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.