1993 congressional repudiation of the October Surprise allegations crumbled amid admissions that important evidence was hidden from investigators and that internal doubts were suppressed.
The collapse of those 1993 findings by a House task force left behind a troubling impression that disgruntled elements of the CIA and Israel’s Likud hardliners may have teamed up with ambitious Republicans to remove a U.S. president from office.
That scenario would mean that two of the great fears of the American republic had come true – George Washington’s warning against the dangers of “entangling alliances” and Harry Truman’s concern that the clandestine operations of the CIA had the makings of an “American Gestapo” threatening democracy.
It is far more reassuring for Americans to think that no such thing could occur, that Israel’s Likud – whatever its differences with Washington over Middle East peace policies – would never seek to subvert a U.S. president, and that CIA dissidents – no matter how frustrated by political constraints – would never sabotage their own government.
But the evidence points in that disturbing direction, and there are some points that are not in dispute. For instance, there is no doubt that CIA Old Boys and Likudniks had strong motives for seeking President Carter’s defeat in 1980.
Inside the CIA, Carter and his CIA Director Stansfield Turner were blamed for firing many of the free-wheeling covert operatives from the Vietnam era, for ousting legendary spymaster Ted Shackley, and for failing to protect longtime U.S. allies (and friends of the CIA), such as Iran’s Shah and Nicaragua’s dictator Anastasio Somoza.
As for Israel, Likud Prime Minister Menachem Begin was furious over Carter’s high-handed actions at Camp David in 1978 forcing Israel to trade the occupied Sinai to Egypt for a peace deal. Begin feared that Carter would use his second term to bully Israel into accepting a Palestinian state on West Bank lands that Likud considered part of Israel’s divinely granted territory.
Former Mossad and Foreign Ministry official David Kimche described Begin’s attitude in his 1991 book, The Last Option, saying that Israeli officials had gotten wind of “collusion” between Carter and Egyptian President Anwar Sadat “to force Israel to abandon her refusal to withdraw from territories occupied in 1967, including Jerusalem, and to agree to the establishment of a Palestinian state.”
Kimche continued, “This plan – prepared behind Israel’s back and without her knowledge – must rank as a unique attempt in United States’s diplomatic history of short-changing a friend and ally by deceit and manipulation.”
However, Begin recognized that the scheme required Carter winning a second term in 1980 when, Kimche wrote, “he would be free to compel Israel to accept a settlement of the Palestinian problem on his and Egyptian terms, without having to fear the backlash of the American Jewish lobby.”
In a 1992 memoir, Profits of War, Ari Ben-Menashe, an Israeli military intelligence officer who worked with Likud, agreed that Begin and other Likud leaders held Carter in contempt.
“Begin loathed Carter for the peace agreement forced upon him at Camp David,” Ben-Menashe wrote. “As Begin saw it, the agreement took away Sinai from Israel, did not create a comprehensive peace, and left the Palestinian issue hanging on Israel’s back.”
So, in order to buy time for Israel to “change the facts on the ground” by moving Jewish settlers into the West Bank, Begin felt Carter’s reelection had to be prevented. A different president also presumably would give Israel a freer hand to deal with problems on its northern border with Lebanon.
CIA Within the CIA
As for the CIA Old Boys, legendary CIA officer Miles Copeland told me in 1990 that “the CIA within the CIA” – the inner-most circle of powerful intelligence figures who felt they understood best the strategic needs of the United States – believed Carter and his naïve faith in American democratic ideals represented a grave threat to the nation.
“Carter really believed in all the principles that we talk about in the West,” Copeland said, shaking his mane of white hair. “As smart as Carter is, he did believe in Mom, apple pie and the corner drug store. And those things that are good in America are good everywhere else. …
“Carter, I say, was not a stupid man,” Copeland said, adding that Carter had an even worse flaw: “He was a principled man.”
These attitudes of “the CIA within the CIA” and the Likudniks appear to stem from their genuine convictions that they needed to protect what they regarded as vital interests of their respective countries. The CIA Old Boys thought they understood the true strategic needs of the United States and Likud believed fervently in a “Greater Israel.”
However, the lingering October Surprise mystery is whether these two groups followed their strongly held feelings into a treacherous bid, in league with Republicans, to prevent Carter from gaining the release of the 52 hostages then held in Iran and thus torpedoing his reelection.
Carter’s inability to resolve the hostage crisis did set the stage for Reagan’s landslide victory in November 1980 as American voters reacted to the long-running hostage humiliation by turning to a candidate they believed would be a tougher player on the international stage...
‘Blond Ghost’Perhaps most significantly, Bush quietly enlisted Theodore Shackley, the legendary CIA covert operations specialist known as the “blond ghost.” During the Cold War, Shackley had run many of the CIA’s most controversial paramilitary operations, from Vietnam and Laos to the JMWAVE operations against Fidel Castro’s Cuba.
In those operations, Shackley had supervised the work of hundreds of CIA officers and developed powerful bonds of loyalty with many of his subordinates. For instance, Donald Gregg had served under Shackley’s command in Vietnam.
When Bush was CIA director in 1976, he appointed Shackley to a top clandestine job, associate deputy director for operations, laying the foundation for Shackley’s possible rise to director and cementing Shackley’s loyalty to Bush. When Shackley had a falling out with Carter’s CIA Director Turner in 1979, Shackley quit the agency.
Privately, Shackley believed that Turner had devastated the agency by pushing out hundreds of covert officers, many of them Shackley’s former subordinates.
By early 1980, the Republicans also were complaining that they were being kept in the dark about progress on the Iran hostage negotiations. George Cave, then a top CIA specialist on Iran, told me that the “Democrats never briefed the Republicans” on sensitive developments, creating suspicions among the Republicans.
So, the Republicans sought out their own sources of information regarding the hostage crisis. Bush’s ally Shackley began monitoring Carter’s progress on negotiations through his contacts with Iranians in Europe, Cave said.
“Ted, I know, had a couple of contacts in Germany,” said Cave. “I know he talked to them. I don’t know how far it went. … Ted was very active on that thing in the winter/spring of 1980.”
Author David Corn also got wind of the Shackley-Bush connection when he was researching his biography of Shackley, Blond Ghost.
“Within the spook world the belief spread that Shackley was close to Bush,” Corn wrote. “
Rafael Quintero [an anti-Castro Cuban with close ties to the CIA] was saying that Shackley met with Bush every week. He told one associate that should Reagan and Bush triumph, Shackley was considered a potential DCI,” the abbreviation for CIA director.
Some of the legendary CIA officers from an even earlier generation, those who had helped overthrow Iran’s elected government in 1953 and put the Shah on the Peacock Throne, also injected themselves into the hostage crisis.
Carter, a ‘Utopian’
Miles Copeland, one of the agency’s old Middle East hands, claimed in his memoir, The Game Player, that he and his CIA chums pondered their own hostage rescue plan while organizing an informal support group for the Bush campaign, called “Spooks for Bush.”
In the 1990 interview, Copeland told me that “the way we saw Washington at that time was that the struggle was really not between the Left and the Right, the liberals and the conservatives, as between the Utopians and the realists, the pragmatists.
“Carter was a Utopian. He believed, honestly, that you must do the right thing and take your chance on the consequences. He told me that. He literally believed that.” Copeland’s deep Southern accent spit out the words with a mixture of amazement and disgust.
Copeland’s contacts at the time included CIA veteran Archibald Roosevelt and former Secretary of State Henry Kissinger – both of whom were close to David Rockefeller whose Chase Manhattan Bank handled billions of dollars in the Shah’s accounts, a fortune that the Iranian mullahs wanted to lay their hands on.
“There were many of us – myself along with Henry Kissinger, David Rockefeller, Archie Roosevelt in the CIA at the time – we believed very strongly that we were showing a kind of weakness, which people in Iran and elsewhere in the world hold in great contempt,” Copeland said.
As Copeland and his friends contemplated what to do regarding the hostage crisis, he reached out to other of his old CIA buddies.
According to The Game Player, Copeland turned to ex-CIA counter-intelligence chief James Angleton. The famed spy hunter “brought to lunch a Mossad chap who confided that his service had identified at least half of the [hostage-holding] ‘students,’ even to the extent of having their home addresses in Tehran,” Copeland wrote. “He gave me a rundown on what sort of kids they were. Most of them, he said, were just that, kids.”
One of the young Israeli intelligence agents assigned to the task of figuring out who was who in the new Iranian power structure was Ari Ben-Menashe, who was born in Iran but emigrated to Israel as a teen-ager. Not only did he speak fluent Farsi, but he had school friends who were rising within the new revolutionary bureaucracy.

In his memoir, Profits of War, Ben-Menashe offered his own depiction of Copeland’s initiative. Though Copeland was generally regarded as a CIA “Arabist” who had opposed Israeli interests in the past, he was admired for his analytical skills, Ben-Menashe wrote.
“A meeting between Miles Copeland and Israeli intelligence officers was held at a Georgetown house in Washington, D.C.,” Ben-Menashe wrote. “The Israelis were happy to deal with any initiative but Carter’s.
“David Kimche, chief of Tevel, the foreign relations unit of Mossad, was the senior Israeli at the meeting. … The Israelis and the Copeland group came up with a two-pronged plan to use quiet diplomacy with the Iranians and to draw up a scheme for military action against Iran that would not jeopardize the lives of the hostages.”
Arms Dealing
In late February 1980, Seyeed Mehdi Kashani, an Iranian emissary, arrived in Israel to discuss Iran’s growing desperation for spare parts for its U.S.-supplied air force, Ben-Menashe wrote.
Kashani, whom Ben-Menashe had known from their school days in Tehran, also revealed that the Copeland initiative was making inroads inside Iran and that approaches from some Republican emissaries had already been received, Ben-Menashe wrote.
“Kashani said that the secret ex-CIA-Miles-Copeland group was aware that any deal cut with the Iranians would have to include the Israelis because they would have to be used as a third party to sell military equipment to Iran,” according to Ben-Menashe.
In March 1980, the following month, the Israelis made their first direct military shipment to Iran, 300 tires for Iran’s F-4 fighter jets, Ben-Menashe wrote.
Ben-Menashe’s account of these early Israeli arms shipments was corroborated by Carter’s press secretary Jody Powell and Israeli arms dealer William Northrop.
In an interview for a 1991 PBS “Frontline” documentary, Jody Powell told me that “there had been a rather tense discussion between President Carter and Prime Minister Begin in the spring of 1980 in which the President made clear that the Israelis had to stop that [arms dealing], and that we knew that they were doing it, and that we would not allow it to continue, at least not allow it to continue privately and without the knowledge of the American people.”
“And it stopped,” Powell said. At least, it stopped temporarily.
Meanwhile, Carter also was learning that Begin was siding with the Republicans.
Questioned by congressional investigators in 1992, Carter said he realized by April 1980 that “Israel cast their lot with Reagan,” according to notes I found among the unpublished documents in the files of a House task force that had looked into the October Surprise case.
Carter traced the Israeli opposition to his reelection to a “lingering concern [among] Jewish leaders that I was too friendly with Arabs.”
Closer Enemies
Carter also may have had political enemies who had penetrated his inner circle.
Jamshid Hashemi, an Iranian businessman who was recruited by the CIA in January 1980 along with his brother Cyrus, said that in spring 1980, he encountered Donald Gregg, the CIA officer serving on Carter’s National Security Council staff, at Cyrus’s Manhattan office.
Jamshid Hashemi said his brother Cyrus was playing a double game, officially helping the Carter administration on the hostage crisis but privately collaborating with the Republicans. [For details, see Robert Parry’s Secrecy & Privilege.]
The alleged involvement of Gregg is another highly controversial part of the October Surprise mystery. A tall man with an easy-going manner, Gregg had known George H.W. Bush since 1967 when Bush was a first-term U.S. congressman.
Gregg also briefed Bush when he was U.S. envoy to China. Gregg served, too, as the CIA’s liaison to the Pike Committee investigation of the CIA when Bush was CIA director in 1976.
“Although Gregg was uniformly regarded as a competent professional, there was a dimension to his background that was entirely unknown to his colleagues at the White House, and that was his acquaintance with one of the Republican frontrunners, George Bush,” Sick, the former Carter aide on the National Security Council, wrote in October Surprise.
As the Iran crisis dragged on, Copeland and his group of CIA Old Boys forwarded their own plan for freeing the hostages. However, to Copeland’s chagrin, his plan fell on deaf ears inside the Carter administration, which was developing its own rescue operation.
So, Copeland told me that he distributed his plan outside the administration, to leading Republicans, giving sharper focus to their contempt for Carter’s bungled Iranian strategy.
“Officially, the plan went only to people in the government and was top secret and all that,” Copeland said. “But as so often happens in government, one wants support, and when it was not being handled by the Carter administration as though it was top secret, it was handled as though it was nothing. … Yes, I sent copies to everybody who I thought would be a good ally. …
“Now I’m not at liberty to say what reaction, if any, ex-President [Richard] Nixon took, but he certainly had a copy of this. We sent one to Henry Kissinger. … So we had these informal relationships where the little closed circle of people who were, a, looking forward to a Republican President within a short while and, b, who were absolutely trustworthy and who understood all these inner workings of the international game board.”
Desert One
Encircled by a growing legion of enemies, the Carter administration put the finishing touches on its hostage-rescue operation in April. Code-named “Eagle Claw,” the assault involved a force of U.S. helicopters that would swoop down on Tehran, coordinate with some agents on the ground and extract the hostages.
Carter ordered the operation to proceed on April 24, but mechanical problems and the mysterious decision by one of the pilots to turn back forced the operation to be terminated. At a staging area called Desert One, one of the helicopters collided with a refueling plane, causing an explosion that killed eight American crewmen.
Their charred bodies were then displayed by the Iranian government, adding to the fury and humiliation of the United States. After the Desert One fiasco, the Iranians dispersed the hostages to a variety of locations, effectively shutting the door on another rescue attempt.
By summer 1980, Copeland told me, the Republicans in his circle considered a second hostage-rescue attempt not only unfeasible, but unnecessary. They were talking confidently about the hostages being freed after a Republican victory in November, the old CIA man said.
“Nixon, like everybody else, knew that all we had to do was wait until the election came, and they were going to get out,” Copeland said. “That was sort of an open secret among people in the intelligence community, that that would happen. … The intelligence community certainly had some understanding with somebody in Iran in authority, in a way that they would hardly confide in me.”
Copeland said his CIA friends had been told by contacts in Iran that the mullahs would do nothing to help Carter or his reelection.
“At that time, we had word back, because you always have informed relations with the devil,” Copeland said. “But we had word that, ‘Don’t worry.’ As long as Carter wouldn’t get credit for getting these people out, as soon as Reagan came in, the Iranians would be happy enough to wash their hands of this and move into a new era of Iranian-American relations, whatever that turned out to be.”
In the interview, Copeland declined to give more details, beyond his assurance that “the CIA within the CIA,” his term for the true protectors of U.S. national security, had an understanding with the Iranians about the hostages. (Copeland died on Jan. 14, 1991.) ...
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