The Tower Panel: Laying Out the Brutal Facts

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When Congress appeared ready to resume military funding in October 1986, North proposed that the CIA purchase the Project Democracy assets, which he listed as including six aircraft, warehouses, ships, boats, houses and a 6,520-ft. airstrip in northern Costa Rica. The price tag: $4.5 million. North even seems to have engaged in near blackmail when officials in Costa Rica threatened to close this airstrip. After consulting with Elliott Abrams, the top State Department official on contra policy, and Lewis Tambs, U.S. Ambassador to Costa Rica, North reported that he called Costa Rican President Oscar Arias Sanchez to threaten that the U.S. would cut off $80 million in aid if this happened. Costa Rica closed the field anyway; the aid continued.

Later North wrote Poindexter, admitting that "I was well beyond my charter in dealing w/a head of state this way and in making threats/offers that may be impossible to deliver . . . it seemed like the only thing we could do." Replied Poindexter: "You did the right thing, but let's try to keep it quiet."

The Tower commission finds the legality of these NSC staff actions murky, partly because in December 1985 Congress altered the Boland Amendment to permit some CIA intelligence exchanges with the contras. A classified appendix provided other loopholes. Scowcroft calls the Boland Amendment a "masterpiece of ambiguity."

Who knew of the diversion of Iran arms proceeds to the contras? Scowcroft conceded in an interview that the report "only scratches the surface of the contra diversion." The board was able to determine that at least $23 million in profits from the arms sales was available for diversion. This includes $3 million from the first two Israeli shipments and $20 million from the four U.S. deliveries. In each case "the price charged to Iran was far in excess of what was paid to the Department of Defense." The board reports that "nothing is known" about the disposition of the Israeli profits and that other excess monies "remain unaccounted for."

Meese told the board North claimed that such a diversion had first been suggested by Israeli Counterterrorist Expert Amiram Nir in January 1986. Manucher Ghorbanifar, the Iranian middleman on the arms deals, contends that in February North asked him if the Iranians would pay $10,000 per TOW missile, instead of $6,500. When Ghorbanifar said yes, North "was a changed man."

The panel cites evidence that the CIA may have known about the existence of a possible diversion far earlier than it has admitted: a memo from George Cave, a former CIA official working with North on the Iran initiative, reported that Ghorbanifar, at a meeting in Paris in early March, had "proposed that we use profits from these deals and others to fund support to the rebels in Afghanistan. We could do the same with Nicaragua." But Cave told the board that neither he nor Ghorbanifar had ever mentioned a diversion.