This article I wrote in 1991 with research assistance by John Kelly. It was published in The Age, in Australia on 18 May that year. This was one of the first major newspaper reports on the role played by George Bush and soon to be CIA chief Casey in the arming of Iran.

It was published after the US national PBS investigative program 'Frontline' had phoned me in Australia to say that they would make the film I had proposed to them on this issue but had to apologise to me because they had decided only to employ Americans to make it as it was a major American story.

Frontline made a documentary precisely along the lines I had proposed. They used a first rate US journalist, one of the few others bold enough to cover this story, Bob Parry, now publisher of The Consortium. I believe this to be one of the major scandals of modern US politics.

ARMSGATE

How some of the world's most shadowy characters say they helped George Bus trade arms to delay the release of American hostages.

By Jani Roberts with John Kelly ©96JR outside Australia.

Champagne corks flew in January 1981 as Ronald Reagan and George Bush celebrated their inaugeration as United States President and Vice-President and the news that simultaneouly American hostages were making their way from Teheran to freedom.

Reagan staffers told the world that the hostages were released because the Iranians were afraid of Ronald Reagan. During the election campaign, their joke was: "What is flat and glows in the dark?" The answer:"Teheran - five minutes after Reagan gains office." The clear implication was that President Jimmy Carter had failed to recover the hostages because he was a wimp.

Right up to election day, Carter and his staff had negotiated desperately for the release of the 52 hostages held since 1979. Polls showed that had he succeeded, he stood a much better chance of winning the election.

Ten years on, a startlingly different story is emergeing. If it is true, then secret and illegal deals were done by the Reagan-Bush election team to delay the release of the hostages in order to discredit Carter. It is claimed that at a secret meeting in Paris, Iran was offered arms worth billions of dollars in lieu of assets frozen when the Shah was toppled. To arrange such a deal would be to violate America's own embargo on arms sales to Iran (as well as to have been an act of treachery unparalleled in US history.)

All of this suggests that the so-called Irangate inquiry that proved Admiral John Poindexter and Colonel Oliver North had traded arms with Iran for hostages in Lebanon could be an elaborate cover-up of a far bigger deal.

It has taken 10 years for a different version of events to emerge. Only now has the official version of events been seriously questioned. It is true that the men making the allegations are (mostly) shadowy characters and all of them have axes to grind, but each week the unofficial version gains momentum.

Even some of the hostages now believe that they were used. Former hostage Charles Scott and others who once appeared with Reagan on the White House lawns are taking legal action against the US Government for delaying their release.

The emerging claim is that the Reagan/Bush team did not trust the arms merchants and Secret Service agents who had put the nuts and bolts of the operation into place. Some have conveniently died while others were jaoiled on what they claimed were trumped-up charges brought by US authorities. Still others have just emerged from prison.

When Bill Hermann, arms dealer and former CIA and FBI operative, walked from a US jail he had a scarcely believable story to tell.

The search for Hermann took us to the back streets of an industrial wasteland in New Jersey to a room in a nonedescript block of flats. Here we were told we would find an American who had been in Teheran when the hostages were released.

The room was plain, scarcely lived in. The man we had come to see leant forward and stubbed his cigarette. He spoke laconically, almost casually. Asked why he had given the interview, he replied: "Because I was the only one in the group to go to jail."

"What group?" He replied: "(Admiral) Poindexter and Oliver North."

"You were part of THAT goup""Yes. I fixed up all the deals on the ground, in Israel and Iran." He said his ranking in US intelligence was that of colonel - the same as Oliver North - and he was in Teheran when the hostages were released.

During 4 hours of interviews, Hermann told how he had worked for the intelligence services of the US Government inside Iran both under the Shah and under Ayatollah Khomeini.

Under the Shah, he said he was the assistant military attache at the American embassy in Teheran. He left in 1977. When asked why he left, he replied: "to go into private business - (arms) marketing." He was also doing jobs for the CIA. He described his link to the CIA in 1980 as "almost formal."

He was sent back to Teheran. "Reagan's people wanted me to go to Iran pre-election." He said that in January 1981, after the release of the hostages, a "senior Iranian official told me that the release of the American hostages was part of a deal made by Reagan's team before Reagan got elected."

Hermann said the Iranians got their arms. He claimed that he was a member of the delivery team, which brought arms from Western Europe's NATO stores. During the Iraq-Iran war "I supplied both sides" he said. "I was told to by the agency (the CIA), to keep the war even."

He said that "from February or March 1981 NATO stores were used. Arms came out of Brussels and were shipped via Rotterdam or flown from Vienna to Israel."

In the shadowy world of espionage, Bill Hermann's true identity is shrouded in secrecy. During our interview, he was evasive about who he worked for in Washington. At first he said he was FBI. He named the FBI agents he reported to. "John Mercer and Daryl Mills, - they were running me together."

Under further questioning, he said he had standing in the CIA with a rnak equivalent to that of colonel. It has been claimed that he is a colonel in the US army. However, his detailed claims about massive arms shipments are supported by other accounts given by arms merchants and former spies.

They agree on the hotels where meetings over arms shipments took place, the numbers of arms shipped and the routes taken. Even his claim that FBI agents had operated outside the US checked out. A former CIA spymaster confirmed to us that he was running FBI agents inside Iran in 1985.

Hermann said the operation to supply Iran was essentially completed by 1984. He then "took the idea of trading (more) arms for the (Beirut) hostages to (CIA Director) Casey in 1984."

It was at this stage he claims that Oliver North complicated the deal by over-charging Iran for American weapons. "I was selling Iran TOW missiles from Israeli stockpiles for a lower price than North. North more than doubled the price."

The Irangae inquiry esablished that Colonel North sold arms to Iran at high prices so he could use some of the profits to purchase arms for the Contras in Central America and circumvent the US Congrress ban on arming the Contras.

It was said Colonel North organised a different arms route into Iran for his deal. But at his prices he could not compete against the existing network. So it is claimed he decided on a coup to get rid of the opposition.

Hermann said: "the Washington cowboys (North's group) wanted to exclude the Israelis and all other middlemen". He said he was one of the first victims.

The FBI asked me to penetrate Action Directe (a French terrorist group). They were counterfeiting $100 American notes... I got some of the counterfeited notes and took them back to my (London) room. I telexed Washington to tell them and to ask for further instructions." (He rummaged through his papers and produced copies of the telexes.)

"Then, next morning, Scotland Yard were at my door. They arrested me for having counterfeited notes. I got in touch with John Mercer of the FBI and with Daryl Mills at the American Embassy in London. No one wanted to know me. I was held for the next few years in different British prisons."

Immediately after his arrest, news came from Washington that Oliver North's operation to supply the Contras was coming unstuck. When Hermann heard that the US Senate Intelligence Committee was inquiring into North's activities, he wrote offering to give evidence. His offer was not accepted.

Hermann wrote to the Briish press. The "Daily Telegraph" of 1 April 1987 reported: "CIA man may be sent back to the USA." The article said that Hermann "had new evidence... of meeting that took place between CIA agents and senior Iranian officials ... earlier than the Reagan Administration has admitted in the Iran hostages-for-arms scanda." His pleas were ignored, he said, because authorities feared what he knew.

If Hermann's allegations were right, it would have been vital to the Reagan-Bush Administration that the Irangate inquiry did not uncover earlier arms deals.

It is a matter of public record that the terms of reference of (the Congressional) Irangate Inquiry excluded any arms deals before 1985.

It seems certain that the US Embassy in London would have passed on to Washington the published statements by Hermann. The Irangate Inquiry should have been aware of him. Yet there was no move to have his testimony brought before the hearing.

Of course, it is also possible that Hermann, angry at being jailed, had lied about the earlier arms deal in order to "get even" with the Administration.

To test his story, we went to Washington where we had located a former CIA controller. A phone call led to Bruce Hemmings, who spent 17 years with the CIA, mostly undercover in the Middle East. Hemmings talked to us until late many nights in Washington' he spoke with considerable passion about what he saw as the injustice of the CIA sacking him after he reported arms flights into Iran.

In 1985, as the Irangate scandal broke, Hemmings had been promoted to running all American agents inside Iran from the CIA headquarters in Langley, Virginia.

He claimed that an agent he was running had seen a C-141 American crewed plane at Tabriz, Iran, unloading arms before the dates established by the Irangate inquiry for the first Iranian arms flight. He said he had been told to do nothing about it a "it was a White House operation." This rankled and he felt he had to pursue it further.

US Congressional officers*** confirmed to me Hemming's credentials and they said his charges were investigated. However, the inquiry had been closed and they could not publicly discuss his claims because they had signed non-disclosure pledges.

Hemmings said he felt like a voice in the wilderness. No matter what he did, no one would listen.....Hemmings said he felt like a voice in the wilderness. No matter what he did, no one would listen.....

(to be continued.)

And click here if you ever wondered if Bush was ever a spook?

[ A Post Script - These ***Congressional officers worked for the Senate Intelligence Committee. Senator Armstrong was allegedly one of those that got them to sign non-disclosure pledges.]

A thank you to Barbara Honegger

Barbara, a former staffer in the Reagan administration, was one of the first to document this conspiracy with her book "October Surprise" published 1989 by Tudor Publishing Company. I was at the time working with the BBC's Panorama program in London so I asked a BBC researcher in New York to purchase a copy of Barbara'sexplosive book . Three days later I received a phone call from this researcher saying; "You could not believe my difficulties in getting a copy. I think I found the only copy in New York's book shops." I was surprised as it was only just published.

Some weeks later I flew to the United States to check out her story. (My film proposal to Frontline and the above article were the results - her story checked out magnificently.) At a dinner in Washington with a number of journalists, my copy of Barbara's book was grabbed by the other journalists at the table. Afterwards I was told by a surprised well connnected journalist: "She is not at all mad. This is a very sane book." This journalist went on to tell me that rurmours had circulated attacking her sanity and that Barbara's book was impossible to find in Washington, even the Libary of Congress' was "in binding" and not available. Since then I am told her publisher failed - and another writer put out his own book with the same title as her's. Effectively her work was buried.

Barbara Honegger was a member of the policy research team of the Reagan-Bush campaign in 1980. After their victory in the election, she was a member of the Reagan-Bush Presidential transition team. In 1981 she worked in the White House Office of Policy Development as a Research and Policy Analyst. She served in for 3 years - thenn took a job in the US Justice Department.

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