The Beginning of the Affair

Connections Made

As the 1980s continued, the relationship between the U.S. and Iran worsened. In 1983, the U.S. was actively involved in preventing arms sales to Iran, a country it accused of supporting terrorists. The U.S. also used its influence to lean on countries that dealt with Iran. However, at the same time, National Security Council (NSC) members began to look into covert operations that could lead to a better relationship with Iran. 

According to him, Adnan Khashoggi met with National Security Adviser Robert McFarlane beginning in 1983 to discuss U.S.-Iran relations. Meanwhile, former CIA Associate Director of Operations Theodore Shackley was introduced to General Manucher Hashemi, a former head of the Shah's secret police, SAVAK. Hashemi then introduced Shackley to other Iranians, including Manucher Ghorbanifar and Hassan Karoubi, who became infamous during the ensuing investigation as the “first Iranian.”  

In January 1984, McFarlane formally requested that the NSC examine how the U.S. could work to influence Iran, particularly a post-Khomeini Iran (the U.S. believed that he was close to death and that it would be easier to deal with the country after he died).  However, the report conveyed the sense that the U. S. was at an impasse in its relationship with Iran.

In 1985, Ghorbanifar and Khashoggi came into contact in Hamburg, Germany, and began devising the skeletons of the plan that would eventually become the Iran side of the Iran/Contra Affairs. Three Israelis were drawn into the discussion in the summer of 1985. A number of stories exist regarding the exact time, place, and specifics of these meetings. However, from these meetings came the idea to sell U.S. arms to Iran via Israel and the suggestion that, to gain the U.S.'s approval for the scheme, American hostages in Lebanon could be released.  At the same time this was happening, the NSC was searching for new ways to deal with Iran.

McFarlane met with Israeli David Kimche on July 3, 1985, who had been sent to the U.S. on behalf of the Israelis who had been involved in discussions with Khashoggi and Ghorbanifar.  Kimche presented their ideas to McFarlane had said that they were supported by both Iranian and Israeli officials.  Whether or not any of them had any official authority is unclear, but it seems unlikely. In a report to other top NSC advisers a few days later, McFarlane explained that Kimche had presented him with an opportunity to open dialogue with Iran. The Iranians wanted TOW missiles, and providing them would be an excellent way to improve  the U.S.'s relationship with the country. It could also likely lead to the release of the seven hostages held in Lebanon as Iran had influence over the terrorist groups who took the hostages.  In this report, McFarlane conveyed that Kimche was an emissary of the Israeli government—whether he actually believed this to be true is unclear. Secretary of State George Shultz and Secretary of Defense Caspar Weinberger voiced some opposition. However, McFarlane encouraged talks with Iran. Ghorbanifar put himself forward as a representative of the moderates in Iran who were interested in bettering relations with the U.S.  McFarlane, Ghorbanifar, and a variety of Israeli representatives began to formulate and refine a plan.

President Reagan's Approval

On July 1, 1985, The New York Times quoted President Ronald Reagan: “The United States gives terrorists no rewards. We make no concessions, we make no deals.”  However, in August 1985, McFarlane visited Reagan in the hospital, where he was recovering from abdominal surgery, to talk about the deal in the works. The President approved the plan to allow Israel to sell approximately 100 American-made TOW antitank missiles to Iran, seeing it as a chance to improve relations with Iran and to gain the release of hostages. Israel would send Iran some of their American-made TOW missiles.  In exchange, the Iranians would release some, if not all, of the American hostages that they held. The U.S. would also send Israel replacement TOW missiles so that its arsenal would not be depleted. It is not entirely clear what was said during this discussion, as both Reagan and McFarlane have given varying accounts. However, soon after, the plan was put into motion. Iran, represented by Ghorbanifar, and Israel, represented by Kimche and Nimrodi, worked out the details of the plan.

Shipments Begin

On August 20, the first load of 96 missiles was sent to Iran from Israel, with Ghorbanifar and Khashoggi acting as financial intermediates.  However, no release of hostages followed. According to Ghobanifar, there had been a mix-up, but the hostages would be released if more missiles were sent, which Iran would pay for. President Reagan signed off on the second shipment from Israel, which consisted of 408 TOW missiles. On September 15, the day after the shipment arrived in Iran, Benjamin Weir, an American hostage, was released. It was at this point that Lieutenant Colonel Oliver North, the “principal action officer” for the NSC's Contra dealings, was brought into the Iran dealings when McFarlane put him in charge of working with Kimche to figure out the logistics of getting Weir from Lebanon to the U.S. Though the very few people in the U.S. aware of the plan were angry that only one hostage had been released in exchange for 500 TOWs, McFarlane and others recognized other benefits they stood to gain from the trade. Additionally, all of the money transfers were being conducted by independent intermediaries""like Ghorbanifar and Khashoggi—instead of governments, which allowed for a great deal of flexibility. They were also determined to secure the release of more hostages.