The Murky World of Weapons Dealers

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Once the shipments were under way, Ghorbanifar claims, he made 76 trips between Europe, the U.S. and the Middle East to keep the negotiations on track. When McFarlane, North and other American negotiators flew to Iran last May with a planeload of weapons, Ghorbanifar says, he chartered the jet and paid for the group's stay in Tehran. McFarlane says he does not know who paid but assumes the bill was split by the U.S. and Iranian governments. Ghorbanifar also charges that Khashoggi was cut out of several of the deals on orders from McFarlane. The former National Security Adviser replies that he never had anything to do with Khashoggi but did recommend, after meeting Ghorbanifar in London in December 1985, that the U.S. have no more dealings with any middlemen. Whatever the fact, Khashoggi had to be brought back into the arms deals in 1986, when the U.S. began shipping weapons from its own stockpiles and once more needed the Saudi to supply bridge financing. Khashoggi rounded up investors who put $15 million into a May shipment that went sour, leaving them in the hole (see chart).

The suspicion, of course, is that some of the money went to the contras. A Senate Intelligence Committee report that leaked last week charges that it was Ghorbanifar who first suggested to a CIA contact in March 1986 that money paid by Iran be funneled to the Nicaraguan rebels. Ghorbanifar furiously denies that he had anything to do with money for the contras -- and in fact it is hard to see how he could have gained anything from the diversion. The Senate committee report, he charges, reflects "lying under oath" by "some U.S. officials in trouble (who) were trying to deflect the heat off themselves and onto me." He insists that he has been caught in a dispute betwen two CIA factions vying for influence in Iran. One faction, he says, botched the diplomatic initiative by trying to make its own deal in Tehran, and is now trying to cover its tracks by launching a smear campaign against him.

The account sounds hard to believe. But then, who would have imagined even three months ago that the U.S. would get caught slipping arms to the Ayatullah's regime? In the byzantine world of the weapons dealers, it is as hard to determine what is truth and what is disinformation as it is to disentangle the mixture of visionary and conniver in the personalities of Ghorbanifar and Khashoggi. As investigators probe deeper into the scandal, Americans can only hope that Washington's policy does not prove to be as devious as the arms merchants say it was -- and as their own maneuvers often seem to be.

CHART: TEXT NOT AVAILABLE.

CREDIT: TIME Diagram by Joe Lertola

CAPTION: A DEAL THAT WENT SOUR

DESCRIPTION:Color illustration: Four panels detailing exchanges of money and arms amongst cartoon figures.