chemical weapons to Saddam Hussein during the I980s.

The exposes in the media have had some impact. Both the U.S. House of Representatives and the U.S. Senate have begun looking into the October Surprise. The full Senate voted down a formal investigation, but the Senate Foreign Relations Committee decided to hold limited hearings on the arms-for-hostages deal, within its regular budget. The House, however, funded a fullscale October Surprise Task Force, whose chief counsel is former federal prosecutor E. Lawrence Barcella, Jr., to investigate Sick's and my allegations, among others.

In June 1992 I was interviewed at length by the Task Force staff. Unbeknownst to me, however, a deal had apparently been struck between the Democratic and Republican leaderships before the Task Force was authorized. The Task Force was required to issue an interim report prior to July 1, 1992, and the deal evidently required that President Bush be completely, and quickly, exonerated. So, the interim report, issued by its chairman, Rep. Lee Hamilton, on June 30, while explaining that the Task Force had only begun its investigations, drew one, and only one, conclusion: "that Mr. Bush was in the United States continuously during the October 18-22 time period, and that he therefore did not travel to Paris, France, to participate in the alleged secret meeting."

This conclusion was drawn despite the interim report's assertions that it had interviewed only about 50 out of some 150 potential witnesses, and had obtained only a small fraction of the documents it was seeking. At his July 1 press conference, Hamilton stated that "all credible evidence" led to the conclusion that George Bush was not in Paris.

In June I also testified under oath, in closed session, before the Senate Foreign Relations Committee. I stated unequivocally that I had, indeed, seen Bush in Paris, but 1 am not sanguine that the Senate Committee's report will be any more forthcoming than the House Task Force's interim report. A lot of other heads may roll, but President Bush is apparently going to keep his, whether or not he is reelected.

Several official inquiries are also currently underway in Great Britain, focusing on the activities of Robert Maxwell and Nicholas Davies. And in Australia, a Western Australia Royal Commission has launched a probe that touches on some of my allegations. It is still too early to know whether these investigations will lead to further action.

A lot has happened to the main characters in my story. George Bush is still president of the United States, but his approval rating has plummeted, as the U.S. economy continues to falter and every day brings new revelations of his administration's dealings with Iraq. His reelection bid seems to be in serious trouble.

Robert Gates was nominated for a second time to be CIA director. When I and others testified in late spring 1991 before closed sessions of the House and Senate Foreign Relations Committees and the Senate Intelligence Committee, his confirmation hearings were postponed until October of that year. But then, in the shadow of Clarence Thomas's dramatic Supreme Court confirmation hearings, Gates was quietly confirmed as CIA director. He remains in that position today.

Former Sen. John Tower wrote a book about the Iran-contra affair, which said nothing new and was not widely read. He was killed in a plane crash in Georgia in early 1991.

Robert McFarlane, now a private citizen, came under FBI counterintelligence investigation in early 1991 regarding his relationship with Rafi Eitan and Israeli intelligence and his involvement in the Pollard case. The results of that investigation have never been made public. But in October 1991, an article by Craig Unger in Esquire magazine repeated my allegations that McFarlane had been recruited by Rafi Eitan and named him as Mr. X in the Pollard case. McFarlane sued the magazine. That litigation is still pending.

As for the Israelis, in early 1992, Shimon Peres was ousted as leader of the Labor Party by his longtime rival Yitzhak Rabin. On June 23, Labor won the national elections by a wide margin, and Rabin replaced the 76-year-old Yitzhak Shamir as prime minister. The repudiation of Shamir increased American hopes for a Bush-sponsored settlement in the Middle East, but as of August, no solution was in sight.

Rafi Eitan retired from intelligence work, and gave away all the money he got from the slush fund. According to the Israeli press, he is now, ironically, working for an international oil trader who is instrumental in selling Iraqi oil, in violation of the United Nations embargo.

Moshe Hebroni now works for the Jewish Agency, Yehoshua Sagi became a member of the Knesset. Avi Pazner, Shamir's spokesperson, was hounded by the press about the Israeli government's lies about me, among other things. He was appointed ambassador to Italy in 1991. Nachum Admoni was removed as director of Mossad in 1989, but was still advising Shamir on intelligence. He is the chair of a public utility in Israel.

My Iranian friend Sayeed Mehdi Kashani is now an adviser to Iranian President Rafsanjani. Col. Mohammed Jalali is now retired, living in Iran, with a second home in London.

Iraqi President Saddam Hussein went from darling of the Americans to George Bush's satanic madman virtually overnight in August 1990. In January and February 1991, his country was devastated by the heaviest aerial bombing since World War II. More than 100,000 Iraqis were reported dead in the aftermath of the Gulf War. But Saddam Hussein survived and remains in power.

The turbulent Soviet Union has, meanwhile, undergone dizzying changes. In the summer of 1991, Mikhail Gorbachev survived a coup attempt but then was forced to resign. The union dissolved into separate states, and the KGB was stripped of its powers. One of its former heads, Viktor Chebrikov, who had helped us move slush fund moneys to East Bloc banks, is out of a job. He is living quietly in Russia as a private citizen.

In Peru, Abimael Guzman died of cancer in 1990, but the Shining Path, the revolutionary movement he founded, lives on with my friend Roberto leading it. Largely to combat the Shining Path, President Alberto Fujimori suspended the Peruvian constitution in early 1992 -- an action that brought condemnation from around the world.

Carlos Cardoen still heads Cardoen Industries in Chile. After the appearance of a number of newspaper stories describing his involvement with Iraq, the U.S. Customs Service began an investigation, and in April 1992, charges against him were filed in Miami. His plant in Paraguay was not closed down in 1989, thanks to President Andres Rodriguez, who continues to rule the country with the blessing of the U.S. government.

Several Australians involved in the activities I've described have run into problems. Prime Minister Bob Hawke was defeated in a special vote in the Labor Party caucus in December 1991. Forced to resign, he was replaced by Paul Keating, who had for several years been considered Hawke's natural successor until they fell out over the timing of Hawke's departure. Brian Burke, the premier of Western Australia in whose jurisdiction we were allowed to park our aircraft, was forced to resign and has been subjected to prolonged questioning in a Royal Commission. And Alan Bond, the wealthy Australian businessman who had been entangled with Carlos Cardoen in Chile and Iraq, was convicted in May 1992 of bank fraud. He was sentenced to two and a half years in prison, which he is currently serving, although an appeal is pending.

Revelations in the British press ruined both of the men I worked with most closely in London. Media mogul Robert Maxwell, of course, received more attention than anyone. The publication in October 1991 of Seymour Hersh's book, naming him as a collaborator with Israeli intelligence, was the beginning of the end. Maxwell and the Mirror Newspaper Group sued Hersh and his publishers, and the Daily Mirror published lengthy articles denouncing the allegations against Maxwell and Nicholas Davies. (Davies also filed a suit, but allowed it to lapse.) Almost immediately, however, some of the critical denials in the Mirror articles were shown to be false, and Hersh and his publishers filed a countersuit against Maxwell, Davies, and the Mirror Group. But, just as the claims and counterclaims were reaching fever pitch, on November 5, 1991, Maxwell's body was found floating off the Canary Islands near his yacht, causing an international uproar. A Spanish autopsy concluded the death was an accident. An Israeli autopsy called it a murder. Under British law, Maxwell's libel suit ended with his death; and in July the court threw out the Mirror Group's claim, an action it has appealed. The counterclaims are still quite alive.

After Maxwell's burial on Israel's Mount of Olives, his empire crumbled. The British press exposed him for what he was -- a fraud and a crook, who stole the pension funds of his own employees to the tune of about a billion dollars. A number of stories alluded to his ties with both Israeli and Soviet intelligence. His business dealings are currently under investigation by intelligence agencies and parliamentary committees in Israel, Bulgaria, Russia, and Great Britain. In the U.S., congressional investigators are also looking into his activities. Maxwell's two sons, Kevin and Ian, who inherited the tattered remains of his empire, were arrested for fraud in London in June 1992.

Nick Davies, the Daily Mirror foreign editor, was accused by Seymour Hersh and several British publications of being an Israeli agent and arms dealer. Davies flatly denied the accusations, but after he was caught in some flagrant lies, he was fired from the Mirror in early November. In June 1992 he published a book about Princess Diana, but it was overshadowed by Andrew Morton's book on the same subject published around the same time. He is said to be currently working on a book about "the real" Robert Maxwell. Scotland Yard, MI-5, the Serious Fraud Squad, and Inland Revenue are all investigating Davies.

***

As for me, immediately after my acquittal in November 1990, I rented an apartment in Lexington, Kentucky. I feared for my life, and I had close friends in high office there who offered me protection. (Years earlier they had worked with the Israelis on arms deals.) I stayed in Lexington until mid-April 1991.

Then, traveling on an Israeli passport that is valid until 1994, I went to Sydney, Australia. I had a number of friends there from my arms-dealing days, among them former high government officials. They had promised that I would receive political asylum in Australia and that I would be allowed to live there, eventually receiving citizenship.

However, in the next few months I got a lot of attention in the press, I testified before congressional committees, and Seymour Hersh's book was published. Suddenly, on December 28, 1991, three days before George Bush's visit to Australia, upon my arrival from a trip to Europe and the United States, my visa was revoked at Sydney airport. The authorities allowed me into the country for only one month. This caused a furor in the Australian press, and there were accusations that the government had yielded to American pressure, since my presence in Sydney was deemed an embarrassment to the visiting president. I took the Australian minister of immigration to court. Federal Justice Graham Hill ordered the government to identify the person responsible for canceling my visa and to provide all documents used in making that decision. Rather than do that, the Australian government reinstated my visa and agreed to pay my court costs.

In the meantime, in early 1991 the CIA had contacted me through an informant, Herbert Alwyn Smith, a convicted British arms dealer whom I'd known in prison. Smith, on behalf of the CIA, offered me a deal. I would get $2 million and U.S. citizenship in exchange for my silence and my signature on a piece of paper stating that I had no legal claims or allegations against the U.S. government. I even received a letter of credit in the amount of $2 million from them, but I did not cash it or accept the deal.

Smith visited me in Australia five times over the next year, and I continued to talk to him. Through Smith as messenger, it was arranged for me to meet with two CIA officials in Ireland in August 1991 and with Robert Maxwell in the Soviet Union the same month. The purpose of both meetings was to try to get me to hand over control of part of the slush fund to the CIA. Unable to deliver a successful deal, and perhaps having learned too much, Smith died, purportedly of a heart attack, in March 1992, ten days after he left Sydney.

One thing I've learned since my acquittal in New York is the power of the printed word and how much those who seek to conceal the truth fear it. So, in June 1991, I contracted with Allen & Unwin, the Australian publishers, to write this book. The Israeli government evidently got wind of it, and shortly thereafter I had a distinguished visitor. Ehud Ulmart, then Israel's minister of health and a close crony of Shamir's, offered to see that I got Australian citizenship (just how, I never knew), and to guarantee that the Israelis would "leave me alone," if I agreed to stop writing the book. I refused.

But that was just the beginning. After Gary Sick's and Seymour Hersh's books came out in the fall of 1991, both quoting me as a prominent source, an intense, prolonged barrage of media assaults seeking to discredit me started up in earnest. Time magazine was first, on October 28, calling me a "veteran spinner of stunning-if-true-but yarns," and a "fabricator."

Newsweek chimed in on November 4, 1991, with a two-and-a-half-page story that described me as a "shadowy, Israeli exile," "a former translator for the Israeli government." Grudgingly conceding that I was "difficult to ignore," the article nonetheless concluded that much of what I said "does not seem to check out." The article took great pains to suggest that my involvement in the leaking of the Iran-contra story "makes no sense," but of course they never mentioned the testimony of Raji Samghabadi at my trial.

The next week, November 11, Newsweek was at it again, with a seven-page piece on the October Surprise, calling it "a conspiracy theory run wild." Steve Emerson then viciously attacked me in both the New Republic and the Wall Street Journal. In the former, on November 18, he called me a "low-level translator" and described the ERD as "one of the most insignificant" branches of Israeli intelligence. In the latter, on November 27, he described me as an "abject liar." Just for good measure, he asked Hersh to apologize to the Maxwell family for printing my insulting allegations against the publishing baron.

At the time, Maxwell seemed perfectly capable of taking care of himself. His newspapers in London, New York, and Tel Aviv, to no one's surprise, all took their turns slamming me.

Amidst all these smears on my credibility, there were also articles supporting my claims. Most important was a two-part piece, entitled "Who Are You, Ari Ben-Menashe?", by Pazit Ravina in the Israeli daily Davar, in January and February 1992. She said, "In talks with people who worked with Ben-Menashe, the claim that he had access to highly sensitive intelligence information was confirmed again and again." And, just as this book was about to go to press, on July 7, 1992, the Village Voice printed a long article by Craig Unger. He quoted my former colleague, Moshe Hebroni: "Ben-Menashe served directly under me. He worked for the Foreign Flow desk in External Relations. He had access to very, very sensitive material."

Aside from the media attacks, there were more subtle approaches. An old friend of mine from Mossad just happened to "bump into me" at my London hotel in December 1991 and said how nice it was to see me again after all these years. Although I made no mention of this book to him, he called a couple of days later to ask how it was going.

"Don't forget your country in all this, Ari," he said. "Whatever you did, whatever sacrifices had to be made, it was all in the cause of Israel."

"Are you saying I was sacrificed?" I asked.

"Just remember us," he replied. "That's all we ask. There are matters which should not be talked about ... "

Other attempts to sabotage this book were less gentle. The writers who worked with me in Australia received a number of death threats. One American publisher with whom I thought I had a deal to publish the book in the U.S. was apparently intimidated and backed out. A British publisher with whom I did have a deal, refused, at the last minute, to publish the book. Fortunately, Sheridan Square Press in New York and Allen & Unwin in Sydney remained impervious to intimidation.

***

And what became of all that slush-fund money? There was approximately $780 million (including interest) in the Israeli slush fund, and another $780 million (including interest) in the American CIA slush fund. To a clever politician or a secret intelligence service, this would be a formidable sum, especially because it is not on any budget line and can be used without accountability.

In 1991, about $80 million of the Israeli slush fund that had been on deposit in Australian banks was transferred out of Australia to the former East Bloc. Another $100 million was taken from accounts in Eastern Europe and given to a political party in Israel (neither Labor nor Likud) that favors peace with the Palestinians. The remainder of the Israeli money -- approximately $600 million -- is distributed in various countries around the world, with no final resolution.

As for the American CIA money, in August 1991, we cut a deal handing control of it to Robert Maxwell, who in turn was supposed to disburse it to the Americans. But Maxwell reneged on the deal.

***

Today, I am a man alone. After my trial I sought a divorce from my wife Ora in the Dominican Republic, only to find out, months later, that she had already divorced me in Israel. I have not seen my daughter Shira since October 1989. I have no country. I am a citizen of the world -- or a citizen of nowhere.

Looking back, I can say that the 1980s were a mean decade, perverted in their lack of humanity. It would be too easy to say simply that I regret my role -- though I am deeply sorry for the human suffering of the Iranians and Iraqis. I also regret that Israel continued to develop its capacity for nuclear destruction and that we were unable to bring about peace with the Palestinians.

But I do not regret that my experience allowed me to see firsthand how secret intelligence agencies increasingly dominate the foreign policy of nations like the United States and Israel. Whereas once intelligence was supposed to inform leaders and guide them in making policy decisions, today covert intelligence operations and foreign policy are too often inseparable, one and the same. The tools of secret slush fund money, covert operations, and disinformation have been used on such a grand scale that they have changed the nature of the entire political process. A handful of people never elected by anyone are now able to manipulate politics.

And my former colleagues, the international arms merchants, with whom I had so many dealings, are not out of business, not by a long shot. If there isn't a big war going on at any given time, there are always a number of small wars. The events in Eastern Europe, in Yugoslavia and in the former Soviet republics continue to generate profits for them. As I sit here I imagine them around their tables, waiting for the next big one, just like Iran and Iraq. Perhaps India and Pakistan. Plenty of cannon fodder to be equipped, a balanced enough conflict to last a long time, no one in the West to care who gets killed -- a real goldmine.

I am a humbler man today than I was in the 1970s when I joined Israeli intelligence. I've learned the hard way that everyone makes mistakes, some of them so big that they are irrevocable. I've also changed my view of Israel and the Jewish people. When I was young, I shared with many Israelis a deep nationalistic feeling -- the self-righteous and arrogant belief that we were right and everyone else was wrong, that it was more important for Jews and Israel to survive than others, that we were -- as the Bible says -- the chosen people.

I still believe that Jews are chosen. But no longer can I accept the premise on which the Iranian arms deals were based: "Better that their boys die than ours."

People are people. We are all chosen.

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Appendices

THE FOLLOWING ARE some of the documents still in my possession, indicative of the activities discussed in this book.

The first four documents (1-4) are the letters of reference introduced at my trial, which confirmed my employment by the External Relations Department over the period 1977-1987, and refer to my "complex and sensitive assignments which demanded exceptional analytical and executive capabilities," to my "key positions," my "great responsibility," and my "considerable analytical and executive skills."

The next seven documents (5-11) relate to arms transactions conducted on behalf of the Joint Committee, including some from Nicholas Davies, who signed his name "Davis." Documents 8 and 9 are messages from me to Hojjat EI-Islam Rafsanjani and his aide, Iran Nadj Rankuni; the "4,000 units" are TOW missiles. Note that all of this activity occurred during the time within which the letters of reference confirm that I was working for the ERD.

Document 12 is a letter from San Cristobal University asking the assistance of the Israeli Cultural Attache in Lima in my work as a lecturer in the department of language and literature.

Document 13 is a letter from Joseph O'Toole to the director general of the Israeli ministry of defense regarding the transfer of C-130 aircraft. Document 14 is a letter from me to the president of Sri Lanka also regarding C-130 sales.

Document 15 is a letter from an attorney representing me to the Office of the Independent Counsel, offering to initiate discussions concerning the transfer of the slush funds to the United States. The recipient acknowledged receipt of the letter, but no meeting ever took place.

Document 16 is the letter of credit by which I was offered two million dollars to keep quiet. I never presented it.

***

ISRAEL DEFENCE FORCES
4 September 1987
TO WHOM IT MAY CONCERN

Mr. Ari Ben-Menashe has served in the Israel Defence Forces External Relations Department in key positions. As such, Mr. Ben Menashe was responsible for a variety of complex and sensitive assignments which demanded exceptional analytical and executive capabilities. From my acquaintance with him in the Department, I came to know Mr. Ben-Menashe and admire his proficiency and devotion. He fulfills his assignments in a very efficient and reliable manner.

I can vouch that Mr. Ben Menashe combines a very astute mind and fine intelligence with exceptional understanding, which I am sure will hold him in good stead in any career he wishes to pursue.

Yours Faithfully,
Pesah Melowan -- Colonel Israel Defence Forces



1. Letter of reference, dated September 4, 1987, from Col. Pesah Melowany.

***

ISRAEL DEFENCE FORCES
6 September 1987
TO WHOM IT MAY CONCERN

I have been acquainted with Mr. Ari Ben Menashe for approximately ten years. During this period, he served in the IDF External Relations Department in key positions. From my personal acquaintance and working relationship with him, I came to know Mr. Ben Menashe as a gifted person, who carries out his assignments with considerable capability, dedication, determination and responsibility.

During Mr. Ben Menashe's tenure of service in the IDF, the IDF and the External Relations Department underwent a very eventful and unusual period. and Mr. Ben Menashe always was able to adapt himself to new and changing situations with intelligence and assiduousness.

Worthy of special mention is Mr. Ben Menashe's positive and friendly approach to those around him and his rare talent for communicating with people. These traits held him in good stead in his working relations with all those who came in contact with him.

Mr. Ben Menashe is a person known to keep to his principles, being always guided by a strong sense of duty, justice and common sense.

I believe wholeheartedly that Mr. Ben Menashe would be an asset to any academic or professional institute he chooses to join.

Faithfully Yours,
Yoav Dayagi -- Colonel Israel Defence Forces



2. Letter of reference, dated September 6, 1987, from Col. Yoav Dayagi.

***

ISRAEL DEFENCE FORCES
EXTERNAL RELATIONS DEPARTMENT
14 September 1987
TO WHOM IT MAY CONCERN

Mr. Ari Ben Menashe has been working in the IDF Relations Department for approximately ten years. this period, I became well acquainted with Mr. Ben on both the personal and professional levels.

Mr. Ben Menashe fulfilled his duties in the department with great responsibility, expertise and dedication, down to the finest detail.

Mr. Ben Menashe combines considerable analytical ability with fine intelligence and common sense as well as a rare ability to communicate with all who come in contact with him.

I am confident that Mr. Ben Menashe's fine qualities on the intellectual, executive and personal levels will hold him in good stead in the future in any career he wishes to pursue.

Faithfully,

Dr. A. Granot, External Relations Department IDF



3. Letter of reference, dated September 14, 1987, from Dr. A. Granat.

***

ISRAEL DEFENCE FORCES
EXTERNAL RELATIONS DEPARTMENT
14 September 1987
TO WHOM IT MAY CONCERN

I have been acquainted with Mr. Ari Ben Menashe for approximately two years, since I assumed my position in the External Relations Department.

During Mr. Ben Menashe's service in the department, he was in charge of a task which demanded considerable analytical and executive skills. Mr. Ben Menashe carried out his task with understanding, skill and determination, managing to adapt himself to changing situations.

I am convinced that Mr. Ben Menashe will excel in any future career -- academic or professional -- of his choice.

Faithfully Yours,

Arieh Shur -- Colonel Chief of External Relations IDF



4. Letter of reference, dated September 14, 1987, from Col. Arieh Shur.

***

ORA LTD
41 BECMEAD A
STREATHAM LONDON SW 16
ENGLAND
TEL: (01) 677-2400

29 DECEMBER 1984
AZ-088-84

MR. RAN YEGNES
17 MONTEFIORY ST.
PETAH-TIVKA

RE: REQUEST FOR QUOTATION

1. WE WOULD APPRECIATE YOUR BEST QUOTATION AND DELIVERY TIME AND CONDITIONS FOR NEW ORIGINAL SOVIET MADE RED BAKALITE AK-47 (KLASHNIKOV) MAGAZINES.

2. SEVERAL THOUSANDS OF THE ABOVE MAGAZINES ARE REQUIRED BY OUR COMPANY FOR MARKETING IN THE UNITED STATES TO PRIVATE USERS.

3. FORM OF PAYMENT WILL BE THROUGH LETTER OF CREDIT OPENED IN A PRIME EUROPEAN BANK UPON SIGNING OF CONTRACT.

4. PROMPT ACTION AND ACCEPTABLE PRICES MAY BRING TO SUCCESSFUL COMPLETION OF THIS DEAL.

5. WE ARE LOOKING FORWARD TO DOING BUSINESS WITH YOU AND BEST WISHES.

FAITHFULLY YOURS,

NICOLAS DAVIS



5. Letter from Nicholas Davies (note that he signs the letter "Davis") to Ran Yegnes, dated December 29, 1984.

***

DYNAWEST INTERNATIONAL LTD.
The Bank of Nova Scotia Building
|George Town
Grand Cayman

PLEASE REPLY TO:
Suite 2
52 Piccadilly
London W1
Telephone 01-493 5212
Telex: 21330 DYNTEX G

12th January 1985

Mr. Ari Ben Menash
41, Becmead Avenue,
London SW 16.

Dear Sir,

Further to our conversation of 11th January 1985 I am pleased to confirm that we have made arrangements to re-fuel your 2 x 747 cargo aircraft in Lisbon, Portugal en route to your final client.

We will require your aircraft when filing their flight plans to ask for refueling in Lisbon.

We will want to know how many tonnes of fuel your aircraft will require 72 hours prior to their arrival in Lisbon.

I look forward to receiving your instructions.

Yours faithfully,

J. Knight



6. Letter from John Knight to the author, dated January 12, 1985.

***

CONFIDENTIAL

15 MAY 1985
AN-128-85

GMT LTD.
6 BEIZHAN ST.
TEL-AVIV

RE: YOUR INQUIRY/MILITARY EQUIPMENT

1. THANK YOU FOR YOUR ENQUIRY.

2. WE ARE GLAD TO INFORM YOU THAT WE ARE ABLE AND WILLING TO PROVIDE YOU WITH THE FOLLOWING:

ITEM - QUANTITY - PRICE PER UNIT - TOTAL PRICE

1 AK-47 M-70 AUTOMATIC RIFLE WOODEN OR FOLDING BUTT (EACH RIFLE COMES WITH 2 EMPTY MAGAZINES, 1 SLING, 1 CLEANING KIT 5000 US$210 US$1,050,000.00
2 SPARE MAGAZINES FOR AK-47 50,000 US$9.00 US$450,000.00
3 7.62 MM REGULAR AMMUNITION 5,000,000 US$0.11 US$550,000.00
4. 60 MM MORTARS (COMMANDO TYPE) 200 US$1,550.00 US$310,000.00
5 60 MM MORTAR SHELLS 5,000 US$37.00 US$185,000.00
6 81 MM MORTARS 100 US$5,250.00 US$525,000.00
7 81 MM MORTAR SHELLS 2,000 US$52.00 US$104,000,00
8 ANTI-PERSONNEL MINES (SIMILAR TO CLAYMORE TYPE) 1,000 US$68.00 US$68,000.00

3. ALL THE ABOVE ITEMS ARE NEW AND OF YUGOSLAV MAKE AND ACCOMPANIED BY SUPPLIERS QUALITY CERTIFICATE.

4. PRICES SET ARE F.O.B. YUGOSLAV PORT AND DO NOT COVER TRANSPO CARGO COSTS OR INSURANCE.

5. DELIVERY OF GOODS IS GUARANTEED TO BE MADE WITHIN (POSSIBLY WITHIN 45 DAYS) OF OPENING OF AN -_ DIVISABLE AND TRANSFERRABLE LETTER OF CREDIT FOR THE FULL US$2,242,000.00 IN OUR FAVOR CONFIRMED BY A PRIME EUROPE OR PAYMENT IN CASH AGAINST CONTRACT.

6. LETTER OF CREDIT SHOULD BE VALID FOR 75 DAYS AND A __ NEGOTIATION PERIOD AND BE RELEASABLE IN EUROPE UPON ___ OF:

A. BILL OF LAIDING / FORWARDING AGENT'S RECEIPTS

B. COMMERCIAL INVOICES (3 ORIGINALS)

C. PACKING LIST

7. IF NECESSARY, ITEMS CAN BE INSPECTED BY A WEST EUROPEAN NATIONA IN YUGOSLAVIA AFTER TRANSACTION ARRANGEMENTS HAVE BEEN COMPLETE (TRAVEL COSTS WILL NOT BE COVERED).

8. GUARANTEES FOR THE DELIVERY OF THE ABOVE ITEMS CAN BE MADE AND WE WILL BE WILLING TO PUT UP A BOND OF 3.5% OF THE TOTAL VALUE OF YOUR PURCHASE IN YOUR FAVOR WITH A PRIME EUROPEAN BANK UPON COMPLETION OF DEAL ARRANGEMENTS.

9. WE UNDERSTAND THAT A VALID AND ACCEPTABLE END USER'S CERTIFICATE WILL BE PROVIDED BY YOU.

10. THE TERMS OUTLINED ABOVE ARE VALID UNTIL 15 JUNE 1985.

11. DUE TO THE NATURE, WEIGHT AND VOLUME OF THE ABOVE GOODS ____ WEIGHT APPROX. 200 TONS, TOTAL VOLUME APPROX. 250 CUBIT __ ___ ___ THAT THE ABOVE ITEMS WILL BE TRANSPORTED BY A ____ VESSEL WHICH WILL REACH A YUGOSLAV PORT ON A DATE MUTUALLY AGREED UPON. IF NECESSARY, TRANSPORT OF GOODS CAN BE ARRANGED __ US AGAINST ADDITIONAL PAYMENT.

12. WE ARE LOOKING FORWARD TO COMPLETING THIS DEAL SUCCESSFULLY AND TO DOING FURTHER BUSINESS WITH YOU.

FAITHFULLY,

NICHOLAS DAVIS
UK CONSULTANT





7. Letter from Nicholas Davies (also signed "Davis") to GMT Ltd., dated May 15, 1985.

***

87-02-23 18:56
007
FJ216 18.55
297761 BTIEQ B

KEY+88213242+IR21
213242 MOGE IR
297761 BTIEQ B

OUR REF: 4127 87-02-23 18:56

IRAN 213242 ICAI

ATTN: HIS EXCELLENCY PRESIDENT OF THE REPUBLIC REPRESENTATIVE OF IMAM KHOMEINI, AYATOLLAH ALI AKBAR RAFSANJANI. ABLE TO SUPPLY 4,000 UNITS CIF AT A PRICE OF USD13,800 (THIRTEEN THOUSAND EIGHT HUNDRED US DOLLARS) EACH. INSPECTION UPON ARRIVAL. FUNDS HAVE TO BE DEPOSITED IN A PRIME EUROPEAN BANK. FULL DETAILS ARE WITH MR. IRAN NAJD RANKUNI. REGARDS AND BEST WISHES, ABM
297761 BTIEQ B
213242 MOGE IR



8. Telex from the author to Hojjat El-Islam Ali Akbar Rafsanjani, dated February 23, 1987

***

87-02-23 18:59
007
DL030 18.59
297761 BTIEQ B
KEY+88215118+iR21
215118 GHR IR

297761 BTIEQ B

OUR REF: 4128 87-02-23 19:00

215118 BHR IR
ATTN: MR. IRAN NAJD RANKUNI
(HEREWITH COPY SENT TO 213242)
IRAN 213242 ICAI

ATTN: HIS EXCELLENCY PRESIDENT OF THE REPUBLIC REPRESENTATIVE OF IMAM KHOHEINI, AYATOLLAH ALI AKBAR RAFSANJANI. ABLE TO SUPPLY 4,000 UNITS CIF AT A PRICE OF USD 13,800 (THIRTEEN THOUSAND EIGHT HUNDRED US DOLLARS) EACH. INSPECTION UPON ARRIVAL. FUNDS HAVE TO BE DEPOSITED IN A PRIME EUROPEAN BANK. REGARDS AND BEST WISHES
ABM
214118 GHR IR
297761 BT1EQ 6



9. Telex from the author to Iran Najd Rankuni, dated February 23, 1987.

***

87-02-25 10:20
007
DG140 10.29
24873 LONHIT G
KEY+88213744+1R21
213744 PYAM IR
24873 LONHIT G
0773 87-02-25 10:21

ATTN: MR. K. FAKHRIAH

1. THE DETAILS OF THE REPRESENTATIVE OF ORA GROUP WHICH WILL HAVE THE AUTHORITY TO SIGN CONTRACTS IN IRAN ARE AS FOLLOWS:
FAMILY NAME: DAVIES
FIRST NAME: NICHOLAS
MIDDLE INITIALS: AFB
CITIZENSHIP: BRITISH
PLACE OF BIRTH: BIRMINGHAM, ENGLAND
DATE OF BIRTH: 14 MARCH 1939
BRITISH PASSPORT NO: 854675 F ISSUED IN LONDON
PASSPORT ISSUED ON 18 FEB. 1987
PASSPORT VALIDITY 18 FEB 1997
FATHERS NAME: BRIAN
MOTHERS NAME: ELIZABETH
HEIGHT 1.75 M

2. WE HAVE MADE TWO ATTEMPTS TO PRESENT A USD 50,000 BANK CHECK TO YOUR EMBASSY IN VIENNA AND IT HAS BEEN REFUSED DUE TO THEIR LACK OF INFORMATION ABOUT THE SUBJECT. WE PROPOSE THAT SUBJECT BE DISCUSSED WHILE MR. DAVIES IS IN YOUR COUNTRY.

3. REGARDS AND BEST WISHES
ORA GROUP
ABM
213744 PYAM IR
24873 LONHIT G



10. Telex from the author to Khosro Fakhrieh, dated February 25, 1987.

***

87-02-25 13:13
007
DA181 13.14
24873 LONHIT G
KEY+88214219+1R2
214219 PYAM IR
24873 LONHIT G
0781 87-02-25 13:14

ATTN HIS EXCELLENCY MINISTER OF DEFENSE

1. THE DETALS OF THE REPRESENTATIVE OF ORA GROUP WHICH WILL HAVE THE AUTHORITY TO SIGN CONTRACTS IN IRAN ARE AS FOLLOWS:
FAMILY NAME: DAVIES
FIRST NAME: NICHOLAS
MIDDLE INITIALS: AFB
CITIZENSHIP: BRITISH
PLACE OF BIRTH: BIRMINGHAM, ENGLAND
DATE OF BIRTH: 14 MARCH 1939
BRITISH PASSPORT NO: 854675 F ISSUED IN LONDON
PASSPORT ISSUED ON 18 FEB. 1987
PASSPORT VALIDITY 18 FEB 1997
FATHERS NAME: BRIAN
MOTHERS NAME: ELIZABETH
HEIGHT 1.75 M

2. WE HAVE MADE TWO ATTEMPTS TO PRESENT A USD

WE HAVE MADE TWO ATTEMPTS TO PRESENT A USD 50,000 BANK CHECK TO YOUR EMBASSY IN VIENNA AND IT HAS BEEN REFUSED DUE TO THEIR LACK OF INFORMATION ABOUT THE SUBJECT. WE PROPOSE THAT SUBJECT BE DISCUSSED WHILE MR. DAVIES IS IN YOUR COUNTRY.

3. REGARDS AND BEST WISHES
ORA GROUP
ABM
____
____
24873 LONHIT G



11. Telex from the author to the minister of defense of Iran, dated February 25, 1987.

***

UNIVERSIDAD NACIONAL DE
SAN CRISTOBEL DE HUAMANGA
Unidad de Coordinacion en Lima
Av. Nicolas de Pierola 966-201
telef. 28261 - telex 25197
LIMA-PERU

Lima, 20 de abril de 1988

Nota No. 216-UCL-UNSCH-88

Senor|
AGGREGADO CULTURAL
Embajada de Israel
Presente

De mi mayor consideracion:

En nombre de la Universidad Nacional de San Cristobal de Huamanga y por especial encargo del Sr. Rector de neustra Casa de Estudios, Inga Alberto Morote Sanchez, es grato dirigirme a Ud., para hacerle llegar suestro saludo institucional y a la vez solicitarle el apoyo del Sr. ARI BEN-MENASHE, quien ha sido invitado por la Universidad, a fin de que pueda implementar el curso de ingles a nivel de docentes universitarios del Departamento Academico - de Lengua y Literatura de la Facultad de Educacion.

Por esta Pazon, Sr. Agreg do Cultural, agradecere a Ud. se sirva spoyarnos en la invitacion que formulamos al Dr. ARI BEN-MENASHE.

Valgome de la ocasion, para ofrecerle el testimonio de nuestra mayor consideracion.

Atentamente,

[Signature]



12. Letter from the chief administrator of San Cristobal University to the Israeli cultural attache in Lima, dated April 20, 1988.

***

FXC international

28 NOVEMBER 1988

LOCKHEED C130H AIRCRAFT FOR KOREA/CANADA

GOVERNMENT OF ISRAEL
MINISTRY OF DEFENSE
TEL-AVIV ISRAEL

ATTENTION: MAJOR GENERAL DAVID IVRY, DIRECTOR GENERAL

REFERENCE: MR. ARI BEN-MENASHE DISOUSSIONS ON C130 A/C AND KOREAN INSPECTION -- TEL-AVIV.

1. WE ARE IN RECEIPT OF THE OFFICIAL KOREAN DPA-D-8531 SOLICITATION FOR EIGHT (8) C130H AIRCRAFT TO BE PURCHASED IN 4TH QTR. 1988 OR 1ST QTR. 1989. KOREA CERTIFIES THAT SUFFICIENT FUNDS ARE AVAILABLE (DIRECT AND BY LOAN) FOR SUCH A PURCHASE AND, SAMSUNG INDUSTRIES HAS AGREED TO GUARANTEE THE LOAN. MR. JAY KIM, EXECUTIVE VICE pPRESIDENT, AND THE BELOW SIGNED HAVE HAD MEETINGS RELATIVE TO SUCH A PROPOSAL GUARANTEE OF FUNDS (LOAN) AND, FXC, NORTHWEST INDUSTRIES, AMSUNG HAVE A MOU FOR SUBJECT SALE. FXC WAS ADVISED THAT KOREAN SPECIALISTS INSPECTED EIGHT C130 IN SEPT/OCT 88 IN TEL-AVIV. WE HAVE NOT BEEN ABLE TO SPECIFICALLY LOCATE THE KOREAN TEAM LEADERS WITH THE NAMES YOU PROVIDED.

2. FXC SUBMITTED A PROPOSAL IN NOV 88 TO CANADA, DEPT OF ARMED FORCES FOR ACQUISITION MAJOR GENERAL MORTON AND, PROCUREMENT BRIG. GEN. WEBSTER RELATIVE TO SUPPLYING UP TO (8) EIGHT C130H AIRCRAFT TO MEET THEIR IMMEDIATE NEED FOR CARGO AND TANKER C130 AIRCRAFT. CANADA IS PREPARED TO SUBMIT A LETTER OF INTENT, PROVIDE THE NECESSARY EXPORT/AND USER DOCUMENT, HAVE AN INSPECTION TEAM VISIT TEL-AVIV (AS EARLY AS DEC 88) AND CONCLUDE THE PURCHASE NLT 1ST QTR. 89. THE PURCHASE MONIES WERE CERTIFIED TO BE IN THE CARGO AIRCRAFT BUDGET.

3. NORTHWEST INDUSTRIES, MR. FLOYD MAYBEE AND THE BELOW SIGNED ARE PREPARED TO VISIT THE AIRCRAFT PROPOSAL BY MR. BEN-MENASHE AS DESCRIBED ABOVE.

4. NORTHWEST INDUSTRIES IS THE FOCAL POINT FOR THE CANADIAN ARMED FORCES SINCE THEY PROVIDE ALL THE C130 DEPOT MAINTENANCE FOR THAT COUNTRY. NORTHWEST RELATIONSHIP ON THE KOREAN PURCHASE WOULD BE SIMILAR SINCE KOREA DOES NOT HAVE A KOREAN FIRM TRAINED ON THE C130.

5. BOTH COUNTRIES APPROACHED FXC INTERNATIONAL TO BB THE CONTRACTING PARTY FOR BOTH PURCHASES. WE HAVE EXCELLENT COMPANIES (NORTHWEST, SAMSUNG) IN BACH COUNTRY.

6. MAJOR GENERAL HEALEY, DEPUTY MINISTER OF DEFENSE OF CANADA HAS BEEN BRIEFED ON THE AIRCRAFT AVAILABILITY AND WE AWAIT THE DATA SHEETS PROMISED BY MR. ARI BEN-MENASHE.

7. WE DO NOT INTEND TO HAVE DUPLICATION OF SALES BUT WE REALLY WANTED TO BE RESPONSIVE TO BOTH COUNTRIES NEEDS AND, BOTH COMPANIES ARE AWARE OF THE DUPLICATION OF OFFERINGS.

8. PLEASE PROVIDE THE DATA SHEETS TO FXC BY TELEFAX AT 714-641-5093 AT THE EARLIEST POSSIBLE TIME AS BOTH CANADA AND KOREA ARE ANXIOUSLY AWAITING FURTHER INFORMATION. WE WOULD LIKE TO HAVE COPIES OF THOSE DATA SHEETS GIVEN TO THE KOREAN INSPECTORS.

9. FXC HAS RECEIVED U.S. STATE DEPT. APPROVAL FOR THESE SALES AND MR. WHITEHEAD, UNDERSEC. OF STATE HAS COPIES OF OUR CORRESPONDENCE.

10. WE LOOK FORWARD TO AN EARLY MEETING AND CONTRACT IN TEL-AVIV; BOTH COUNTRIES ARE SERIOUS BUYERS.

BEST REGARDS
FXC INTERNATIONAL
JOSEPH W. O'TOOLE
MANAGING DIRECTOR
AIRCRAFT SALES DIVISION

ATTACHMENTS: 1. CANADA LETTER
2. KOREA SOLICITED





13. Letter from Joseph O'Toole to David Ivry, director general of the Israeli ministry of defense, dated November 28, 1988.

***

ora group
london, 1 trafalgar avenue, tel: 01-2310115

22 July 1989
AZ -166-89

His Excellence R. Premadasa
President
Democratic Socialist Republic of Sri Lanka

Subject: Proposal for Sale of Five C-130 E Aircraft to the Sri Lankan Air Force

Your Excellency,

In two most interesting discussions I had with the Commander of your Air Force he showed great interest in C-130 E transport A/C for Sri Lanka. He said he would greatly support any reasonable proposal for such aircraft due to absolute necessity. The following is a proposal for sale of these A/C to the Sri Lankan Air Force directed to your Excellency in your capacity as Defence Minister.

1. We are able and willing to provide you with up to five C-130 E Hercules transport aircraft presently in service with the Israeli Air Force and are in excellent condition. These A/C can be used as troop carriers and military cargo transporters as well as civilian transporters in peace time, i.e. are very cost effective.

2. The price of the proposed aircraft is U.S. $ 9 million per unit. This price will include the reconditioning of the A/C engines to zero hours condition and a technical course for maintaining and flying these A/C for your men. Delivery of these A/C is immediate.

3. If your Excellency approves of the purchase, our company will be able and willing to arrange a credit package for this purpose with a major western bank.

4. There are great advantages in purchasing these A/C through our company. If you order ex-factory A/C, as you may well know, they will cost you U.S. $ 12 million per unit and you will have to wait approx. two years for delivery; you will also run into political obstacles. The package we are proposing is very reasonable, we will handle the political problems and arrange the easiest credit terms possible.

5. Thank you for your consideration; we await your reply. Our handling agent in Sri Lanka is Globe Commercial Agencies Ltd., 40/1, Dickman's Road, Colombo, Sri Lanka. Tel. 586191, 588924, 589783, 584698. Please direct your reply to our agents in your Country.

6. This proposal will be valid until 1 November 1989.

Yours Faithfully,

Ari Ben-Menashe
Director

c.c. Commander of Sri Lankan Air Force
Globe Commercial Agencies Ltd.





14. Letter from the author to the president of Sri Lanka, dated July 22, 1989.

***

MARK ANTHONY CRISTINI
Attorney at Law
235 West 48th Street - 33rd Floor
New York, New York 10036
(212) 265-0307
Fax: (212) 265-0847

Of Counsel
John A. Ja___
Edmund J. Bodine, Jr.
(NEW YORK)
Richard J. Amberg, Jr.
3509 Elizabeth Lake Road
Suite #100
Waterford, MI 48328
(313) 781-6255
(MICHIGAN)

Frank A.Rubine
2601 S. Bayshore Drive
Suite #1400
Coconut Grove, FL 33133
(315) 858-5300
(FLORIDA)

October 29, 1990

FEDERAL EXPRESS & FAX
PERSONAL & CONFIDENTIAL
Greg Mark, Esq.
Office of the Independent Counsel
555 13th Street N.W.
Suite 701 West
Washing-ton, D.C. 20004

Dear Mr. Mark:

I am retained as counsel to Mr. Ari Ben-Menashe. I have attempted to contact you through special Agent Michael Foster (202-383-5476) for the past several days. Today I have been in Federal Court and as a result you and I have missed each others return telephone calls. Pursuant to the instructions of my client, I am herein requesting a formal meeting with you and all relevant members of your staff on Thursday, November 29, 1990 in Washington, D.C.

The purpose of this meeting would be to discuss the terms and conditions as to the orderly transfer of funds that I believe to be of great interest to the United States of America and/or the property of the United States of America. According to information conveyed to the undersigned these funds are attributable to the profits of the sale and/or transfer of a massive quantity and variety of arms, airplanes, jets, ammunition, etc. to a hostile third-party government in the middle-east by an ally of the united States of America in the same region.

I am unwilling to discuss this matter with you other than in the safety and security of your office.

Nothing herein contained shall be construed as a waiver of any or all of my clients rights or remedies whether at law or in equity. All such rights are expressly reserved.

Very truly yours,

Mark Anthony Cristini

cc. Frank A. Rubino, Esq.
Robert Meloni, Esq.
Adeline Ferretti, Esq.
Richard J. Amberg, Jr. Esq.
Senator Alfonse D'Amato
Ari Ben Menashe



15. Letter from Mark Anthony Cristini to the Office of the Independent Counsel, dated October 29, 1990.

***

OMNIBANK

LETTER OF CREDIT

Susan Litwer, Esquire, Trustee,
98 Baybury Lane,
New Rochell, New York 10804

We hereby establish our irrevocable and transferable Credit in favor of Ari Ben Manashi for the account of H.A. Smith, 2052 21st Street, Astoria, New York 11105 available by your drawn at sight on OMNIBANK, 3938 Wilshire Blvd., Second Floor, Los Angeles, California 90010 in the amount of $2,000,000 (two Million U.S. Dollars).

Draft may be drawn and negotiated on 12-19-90, 12:00 P.M. PST, but not later than 12-26-90, 12:00 P.M. PST pursuant to an agreement already in place.

This letter of credit is transferable without presentation of it to us and the payment of any transfer fees.

The draft drawn under this credit must bear on its face the clause "Drawn under OMNIBANK, Credit No.: 121890-1, Dated: 12-18-1990." accompanied by a signed statement by the Beneficiary certifying that the amount of the drawing represents indebtedness due from H.A. Smith in connection with the loan accommodation granted to H.A. Smith.

We hereby agree with the drawers, endorsers and bonafide holders of drafts drawn under and in compliance with the terms of this credit that the same shall be duly honored on due presentation to us.

Philip R. Porath,
Coordinator



16. Letter of Credit in favor of the author in the amount of two million dollars, negotiable between December 19 and December 26, 1990.

[admin]

Index

A

Abbas, Abu'l, 122
ABC News, 243
Abdullah (king), 314-15
Abraham, 67
Abu Nidal: A Gun for Hire (Seale),
343
Achille Lauro, 122
Adam, Yekutiel, 185
Administrative Officers' Bureau, 23
Admoni, Nachum, 77, 137, 152-53,
185, 187-89, 196, 242, 345
Casey and, 69
and Gates, phone call with, 302-3,
304
and the Vanunu affair, 203
Afghanistan, 313
African National Congress, 139
Age, The, 201
Agranat Commission, 25
Air-ta-surface missiles, 91
Aird, Guillermo, 293
AK-47 rifles, 112, 155, 156
Al Shiraa, 190, 341
Albania, 216
Algeria, 59
Allen, Richard, 71
Allen & Unwin, 349, 351
Alliance Tire Factory, 57, 58
Allied Irish Bank, 117
American Community School, 4
American Israel Public Affairs
Committee (AIPAC), 119
Amirian, Mahmoud (pseudonym), 29,
31
Amnesty International, 214
Amsterdam meetings, 65-66, 70
Angola, 161
Anti-Semitism, 3-4, 148
Arafat, Yasser, 59, 122, 318, 319, 324
Arens, Moshe, 97, 128
Argentina, 6, 95, 98, 102, 262, 270,
290
aircraft from, shootdown of, 106-7
sale of weapons to, freeze on, 119
Armed Services Committee, 54, 55
Armenia, 99, 209, 242
Arms Export Control Act, 177, 328
ARMSCOR, 240-41, 243, 257, 279,
287
Assad, Hafez El, 172
Associated Press, 89
Atamna, Adel Mohammad, II, 13
Australia, xi-xii, 111, 119, 191, 192,
201, 311, 344, 346, 349, 350
and arms bought from Vietnam,
160
deportation of Rohan to, 11
and FXC, 292
and the Promis program, 129, 140
shipment of TOW missiles
through, 117
Vanunu in, 200-201
Australia (continued)
and weapons sales to Iraq, 275,
281-82, 287
Australian Security and Intelligence
Services (ASIS), 281
Australian Security Intelligence
Organization (ASIO), 201
Austria, Ill, 159, 317
Azerbaijan, 209

B

B-52 bombers, 208, 210
Baader-Meinhaf Group, 19-20
Babayan, Richard, 120, 242, 275,
305
Bahrain, 47
Baker, James, 111, 71-72
Bakhtiar, Shahpour, 45-46
Banar, Elaine, 327, 328
Bandar (prince), 172
Bani-Sadr, Abol Hassan, 68, 97,
98
Bank of Budapest, 153
Bank of Luxembourg, 154-55, 296
Bank Melli, 106, 154
Bank One, 106
Banque Worms, 57, 73, 81-83, 88,
108, 164
Barak, Ehud, 152, 175, 178, 183
Bar Am, Avraham, 178, 179, 180,
188, 190, 196
Bar David, Abraham, 116, 117
Barbouti, Ihsao, 242, 243, 253-54,
287, 288, 289, 305, 306
Barcella, E. Lawrence, Jr., 343
Barcelona meeting, 68, 84
Bazargan, Mehdi, 46, 49, 50-51, 53,
54
Bechtel Corporation, 172-73
Beckwith, Charles, 58-59
Begin, Menachem, 6, 41, 42, 97, 185,
261
and Carter, 58, 63, 70, 75
and Casey, 69, 101
and Eitan, S4, 129
and Eshkol's coalition government,
205-6
and the Iran-Iraq war, 48-49
and the Iraqi reactor, 96, 98
and Israel's nuclear capability;
209
and Khomeini, 127
order to Sagi to supply Iran with
arms, 77
and the Palestinian problem, 316
and Peres, 56
and the Promis program, 136
resignation of, 127
and the sale of non-American
military equipment to Iran, S 7,
58, 63, 75
and ShamiI, 142
Belgium, Ill, 192, 286, 306
Ben-David, Ruth, 41-42, 70
Ben-Gurion, David, 5, 204, 205
Ben-Hanan, Yehuda, 132-33
Ben-Menashe, Ciarisl 7
Ben-Menashe, Evon, 7
Ben-Menashe, Herut, 100, 109, 161-
62, 189
Ben-Menashe, Ora, 189-90, 192,
194-95, 199, 212, 311, 325-26
and Ben-Menashe in Peru, 213-14,
221, 229
and Ben-Menashe in Chile, 249,
289, 294
and Ben-Menashe in Paraguay, 262,
299
and Ben-Menashe's imprisonment,
328, 330, 331, 334
divorce from, 351
and Magari, 328
Ben-Menashe, Shira, 231, 294, 311,
325-26, 331, 351
Ben-Menashe, Stella, 7
Ben-Or, Pesach, 137
Ben-Porat, Yoel, 15, 22-23
Bentov, Cindy Hanin (pseudonym),
203, 204
Berlitz Language Schools, 135-36,
153
Bermuda sting. See Hashemi sting
Bet Shemesh Engines, 294
Bianchi, Isabel, 250, 251-53, 255-56
Black September, 23
Blau, Amram, 41-42
Bond, Alan, 120, 275, 281-82, 346
Botha, P. W., 209
Bouteflika, Abdelaziz, 59
Brazil, 140, 335
Brenneke, Richard J., 107, 150, 165
Brezhnev; Leonid, 16
Brian, Earl, 120, 271
and the coup d'etat in Paraguay,
296, 300, 306
and the Madrid meetings, 62-63
and the Paris meeting, 69
and the Promis program, 131, 133,
138, 140, 141
and the Tehran meeting, 53-55, 56
Valley National Bank account of,
79, 83, 87
Britain, 16, 112, 119, 220, 291
Ben-Menashe's meeting with Jalali
in, 226-27
and Cardoen, 275, 279-80, 283-85
Chieftain tanks from, 91, 284
and East Bloc countries, 152, 153,
154
investigation of Maxwell and
Davies in, 344
and Jordan, 314
meetings with Davies in, 112-15
metal sheets developed in, 28
and the Ora group, 119, 121,
122-24
and the Promis program, 129,
134-41
Shamir and, 5
and the Suez Canal, 52
and the Vanunu affair, 202-3
and World War 11, 142.
See also Thatcher, Margaret;
Thatcher, Mark
Brunei, Sultan of, 181
Brzezinski, Zbigniew, 49, 59
Buddhism, 200, 201
Bulgaria, 191
Bull, Gerald, 254, 256-59, 271, 276,
280, 288, 305-6, 309
Burke, Brian, 120, 346
Bush, George, xiv, 281, 293
and Baker, 71
briefing of, by Ben-Menashe, 185,
186-89
and the CIA, 62, 135, 169-70
cover up for, Samghabadi on, 340
family of, oil interests of, in the
Middle East, 172
Gates as the representative of, at
the second Madrid meeting, 62,
63
and the Gulf War, 346
inauguration of, 89
and the Iran-contra hearings, 194,
290
and Jewish voters, in 1988, 280
and Matthei, 302
and McFarlane's resignation, 176
and the Nir-North operation, 170,
173
and Nir's death, 290
and North's trial, 290
nomination of, for vice president,
64
and Noriega, 105
Bush, George (continued)
and the October Surprise Task
Force, 344
and the Paris meeting, 68-69, 72,
75, 95, 344
and Tower, 54, 135, 191
and U.S. peace negotiations, 345
visit to Australia (December,
1991), 348
Bush, Prescott, Jr., 172
Buthelesi, Gatsha, 139

C

C-130 aircraft, xi, 21, 58-59, 91,
119-20, 159-60, 227-30, 237,
277-79, 294, 306-8, 319-22,
327, 334, 335, 353, 368
Cabazon Indian Reservation, 134
Cahani, Yitzhak, 27, 28
Camp David Accords, 49, 77-78, 93,
129, 111, 316
Canada, 91, 160, 254, 307
and the Promis program, 129, 140,
153
Cardoen, Carlos, 239-59 passim,
263-77 passim, 281-97 passim,
302-6, 309, 312, 343, 346
Carter, Jimmy (Carter
Administration), 65, 68, 343
and Begin, 58, 63, 70, 75
and Fakhrieh, 61-62
and Gregg, 75
and the Hashemi brothers, 51, 63,
64, 177
and the Iranian hostage crisis,
51-52
Iranian unwillingness to deal with,
62-64, 70
and the Iran-Iraq war, 48-49, 50-51, 53
and the Madrid meeting, 60
and Operation Eagle Claw, 58, 59
and the Paris meeting, secrecy of,
69
and the sale of non-American
military equipment to Iran, 57,
58
and the Shah, 40, 45. See also
Camp David Accords
Casey, William, 53, 101
death of, 280
and Iran-contra, 169-70, 194
and the Paris meeting, 7S
and the Madrid meetings, 56, 59-
60, 61, 62-63, 69
and Sag;, II
and strategic agreements with
Israel, 104
Castro, Fidel, 218
Castro, Jose Merino, 302
Cave, George, 73, 74-75, 300, 306
CBS (Columbia Broadcasting
System), 220
Central America, 31, 62, 80, 104-5.
See also specific nations
Cenzin, 144, 148, 156, 157, 158
Chase Manhattan Bank, 90
Chebrikov, Viktor, 143, 152-54, 313,
317, 346
Chemical Bank, 106, 178, 179
Chevrier, Frank, 292
Chicago-Tokyo Bank, 106
Chieftain tanks, 91, 284
Chile, 140, 174, 186, 193, 227-28,
238-39, 286-309
arms embargo against, 241
Cardoen Industries in, 239, 24044, 249-
59, 263-65, 268-77,
281-86, 289, 291, 293, 296-97,
302-6, 309, 312, 343, 346
Chilean Air Force, 291
Chilean Mining Corporation, 239
China, 120, 172, 191, 192
Chobham armor, 28
Choo, Winston, 293
Christianity, 201
CIA (Central Intelligence Agency),
xii, 69, 72, 80, 173, 188, 270
and Australia, 120
and the ban on Chilean foodstuffs,
304
and Ben-Menashe in Peru, 214, 218
and Ben-Menashe's trial, 341
and Ben-Shalom, 194-95
and Cardoen, 273, 275
Copeland group, 52-53, 56
director, Gates's nomination for,
280, 344-45
and East Bloc countries, 154, 155,
322-23, 351
and GMT, 278
and Iran-contra, 169-70, 190, 192
Iran Group, 73-74
and the Iranian hostage crisis, 52,
53, 54, 62, 64
and the Iran-Iraq war, 49, 50
and Israeli end-user certificates,
III
and Israeli Military Intelligence,
39
and Israel's nuclear capability,
207
and the Joint Committee, 80,
101-2
and Khomeini, 40, 41
leaks to the press, regarding
Shamir, 280
and the Madrid meetings, 60, 63
and the Miami meeting, 85-86
money, transfer of control of, to
Israel, 310
money, transfer of, to the former
East Bloc, 322-23, 351
and Nir's death, 290
offer to Ben-Menashe, to insure
Ben-Menashe's silence, 348-49,
353, 371
O'Toole and, 291
and Paraguay, 260, 266, 296, 297
and the Paris meeting, 73-74
and the payment to the Tamils, 322
and the Promis program, 134, 135,
139, 141
Raji and, 182
and the Sandinistas, 161
secret deal with, and the 1980
election, 62, 64
and Sharon, 105-6
and the Treasury, acceptances
issued by, 106
and weapons sales to Iraq, 241,
242, 243, 244, 255, 279, 280-81,
282, 286, 287
Clark, General, 291, 293, 295, 301
Cluster bombs, 241-42, 243, 244
Cohen, Daniel T., 164
Colombia, 140, 222
Colorado Party, 264
Communism, 147, 212, 216, 235, 274
Congress, 135, 172, 279, 293, 294
and Bush's nomination of Tower,
191
and the Chileans, 302
and Gates's nomination, 344
and Iran-contra, 105, 119, 193-94
and Israel's nuclear capability, 207
and Jewish settlements, 124
and the Madrid meetings, 63
and the October Surprise, 343
and the Sandinistas, 160
and the supply of weapons to Iraq,
243, 247
Congress Party, 321
Conservative Party (Britain), 119
Contras, 105, 160-61, 173, 190, 278.
See also Iran-contra scandal
Copeland, Miles, 52-53
Cordova, Rafael, 213-17, 220, 231,
233, 234, 235-36
Costa Rica, 81, 105
Cox, Archibald, 177
Credit Suisse, 140, 153
Criminal justice Act, 334
Cuba, 220
Customs Service, 177-78, 179-80,
183, 184, 257, 327, 337, 341, 346
Cyprus, 95, 96, 121

D

Daily Mirror, 112, 113, 114, 140, 152,
202, 347
Daval, 350
Davies, Nicholas, 112-15, 121, 277,
279, 347-48
and Ben-Menashe in Peru, 217,
220, 222, 237
and Ben-Menashe's imprisonment,
333
and East Bloc countries, 144, 152,
155
and Joint Committee arms
transactions, documents
confirming, 353, 358, 360, 361
official inquiries on the activities
of, 344
and the payment to the Tamils, 322
and Vanunu, 201, 202-3
and weapons sales to Iraq, 286, 296
and Zoronovv, 334
Dayan, Moshe, 49, 166, 206, 207, 208
Defense Intelligence Agency (DIA),
39, 49, 50, 118
Degem, 136, 137, 138, 140, 141
de Laroque, John (pseudonym), 1089,
112, 150, 165, 178, 179, 22627, 326
Democratic Party, 118, 191, 193, 194,
343
Dickstein and Shapiro, 141
Dimona reactor, 205, 207-8, 261
Doherty; Joe, xi
Drexel Burnham, 125
Dunn, Thomas, 334-36, 338, 340-42
Durr, Barbara, 217-36 passim, 244-
49 passim, 256, 271-78 passim,
302-3
Dynavest, 121, 286

E

Eagle, 137
Egypt, 43, 78, 205-6, 242, 287, 313
American initiatives with,
Zahedi's reports on, 19
and Iran under the Shah, 18
and the October War 119731, 25,
186, 208
and the Palestinian problem, 323
and the U.S. peace proposal, 170
Eisenberg, Saul, 178, .179, 192, 196
Eitan, Rafael, 40, 54-57, 59~60, 71,
78, 97, 313, 345
and the Hashemi sting, 178, 179
and the joint Committee, 102, 110
and the killing of Adam, 186
and the leak to Gelb, 103-4
and McFarlane, 105-6
and the Mossad comptroller, 110
Nir and, 167
and North's second channel, 174,
175, 176
and the Paris meeting, 69, 73
and the pipeline contract with Iraq,
173
and the Promis program, 131, 132,
133, 135, 138
and Radi, 122~23, 124
Eitan, Rafael (continued)
and Shamir, 129
and the Tel-Aviv-Tehran flights,
102-3
Eitao, Toram, 97
El Aqsa Mosque, 8, 9, 12
El Diario, 220, 222
El Reno Federal Penitentiary, 329~30
El Salvador, 105
Emerson, Steve, 350
Emirates, 18, 43, 255
Engelberg, Stephen, 183
England. See Britain
Entebbe hijacking, 19-20
Eshkol, Levi, 205, 314
Esquire, 345
Ethiopia, 18, 162, 164, 165, 317
Evans, Samuel M., 178, 190
External Relations Department
(ERD), xii, 24, 25-27, 31
Ben-Shalom at, 189
documents confirming Ben-Menashe's
employment at,
353-57
Emerson 00, 350
and the Iran-Iraq war, 49
and Israel's nuclear capability,
209-10
and the Sabra and Shatila refugee
camp massacres, 128-29
and the routing of arms through
South Africa, 53
and the Sandinistas, 37. See also
Israel Defense Forces (IDF)

F

F-4 aircraft, 57, 68, 72, 80-81, 91, 98,
99, 108, 162, 163, 165
F-5 aircraft, 162, 163, 165, 291, 293,
294, 297, 301, 302, 304
F-15 aircraft, 97-98
Fakhrieh, Khosro, 61-63, 70, 74
Falklands War, 119
FBI (Federal Bureau of Investigation),
85, 174, 333
Fernanda, Marie ("Freddie") 32-39,
43, 100-101, 109, 161-62, 189
Fielding, Janet, 113, 114
Financial Times, 217, 243, 248, 271,
302, 303
Finland, 16
Food and Drug Administration (FDA),
303-4
Foster, Michael, 333
France, 29, 40, 206
and Israel's nuclear capability, 204,
205, 207, 208, 209
and the North group, 180
and Shining Path, 219
and the Suez Canal, 52
and weapon sales to Iran, 51, 126,
173, 287
Franco, Francisco, 128
Frank, Yitzhak, 108
Frauenknecht, Alfred, 292-93
Freedom of Information Act, 106
Frontline, 343
FSLN (Sandinista National Liberation
Front), 31-34. See also
Sandinistas
Fujimori, Alberto, 346
FXC International, 292, 295, 296, 301

G

Gabbay, Simon, 73, 96
Gahal Party, 6, 205-6. See also Likud
Party
Galil rifles, 254
Galili, Yisrael, 205
Gamma Corporation, 243, 286
Gandhi, Rajiv, 321
Garcia, Alan, 213
Garment, Leonard, 141
Gates, Robert, 116, 101-2, 173,
192-93
and Admoni, phone call with,
302-3, 304
alias used by, 164
Ben-Menashe's meeting with
11989), 307, 308-9
and Cardoen, 242, 274, 275
and Casey, 169
and the coup d'etat in Paraguay,
296
and GMT, 155
and the Iran-contra hearings, 194,
226
and the Iran-Iraq war, 50
and Iraq, supply of weapons to,
242, 243-44, 245, 255, 279,
295-96
named as an enemy of Israel, 305,
306
and the Madrid meetings, 62-63
and the Miami meeting, 80, 83,
84-87
nomination of, 280, 344
and the Ora group, 116
and the Paris meeting, 73, 74-75
and Peres, 168
and the Promis program, 134, 135,
141
and the sale of C-130s, 307
and the sale of F-SE aircraft, 291,
292, 295-96, 304
and the sale of sophisticated
electronic equipment, 101-2
and the Santiago meeting 119861,
243-44, 280-81
and the secret agreement not to
supply Iran, 228
and Sharon, 105-6, 173
and Stange, 291
and strategic agreements with
Israel, 104
team, briefing of Bush on, 188
and the Tower Commission, 191
and weapon flights to Tehran, 99
Gaulle, Charles de, 204, 206
Gaza Strip, 124-26, 170, 188, 314-
18, 323, 324
Gazit, Shlomo, 17
Gelb, Leslie M., 103
Gemayel, Bashir, 127
Gemayel, Pierre, 127-28
General Trust Company, 164
General Electric, 155
Geneva Convention, 160
GeoMiliTech (GMT), ISS-56, 192,
278, 279, 306
George, Clair, 86, 270, 279, 296, 306
Germany, 23, 71, 91, 174, 242, 243,
261, 287, 288
Ghorbanifar, Manuchehr, 174
Ghows, Faissal, 82-83
Girozentrale Bank, 96
Giuliani, Rudolph, 177, 180, 183
Golan Heights, 206, 208, 2S0
Golani unit, 14, 78
Goldberg, Yosef, 120
Goldsmith, Israel, 116
Gorbachev, Mikhail, 141, 152, 154, 346
Gotti, John, xi
Greece, 38-39
Gregg, Donald, S9, 7S
Grunwald, Henry, 183
Guatemala, 79-87 passim, 105, Ill,
191, 192
and the Promis program, 136,
137-39
shipment of TOW missiles
through, 117
Guerrero, Oscar, 201, 202
Guevara, Che, 218
Guinness Peat, 102
Gulf War, 309, 324, 346
Guzman Reynoso, Abimaelj 212, 216,
217-19, 222-25, 230-31, 346

H

H-bomb, 210
Hadron, 133, 140, 141
Hall, Fawn, 175
Hall, Wilma, 175-76
Hamel, Robert, 184
Hamilton, Donna, 232
Hamilton, Lee, 344
Hamilton, Nancy, 13In
Hamilton, William, 130, 131n
Harari, Mike, 62, 104-5, 137
Harel, Ron, 155
Hasenfus, Eugene, 190
Hasharool Mishmar, 7
Hashemi, Ayatollah Ali Reza, 61, 91
Hashemi, Cyrus, 51, 177-78, 179,
183-84, 190, 196
Hashemi, Jamshid, 51, 177
Hashemi brothers, 51, 63, 71, 95. See
also Hashemi, Cyrus
Hashemi sting, 177-80, 183-84, 190,
192
Hawke, Robert, 281-82, 346
Hawk missiles, 126, 180-81, 191
Hebroni, Moshe, 56, 57, 66, 78, 128-
29, 345, 350
Heftez, Assaf, 40
Henderson-Pollard, Ann, 174
Herrmann, Manfred, 137, 138
Hersh, Seymour, 210, 343, 347, 348,
349
Herot Party; 6
Herzl, Theodor, 228
Hill, Graham, 348
Hindawi, Nezar, 123, 124
Hitler, Adolf, 4, 35, 142
Ho Chi Minh, 218
Honeywell, 138
Hortrich, John, 107-8, 109. See also
de Laroque, John
House Foreign Relations Committee,
193
Hungary, 52, 152, 153
Hunt brothers, 136
Hussein (king), 121, 133, 170, 315,
316, 317, 323-24, 343
Hussein, Saddam, 121, 170-72, 176,
283, 323-24, 345-46
and Cardoen, 253, 254
and China, 192
and the Emirates, 255
Fakhrieh on, 61
and the Iran-Iraq war, 50, 67-69
and the Israeli bombing of an Iraqi
reactor, 98
and Kuwait, 227
and oil reserves, 69
and pipeline contracts, 172
and Saudi Arabia, 227, 255
and Scud missiles, 309
and U.S. peace initiatives, 188
weapons sales to, xii, xiv, 94, 141,
171, 193, 227, 238-39, 254, 255,
287, 295
Husseinzadeh, Cyrus, 66

I

IBM, 133, 138, 140
Independent, 303
India, 313, 321, 352
Ingerman, Shulamir, 16, 17, 23-24
Inslaw. See Promis program
InterMaritime, 173
Iran Air, 91, 92
Iran-contra scandal, 118-19, 166-84,
333
Iran-contra scandal (continued)
and Ben-Shalom, 195
exposure of, 190, 193, 195-96, 226
and GMT, 278
and North's trial, 288
Iranian hostage crisis, 51, - 53-60
and the Paris meeting, 68-70, 72,
73-76, 78, 84, 95, 101, 177, 296
Iranian revolution, 29-30, 31, 36, 40,
49, 55, 168, 182
Iran-Iraq war, 47-48, 67-68, 171, 172
briefing of Bush on, 188
ceasefire of, 226
and Hussein's threat to Israel,
77-78
and the Joint Committee, 77-79,
81
mass killings of, 221
and the Ora group, 126
and the Paris meeting, 74
the Soviets and, 143
Ireland, 102, 117, 124, 180, 235, 349
Israel Aircraft Industries, 96-97, 159,
165, 168, 261, 292
Israel Air Force, 97, 159, 162, 174,
181
Israel Defense Forces (IDF), 23, 24,
29, 70, 78, 102, 109-10, 315
and the Iraqi reactor, 97
and the T-80 tank, 118
and Nimrodi, 168, 169
and the Tehran meeting [February,
19811, 96
Turner's letter to, 69. See also
External Relations Department
(ERD)
Israel Military Industries, 28, 207,
254, 257, 274
Israel Police Border Guard, 10, 40
Israeli Military Intelligence (MI), 17,
21-24, 29, 30, 39, 56, 61, 65,
109-10, 238, 305, 338-39
Begin and, 186
and East Bloc countries, 152
and the KGB, 98-99
and North's second channel, 175
and the press, 183
and the Republicans, cooperation
with, 65-66
and the routing of arms through
South Africa, 53
and the Tehran meeting (February,
1981), 96
and the T-80 tank, 118
Turner's letter to, 69
Italy, 18, 23, 24, 164, 317, 345
ITICO (Integrated Technologies
International Company), 241
Ivry, David, 227, 294, 295-96

J

Jabotinski, Vladimir, 228
Jacobson, Arieh, 116-17, 149
Jalali, Mohammed, 176, 192-93,
226-27, 229, 255, 277, 294-95,
307, 345
Jalloud, Abdul Salam, 47
Japan, 18, 21, 311
Jaruzelski, Wojciech, 144
Jerusalem Post, 19
Jewish Defense League (JDL), 8, 10,
12
Jewish Reform Movement, 119
John Curtin Foundation, 120
John Street operation, 102, 103-4,
109
Joint Committee for Iran-Israel
Relations, xii, 77-79, 90-91, 99,
109, 142, 173, 187, 199, 270
arms transactions conducted on
behalf of, documents confirming,
353, 358-64
Joint Committee for Iran-Israel
Relations (continued)
and Australia, 119-20
and Ben-Shalom, 195
and Chebrikov, 313
and CIA money, control of, 310
control of, by Likud appointees,
151
and East Bloc countries, 149-50,
155, 165, 322-23
Eitan and, 129
and Iran-contra, 169, 192
and Jewish settlements, 124-26
John Street operation of, 102,
103-4, 109
members of, 78
and the Mossad comptroller,
109-10
and the North-Nir group, 181-82,
183
and North's second channel, 175,
176
and the Paris meeting, 10I
Peres and, 167
and the Promis program, 141
and the Sabra and Shatila refugee
camp massacres, shakeup after,
129
and Tower, 191
and TOW missiles, I 16-I 7
Jordan, 18, 43, 78, 121, 172, 313
and the Palestinian problem, 316,
317, 318, 323-24
and pipeline contracts, 172
and the Promis program, 133,
137
state of, creation of, 314
and the U.S. peace proposal,
170
Jordan, Peter, 217, 220
Joy, Leonard, 332
Justice Department, 130-31

K

Kahan, Yitzhak, 128
Kahane, Meir, 8
Kalashnikovs, 33, 34, 91, 146, 147,
148, 150, 217, 321
Karrubi, Hojjat El-Islam Mehdi, 55,
61-63
and the Madrid meeting, 54, 56,
59-60, 61-62
and the Paris meeting, 68-69, 72,
74, 75, 95
and the Tehran meeting, 95
Kashani, Ayatollah Abol Qassem, 29,
55
Kashani, 5ayeed Mehdi, 29, 30, 55-
57, 61, 65-70, 345
and frozen assets, 90-91
and the Iraqi reactor, 97
and the Joint Committee, 79, 81,
88-89
and the Ora group, 115, 116, 117
and the Paris meeting, 69, 72, 73,
74, 75-76
and the Tehran meeting, 94
and the Vienna meeting, 90,
92-93
Kashoggi, Adnan, xi, 173, 178
Katusha rockets, 126, 146, 150, 156,
157, 159, 191
Keating Paul, 346
Kenya, 19-21, I I I
Keyhan International, 182
Kfir aitcraft, 119, 292-93, 294, 295,
296, 301
KGB, 64, 98-99, 152, 154, 218, 313,
346
and the Iran-Iraq war, 143
and Northls second channel, 175
and the Promis program, 135
and Vanunu, 200
KH-11 satellites, 93
Khomeini, Ahmed, 51, 70
Khomeini, Ayatollah Ruhollah, 40-
43, 47, 176, 305, 343
and Arafat, 59
and Bazargao, 54
and Begin, 70
and the Iranian hostage crisis, 59
and Israel as a strategic asset to the
U.S., 78
and the Joint Committee, 77,
79-80
and Madani, 48
and the Shah's departure from Iran,
46
Khuzistan, 47-48, 50, 53, 67
Kimche, David, 53, 70, 73, 78, 101,
129, 187, 188
King, Joe, 184
Kleine, Baldur K., 138
Knesset, 104, 150
Knight, John, 121, 286
Kopp, Hans, 163-64
Korean War, 157
Kruger, Werner, 226-27
Kuwait, 18, 43, 227

L

LAKAM, 54, 167, 174
Lante, Nick, xi
Lavee, Shimon, 210
Lavi, Hushang, 71, 103
Lebanon, 47, 127-28, 190
Adam's inspection tour of, 185-86
alleged capture of arms in, 191,
192
and the Gulf War, 324
hostages in, 191, 237, 277, 318, 320
and the Palestinian problem, 316
Ledeen, Michael, 174
Legal Aid Society of New York, 332
LEHI (Fighters for the Liberation of
Israeli, 4
Lenin, V. 1., 212, 224
Lettner (pseudonym), 307, 308, 326,
327, 328, 334, 337-38
Liberty, 206
Libya, 47, 208-9, 242, 313
Likud Party, 6, 56, 60, 120, 173, 262,
316
and East Bloc countries, 143, 150,
151, 154, 155
,intelligence community slush
fund, 58
and the Iran-Iraq war, 172
and Israel as a strategic asset to the
U.S., 77-78
and Jewish settlements, 12A, 125
and the 1981 elections, 167
and the North-Nir group, 174-75,
181-82
and the Palestinian problem, 316,
317, 324
and the Sabra and Shatila refugee
camp massacres, 129
Sharon and, 104
and the U.S. peace proposal, 170,
171, 187
Lloyd's of London, 96
Lockheed Aircraft Company, 21
LTTE (Tamil guerrillas), 319, 320-22
Lubrani, Uri, 41
Luxembourg, 286, 296

M

M-16 rifles, 172
McFarlane, Robert, 53-55, 333, 345
and Bazargan, 54-55
and Eitan, 105-6, 169
and the exposure of the Iran-contra
scandal, 190
McFarlane, Robert (continued)
and the Iranian hostage crisis, 53,
54
and the Madrid meeting, 59-60,
62-63
and North's second channel, 169,
174-75, 176
and the Paris meeting, 69, 74-75
resignation of, 176
and strategic agreements with
Israel, 104, 105-6
suicide attempt of, 194
and the Tehran meeting, 53-55, 56
and the Washington meeting, 71,
72
Macmillan Company, 135
McNamara, Cynthia, 222-23, 232,
233-34, 235
Madani, Ahmad, 48, 68
Madrid meetings, 55, 56, 59-60, 61,
62-64, 84
Maldal party, 151
Magori, Ann, 328-29, 330
Maitland, 138
Majlis, 3
Mao Zedong, 192
Maoists, 212
Mapai Party, 205
Mapam Party, 134
Marcos, Ferdinand, 55
Marx, Karl, 212
Marxism, 29, 212
Mathenet, Jacques, 108
Matthei Aubel, Fernando, 290-93,
295, 301, 302, 303, 304
Maxwell, Ian, 347
Maxwell, Robert, 113, 120, 129, 274,
312, 333
and Ben-Menashe's imprisonment,
333
and CIA money, movement of,
322-23, 351
death of, 347
and East Bloc countries, 143, 144,
152, 153, 154, 155
Hersh's book on, 343, 347, 348,
349, 350
official inquiries on the activities
of, 344
and the Promis program, 129,
134-41
and Rabus, 144
and Shamir, 143, 311, 323
and the Vanunu affair, 202, 204
and Zoronow, 334
Maxwell, Kevin, 347
Mayers, Hans, 267-68, 287
Medan Computers, 138
Meese, Edwin, 111, 131, 172, 173
Meija Victores, Oscar, 137, 138, 139
Meir, Golda, 16, 104, 260-61, 314,
315-16
Meir, Meir, 37, 38, 53
Melli Bank, 74
Menashi, Gourdji, 4
Menashi, Khatouon, 7
Melowany, Pesah, 339
Mengistu Haile Mariam, 162,
163-64
Meridor, Yaacov, 136-37
Merkava tanks, 28
Metropolitan Correction Center, xi,
xii, 180, 190, 328, 331, 332
Mexico, 105
MI-s protection, 124
MiG fighters, 126, 153-54, 161
Military Intelligence. See Israeli
Military Intelligence (Mil
Milken, Michael, 125
Mirage aircraft, 126, 206, 292, 301
Mirror Newspaper Group, 347
Mohammed, 8, 42
Morieh, Shmuel, 70, 73, 78
Moroccan Waiter Affair, 105
Morton, Andrew, 347
Moses, Judy, 166
Moslems, 8, 9, 67, 112, 208
Mossad, 5, 12, 26-28, 99, 109-10,
196, 218, 287, 305, 306, 312, 345
and Adam, 185, 186
and Ben-Menashe's writing of a
book, 350
Ben-Shalom at, 189
and Black September, 23
and Britain, 112, 119
and Bush's 1986 briefing by Ben-Menashe,
187-88
in Chile, 242, 249, 256, 282, 293,
302
and Davies, 112, 113
and the East Bloc countries, 152,
154, 157
in France, 93
Harari and, 104
and the Hashemi sting, 184
hit squads, and weapons sales to
Iraq, 288
and Iraq, supply of weapons to,
238, 249
and the Iraqi reactor! 97
Lavi and, 71
and the "mosque network," 30
operating budget, 102
and the Pakistani reactor, 313
in Paraguay, 270, 296-99, 300, 302
and the Paris meeting, 73
Pearson and, 121
plot, to bomb the U.S. embassy in
Cairo, 206
power of, compared with Military
Intelligence, 25
and the Promis program, 133, 134,
135, 137
Shamir and, 187
and SIM, 26
and the Tehran meeting, 96
Tevel unit, 26, 53, 70, 78, 187
transfer of funds by, to South
America, 196
and Unit 8200, 15
and the Vanunu affair, 202-3
and the Vienna meeting, 92
Mossadegh, Mohammed, 3, 46, 52
Mousavi, Mir Hosseini 174, 176
Mujahedin, 313
Mullahs, 68, 182
Munitions Export Act, 257
Murphy, Ann-Marie, 123, 124
Muskie, Edmund, 302

N

Nahal Salek, nuclear reactor in, 204
Namibia, 207
Naor, Aryeh, 110
Nassar, Garnal Abdel, 52, 205-6, 314
National Security Agency (NSA), 130,
131, 132, 134, 175
National Security Council (NSC), 50,
59, 75
contacts of, with top Iranian
officials! formation of, 174
Gates and, 62
and Iran-contra, 169, 191
and strategic agreements with
Israel, 104
National Unity Government, 151
National Westminster Bank, 106, IS4
NATO (North Atlantic Treaty
Organization), 16, 111, 117
Nazism, 4, 5, 33, 242, 247, 260, 261,
263, 269
Neturei Karte, 41, 42
New Caledonia, 205
New Republic, 350
Newsday, 183
Newsweek, 336, 349-50
New York Times, 103, 183
Nicaragua, 31-39, 43, 100, 105, 137,
140, 162. See also Contras
Sandinistas
Nidal, Abu, 121, 122
1967 War, 121, 168, 171, 205-6, 258
Nimrodi, Rosie, 182, 183
Nimrodi, Yaacoy, 168-69
Nit, Amiram, xii, xiii, 166-67, 16970,
174, 176-78, 180-82, 187,
288-90
death of, 289-90, 333
and North's trial, 288
Nixon, Richard M., 177-78, 208
Noriega, Manuel, 105, 139
North, Oliver, 118-19, 137, 169, 177,
190, 193, 333-34
contacts of, with top Iranian
officials, formation of, 174
and the Hashemi sting, 177-78,
180
and Operation Eagle Claw; 59
second channel of, 166-84
trial of, 288, 290
North Korea, 119, 126, 154, 156-57,
192, 332
North West Industries, 160, 307

O

Ocho Group, 222
October surprise, 343, 349-50
October Surprise (Sick), 343
October Surprise Task Force, 343
October War (19731, 186, 208
Odom, William, 175, 176
Office of Independent Council, 353,
370
Office for Purchase of Military
Equipment, 92
Office of Strategic Services, 260
Official Secrets Act, xiv, 12
Oliver, Spencer, 193
Olympic Games, 23, 105
Omshei, Ahmed, 59, 62, 70, 71-72,
296, 301
and the Iraqi reactor, 97
and the Ora group, 117
and the Paris meeting, 74
and the Tehran meeting, 93-94
and the Vienna meeting, 90, 92-93
Operation Eagle Claw, 58-59
Ora Group, 100-26, 137-38, 154,
156, 189
O'Toole, Joseph, 291-92, 295, 301,
306, 307, 326-27
letter from, to the director general
of the Israeli Ministry of
Defense, 353, 366
prosecution of, 334, 335, 336-37
Overseas Private Investment
Corporation, 173

P

Pahlavi, Mohammad Reza (Shah of
Iran), 27, 28, 47, 48, 71, 182
Begin and, 49
departure of, from Iran, 44-45
and the Iranian hostage crisis, 51
and the Iranian revolution, 29-30,
31, 36, 40, 44-45, 49, 55
military equipment accrued under,
68
and moderate pro-American Arabs,
43
Nimrodi and, 168
and the plan to kill Khomeini, 40-
41, 43
and Saddam Hussein, 170-71
restoration of, to power, in 1953, 52
White Revolution of, 30
Pakistan, 70, 287, 313, 352
Palestinians, 120, 122, 124, 171, 351
in the Mossad hit squad, 288
and the promis program, 133
and the Sabra and Shatila refugee
camp massacres, 127, 128
slaughter of, by the Jordanian army
11970), 121
and the U.S. peace proposal, 170
Vanunu and, 200. See also PLO
(Palestinian Liberation
Organization)
Palme, Olof, III
Panama, 105, 137
Paraguay, 111, 254, 260-71, 273,
275-76, 287, 293, 346
Paris meeting, 68-69, 70, 72, 73-76,
78, 84, 95, 101, 296, 344
Parry, Robert, 335-36, 343
Pazner, Avi, 199, 219, 227-28, 230,
238, 240, 248, 249, 269, 270, 345
and Ben-Menashe in Chile, 27677, 278, 292, 293-
94, 305, 307
and Ben-Menashe in Paraguay, 261,
262, 266, 276-77, 297, 304
and Ben-Menashe's leave of
absence, 325
and control of CIA money, 311
and the coup d'etat in Paraguay,
297
and the secret agreement not to
supply Iran, 228
Pearson, Anthony, 112-13, 121, 122,
286
Peeples, Joe, 136
Peres, Shimon, 172, 174, 345
and Bush, 170
and Casey, 59, 60
and the CIA Copeland group, 56,
59, 60
and East Bloc countries, 154
and Kashoggi, 178
and Iran-contra, 166
and Israel's nuclear capability, 201,
202, 204, 206-7
and Lockheed, 21-23
and the Madrid meeting, 59, 60
Nir and, 166, 167-68, 180-81, 288,
290
and the Palestinian problem, 316
and the pipeline contract with Iraq,
173
and Shamir, 150-51
and the South Africans, 206-7
and U.S. peace proposals, 170, 171
and the Vanunu affair, 201, 202, 204
Pergamon Press Trust Fund, 120
Peronists, 6
Peru, 111, 179, 180, 212-25, 227-28,
230, 232-37, 275, 346
and nuclear materials 211, 219,
221, 223, 231, 237
Phelps, Timothy, 183
Pinochet, Augusto, 239, 244-50,
252-53, 263, 266, 272, 280-81,
283-84, 290, 301, 303
Playboy, 104
PLO (Palestinian Liberation
Organization), xii, 191, 313-24
and the death of Military Intelligence
personnel in Rome, 23
Eitan and, 129
and the Iranian hostage crisis, 59
and Jewish settlements, 124
personnel, expulsion of, from Iran,
47
and the Sandinistas, 35, 160
and the Shah's departure from Iran,
46. See also Palestinians
Poindexter, John, 169, 194
Poland, 137, 143-49, 153-58, 160,
161, 163, 191, 278
Pollard, Jonathan, 174-75, 179,
Portugal, 38, 43, 95, 96, 100, 101,
102, 109
Premadasa, Ranasinghe, 320
Promis program, 127-41, 142, 153,
306, 310

Q

Qaddafi, Muammar, 20, 47, 208-9

R

Rabin, Yitzhak, 151, 169, 181, 209,
345
Rabus, Dieter, 143-44, 150
Radi Abdullah, Mohammed, 113,
121-23
Rafiqdoust, 176
Rafsanjani, Hojjat El-Islam Ali Akbar
Hashemi, 115, 180, 176, 190,
345, 353, 362
Ramat Gan, Iranian embassy in, 15,
21, 27
Rankuni, Iran Nadj, 52, 353
Rappaport, Bruce, 172, 173, 181, 306
Ratiner, Leigh, 141
Ravina, Pazit, 350
Reagan, Ronald (Reagan
administration), xiv, 54, 70-71,
75, 86, 89, 343
and Casey, 53, 63
and the Iran hostage crisis, 177
and the Paris meeting, 75-76
presidential campaign of, 56, 64,
170
and Iran-contra, 169, 190, 288,
290
and the Madrid meeting, 55
and Nir's death, 290
and Saddam Hussein, 170-71
Republican Party, 54-55, 62, 63, 64,
65, 72
and the exact date of the hostages'
release, 75
and frozen Iranian assets, 70, 90
and the Madrid meeting, 60, 64
and the October Surprise Task
Force, 343
and the Palestinian problem, 316,
317
and the Paris meeting, 68, 69
RESH (R branch), 26, 27
Revolutionary Guards, 52, 176, 227
Richardson, Elliot, In
Richtmeyer, 219
Rodriguez, Andres, 264, 266, 269-71,
296-300, 306, 346
Rodriguez, Jose, 266-67
Rohan, Michael Dennis, 8-11
Roosevelt, Kermit, 52
RPG rockets, 156
Russian Orthodox Church, 64

S

Sabra and Shatila refugee camps,
127-28
Sadat, Anwar, 19, 16, 314, 316
Sadr, Sheikh Mussa, 47
Sagi, Yehoshua, 56, 57, 58, 65, 79-81,
88, 345
Begin's order to, to supply Iran
with arms, 77
Casey and, 69, 71
and the Iranian weapons list, 66,
67
and the Iraqi reactor, 96
and the KGB, 98-99
and the Paris meeting, 75.
and the Sabra and Shatila refugee
camps massacres, 128-29
Sagi, Yehoshua (continued)
and the Tehran meeting, 96
and Turner's letter, 69
and the Washington meeting, 72
St. Francis; Richard, 306-8, 326, 334,
33S, 336, 340, 342
Salame, Ahmed, 105
SAM-7 missiles, 156, 159
Samghabadi, Raji, 182-83, 190, 336,
340-41
Samson Option, The (Hersh), 210,
343, 347, 348, 349, 350
San Cristobal University, 361, 365
Sand, Leonard, 190
Sanders, Alan, 241, 242, 243
Sandinistas, 31-39, 43, 105, 137, 155,
160, 161, 264
Sandino, Augusto, 32
Santiago meeting, 243-44
Sapir, Pinchas, 205
Sargalian, Sarcis, 305
Saud bin Abdul-Aziz (king), 314
Saudi Arabia, 43, 171, 227, 313
and the Iran-Iraq war, 50
and Israel as a strategic asset to the
U.S., 78
and the Joint Committee, 79, 80,
81-83
oil reserves of, 48
and the Palestinian problem, 315,
324
and pipeline contracts, 172-73
SAVAK, 18, 27, 28, 29, 40, 66, 182
Schneerson, Menachem, 125
Schultz, George, 172
Schwimmer, Al, 168, 169
Scud missiles, 126, 287, 309
Seale, Patrick, 343
Secord, Richard, 275
Secret Service (United States), 74, 187
Sedra, 137, 138
Sella, Aviem, 174
Senate Armed Services Committee,
135
Senate Foreign Relations Committee,
343, 344
Senate Intelligence Committee, 344
Seychelles, 112
SFAIR, 164
SHABAK, 11-12, 15, 22, 24, 66, 70,
78, 194-95, 305
Shah of Iran. See Pahlavi,
Mohammad Reza
Shamir, Yair, 312
Shamir, Yitzhak, xii-xiii, 4-5, 6, 97,
120, 129, 199-200, 269, 277,
280, 294
and attempts to keep Ben-Menashe
from writing a book, 349
Ben-Menashe's confrontation with,
323, 325
and Ben-Menashe's meeting with
Jalali (London, 1988), 226
and Ben-Menashe's mission in
Peru, 219, 227-29, 237
and Ben-Menashe's prosecution,
337
and Bush, 186, 187
and Cardoen, 240, 274
and Chebrikov, 3I 7
and control of CIA money, 310,
311, 313
cover up for, Samghabadi on, 340
and East Bloc countries, 142, 143,
150-51, 153, 154, 155
and the list of enemies of the state
of Israel, 306
loan guarantee to Maxwell, 311,
323
and Paraguay, 263-64, 300
letter to Pinochet, 246-47
and the Promis program, 134, 135
and Maxwell, 134, 135, 311, 323
and Nir's death, 290
Shamir, Yitzhak (continued)
and the Palestinian problem, 31214, 316-
17, 318, 319, 323
Peres and, 167-68, 199
and the pipeline contract with Iraq,
173
replacement of, by Rabin, 34S
and the sale of C-130s, 306, 307
and the supply of weapons to Iraq,
238, 240, 243, 244, 246, 252
and the transfer of funds by
Admoni and Ben-Menashe, to
South America, 196
and U.S. peace proposals, 170, 171
and the Vanunu affair, 204
Sharon, Ariel, 31, 62, 104-5, 137, 169
and Israel's nuclear capability,
210-11
and the Sabra and Shatila refugee
camp massacres, 127, 128
and the Sandinistas, 160-61
and strategic agreements with
Israel, 104, 105-6
Shas Party, 125, 151, 322
Shatt al-Arab, 47, 67
Sheik, AI, 277
Sheridan Square Press, 351
Shi'ites, 28, 29, 3D, 41, 47, 49, 320
Shining Path (El Sendero Luminoso),
212-24, 228, 230-33, 236, 346
Shlom Zion, 104
Shur, Arieh, 339
SIBAT, 57, 115, 116, 239
Sicily, 121, 122, 288
Sick, Gary, 343, 349
Sidem International Limited, 121
Siff, Leon, 320, 325-30
SigInt (Signals Intelligence), xii, 14,
15-17, 18, 19-24, 93
Silberman, Lawrence, 71
Silkworm missiles, 120, 126, 191,
Simchoni, Uri, 70, 73, 78
SIMWA, (SADF-IDF Mutual Wartime
Agreement), 209-10
Sinai Desert, 52-53, 206, 207
Singapore, 291, 292, 293, 295
Singlaub, John, 59, 155, 279
Smith, Herbert A., 348-49
Software and Engineering
Consultants, 132
Somoza Debayle, Anastasio, 31-33,
34, 35, 264
SonntagsBlick, 165
Sonterelli, Don, 332
South Africa, 53, 111, 112, 174, 312
intelligence agents from, 103-4
and Israelis nuclear capability, 2067, 208, 209, 210, 211
and the Labor Party, 6
and the Promis program, 136,
139-40
shipments from, and Paraguay, 261,
267
and the supply of weapons to Iraq,
239, 240, 241-44, 257-59, 274,
276, 279, 280, 286-87, 290-91,
294, 304-5
and the Transkei connection, 136,
139-40
South African Arms Corporation. See
ARMSCOR
South Korea, 140
Soviet Union, 5-6, 10, 16, 99, 115,
126, 145-46, 152, 154-55, 160,
175, 215, 276, 349, 352
and Albania, 216
Amirian in, 29
and the black market in Poland,
145
and the CIA, 260, 313
and the DIA, 50
dramatic political changes in, 346
and the FSLN, 31, 33
Soviet Union (continued)
Gates' knowledge about, 62
and GMT, 278
and Israel's nuclear capability, 208,
209, 210
invasion of Hungary, 52
investigation of Maxwell's
activities in, 347
Iran and, 19, 46, 98, 99
Jewish immigrants from, 16, 118,
313, 317
and Khomeini's regime, 46
and the Labor Party, 6
oil reserves of, 48
and the Palestinian problem, 317
Pergamon Press Trust Fund in, 120
and the Promis program, 135, 140-
41
and the Sandinistas, 36, 161
and the Shah's departure from Iran,
45
Shamir and, 312-13
and the Shining Path, 224-25
shootdown of the Argentinean
cargo aircraft (1981), 106-7
and SigInt, 16
and the supply of weapons to Iraq,
64, 173
and travel to North Korea, 157,
158, 159
and the Tudeh Party, 29
and the U.S. peace proposal, 170
and Vanunu, 200
Special Assistance Branch (SIM), 26
Spycatcher (Wright), 16
Sri Lanka, 319-22, 325, 327, 353, 368
Stalin, Josef, 212, 216, 224, 260
Stange, Rodolfo, 243, 245-52, 265,
266, 270, 272, 280-81, 290, 291,
293, 301, 305, 312
Stanton, Louis, 336-37
Staudinger, Special Agent, 328
Stern, David, 4, 228
Stern Gang, 4, 5, 135
Stinger missiles, 214, 236, 336
Stirling Island, 119-20
Stroessner, Alfredo, 260-77 passim,
293, 296-97, 298
Stroessner, Marta, 264, 265
Studley, Barbara, 155, 279
SU aircraft, 126
Suarez, Adolfo, 60
Sudan, 112
Suez Canal, 206, 208
Sunday Mirror, 202, 203
Sunday Times, 202, 203
Suouis, 47
Supergun artillery, 257
Supreme Court, 344-45
Switzerland, 27, 57, 140, 163-64,
173, 292-93
Sydney Morning Herald, 201
Syria, 25, 59, 122-23, 124, 153-54,
250
and the Iran-Iraq war, 172
and the October War 119731, 186,
208
and the Palestinian problem, 315,
317, 324

T

T37 aircraft, 293
T-72 tanks, 118, 144
TAHAL, 207, 210
Tamil guerrillas, 319, 320-22
Tammuz 17, 93, 95, 96-98
TAp, 10I, 102
Tehran meetings, 54-55, 93-94,
180-81
Tehran University, 29
Tevel, 26, 53, 70, 78, 187
Thatcher, Mark, 257, 259, 276, 28087
passim, 304-5
Thatcher, Margaret, 112, 119, 124,
152, 257
and the Vanunu affair, 203
and weapons sales to Iraq, 275,
279-80, 284-85
Thomas, Clarence, 344-45
Tiger One, 321-22
Time, 182, 183, 190, 336, 340, 349
Timpani, Mike, 278, 279, 306
TOW missiles, 115, 116, 119-20,
126, 180, 191, 264, 353
Tower, John, 54, 135, 190-191, 243,
274, 311, 334, 345
TransCapital, 140, 306, 340
Transkei, 136-37, 139
TransWorld, 153
Treasury (United States), 106
Tsippori, Mordechai, 210
Tsomet, 280, 287
Tudeh Party, 29, 31, 36, 182
Tunic, Yitzhak, 10
Turkey, 98, 99
Turner, Stansfield, 50, 52, 63, 69

U

Uganda, 20
Ulmart, Ehud, 120, 318, 349
Unger, Craig, 345, 350
United Nations, 206, 241, 250, 345
University of San Cristobal, 212,
215-16
UPI (United Press International), 271,
300

V

Valley National Bank, 79, 87, 106,
243
Van Der Westhuizen, Pieter, 243, 257,
279, 286-87, 304
Vanunu, Mordecai, 200-204
Vega, General, 291, 293, 295
Velliot, Bernard, 107-8
Venezuela, 219, 221
VENONA, 16
Vienna meeting, 90-92
Vietnam, 53, 119, 130, 154, 159-60,
192, 307, 332
Vila Godoy, Mario, 291
Village Voice, 350
Von Raab, William, 180
Voorst, Bruce van, 182
Varona, Jack, 49-50

W

Wackenhut, 133, 134
Wall Street Journal, 350
Walsh, Lawrence, 194, 333
Washington meeting !October, 1980),
71-72
Watergate scandal, 104, 177, 341
Webster, William, 280
Weinberger, Caspar, 172
Weiss, Baruch, 331, 333, 334, 336-41
Weiss, Harry, 328, 330, 332
Weizman, Ezer, 49, 209-10
Weizman Institute, 136
West Bank, 124-26, 170, 188, 206,
314-17, 318, 323, 324
White Revolution, 30
World War 1I, 4, 135, 142-43, 204,
260, 346
Wright, Peter, 16

Y

Ya'ari, Aviezer, 134-35
Yavne area, nuclear reactor in, 204,
205
Yediot Ahronot, 166
Yirador, Reuben, 16, 17
Yishaek, Sasson, 13-14, 17, 19, 21,
22, 23-24
Youset, Ovadia, 125
Yugoslavia, 121, 150, 155, 156, 352
Yusef, Ovadia, 322
Yves, Jean-Paul, 116, 117

Z

Zahedi, Ardeshir, 19
Zeira, Yosef, 19
Zhou Enlai, 192
Zia el Haq, 313
Zionism, 228
Zoronow David, 333-34