Iran Contra: Episode 2 - Trade Secrets

This is an I Heart podcast. Guaranteed Human. It's Michael Lewis here with some exciting news. I have a new audio book coming out on October 6th called Blockers. It's among other things an inside look at the early days of Trump's Department of Government efficiency or DOGE, as it's referred to, as told by the public servants it entangled. But it's not just that. One kept Americans' most sensitive tax data out of the wrong hands, and another made sure that politicians and civil servants, played by the rules. One figured out how to stop wildfires from destroying suburban neighborhoods. Another delivered the cure to cystic fibrosis. And there was also a security guard. You can pre-order your copy of the audio book exclusively at blockers.fm. That's blockers.fm. Pre-order now, and we'll also send you a code for 25% off of all Pushkin titles, including mine, like Lyres Poker and The Big Short, through the end of the year. Pushkin. Pushkin. Pushkin. Hey, Leon here. Before we get to this episode, I want to let you know that you can binge the entire season of fiasco Iran Contra right now, add free, by becoming a Pushkin Plus subscriber. Sign up for Pushkin Plus on the fiasco Apple Podcast Show page, or visit pushkin.fm.com. Now, on to the show. Ronald Reagan makes his debut today as America's leading man. On the morning of January 20, 1981, the White House was preparing for the arrival of a new president. But some unfinished business was threatening to overshadow the festivities. Reagan may be the first president who won't be the day's top news story on his inauguration day. This anxiety that hangs over everything, this whole business of the hostages. This whole business of the hostages referred to more than 50 American citizens who were being held prisoner in Iran. They had been there for more than a year, locked inside the U.S. Embassy in Tehran by a group of young radicals. The U.S. Embassy in Tehran has been invaded and occupied by Iranian students. The American hostages were blindfolded, handcuffed, and marched out on the U.S. Embassy's front steps by the revolutionary students. The Iranians had fought U.S. Marine guards for three hours for control of the embassy. The hostage crisis started in November of 1979. Iran had just undergone a revolution a few months earlier. The Shah, Iran's long-serving U.S.-backed leader, had been overthrown and exiled. Islamic fundamentalists who called America the Great Satan had taken power. American news networks reported that Iran's new supreme leader, the Ayatollah Ruhollah Khomeini, had given the hostage takers his blessing. The move has the Ayatollah's personal support, which adds to Washington's difficulty in trying to resolve this dangerous situation. President Jimmy Carter tried to pressure Iran into releasing the hostages. His administration cut diplomatic ties with the Khomeini government, and they froze Iranian state assets in U.S. banks. Carter even authorized the secret rescue mission, but it ended in disaster. Thousands of Jubilant Iranians gathered outside to celebrate the defeat and disgrace of America. The United States tried to free the hostages and failed. None of the hostages were released, and eight American servicemen were killed in a helicopter crash. The failed mission made Carter look hapless and ineffective, and the crisis continued. Americans turned on their televisions for nightly updates. Walter Cronkite began signing off at the end of every broadcast by noting the number of days the Americans had been held captive. And that's the way it is. Tuesday, February 19th, 1980, the 108th day of captivity, the 222nd day of captivity, the 377th day of captivity for American hostages in Iran. Carter's efforts to win the hostage's release stretched into his reelection campaign. The Republicans are itching to turn the hostage crisis against the administration. The administration has botched it so bad that we're left with very few options. The hostage issue hovered over the whole campaign, and it was something that just so damaged Carter. That's journalist Jane Mayer, who covered the Reagan administration for the Wall Street Journal and co-authored the book, Landslide. And the idea of Carter being weak was really the thing that was hammered over and over again and played a big part in why he lost. Reagan's inauguration in 1981 marked the 444th day of the hostage crisis. The outgoing Carter administration had hoped it would be the last. This has been quite a suspense-filled evening, Jimmy Carter, his last night in the White House spent it in the Oval Office working with his aides. The day before, they had notified the press that a deal had been reached to finally free the Americans. But the hostages were still not home. At the inauguration ceremony, Carter walked to the dais where Reagan was about to be sworn in. Even then, reporters were yelling out to him for confirmation that the hostages were being released. The Iranians were not going to release the hostages on Carter's watch. They waited until after Reagan was sworn in before allowing them to leave Tehran. As Carter traveled home to Georgia, Reagan got to announce the good news. The hostages were now free from the airspace. But it had been a wrenching day for Mr. Carter. An aide said he had been terribly hurt and disappointed when he was not able to announce the release of the hostages before leaving office this morning. The simultaneous inauguration of Reagan and the hostages getting out enabled him to take full credit for it and sort of appear to be the savior. A week later, Reagan welcomed the hostages home in a ceremony in the Rose Garden. At the White House, a welcome fit for a king, a kind of South Lawn ceremony usually reserved for visiting heads of state. Welcome home. You are home and believe me, you're welcome. But the triumphant moment also created a liability for the Reagan administration. It so publicly associated them with this act that it upped the ante for Reagan. He was more vulnerable than maybe other presidents would have been to being manipulated on the issue because he'd made this sort of his selling point. Later, one of Reagan's counterterrorism analysts expressed regret over the spectacle. Where did we first go wrong? 1981, he said. Once we had the Rose Garden ceremony, we had attached huge political benefit to the return of U.S. hostages. In other words, Reagan had set himself up for a potential hostage crisis of his own. I'm Leon Mayfock. From prologue projects and Pushkin Industries, this is Fiasco, Iran Contrast. Seven Americans kidnapped over the past 15 months. Seven Americans who have disappeared. The Reagan administration's response to the series of kidnappings has been one of almost total silence. They did not want to have a hostage problem like Jimmy Carter did. Maybe they can get the hostages out. I can assure you that no deal was made. The impression left by all of this is that things are afoot. The only person that could have stopped it was me and I didn't do it. Episode 2, Trade Secrets. How Ronald Reagan tried to avoid Jimmy Carter's fate by extending a hand to one of America's sworn enemies. We'll be right back. It's Michael Lewis here with some exciting news. I have a new audio book coming out on October 6th called Blockers. It's among other things an inside look at the early days of Trump's Department of Government Efficiency or DOGE, as it's referred to, as told by the public servants it entangled. But it's not just that. One kept Americans most sensitive tax data out of the wrong hands, and another made sure that politicians and civil servants played by the rules. One figured out how to stop wildfires from destroying suburban neighborhoods. Another delivered the fibrosis. And there was also a security guard. You can pre-order your copy of the audio book exclusively at blockers.fm. That's blockers.fm. Pre-order now, and we'll also send you a code for 25% off of all Pushkin titles, including mine like Lyres Poker in the big short, through the end of the year. Among the advisors and aides who joined Ronald Reagan in the White House was a soft-spoken and cerebral retired Marine named Robert Bud McFarland. McFarland's domain was foreign policy. As a student at the U.S. Naval Academy, he had longed to have a hand in shaping America's relationship to the rest of the world. And I had to think with all the rigor I could muster about the elements of power and their nature and their limits. This is Bud McFarland speaking to me in December of 2019 in Washington, D.C. All that is not unique to me. I mean, hundreds, thousands of people go through as good or better schools than I did and get this foundation knowledge and self-confidence that, yes, you can contribute constructively because you know the rules and you occasionally have a lucid interval and even imagination that could make the world a better place. Bud McFarland died in 2022 at the age of 84. Perhaps more than anyone else in the Reagan White House, McFarland felt personally responsible for the events that led to Iran-Contra. When I first approached him about an interview, he made it clear that rehashing the story of the scandal would be painful. The remorse doesn't quite capture it. I failed my country. McFarland's career in government began during the Nixon administration when he worked for Henry Kissinger. Henry Kissinger has been on the road conferring, negotiating and meeting with heads of state in eight countries in nine days. McFarland saw Kissinger as a professional role model, an ambitious geopolitical thinker who could see the vulnerabilities of America's adversaries and knew how to exploit them. Kissinger carried out his Middle East peace mission today in three Arab countries. He's the most gifted man to work in American foreign policy in any generation since World War II. Henry was someone who I had admired notwithstanding his cynicism and occasionally ruthless methods and being there even as a note taker was a gift. In 1983, just days before the invasion of Grenada, Reagan made McFarland his national security advisor. The same job Henry Kissinger had held a decade earlier. Robert McFarland will be confirmed as national security advisor, and I want to thank you for accepting this new challenge. All of us look forward to working with you in the coming months. From the beginning of his tenure as national security advisor, McFarland had a special interest in Iran. He believed that even though Iran was led by the intensely anti-American Ayatollah Khomeini, the U.S. might have a chance to intervene in the country's politics. Conscious of Iran's strategic and economic importance, the administration wants to keep the door open to possible reconciliation. But while Khomeini lives, that seems a distant hope. I really didn't imagine that we had a plausible prospect of being able to engage with this government. I did think, however, that there were reasons why the circumstances facing Iran might give us an opportunity to influence the regime change. McFarland had this theory that there might be people inside the Iranian military who would be amenable to the idea of a coup against Khomeini. Theoretically, the Americans could help these dissident elements and in the process turn Iran from an enemy into an ally, the way they had been before the revolution. I mean, you'd have to have the very senior leadership of the military who had become demoralized and that's theory. But it was a very plausible possibility that the military would be the instrument of changing the regime in a relatively bloodless coup. McFarland had a specific reason for thinking that Iran was vulnerable to an internal coup. As he saw it, the country was stuck between two foreign powers, Iraq to the west and the Soviet Union to the northeast. In Iraq, the problem was Saddam Hussein, who had invaded Iran in 1980, right after the Iranian Revolution. The war that followed was unimaginably violent. Hundreds of thousands of people were being killed. A war that started months ago with fretful skirmishes. A war that no one now seems able to stop. Meanwhile, the Soviet Union was just sort of looming over Iran. On its northern border, Iran worries about 24 Soviet divisions. The two countries shared a border, and McFarland had no doubt that the Soviets, who had recently invaded Afghanistan, wanted to gain influence in the Middle East. He thought maybe there were people within the Iranian leadership who were concerned about the same thing. Out of self-interest, that ought to have nurtured a dissident element. There was just one problem. McFarland didn't actually know for sure that these dissidents existed. He was thinking strategically, just like Kissinger had taught him. And he was hoping. To be fair, there wasn't much else he could do. Concrete intelligence about what was happening in the Iranian government was very hard to come by. The relationship between Iran and the U.S. was openly hostile. Leading officials of the Reagan administration repeatedly have accused Iran of sponsoring terrorist attacks against the United States. In 1984, the Reagan administration officially designated the Khomeini regime a state sponsor of terrorism. They enforced an arms embargo that prevented the U.S. government from selling weapons to Iran, and launched a diplomatic campaign to pressure other countries to do the same. The burning of the American flag, the shouts of death to America. At Friday prayers, Iranian imams led chance of death to America. So it was chilly between the Reagan White House and the Khomeini regime. But then, in July of 1985, Bud McFarland received a visit from a trusted associate bearing good news. It turned out that the people McFarland had been imagining, the dissidents within the Iranian regime were in fact real, and they wanted to talk. Around the same time, a related crisis was unfolding in the Middle East. The American University of Beirut today is under heavier guard than usual. The U.S. Embassy there, citing intelligence reports, has warned that pro-Iranian extremists are planning mass kidnappings of Americans on the campus. John Weir was in his 20s when his father was taken hostage in Lebanon. I remember talking to my sisters and my sisters being upset, my mom being very upset. It was six months into Bud McFarland's tenure as national security advisor, and about three years since the American hostage is taken in Tehran were returned home. John Weir's father, the Reverend Benjamin Weir, was a Presbyterian minister who had been assigned to Beirut, the capital city of Lebanon. Weir was kidnapped as he and his wife, Carol, were leaving their apartment. And not too far from the entrance of the apartment building, a car pulled up, some guys got out and grabbed my dad. My mom tried to fight them off. She's not much of a fighter, and they basically just muscled him into the car and drove off. In the 1980s, Lebanon was embroiled in a brutal sectarian civil war, and Islamic militia groups began kidnapping European and American citizens. The group that captured Benjamin Weir was associated with Hezbollah, which enjoyed the support of the Khomeini regime in Iran. By 1985, Weir was one of seven Americans being held hostage in Lebanon. Seven Americans kidnapped in Beirut over the past 15 months, seven Americans who have disappeared. In addition to Weir, the group of hostages included a Catholic priest, a correspondent for the Associated Press, and three employees of the American University in Beirut. In the federal government, administration officials were most concerned with one hostage in particular, a CIA operative named William Buckley. William Buckley, a political officer at the U.S. Embassy in Beirut, was kidnapped. He was kidnapped on March the 16th, 1984. Buckley had been with the CIA for decades, working in Zaire, Cambodia, Egypt, and Pakistan. When he was kidnapped, Buckley was the head of the CIA's Beirut division, though that was not public information at the time. News outlets identified him only as a political officer at the U.S. Embassy. In January of 1985, Buckley's captors released a videotape of him to prove that he was still alive. In the video, Buckley appeared weak and his voice sounded thin. Intelligence officials feared that the kidnappers were torturing him in order to get CIA secrets. As Buckley's captivity stretched into its second year, it weighed on the minds of administration officials like McFarlane, CIA director William Casey, and President Reagan himself. But the administration seemed to be avoiding drawing attention to the hostage situation as much as possible. The Reagan administration's response to the series of kidnappings has been one of almost total silence. What a complete contrast to the actions of the Carter administration when Iranian extremists seized the American embassy in Tehran more than five years ago. Here again is John Weir. The Reagan White House had made a lot of political hay out of Jimmy Carter's issues with the hostages in Iran. And it was pretty clear to us that they were kind of suppressing as much as they could discussion of hostages or use of the word hostages. And they did not want to have a hostage problem like Jimmy Carter had. The administration had also publicly committed itself to an ironclad principle. America does not negotiate with terrorists. Terrorists and those who support them must and will be held to account. The principle was that, you know, we should never deal with terrorists. Here's Jane Mayer again. That you do not honor them by dealing with them. And they took a very hard line on it. The Reagan administration communicated a consistent message to the Weir family. Just lay low. The government is doing everything it can. They even had a phrase for it. Quiet diplomacy. Quiet diplomacy was their explanation of why we had no idea what they were doing. We would say, so what are you doing? Oh, well, we're using quiet diplomacy. Eventually, Benjamin Weir's wife, Carol, took matters into her own hands. She had lived in Lebanon for more than 30 years and she knew a lot of people. She began traveling around the region talking to religious leaders, following leads of her own, and comparing notes with her contacts at the U.S. Embassy. She would ask them, you know, who have you seen? And there were a couple of occasions when they mentioned some people and she said, well, I've already seen that person. So, you know, she started trying to figure out who had and what was going on, what did they want. But after we'd heard quiet diplomacy long enough, we decided that the quiet diplomacy was just a way of trying to pacify us and that we needed to ratchet things up. Finally, Carol Weir decided that she needed to relocate to the United States and take her message to Washington. The wife of the Reverend Benjamin Weir was in Washington today seeking more help for her husband. It's 417 days now for me since my husband was kidnapped. That's a long time and I believe they have been forgotten. The Weirs used the resources of the Presbyterian Church to launch a public pressure campaign. They spoke at churches and gave press conferences. They organized an effort to get a million letters written to the administration. In one speech, Carol Weir invoked the Iranian hostage crisis that had consumed the nation's attention just a few years earlier. She asked if she would have to wait 444 days to see her husband. During his first term, Reagan's closest aides had tried to prevent the president from directly engaging with the hostage families. The old aides who knew him well tried to keep people with hard luck stories away from him. That is the truth about Reagan, was that whenever there was somebody who was an individual with a problem that was near him, he had a tendency to be empathetic and he could be manipulated. Reagan's minders had feared that if he met with the hostage families, he would begin pushing to get their loved ones released at any cost and he might be tempted to violate his policy of never negotiating with terrorists. But by the summer of 1985, many of Reagan's first term aides were no longer around. Without them there to hold him back, the president began to fixate on the hostages, asking about them in meetings nearly every day and agonizing over their continued captivity. He basically got drawn in and hooked and became emotionally involved in the situation and he made clear that he cared and he really wanted these hostages out and something done about it and his motto which he often said to his aides was, don't bring me problems, bring me solutions. In July of 1985, national security advisor Bud McFarland approached the president with a possible solution. In his diary, Reagan wrote, some strange soundings are coming from the Iranians. Bud M will be here tomorrow to talk about it. It could be a breakthrough on getting our seven kidnapped victims back. McFarland's meeting with Reagan was prompted by a conversation he had had two weeks earlier with a senior Israeli diplomat. The diplomat's name was David Kimke. He had previously served as deputy director of Mossad, Israel's intelligence agency, and McFarland trusted his judgment. According to McFarland, Kimke told him that Israel had been in touch with Iranians who were disaffected by the turmoil in their country and who were both willing and able to change the government. It was simply stated that there are elements in the Iranian army that are prepared to open a dialogue with us that might lead to regime change, but that it would take probably years of nurture to do it. I was simply heartened, however, by the fact that he thought it might be nurtured and developed over time. It was exactly what McFarland had hoped for. Iranian moderates in positions of power were secretly opposed to the revolutionary government that had taken over their country. But there was a catch. The coup was not going to nurture itself. Before there could be any dialogue between the U.S. and these Iranian moderates, the Americans would have to do their new friends a good turn. They would have to sell them some weapons. Specifically, the Iranians wanted anti-tank missiles for use in their war against Iraq. It was a big request, but the Iranians were offering something valuable in return. They could use their influence over Hezbollah to bring about the release of William Buckley, Benjamin Weir, and all the other American hostages being held in Lebanon. At least, that's what Bud McFarland was hearing from David Kimke, the Israeli diplomat. Kimke presented it as they're being able to achieve the release of the hostages. And that wasn't just his notion, but that it had been vetted by Iranians that he believed were worthy people. How did David Kimke know they were worthy people? The answer lay with the man who was helping Israel make contact with the Iranian moderates. His name was menu chair Gorbani Farh. Gorbani Farh was an Iranian businessman living in Europe. He was a kind of international fixer, a guy who helped broker deals between parties who would otherwise have no reason to trust each other. And according to David Kimke, Gorbani Farh could connect the Americans to the moderates inside Iran, who were open, perhaps even eager, for a better relationship with the United States. If this all sounds convoluted, that's because it was. McFarland, Kimke, Gorbani Farh, these nameless moderates in Iran, it's a bizarre daisy chain, and the mechanics of it aren't that important. The point is, a guy knew a guy who knew a guy who claimed to know some high-level Iranians who didn't see eye-to-eye with the anti-American Khomeini regime. Incredibly, that was enough to get the ball rolling. Over the course of several weeks in July, a specific proposal took shape, in which 100 American missiles would be traded for all seven American hostages. The trade would serve as a demonstration of good faith. With mutual trust established, the two sides might then be able to start talking about the bigger picture, the eventual ouster of the Ayatollah. As McFarland well knew, the deal would violate American policy in at least two ways. First, it would break the Reagan administration's rule against negotiating with terrorists. Second, it would undermine the international effort to stop weapon sales to Iran that the U.S. itself had introduced. Principles aside, the arms for hostages deal would depend entirely on the credibility of the mysterious Iranian fixer, Manu Chair Gorbani Farh, a man McFarland didn't know at all. I thought it was fraud. After all, unless you have absolute conviction in the integrity of the people you're dealing with, a barter for hostages is just an open door to encouraging more hostages being taken. Nonetheless, McFarland decided the opportunity was worth bringing to President Reagan. The risk was obvious, but so was the potential for a historic world-changing moment. Remember, McFarland's role model was Henry Kissinger, whose crowning achievement under Nixon was making a surprise opening to Communist China. Here again is Jane Mayer. He just so wanted to be a major global player. He wanted to be like Henry Kissinger. He wanted to be a huge, you know, statecraft warrior who was going to change the world. And this looked like something where he could, you know, put his mark on the world and have a legacy here. Two weeks after McFarland's meeting with David Kimke, Ronald Reagan was in the hospital, recovering from surgery that removed a cancerous growth from his intestine. McFarland came to Reagan's bedside to brief him on the potential opening to Iran. McFarland says he mapped out the benefits, but was very clear on the downsides. He said, this is a very high-risk venture for you. I briefed him on the prospect that this could go wrong. McFarland told me that Reagan was enthusiastic about the idea as soon as he understood that it might bring home the hostages. He focused upon what Kimke had said, that his intermediary, Gorbani Far, believes that the army officers involved could affect the release of hostages. Well, Reagan said, well, but we can't let an opportunity of that, though it's risky, go by. Let's test it first and see to what extent there is good faith here or not. McFarland worked out a plan with Kimke and other Israeli officials. In order to avoid the appearance of a direct weapons sale from the United States to Iran, the White House would use Israel as a go-between. Essentially, Israel would sell some of their American-made missiles to the Iranian moderates, and the U.S. would then replenish Israel's stocks. Several top officials in the administration, notably the Secretary of State and the Secretary of Defense, thought the arms for hostages trade was a terrible idea. But as Jane Mayer writes in landslide, Reagan often blocked out uncomfortable information and focused only on the positive, sometimes to the point of self-delusion. For example, after getting his cancer removed, Reagan took the position that he had never had cancer in the first place. As he saw it, whatever cancer had been in his body had been taken out, and it was never he who had had it. It was just the tumor that had it. So he could say that actually he never had cancer. Reagan was so focused on the hostages that he waved away the arguments his cabinet officers tried to make against the Iran plan. He just didn't want to deal with it. He was an optimist. He was a nearsighted humanitarian, if you will, but without thinking seriously about the downside risks here. According to McFarlane, Reagan called him in early August to personally authorize the shipment of anti-tank missiles to Iran. I reminded him again that, look, this may not work. And he said, well, bud, we don't know until we try. By the summer of 1985, the Weir family felt like they were finally getting traction with the Reagan administration. According to John Weir, the breakthrough came after the family scored a meeting with a prominent politician who had some experience dealing with the hostage crisis, Jimmy Carter. We flew to the airport in Atlanta, and Jimmy Carter met us in a lounge at the airport. There was no one else present other than his security detail. The Weirs asked Carter for advice and said, you know, we've been very frustrated with the current administration. We don't feel like we're making any progress. You know, what do you think? What can you tell us? Weir says that Carter initially hesitated, saying the family couldn't possibly want his advice. But the Weirs kept pushing. And finally, Carter gave them a name. Jimmy Carter said, you know, bud McFarlane works in the current administration in the National Security Council. And I will contact bud and ask him if he will meet with you. And Jimmy Carter stepped out of the room. And he came back a few minutes later. And he said, bud McFarlane has agreed to meet with you. Basically, that was the end of the meeting. John Weir says that his family felt a sense of momentum once they were introduced to bud McFarlane. McFarlane seemed engaged, sympathetic, and solutions oriented. He also gave the family another contact in the White House. This guy over here, Lieutenant Colonel Oliver North, and he will be your contact person. And if you have any questions or any issues, Colonel North will make himself available to you. And you contact him and you talk to him and he'll bring you up to speed on anything that's going on. McFarlane had taken Oliver North under his wing at the National Security Council. They were both graduates of the Naval Academy who had served in Vietnam. And though they had very different personalities, they were fond of each other. Accounts differ on when exactly North was brought in to the Iran Initiative. But starting in the summer of 1985, he began interfacing with hostage families like the Weirs. Colonel North would provide information from time to time about trips he was taking. He wouldn't give any details, but he would say, well, you know, I flew in an F-14 to go to Europe for a quick meeting that was really important. We'd kind of talk about how tough his life was, which is kind of funny, you know, how hard he worked and all the hours he put in and how he had to take off on short notice for things. And he would answer the phone when we called, and he would talk to us, which was a big step forward. McFarlane and North met with several hostage families throughout the summer and offered similar assurances. The families of the American hostages said that in an hour with National Security Advisor Robert McFarlane, they had learned a lot more about what the Reagan administration has been doing than they had known in the past. John Weir says that despite the overtures, his mother, Carol, was skeptical. After spending decades living in Lebanon, she had deep reservations about U.S. foreign policy in the Middle East. Earlier that year, she had met with Secretary of State, George Schultz. But to Schultz's surprise and frustration, she used the time to lay out the grievances of her husband's captors, telling Schultz that U.S. policy in the Middle East was partially to blame for her husband's kidnapping. As Carol Weir saw it, McFarlane and North were part of the same American-made machine. My mother did not trust Bud McFarlane or Colonel North or George Schultz at all. She didn't believe anything they told her, and she didn't really trust the information that they gave her. You know, she didn't want to be uncooperative or ungrateful, but she didn't really believe that they were being productive or being honest. On August 20, 1985, the first arms for hostages trade between the U.S. and Iran began. That evening, 96 anti-tank missiles were loaded onto a plane at Ben-Gurion Airport in Tel Aviv. The operation was carried out in complete secrecy. Only a handful of people knew it was happening. According to plan, the missiles were Israeli-owned and made in California. The cargo also included the man responsible for putting the deal together, Manu Chair Gorbani Far. But after the shipment went through, no hostages were released. Instead, Gorbani Far conveyed a new demand. He said the 96 missiles had been intercepted by hardliners in the Iranian Revolutionary Guard Corps. His moderate contacts in the Iranian government now wanted 400 more. Gorbani Far also said that the exchange would only get one hostage released, not all seven, as the Americans had been hoping. But McFarland did not like what he was hearing. The kind of things that are obfuscations that tell you either they're not competent to do this, or that there is malfeasance and you're being screwed here. And I said, look, this is really unimpressive on their part and foolish on ours if we can't get this straightened out. Reagan agreed to the terms of the new proposal. A second Israeli shipment, this time carrying more than 400 missiles, was sent to Iran. Meanwhile, McFarland had received a call from one of the many intermediaries he had been dealing with, and was told that he would have to pick which hostage to release. As McFarland later described it, he was being asked to play God. Despite the pressure, McFarland felt the choice was obvious. Administration officials have been profoundly worried about William Buckley, his CIA officer. They were worried about his health, of course, but they were also really worried about the kidnappers getting classified information out of him. So McFarland chose Buckley. And clearly that's the one I favored just out of professional anguish. But the kidnappers did not release the CIA station chief. Gorbani Farr relayed that Buckley was too sick to be transferred. This was disturbing news. Either Buckley's condition was worsening, or the kidnappers thought they could get more weapons for him later. Instead, the Americans were getting someone else. We'll be right back. It's Michael Lewis here with some exciting news. I have a new audio book coming out on October 6th called Blockers. It's among other things, and inside look at the early days of Trump's Department of Government Efficiency, or DOGE, as it's referred to, as told by the public servants it entangled. But it's not just that. One kept Americans' most sensitive tax data out of the wrong hands, and another made sure that politicians and civil servants played by the rules. One figured out how to stop wildfires from destroying suburban neighborhoods. Another delivered the cure to cystic fibrosis. And there was also a security guard. You can pre-order your copy of the audio book exclusively at blockers.fm. That's blockers.fm. Pre-order now, and we'll also send you a code for 25% off of all Pushkin titles, including mine like Lyra's poker in the big short, through the end of the year. On September 15th, nearly 500 days after the Reverend Benjamin Weir was kidnapped, his family got a call from the Reagan administration. Somewhat unexpectedly, we were told that my dad had been released. At that particular moment, we weren't really expecting that news. We'd had no premonition that that was going to happen in any way. But we were also told, you know, you really need to keep this quiet. We don't want anybody to know. We think other people may be released. And any type of public disclosure of this information right now could put the release of the other people at risk. The family traveled to a hotel in Virginia to gather with officials from the federal government. And then all of a sudden, there was a knock on the door and there was my dad. Quite a shock. Five days later, President Reagan announced that Weir had come home. I'm pleased to inform you if that Reverend Benjamin Weir has now been released. Neither Weir nor his family nor anyone else outside of Reagan's inner circle knew that Weir had been set free as part of an armed for hostages deal. And so the administration had to walk a very long distance. And so the administration had to walk a very long distance and so the administration had to walk a very fine line between celebrating Weir's release and keeping its distance. In the briefing room, the official explanation was that foreign humanitarians had helped secure Weir's freedom. I can assure you that no deal was made and that our position on no concessions to terrorists has not changed. The president and other officials hinted strongly that U.S. efforts had obtained Reverend Weir's release. But they wrapped that claim in a mystery of no comment. The impression left by all of this is that things are afoot, that Reverend Weir's release was no fluke, but the product of an intense administration effort that could still result in the freeing of the other six. As far as William Buckley was concerned, he would never be released. He had died before the first weapons shipment ever touched down in Tehran. In the weeks after Weir's release, the big question for the Reagan administration was what to do next. Six hostages remained in Beirut and Manut Shahr Gorbanifar was saying that the Iranians wanted more weapons. All of that meant that an opening to Iran and potentially a path to regime change were still on the table. But McFarland was starting to have serious doubts about Gorbanifar. Did this guy actually know any moderates in Iran? Or was he just saying whatever he needed to say in order to earn his commission on the weapons sales? Well, the more I heard about Gorbanifar, the lower my confidence that this had any plausibility. McFarland was right to be skeptical. As it turned out, the August arms deal wasn't the first time Gorbanifar had approached the U.S. government to offer help in releasing the hostages. Here's Jane Mayer again. He had already twice taken polygraphs at the CIA and flunked them both in earlier episodes when he went to the CIA and claimed that he knew who had kidnapped Buckley, at which point the CIA labeled him a fabricator and put out a burn notice, meaning don't deal with this guy. By the fall of 1985, McFarland was exhausted and he was ready to retire from government. In late November, he told Reagan that he wanted to leave the administration. He tried to resign once before, a year earlier, but Reagan had convinced him to stay, telling him he considered him indispensable. This time, Reagan accepted McFarland's decision. According to McFarland, he then told the president that the Iran initiative that McFarland himself had introduced four and a half months earlier was doomed to failure. I didn't think it was working. I think at best, if there are any pragmatists in Iran, we're not in touch with them. The stakes here, in terms of the failure of the mission, but more importantly, the embarrassment, even if it succeeded and were disclosed, was just too great and wanted to leave government and did not want to leave a ticking bomb. Though McFarland was getting ready to leave the White House, Reagan asked him to fly to London and discuss the arrangement with Gorbonifar in person. McFarland was on a flight to London that very night. Oliver North was already there, and on Sunday, December 8th, the two of them met Gorbonifar in a West End apartment belonging to an Israeli arms dealer. The meeting did not go well. It started off mildly enough, but I explained that the president had heard my recommendation that it be discontinued because there simply was amounting evidence of bad faith on the Iranian side. I said, this is a pointless, open-ended bad idea. In my country, my president is unwilling to accept the risks, and I'm here to convey his decision that this simply will not go on. It's terminated immediately. Gorbonifar flared, stormed around, said, you're foolish, you're crazy, you're misguided, you're wrong, this will mature, it will develop. I'm telling you, I've dealt with these people for a long time, and I said, I don't believe you, and we left. When McFarland returned to Washington, he reported that Gorbonifar was a borderline moron and called him the most despicable character he had ever met. But as he prepared to clear out his office, McFarland says he feared that despite his best efforts, the Arms for Hostages program was not truly dead. The president was simply too invested in bringing the hostages home. I knew that his preoccupation with the safety of the hostages would lead him to start this process up again. And it was with doubt, in fact, high prospect of it being renewed, that I nonetheless tabled my resignation and left, and I shouldn't have done it. I, I couldn't have done it. I didn't do it. McFarland knew that Reagan trusted him. If he had stayed by the president's side, maybe he would have succeeded at extinguishing the Iran Initiative for Good. The president came to Washington, and he said, I don't believe you. I don't believe you. I don't believe you. I don't believe you. I don't believe you. I don't believe you. The president came to office, I think to be a domestic president. And he had never made any pretence at being a man of great depth on foreign affairs and for him to say at the end in tears. But I had never had anybody I could count on as indispensable. But you are that guy. Well, I was, but for my first time at the Naval Academy, I mean, it's in your bones, you know what your job is, serve the country, and don't blame somebody else. Don't make a pretend. Don't figure out some excuse, circumstances, this kind of blarney. I mean, step up. You can salve your soul by saying, well, the president asked me to do it. But if you know, as I know, that this was not going to work, I don't think there's any way of salving that. That's something that gets sorted out when you die and it's all over. But you can at least stand up, tell the truth, take responsibility, and move on. And judgments will be rendered by people that aren't really qualified. Whatever good you did while you were in government, nobody will remember that. The ending of the Cold War, bringing down Marxism, Soviet Union, reducing nuclear weapons for the first time in history, all these things happened and nobody knows that. And they never will. And so, sure, if I had to do it again, I would not have let it go on. But I did. And there's no changing the facts. A changing of the guard today in the top White House foreign policy job, National Security Advisor Robert McFarland resigned and he was replaced by his deputy. McFarland was a Kissinger protégé. He was appointed National Security Advisor as a quiet team player. After McFarland's departure from the White House, talks between Oliver North and Mnuchir Grbanifar did indeed resume. And two months later, more American missiles were on their way to Iran. In the next episode of Fiasco, the Reagan administration's war on communism arrives secretly in Nicaragua. I was confronted with questions which began more or less as follows. Mr. Ambassador, the CIA has blown up the bridges connecting Nicaragua and Honduras. What do you think about this start to your ambassadorship? Our list of books, articles and documentaries we used in our research follow the link in the show notes. Fiasco is a production of prologue projects and it's distributed by Pushkin Industries. The show is produced by Andrew Parsons, Madeline Kaplan, Ula Culpa and me, Leon Nefok. Our editor was Camilla Hammer. Our researcher was Francis Carr, the additional archival research from Caitlin Nicholas. Our music is by Nick Sylvester. Our theme song is by Spatial Relations. Our artwork is by Teddy Blanks at Chips NY. Audio mix by Rob Byers, Michael Rayfield and Johnny Vince Evans. Copyright Council provided by Peter Yasey at Yasey Butler PLLC. Thanks to Chris Weir Abiad, Brian Bonnell, Malcolm Byrne, Shane Harris, Michael Ledean, Howard Teicher, TC Winter, as well as Sam Graham Felson, Sareeah Shockley and Kajik Mkova. Special thanks to Luminary. And thank you for listening. It's Michael Lewis here with some exciting news. I have a new audio book coming out on October 6th called Blockers. It's among other things an inside look at the early days of Trump's Department of Government Efficiency, or DOGE, as it's referred to, as told by the public servants it entangled. But it's not just that. One kept Americans' most sensitive tax data out of the wrong hands, and another made sure that politicians and civil servants played by the rules. One figured out how to stop wildfires from destroying suburban neighborhoods. Another delivered the cure to cystic fibrosis. And there was also a security guard. You can pre-order your copy of the audio book exclusively at blockers.fm. Pre-order now, and we'll also send you a code for 25% off of all Pushkin titles, including mine like Lyra's Poker in the big short, through the end of the year. This is an I Heart podcast. Guaranteed human.