Roy M Furmark/Adnan M Khashoggi/William Casey/ Manucher Ghorbanifar
This is the testimony of my father to the Senate Intelligence Committee. You will notice as you read this article, that there are many spelling errors, and or lines of numbers or other unusual things possibly to be found. The reason for this is due to my ‘copy & paste’ of the testifying information of which I found from another website. Though I tried to delete some of this ‘extra unwanted stuff’ {for lack of a better or other word etc..} and tried to ‘clean it up’ some; I found myself being tempered with regards to how time-consuming it was becoming, thus, in some parts it is left, while maybe in the earlier part is it not as evident or noticeable. Maybe after I publish this, and gradually over time, I will try to neaten it up to a more ‘crisp’ version, at least I wanted to get the story out first and foremost and let the ‘testimony’ be known to the world, to take notice with regards to the ‘inner makings’ of this historical & political story known as the Iran Arms Deal from the 1980s.
I actually have had this article sitting in my ‘draft’ section for months, due to the fact that my intentions were to have it be published and clear from the second I post it, but it took hours, and hours, and in turn months to do little at a time, while I have other things and stuff going on in my life, that out of my own personal frustration, I would prefer to get the ‘story out’ and then with any luck, over an extended period of time in the future, gradually make it to the final outcome of my true desires.
I will never forget one summer in the mid-1980s on Shelter Island, New York. Shelter Island, used to be this ‘hideaway’ ‘unknown’ place where our family would spend all our summer vacations. This place could be found on the very end, the very tip of Long Island Sound, right across from Greenport, in Long Island, New York. It only took approximately an eleven-minute ferryboat ride to reach it. This was a place where our family, actually had a ‘history’ implanted after all those years of renting a different house, most often by the water of Long Island Sound from the early 1970s all the way until our last rental in the mid to late 1980s. We had this ‘private unknown’ Island all to ourselves, and trust me, even the ‘locals’ eventually ‘knew us’ as each summer passed by.
In those days, you didn’t have to be some kind of ‘millionaire’ to rent a house on the water from Memorial Day until the weekend after Labor Day, for under three grand. Yes, you heard correctly! Under three thousand dollars! Today, one would need to shell out millions to do the same. Although, today Shelter Island, is a place where all the ‘snobs’ go, and those who have zero class, despite millions in their bank account. Yes, the kind of people who are so pathetic that they have actually been brainwashed today to actually believe that ‘Shelter Island’ is the “Hamptons”. Well, sorry. I hate to burst your bubble, but Shelter Island is ‘not’ the “Hamptons”. It’s Shelter Island! Thus, why it’s called that in the first place.
During this one particular summer in this very small, older, rented house we had, I remember a time when Dad was sitting on this small chair that was awkwardly against the wall, next to this one and only telephone outlet. He was dialing a number overseas, somewhere either in Europe or the Middle East. And whoever answered the phone, they heard my Dad say these words: “I want to talk with the beard, please”. I remember catching on to this almost immediately. I wanted to stop in my tracks, but I know Dad would’ve tried to ‘shoo’ me away, so I continued on to the living room, where I then took a seat to listen, plus watch some TV too, since we had a small tv there that one summer, something we usually never had. Then, before I knew it, I realized who he was talking with. ‘The beard’ was the code name for Manucher Ghorbanifar. Everyone during this time had ‘codenames’. Khashoggi was known as “The Eagle”. And my Dad sadly had the most pathetic ‘code name’ of all: “Mr. Roy”.
Little did any of us know that that one summer was the inner workings of the Iran Contra Affair ‘behind the scenes’ occurring in front of my eyes. Something that eventually would become a World Wide Breaking News Headline, yet here I was an 18 year old kid thrust into the middle of it just because I was the son of “Mr. Roy”. It still mesmerizes me after the fact.
Well, in this article we are going to learn the step by step process of how this all came about pertaining to how my father “Mr. Roy” and all his business connections, and all his meetings, came to play with what the world learned to be as “The Iran Contra Affair”.
Here is the testimony of my father. In this journey, you will learn ‘what’ and ‘who’, of those ‘powerful and political connections’ were, what they were possibly thinking, or possibly doing, as the ‘behind the scenes’ of this scandal came to light for all the public to see.
PROCEEDINGS
Whereupon ,
My father Roy M Furmark,
was called as a witness and, having first been duly sworn,
was examined and testified as follows:
{ Q = question & A = Answer}
EXAMINATION
BY MR. KERR:
Q State your name for the record, please.
A Roy M. Furmark.
Q Where do you live?
A 200 Hicks Street Brooklyn, New York 11201.
Q I will start with some background information.
Could you describe your educational background?
A Graduate of the New York City public schools.
Graduated Pace University in June of ’57.
Q And what degree did you take at Pace?
A A bachelor of business administration with an
accountancy practice.
Q Do you have any higher education past the
bachelor’s degree?
A No, other than I passed the New York state
certified public accountant’s certification and am a CPA in
the state of New York.
Q Are you certified in any other state?
A No.
Q When did you become a CPA in New York?
A I think 1964. I’m not sure. Around that, around
’64.
recollect
And you still are a CPA in good standing?
Yes, I am.
By whom are you employed at the present time?
I’m basically in my own business.
You tend to operate in a corporate mode, as- I
Yes.
What’s the name of your corporation?
The Furmark Corporation, 274 Madison Avenue.
And what positions do you hold with the Furmark
Corporation?
A I’m president.
Q And the sole stockholder; is that correct?
A No. Furmark Corporation is a wholly owned
subsidiary of Perikari, P-e-r-i-k-a-r-i, Corporation.
Q And who are the stockholders of Perikari?
A I own 80 percent of it and Mr. Adnan Khashoggi
owns 20 percent of it.
Q The holding company, is it simply a holding
company or is it a business as well?
A It is basically a holding company.
Q The business of Furmark Corporation is what?
A Well, it is basically involved in the energy
field. Over the years we’ve had consulting agreements with
— to run a bankrupt refinery in Texas for two years doing
refining. I worked with Roger Tamraz for three years trying
Mr. Roger Tamraz with His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime minister of the United Arab Emirates and Ruler of Dubai.
to buy Commonwealth Oil & Refining in Puerto Rico, which was
in bankruptcy and which was a public company.
The Furmark Corporation had a contract to act as a
developer for two other companies. Alternative Power
Corporation and Pittsburgh Alternative Power, which are
companies trying to develop cogeneration power plants using
waste coal, just trying to get involved in financing, working
now on a financing of a hotel in St. Kitts. Try to do crude
oil deals.
Q How many employees does the corporation have at
present?
A There are two
1 individuals in that office with me and we work together.
2 Q But they are not employees?
3 A No.
4 Q Let’s take a break for a moment.
5 (Discussion off the record.)
6 BY MR. KERR:
7 Q You have a number of other business affiliations.
8 I would like to go through the list of active corporate
9 entities in which you are involved. Can you give me a.
10 description of those?
11 A Sure. APC, Alternative Power Corporation, which
12 is a company which I control; the other shareholders are —
13 Mr. Khashoggi has a few percent. Saarberg-Interplan, a
14 German coal company; third largest coal company in Germany,
15 which is owned by the German government, is a major
16 shareholder with me and we’re trying to develop power plants
17 utilizing their new technology. Another company is Broad
18 Street Resources, which is in the oil field service company.
19 It has a wholly-owned subsidiary called Genergy, which had 10
20 workover rigs and now has five, and Genergy is in Chapter 11.
21 Q In Broad Street, who are the shareholders in Broad
22 Street?
A I own about 10 percent or maybe up to 30 percent
and the balance is owned by, I think. Triad Holding or one of
Mr. Khashoggi’s companies.
Q And Genergy was a wholly-owned sub of Broad
Street?
A It is.
Q And it is Genergy that’s in Chapter 11, not Broad
Street?
A
Q
present?
. A
Q Any other corporate affiliations that you have at
the present time?
A Well, we have a company called Loki Petroleum,
which is an inactive company, however we just transferred the
rigs, the five rigs to Loki Petroleum.
Q Loki Petroleum is owned by whom?
It is owned by me.
Wholly owned by you?
Yes.
Correct.
Are there any other subs of Broad Street at
No.
Any other active corporate enterprises’
A I’m just trying to think. No, that’s it.
Q How about partnerships, joint ventures?
A No . I have just formed a partnership called
Furmark and Partners .
Q What kind of partnership is that?
A It is a Delaware partnership. The purpose of
it —
Q Limited partnership or —
A It is a limited partnership. The purpose o-f that
is to use that for a potential acquisition of a company, and
we’re still working on it.
Q Who are your partners in that enterprise?
A Well, I’m the general partner and the limited
partner is William Seizer, who works in my office, and until
we get the transaction completed, he is the limited partner
and he will then resign and other limited partners will put
their money in.
Q I’m with you. Okay. You are in as a general
partner in your own right or do you use one of your corporate
entities?
A In my own right. I expect also to be a limited
partner .
Q Any’^rher limited partnerships?
A No. Well, way back when there was a partnership
Beta involved with a four- or five-well drilling frame in
Oklahoma .
Q Wh^t is the status of that partnership?
A It is a total’ loss.
Q That’s what happened to my oil partnership.
A There’s another partner called — partnership
called maybe Alpha, which is a disaster too, in Oklahortia.
Q Oil, natural gas?
A Oil.
Q Does that exhaust the current corporate
partnership affiliations?
A Yes.
Q I want to review with you some of your
relationships with people who are of some interest to our
investigation. Let me start with John Shaheen. You were
employed by the late Mr. Shaheen?
A I was employed by Mr. Shaheen through his
companies. Shaheen Natural Resources was his umbrella
holding company and also by MacMillan Ring-free Oil, which is
a company he controlled, and also Founders Corporation which
John Shaheen
he controlled-.
Q Can you give me the time period when you were
employed by one or more Shaheen entities?
A I went to work for him in 1966 and I left him in
1976.
Q And if you can, give me a synopsis of the types of
things that you did for him during that 10-year period that
would be helpful.
A With Shaheen Natural Resources I was the ch-ief
financial officer, and one of the wholly-owned subsidiaries
was called Newfoundland Refining Company. We built a •
refinery in Newfoundland, raised $150 million which was my
job. It was built in the name of Provincial Refining, which
was a crown corporation of the province of Newfoundland and
in 197 6 that corporation went bankrupt. My job included
being head of the marketing committee overseeing the sale of
the products . I was involved with all the financing and
negotiations for ship charters as well as for crude oil
contracts.
Q In terms of John Shaheen ‘s business endeavors, can
you give me a summary of the types of things that he was
engaged in during that 10-year period?
A Well, Founders Corporation is a small public
company with very few shareholders. It was not enough to
file the normal filings that you would have. It owned two or
three radio stations. It owned a station in Syracuse, a
station in Honolulu and it owned half of a station in New
Orleans, and it owned an interest in a television station in
Syracuse. I was president of that company for a number of
years and it also owned a block of shares of MacMillan
Ring-free oil company.
He then tried to develop in Newfoundland a
newsprint mill for about 10 years. I tried to develop it
with him for about five or six years, trying to get newspaper
publishers as customers as well as shareholders. He
attempted to build an oil refinery in Nova Scotia. He
attempted to build a second oil refinery in Newfoundland. He
was working in Ireland on building an oil refinery in Bantry
Bay in Ireland. He worked on three or four years to publish
a New York City newspaper, and he just never got it
finished. He spent about $16 million on it and never got it
done, never printed its first copy.
He was involved years ago, before my time, in
Panama in the building of an oil refinery which was taken
1 over by Ultramar, which is an English company. He became the
2 largest individual shareholder of Ultramar and sold out those
3 shares before my time or early in my relationship with him.
4 Q Let’s shift gears a little bit. In terms of
5 Mr. Shaheen’s relationship with William Casey, there was a
Former CIA Director William Casey
6 relationship?
7 A Yes.
8 Q Can you describe what that relationship was?
9 A They were extremely close personal friends.- They
10 were both very much involved in Republican politics. They
11 were very much involved in the William J. Donovan Foundation
12 or the OSS, the Office of Strategic Services, which is an
13 all members who were in that service, and they would meet and
I
14 have dinners and present awards out. They presented awards
15 to Thatcher, Willy Mountbatton, the three astronauts that
16 landed on the moon. They presented awards to President
17 Reagan, and so that was a focal point for them to get
18 together, I think, and in addition, they were involved with,
19 you know, doing legal work. He was in his own firm and then
20 he became a counsel to Rogers & Wells, and Jack Wells and
21 John, I think, were great pals as well as Casey, you know,
22 was involved in it, in New York City.
Q Was Casey counsel to Shaheen during the time you
were employed by Shaheen?
A He did special things like when the company got
into financial trouble, Newfoundland Refining Company, Casey
and Shaheen and I went to Kuwait for about a week or 10 days
trying to interest KNPC, Kuwait National Petroleum Company,
owned by the government, to become a partner in Newfoundland
Refinery, to invest funds to revamp the refinery so that we
could use 100 percent Kuwaiti crude. It is very high –
sulphur, and you need lots of conversion equipment in the
refinery, and we didn’t have enough conversion equipment to
use all Kuwaiti crude.
He was an advisor when Shaheen had problems, and
you know, but that was my longest involvement with Casey on
that trip.
Q Place that time for me, will you please?
A 1975 or 1976, let’s say.
Q So this would be just before the time that you
left?
Yes.
A
Q Coming back, Shaheen had been in OSS at the same
time Casey was in OSS and that’s how they got to know one
another?
A Yes .
Q Casey thereafter acted as legal counsel for
special projects for Shaheen; is that correct?
A Basically, yes.
Q Did Casey and Shaheen have business relationships
together to your knowledge?
A To my knowledge, I have never heard of any
business relationship.
Q So you don’t know of any partnerships, joint
ventures, joint projects?
A No . I don’t believe so. Shaheen just never did
things like that.
Q Shaheen, I believe, from a conversation you and I
had sometime ago, you characterized him as being a man who
didn’t work well with partners?
A He wanted to do everything himself, you know, and
like, we got shares in the Newfoundland Refining Company, but
we had to sign an agreement that he could buy it back at any
time, so he wanted to be the — he didn’t want any, like you
say, he didn’t want somebody to die and have the wife get a
lawyer and start poking around in his company. He didn’t
mind the employees making lots of money, you know, as long as
he could control it.
Q With regard to the relationship between Shaheen
and Casey after you left, you were aware that they continued
to maintain a friendship?
A Oh, yes.
Q You were aware of that because of, among other
things, you saw them at the OSS dinners each year; correct?
A Sure.
Q The reason you were going to the dinners was not
because you were a member of the OSS —
A No, I was invited to fill out the table, and it
was an a honor, really. I met lots of people because if it
was in New York, Shaheen would have a party back at his
apartment. I met the astronauts, lots of important people at
the apartment, so it was —
Q You were aware, though, that the relationship
between Casey and Shaheen continued, that they continued to
be friends?
A Yes.
Q Let’s move on now to your relationship with
Casey. You got to know Casey best, I guess, on the trip to
Kuwait; is that correct?
A Well, I knew him all these years through Shaheen,
you know, and you got to know more and more, and of course I J
was- Shaheen ‘s heir apparent, okay, and so I would see Casey a
lot and lots of times I wouldn’t see him, you know.
Q Let me move you into the period 1984, 1985. To ^
what extent were you in contact with Casey in ’84-85?
A I saw Casey at Shaheen ‘s funeral, which was in
November of ’85, and I may have saw him. at a dinner in- ’84 or;
at Shaheen ‘s Christmas party in ’84.
Q But you didn’t have occasion to meet socially with
Casey, talk to him on the phone —
A No, I didn’t call him until I made that call.
Q In October of ’86?
A Yes .
Q All right. Let’s move on to a couple of other
people. Let’s take you to Adnan Khashoggi . You mentioned
Mr. Khashoggi as being a business associate of yours with
respect to some of the companies you have gone through .
Let ‘ s backtrack and start out with how you came to know
Mr. Khashoggi.
A I met him I think in 1966, when I was working for
Adnan Khashoggi
John Shaheen. We met in the summer, I think, of ’66, or
could have been ’67, and we met almost every day in the
Waldorf Astoria. Shaheen was attempting to do creative
things involving Saudi Arabia, involving oil, and he and
Khashoggi were ahead of their times. Their first idea they
had was normally that Saudi Arabia was paid a royalty for
their oil which is 12-1/2 percent. In their royalty
contract, they had a right to take it in kind but normally,
the Iranian would send them a check.
So they came up with the idea that the Saudi
government should elect to take the oil in kind and sell it
to Shaheen, and when word got out that was contemplated, the
Aramco partnerships were all excited at the thought of
Shaheen would have control of this oil, and then we were
going to buy — Shaheen and Khashoggi proposed to buy an
interest in the oil which the Saudi government had, again
ahead of its time, that somebody would think of buying the
oil when in reality Aramco partners owned the oil and they
just got a royalty. So Shaheen and Khashoggi were always a
little ahead of their time.
Then I developed a relationship with Khashoggi and
I would see him and he would use me as a sounding board from
time to time. What would I do, you know; his business people
said he should do this or that and he would ask me what I
thought about it. I would see him in London or New York and
have dinner with him and he would use me as a sounding board
for various ideas which his staff was contemplating such as
they wanted him to go public. I told him it was a crazy idea
because all his income was offshore, so why bring offshore
income onto the U.S. jurisdiction and pay taxes on it?
Q When did you and Khashoggi start actually doing
business together?
A I left Shaheen in early ’77 and at that time,
Mr. Khashoggi purchased 20 percent of my company, Perikari,
and retained me as a consultant to one of his companies.
Q You were a consultant to which of his enterprises?
A I think it was Triad Holding.
Q Triad?
A Yes. I forget. I advised him on basically oil.
Q And your relationship with Khashoggi has continued
up through the present time?
A Yes.
Q Let me ask you about Cyrus Hashemi. You knew the
late Mr. Hashemi; is that correct?
Cyrus Hashemi
A Yes.
Q When did you first meet Mr. Hashemi?
A I met him in 1983; I’m not sure of the exact
date. Roger Tamraz asked me to go with him down to the
Bahamas to have a meeting with the prime minister and the
cabinet. There’s a big oil refinery located in the Bahamas
called BORCO, which was owned by New England Petroleum, Ed
Carey’s company, and it was in financial trouble with Libya
and Iran, and Tamraz invited Hashemi to come down as a.
representative of the Iranian government.
BORCO owed Iran like $300 million or something
like that and the idea was Tamraz tried to get the Bahamian
government to work with him to acquire the company, and maybe
within a week or two after our meeting, charter/acquirec^^the V
company from New England Petroleum.
Q So your first occasion to meet Hashemi would be on
the Bahamas trip?
A Correct.
Q Thereafter, you had contact with Hashemi?
A Yes. I had a number of oil transactions I tried
to get him to work with me on, as well as other financings.
Q In what capacity were you dealing with Hashemi;
was it as banker, Hashemi as coventurer?
A He was as banker.
Q Okay. What bank?
A He had a bank called Gulf Trust, I think, First
Gulf Trust or something like that, which was located in New
York at, I think, 9 West 57th Street then, and so I went
there to see him on a number of transactions that I was
trying to do because he indicated he had access to lots of
money.
Q So you went to him as a potential lender for those
ventures?
A Yes.
Q And you would have gone on a number of occasions
from ’83 forward?
A Yes.
Q Was there ever an occasion up through the end of
1984 when you actually entered into a business relationship
with Hashemi or any of his entities?
A In ’84, that’s when my activity with him got a
little more frequent. In November — let’s say October, I
went to him —
Q October of ’84?
A Yes. He was in London. We were trying to acquire
a controlling share of a company called Gulf Resources which
was on the New York Stock Exchange, and it was owned by
Clore, and we went to him with a proposal that he would
participate in the financing with us. We got to the stage of
drafting agreements and et cetera with him, and the
transaction never went forward. While there, he than had a
potential Iraqi crude oil deal and he asked me to work with
him on it, which never went forward.
It was at that time in December I approached him
about the possibility of his ability to assist Caterpillar
Corporation, who was on the blacklist in Iran, who prior to
the revolution had an enormous agency in Iran, and this was
in December of ’84. And he indicated that he could assist in
having Caterpillar’s blacklist removed and Caterpillar
becoming, you know, back in Iran, whereas now it was working
through maybe the Spanish agency selling spare parts from
time to time, but no new equipment.
And the Japanese company Komatsu, I think, was
selling lots and lots and lots of equipment, so this was in
December of ’84. And then in January, first few days of
January, I set up a meeting in London with Paul Kollao,
K-o-l-l-a-o, who was from Geneva in charge of sales in the
Middle East — I’m not sure of his exact title — and we had
a meeting.
Q You had a meeting with yourself, Kollao, Hashemi;
anybody else?
A No, I think that was it.
Q And the purpose of the meeting was to discuss
reopening Iran to Caterpillar?
A Correct.
Q What came of that meeting?
A It went on and on and on, and eventually
Caterpillar came back and said that they wanted to have a
large partner with Hashemi. They didn’t think he was strong
enough or big enough but they thought maybe he might be able
to do something in Iran, and that is how world trade got put
together with Khashoggi.
Q And world trade becomes a prospect at what point
in time?
A Well, let me just maybe go on to the next — to
fill you in.
I then went to Hamburg, like — I can give you the
exact dates. I have them, on a crude oil contract, on the
5th of January, and that contract — those discussions led to
the signing of a letter of intent, which I gave you a copy
of.
Q Let me stop you for a second. At the Hamburg
meeting, that was a meeting with the Iranians?
A Correct. That was signed in April, but that
meeting was —
Q Let’s back up, though. At the meeting in Hamburg,
one of the Iranians present was Manucher Ghorbanifar? –
A Correct.
Q This was the first occasion you had to meet’
Mr. Ghorbanifar?
A Yes, sir.
Q Did you know of Ghorbanifar before this meeting?-
A Never heard of him.
Q Apart from the Iranians, who else was at that
meeting?
A There was an oil consultant from Hamburg named
Shubert, I think.
Q Anyone else?
A That was the only Iranians .
Q You were at this meeting in your own right; were
you also there on behalf of Khashoggi?
A No, I was there on behalf — in my own right and
on behalf of Tampimex and Hashemi.
Q You were there for Hashemi?
A And a company called Tampimex.
Q What business are they in?
A An oil trading company owned by Fritz Ingram. I
go back to the Iraqi crude oil transaction. I brought in
Tampimex as a potehtial buyer of the Iraqi crude if there was
a contract, and there ended up being no contract but that was
the initial introduction of Tampimex and Ingram to Hashemi.
Moving on, had Hashemi set up a meeting with t.he
Iranians?
A Yes.
Did Hashemi know Ghorbanifar to your knowledge?
No.
He did not?
No.
You have a meeting on or about January 5, and is
that, at that point, that the counter at any rate proposal is
broached?
A No. We are negotiating a crude oil contract,
100,000 barrel a year contract, per year, and I then had
lunch. Included in that meeting was a Dr. Espabardi who
headed up the Iranian buying office in Hamburg, so seeing him
for lunch, meeting with him for dinner, I was interested in
what he was doing. And so then I said, why don’t you give
barter contracts, because he had barter contracts with other
companies .
Q When you use the term “barter contracts,” is that
where oil would be traded for goods?
A Yes, let’s say with Kerr Steel Company, specific
contract, and I suggested why don’t you give us a contract,
trade contract, where we will sell your oil, put the money in
escrow and then buy your goods and pay for the goods out of
the escrow amount. So that was the beginning of that
concept, and then it evolved into my going back in April to
negotiate. It was initially 500 million, but in Hamburg, in
April, we got it up to a billion dollar contract.
Q With regard to Hashemi, let’s stop there for a
moment. Do you recall when the indictment of Mr. Hashemi
came down? Was it in early 1985?
A The first one?
Yes.
A I’m not sure when.
Q Is it your recollection that you were dealing wit^.
Hashemi outside of the United States in 1985?
A Yes, because I was going to London.
Q The reason he was in London was because there was
a warrant outstanding for his arrest in the United States;
correct?
A I think it happened later. I’m not sure when it
happened.
Q Okay.
A I’m not sure of the date because I remember- he was
traveling, from what I read in the paper.
Q Were you ever present at meetings where both
Ghorbanifar and Hashemi were present together?
A No . I shouldn’t say — in June of ’85, in
Hamburg .
They were together at that time?
Yes.
All right, let’s pursue the chronology, then, in
terms of the world trade development. You have meetings in
January?
A On Caterpillar.
Q Yes. Take me chronologically. What happens
next? Where next do you go?
A The Caterpillar thing was on and off, on and off
while Caterpillar U.S. did lots of checking on Hashemi, and
they came up with a lot of black marks about him, gambling
problems and other things, but they thought maybe he had
contact in the country. But they suggested that I needed a
big partner, and that is when I recommended Khashoggi .
Q Place that in time, when that recommendation
occurred; is that February?
A No, no. You know, probably in March, and I- then
arranged a meeting for Hashemi and Khashoggi, but that
meeting was set up on a different matter, okay? Khashoggi
was in Brazil and was negotiating a deal with Petrobras
involving his Sudan oil concessions. He owned half of a
company called, I guess. National Company of Sudan or
whatever the name of it was , and he was going to have
Petrobras, which is the national company of Brazil, join him
in the effort in developing the oil in Sudan.
So I’m in New York in my office, and I get a call
from Hashemi, and he tells me that Khashoggi ‘s proposal in
Brazil has fallen apart is going to be turned down, so I
called Mr. Khashoggi in Brazil and I tell him that this guy
Hashemi that I’m working with who is on Iranian things and on
the Caterpillar transaction — let me go back.
One of Khashoggi ‘s guys asked if I could help
Caterpillar, so I talked to Adnan, Cyrus, and Cyrus tells me
these things about Brazil and I tell Khashoggi all these
things, and Khashoggi is amazed how much information this guy
has about Brazil and Petrobras . So I think it was in March,
a meeting was set up between — because he said he knew how
to solve Khashoggi ‘s problems in Brazil and how to present it
in a different fashion so it could get approved. So a^
meeting was set up and that’s how they met, okay? In that
meeting. Caterpillar transaction came up and also the
potential contract for the $500 million counter trade
contract came up. It was at that meeting where the world
trade concept came up, that and an agreement was worked up.
Q Where was the meeting and when was it?
A It was in London in March, I guess, because I see
I was at Claridge’s in London for about a week, like March 5
through 12th, so I thiiik it was in that period of time.
Q And the people —
A What’s the date of this; this shareholders’
agreement? This is March 29, okay? So —
Q People attending that meeting were yourself,
Khashoggi, Hashemi?
A Lots of those people.
Q Ghorbanifar was not at this one?
A No.
Q Okay. And the upshot of that meeting is what;
what was concluded?
A That a company would be formed which would have
two purposes, two subsidiary companies. One was to deal with
the Caterpillar transaction and the other to deal with- the
countertrade transaction.
Q All right, and the participants in the company
were to be whom at the outset?
A Khashoggi, Hashemi, each with 45 percent, and I
had 10 percent.
Q All right. That results in a shareholders’
agreement?
A Correct .
Q Of March 29?
A Correct .
Q Let’s take a look at that. We have a copy of it
which will be marked as Exhibit 1. Is that the shareholders
agreement that was one of the formative documents on the
venture?
A Yes .
MR. KERR: Let’s mark it.
(Exhibit 1 identified.)
BY MR. KERR:
Q As of the time of this document, March 29, 1985,
had you introduced Khashoggi to Ghorbanifar?
A No .
Q Had you talked to Khashoggi about Ghorbanifar?
A No .
Q To what extent had you had contact with
Ghorbanifar between the first time you met him in early
January 1985 and the end of March? Had you had further
contacts with Ghorbanifar?
A I don’t think so.
Q You got the shareholders’ agreement of March 29.
What happens next?
A We then — I was proceeding to try to get
Caterpillar to agree to giving us an agency agreement.
MS. DORNAN: Could you tell me what the original
problem with Iran and Caterpillar was?
THE WITNESS: Well, my understanding is that when
they had the revolution, Caterpillar was loyal to whoever
they were, working with in Iran, and didn’t change, you know,
shift over to a new agent or new group or something, and they
got put on a blacklist.
- DORNAN: Caterpillar was in any case having
trouble competing with Komatsu worldwide?
THE WITNESS: Up to that time I didn’t know much
about Caterpillar other than it was — you know, you see the
big tractors .
BY MR. KERR:’
Q Let’s move forwatd from March 29. What was the
next event?
A I then — we were working with Caterpillar,
numerous meetings trying to get them to give us the agency.
Caterpillar U.S.A. then decided that they wanted to bring us
a partner, which was Finnings, which is a Canadian company
with a big English operation, which handles like Poland and
some of these other countries for repairs as well as new
equipment as well as supplies .
So we were negotiating with Finnings to be our
partner for Iran because they had a big operation in U.K. and
they had expertise, in addition to Poland, I think another
couple of countries where they handled the whole thing. And
we left world trade in, I think, July, and so I don’t know
what happened. I know they never concluded anything.
Q Let me keep you in April. There is a letter of
intent that gets executed April 23 in Hamburg, Germany,
apparently. Let’s mark that as Exhibit Number 2.
(Exhibit 2 identified.)
BY MR. KERR:
Q First, if you can identify that document.
A Yes, this is the letter of intent that I
negotiated.
Q Tell me what this document is intended to do and
how you got to that point from where you were on March 29 .
A Well, I went to Hamburg on the 21st of April. I
was there for the 22nd and 23rd negotiating with a team of
people from Iran at the offices of Iranian Commercial
Industrial Services, ICI, concerning this agreement. And
what this does is, okay, we would sign, “we” being World
Trade Group, would sign a crude oil contract with NIOC for a
billion dollars. We would then pay, let’s assume we could do
it in one shot, we sell a billion dollars today, we put 500
million into an escrow account which we would use to pay for
goods and services which we would buy for Iran, and we would
pay 500 million to IROC in cash.
So this was a letter of intent. We would have to
then negotiate a crude oil contract with NIOC. We would have
to negotiate a credit agreement with the central bank of
Iran, and we would have to negotiate a goods purchase
agreement with the ministry of industry, so this was the
first step toward the negotiation of three contracts .
Q Now, the Iranians you were dealing with for’ the
letter of intent, did they include Ghorbanifar?
A He was not involved in the negotiations .
Q Were you dealing with Ghorbanifar in this period
of time, April of 1985?
A I met him but I wasn’t — he was not involved in
any of the negotiations whatsoever.
Q What were the circumstances under which you met
him; was it social?
A He was in Hamburg.
Q He was in Hamburg?
A
I believe so
Q You met with him socially?
A Yes. With — I think with his family, if I’m not
mistaken. I think he was there.
Q Do you recall discussing with him at that time any
activities he was involved in?
A None whatsoever.
Q Was there any discussion at that time of his
interest in seeing relationships between the U.S. and Iran
improve, talking about arms for hostages, any of those- items
that came up?
A Let’s go back to January of ’85 when we had- —
when I was there on the oil contract. We had, I don’t know,
three, four, five lunches or dinners, and they were talking
about, you know, the difficult problems in Iran and the
various scenarios as to what could happen in the country.
They could have another Lebanon, the Russians, total
isolation, or there could be, you know, pro-Western people
that take over. It was at dinner or at lunch in an Iranian
restaurant, and those kind of conversations, discussion.
Shubert, the German guy, was discussing lots of hard
questions, and they were, you know, very open.
Q And what, if any, direction did you sense
Ghorbanifar to be taking?
A Well, I sensed that lots of people in Iran were
unhappy with the situation, but they couldn’t do anything
about it. I mean, I think one of the Iranians said the only
way they can protest is to slow down on the job. The only
way they can do it.
Q By April, you are meeting with Ghorbanifar again.
At that point, does he talk any more about these kind of
things?
A No.
Q With regard to the relationship developing from
April forward, take me past the letter of intent. What
happens next?
A Well, we then began to try to get from Hamburg,
you know, various potential orders; like one order they gave
us was for paper boxes or something like that. Another order
they gave us was for steel billets, and we could — we went
out in the marketplace. We found that three other Iranian
ministries had already also sent word out they wanted to buy
it, so we were just, instead of thinking, we had some kind of
exclusive relationship with Hamburg. We found out that, you
know, 35 other people were trying to buy the same thing we
were trying to buy.
So the supplies of stuff — thought there was a
big demand and the price went up. This is the way they have
always operated, I’m told. Nobody has any exclusive because
each department, each industry, each ministry, each
everything, they do what they want to do, and if they want to
buy something rather than use Hamburg, which is supposed to
be one of the buying offices or their only buying office, but
it is not tha.t way. So every time we went out for something,
you know, we were — with the fifth inquiry or the 10th
inquiry that the company had gotten. We talked about Bowater
Paper Company and they had a number of inquiries on the same
purchase item. We then continued to worked with Finnings and
Caterpillar trying to get that thing done.
Q When did you introduce Khashoggi to Ghorbanifar?
A We then went to Hamburg to have a meeting with
Espabardi, the head of the office, to try to accelerate how
we would get this done, the letter of intent done, and in
Hamburg, I was there, Khashoggi came, Ghorbanifar was there,
Hashemi was there.
Q And when did this meeting take place?
A I have — like the 12th of June.
Q And what do you recall happening at this meeting?
A Well, lots of things. Number one, when I was with
Espabardi who is head of the office, he told me that
Mannesmann, the big German company which had a barter
contract with Iran was in trouble. So they asked me to go
and I went to Dusseldorf to meet at Mannesmann. Khashoggi
met Espabardi, Ghorbanifar; Hashemi was there, and the idea
was how do we accelerate this and expand this . It was a
billion dollar contract, and it seems like a lot of money,
but we’re talking about getting it enlarged and how do we get
it done; how do we get to negotiations in Hamburg rather than
in Tehran, and then Ghorbanifar and Khashoggi hit it off.
Q Was it your impression this was the first time
that Khashoggi and Ghorbanifar had met?
A That was my impression.
Q Has it come to your attention since that time that
they had met or had done business before then?
A No.
Q So you have no reason to believe that they had
known each other prior to the introduction in June of 1985?
A Right.
Q All right, they met, they hit it off. Hashemi was
also involved in these meetings?
A He was there, yes, because it was world trade.
Q And Hashemi and Ghorbanifar also appeared to get
on with one another or did not?
A No, it was very formal and —
Q All right. Hashemi was under indictment at that
time. Do you recall any discussions that you would have been
privy to with regard to what he was going to try to do to get
that indictment taken care of?
A Not at that meeting, but at one meeting he asked
if I knew a good lawyer in London and I gave him the name of
a lawyer here in New York or Washington and the lawyer went
to see him, and he didn’t retain him.
Q He did retain Elliot Richardson?
A Eventually, yes.
Q Mr. Richardson apparently begins to represent
Hashemi in late June, early July. In terms of placing your
conversation with Hashemi —
(Discussion off the record.)
BY MR. KERR:
Q Place for me, if you ‘can, in relationship to this
meeting on June 12 in Hamburg, when you would have talked to
Hashemi about his legal difficulties.
A He asked me in London. At some point in time he
asked if I knew a good lawyer, and then I forget the name of
the lawyer that I recommended. I called somebody who called
somebody who said this may be a good guy and then I spoke
with him and he spoke directly with Hashemi and then he went
to London and he wasn’t retained.
Q Let me take you back into June then. In the June
period of time, or any period of time up to June, were- you
involved in any discussions with Hashemi in an effort he
would make to suggest to U.S. officials that he could put
together an arms-for-hostages arrangement involving
Ghorbanifar if they would take care of his indictment?
A No.
Q Did you at any time have such a conversation with
Hashemi?
A No, but I overheard a conversation — I think it
was maybe talking to Shaheen, John Shaheen, in his office in
London, where he was saying that he could get the hostages
released and he wanted to have an agreement that his
indictment would be withdrawn.
Q Let me focus on that. First, can you place that
in time? When did that occur? Use whatever dates you have
there.
A It would have to be like June or July of ’85.
Q Right. But you can’t narrow it down more than
that?
No.
You were present when this conversation took
place’
I was in his office.
In whose office?
Hashemi’s office.
In London?
In the world trade office.
And John Shaheen was also present?
No, he was on the telephone. I assumed he was
talking to Shaheen. I don’t know that he was, but I assumed
that.
Q Why did you assume that?
A Because — go back to the Iraqi deal in ’84. He
was trying to do the same deal with Shaheen on the Iraqi deal
and one of Shaheen’ s guys was in Geneva, ready to go to Iraq,
and when I knew there was no Iraqi deal I was going to call
Shaheen and say, listen, there’s no Iraqi oil deal and he
would have said, maybe, Roy is trying to put me off the deal
so he can do the deal. So I never called Shaheen, and
through mutual friends I heard and knew that Shaheen and
Hashemi were involved in some financing deals and other
potential deals.
Q Let me come back. Let’s set the context. Why was
it that you were in Hashemi’s office?
A It was world trade. It was world trade. L
happened to be talking to him and the phone call came in.
Q And it was your perception the phone call was from
John Shaheen?
A Yes. It was — either he had placed the call or
John Shaheen had called.
Q And in capsule form, tell me what you recall
overhearing in that conversation.
A That he, Hashemi, you know, could be instrumental
in the release of the hostages and he would want to have an
ironclad agreement that his indictment was, you know, thrown
out or whatever.
Q was Ghorbanifar’s name mentioned during the course
of that conversation?
A Never.
Q Did there ever come a time when you were involved
in a discussion with Hashemi when he discussed using
Ghorbanifar as the vehicle to affect an arms-for-hostages
deal?
A Never. I never heard “arms for hostages.”
Q With regard to Hashemi, is this the only occasion
when you heard such a conversation?
A Yes .
Q And it is the only knowledge you have about
Hashemi’s involvement in an effort to get the hostages- out ;
is that correct?
A Correct. Let’s go back to October ’85. October-.
3, maybe. I had a drink with John Shaheen in New York, and
he had just come back from Japan. He had been there for I
guess four or five months, having treatment for liver cancer,
and he told me that he had been dealing with Hashemi on at
least getting the hostages released, but that on July 13,
1985, he was cut off.
Q Cut off by whom?
A By Casey, because Shaheen was talking to Casey.
Q Let’s back up. What did he tell you about how he
was dealing with Hashemi and with Casey. Tell me what
Shaheen told you in as much detail as you can recall.
A Only that he had been working with Hashemi and
Hashemi said he could get the hostages released. Casey — he
was relaying it to Casey, of course, and Shaheen said that,
you know, we cut him off on July 13, 1985, because we felt
that he could not deliver anything, and in fact, Shaheen said
the only Iranian name he could —
(Discussion off the record.)
THE WITNESS: So Shaheen said the only Iranian
that he mentioned was a guy named Ghorbanifar, and
Ghorbanifar, you know, couldn’t do the job or something, John
said, and that was the end of the conversation.
- KERR: Let’s take a recess.
(Recess. )
BY MR. KERR:
Q With regard to what you knew about the Hashemi
effort to involve the Central Intelligence Agency and getting
back the hostages and getting his indictment quashed, I think
if I understand what you are telling me, you did not have any
contemporaneous knowledge that these initiatives were going
on apart from the telephone conversation?
1 A Correct .
2 Q But you did get kind of a recap from Shaheen when
3 you had a drink with him in New York in October of 1985?
4 A Right. Then he died about three weeks later.
5 Q I understand.
6 Did he tell you any more about who at the agency
7 he had been dealing with?
8 A No.
9 Q You were left with the impression that Shaheen had
10 been in touch with Casey?
11 A Correct.
12 Q But T/mm didn’t give you the identity of any other
13 CIA personnel he had dealt with?
14 A No, he just mentioned Casey.
15 Q In terms of Iranians, he had mentioned
16 Ghorbanifar’s name?
17 A Correct.
18 Q Did he mention the name of any other Iranians?
19 A No, and I did not mention that I knew Ghorbanifar
20 when I saw Hashemi.
21 Q Okay.
22 MS. DORNAN: Did you receive the impression that
Hashemi hoped to secure the hostages’ release on this through
his contacts in Iran, or did he also have contacts in Lebanon
or elsewhere that he could use?
THE WITNESS: No. I can now speak today. Hashemi
led everybody to believe he knew everybody, and in the end he
really knew nobody, and I went through so many transactions
with him where it gets to the point and he wouldn’t sign,
couldn’t deliver, wouldn’t do anything. That’s why, you
know, we walked away from it and I stopped trying to dp
anything with him.
- DORNAN: So either in the telephone
conversation you overheard or in your conversation with
Shaheen, you didn’t get any details on how you planned to go
about it?
THE WITNESS: You know this indictment was an
obsession with him. He wanted to be — he would give his
ascot party in June and invite the lords and ladies, and then
in one of the London papers there would be a story
occasionally about him and this indictment, and it was an
obsession to get rid of it.
- DORNAN: If he could get the U.S. government
to get the hostages back, he would do anything. It was an
obsession to get rid of it. Occasionally the U.K. press
would attack him and who he was .
- DORNAN: In part because it was a social
stigma as well?
THE WITNESS: Sure. He was extremely wanting to
climb the social ladder in London and all over the place.
BY MR. KERR:
Q Let me touch base on a couple of other things .
There’s a report that grew out of the indictment of Sam Evans
that you introduced Evans to Hashemi in January of 1985. Is
that correct?
A That’s not true.
(Discussion off the record.)
BY MR. KERR:
Q Did. you introduce Evans to Hashemi?
A Yes .
Q When did you do that?
A In October, maybe of ’84, because I was using Sam
Evans as my lawyer on the Gulf Resources deal, and then he
became the lawyer when we were trying to do the Iraqi crude
oil deal in November, December.
Q So you would have introduced him to Hashemi, but
it was earlier than January or February?
A I would say it is October. I look at the drafts
of the Gulf Resources transaction.
Q There is also an allegation that’s been made in
that lawsuit that at some point in January of 1985, you
related a conversation perhaps to Evans that Casey had tola
you that the United States had supplied and permitted others
to supply arms to Iran as of January 1985. Was there ever
such a conversation that you had?
A Never .
Q And I take it from what you have told me you
weren’t having many conversations with Casey as of January
1985.
A I saw him maybe at a Christmas party. Maybe. I’m
not sure if he was even there or if I was there, but that
would have been Shaheen has a Christmas party, his company,
MacMillan would have a Christmas party at the Metropolitan
Club.
Q Let me phrase the question another way. As of
late ’84, early 1985, had you had any conversations with
Casey about U.S. responses to folks who wanted to send arms
to Iran?
A Never .
Q That had not been something you discussed with
him?
A Never. Never.
- DORNAN: When had been your last fairly
extensive contact with Casey other than something casual?
THE WITNESS: You know, in — let’s say prior to
’76.
BY MR. KERR:
Q As of June 1985, your meeting in Hamburg at that
time, had you become aware of Michael Ledeen? Had you’ come
to know that name?
A No.
Q When did Ledeen first become a name that was
familiar to you?
A I met him for the first time in January 1986.
Q January of ’86?
A Yes.
Q Is it possible that you would have met Ledeen in
October of 1985 when Ghorbanifar was in Washington, D.C.?
A No. I met him at Scott’s in Georgetown, the
restaurant, for dinner that night with his wife and
Ghorbanifar and his lady friends and myself. First time. I
never heard of him before.
Q And that was the first time Ghorbanifar was to
take the lie detector test?
A He was here in Washington, yes.
Q Ghorbanifar reacted fairly violently to that lie
detector test?
A He told me he took one.
Q That was taken January 11 or thereabouts?
A I was in Washington and I met on, I think a
Saturday night, that’s where I met Ledeen for the first time.
Q Again, see if I can refresh your recollection,
Ledeen when interviewed had some recollection of having had
dinner with you on an earlier trip Ghorbanifar made to the
U.S. Ghorbanifar came into the United States on October 7
for a meeting that he had on the 7th and 8th with Ledeen and
others at the Old Executive Office Building. I have a note
from our interview that you may have had some recollection of
being present for a dinner with Ledeen and Ghorbanifar at
that time; but that’s an error?
A I had dinner in New York with Ghorbanifar, and I
didn’t meet Ledeen until January of ’86 in Washington.
Q You had dinner with Ghorbanifar in New York when?
October of 1985?
A I think it was October.
Q Let me give it one more shot. Ledeen was in Tel
Aviv in late July, early August of 1985, we will come to it
in the chronology in a moment; but you also were in Tel Aviv
meeting with Ghorbanifar during that period of time.
A That was June.
Q June?
A Yes.
Q Okay —
A Yes, June 20, we left on the 19th, I think, of
June from Frankfurt to Tel Aviv, and we were at the Hilton
Hotel and we left on the 22nd of June.
Q Okay, that rearranges the dates by a month or so.
So your recollection of the trip to Israel with Ghorbanifar
is that it would have been the third week of June?
A Right, 19th of June, I left Dusseldorf to go to
Frankfurt and then Frankfurt to Tel Aviv. That was the day
that the Frankfurt airport had a terrorist bomb blast, then
we were at the Hilton Hotel for three nights, look like. We
left on the 22nd, Tel Aviv to Paris.
Q Let’s back up then. The meeting in Hamburg was
when in June? June 12?
A Yes.
Q And you would have gone from the meeting in
Hamburg to Tel Aviv; is that the way it worked?
A Well, I went to Paris, and then I went to
Dusseldorf to meet for two days with Mannesmann, and then I
went from Dusseldorf to Frankfurt to go to Tel Aviv.
Q And you left Frankfurt for Tel Aviv when?
A On the 19th.
Q June 19? All right. And you made that trip with
Ghorbanif ar; correct?
A Right.
Q And you made it with the consent of Adnan
Khashoggi?
A Yes.
Q Let me get it clear. Something has developed in
the relationship between Ghorbanif ar, you and Khashoggi,
obviously, by June 19. Describe for me what’s happening.
What’s going on between you, Khashoggi and Ghorbanifar?
A Well, I am — you know, I’m working with Adnan
for many years. I’m working with Ghorbanifar, trying to get
crude oil contracts, trying to get other business that we can
get out of the country. Here’s a guy that says he can
deliver, and it is extremely hard to even, you know, spend
time with the guy because the guy comes and goes, disappears,
and so I think probably when I was in Paris on the 17th, he
says I’m going to Israel, why don’t you come along; and I
called Khashoggi and he said go ahead.
Q As of that point, what if anything did you know
about Ghorbanifar’ s interest in developing relations between
Iran and the United States?
A It goes back to —
Q But tell me what your state of mind was, what you
knew as of mid-June, 1985.
A Khashoggi was trying to assist him.
Q Assist Ghorbanifar?
A Right .
Q In what sense?
A To develop a relation with the U.S. via Israel.
Q So the prospect of using Israel as a way of
improving Ghorbanifar ‘ s access to the United States had come
up by that point; is that correct?
Right.
Q Explain to me what Khashoggi was suggesting to
Ghorbanifar vis-a-vis Israel.
A Well, I think — I know — I don’t know a lot of
details, but I think Khashoggi ‘ s view was that he did not
know how to check out Ghorbanifar and Ghorbanifar’ s bona
fides and his contacts in intelligence, but he thought the
Israelis would know how to do it best of all, and if they
could do it best of all and verify he was what he says he
was, that could be the first step toward opening better
relations .
And all the time you must remember Khashoggi had
just signed a billion dollar contract, trade contract, which.
would be 10 billion or 20 billion, so in his mind is that if
we could get Iran close to the West and Ghorbanifar was the
person doing it, we could then go from a billion dollar
counter trade contract to a 10 or 20 billion dollar contract,
so that was ultimate in Khashoggi ‘s mind; because he thought
once the war would be stopped, Iraq and Iran would probably
spend 20, 30, 40, 50 billion a year to rebuild for the next
10 years. The bloom was off the Middle East in making big
money on big contracts, because they had already built
everything they were going to build.
Q Let’s pursue it a step further. As of June 1985;
what knowledge did you have of Ghorbanif ar ‘ s past
relationship with the Central Intelligence Agency?
A Zero.
Q Ghorbanifar had not told you of his past dealings
with the CIA?
A Never.
Q What knowledge did you have or did you acquire ir
June of 1985 of efforts that Khashoggi was making usir
😮 learn more about Ghorbanifar?
A I didn’t know anything about it.
Q Did not know anything about it?
A No.
Q You did know he was going to use Israeli
intelligence to check on Ghorbanifar?
A Right.
Q Who were Khashoggi ‘s contacts in Israel at that
time to your knowledge?
A I guess he knew the prime minister.
Q Peres?
Shimon Peres
A Yes. I don’t really know but —
Q What names was he running by you? Had he
mentioned Nimrodi or Nir or Schwimmer?
A Yes, Schwimmer.
Q What did you know about Schwimmer?
A Didn’t know anything about him.
Q Any other names being used at that time?
A I heard the name Nimrodi, but that was it. Nir I
never heard of until this whole thing was blown up.
- DORNAN: Were you certain in your mind that
Israel was raised by Khashoggi and not by Ghorbanifar,. that
Ghorbanifar didn’t suggest Israel as a way to check the bona
fides or an interroediary?
THE WITNESS: All I know is that Khashoggi was
instrumental. That’s my understanding, but I don’t know.
BY MR. KERR:
Q Well, by June 19 or thereabouts, you are getting
on an airplane to fly with Ghorbanifar to Israel; correct?
A Right .
Q What was your understanding as of that time of
Ghorbanifar ‘s relationship with the Israelis?
A I didn’t know of any relationship.
Q You knew that Ghorbanifar had traveled to Israel
before?
A Did not.
Q Did not?
A No.
Q You get on an airplane, it is a El Al airplane
that you take?
A Yes.
Q Did you discuss with him on that airplane ride
what his relationship was with the Israelis?
A No.
Q Did not?
A No.
Q What did you discuss on the airplane ride?
A What?
Q What did you talk about with him?
A Lots of things .
Q Such as?
A Business, potential for getting, you know, oil
field supply contract, how do we get this done quicker.
Q This being the counter trade deal?
A Yes. How do we get crude oil contracts, you know,
in January of ’84, I went to Singapore to try to sell the
Iranian offshore oil company a drilling frame from Singapore
for S40 million, so I was trying to see how he could get
things done for us in a commercial sense, because it is not
easy.
Q All right. The June trip to Israel, when you
arrived at the airport, who met you?
A Mr . Nimrodi .
Nimrodi
Q What did you know about Nimrodi at that point?
A Nothing.
Q You had not been told anything by either
Ghorbanifar or Khashoggi about Nimrodi?
A No.
Q Did they introduce you to Nimrodi? Somebody .must
have introduced you to Nimrodi? He stuck out his hand and
said hi? What happened?
A I had met Nimrodi I think once in London, in May
or June or something.
Q What had caused you to meet him in London?
A He was meeting Khashoggi .
Q He was meeting Khashoggi?
A Yes .
Q To discuss business?
A I don’t know.
Q You weren’t present when they —
A No.
Q What was your understanding of what Nimrodi’s role
in life was?
A I didn’t know. I have learned, being around in
the Middle East, you don’t ask lots of questions, because if
you do they will wonder why you- are asking questions . You
may sit at a dinner table and learn lots of secrets, but you
never ask anybody in the Middle East any questions about this
or that unless you are working on a specific thing and you
say, I need this or I need that; but it is a cardinal rule
you don’t ask any questions.
Q What did you understand Nimrodi’s relationship to
Khashoggi to be?
A I don ‘ t know .
Q You didn ‘ t Icnow?
A I didn’t know of his relationship.
Q As of today, do you have any knowledge of the
relationship between Nimrodi and Khashoggi?
A I don’t know how deep it is . I know they know
each other.
Q what’s the nature of the relationship?
A I think Mr. Khashoggi, you’ know, believes that
Israel, you know, can play an important role in peace, and
Nimrodi is an important guy in the country. He apparently is
involved with the Sharon faction, and Sharon is involved in
another faction, so he has access to people. Since this I
learned he was involved with the August transactions.
- DORNAN: Did you have the impression that they
had a longstanding relationship or was there anything to —
THE WITNESS: No.
BY MR. KERK:
Q You arrive at the airport with Ghorbanifar. I
take it your being with Ghorbanifar caused something of a
stir; is that correct?
A Oh, that’s what Ghorbanifar said.
Q What were you told in that regard?
A Ghorbanifar told me they think you are a CIA
agent .
Q “They” being the Israelis?
A Yes.
Q And how was that manifested to you, if it was?
A Well, I didn’t see it, but Ghorbanifar said they
are snapping pictures like crazy of you but you didn’t see
Q “They” being the Israelis?
A ‘ Yes. They told me they think you are a CIA
agent. Are you an agent?
It is funny, I remember my mom telling me about how my father was talking to my mom, about his trip to Israel when he got home. He apparently did mention in hindsight, that he may have remembered but only vaguely possibly seeing people hiding behind walls and or pilings within the Airport in Israel, as the Israelies were taking tons of pictures of my father as they feared he was a secretive, or undercover CIA agent. He wasn’t, but I will say many people even to this day, still feel that my Dad may have been ‘undercover’ CIA agent. He wasn’t – but , you couldn’t tell some that, they believe what they want to believe!
Q You were in Israel for what period of time?
A I think we were there three nights . We got there
on I guess the 19th and we left on the morning of the 2 2nd.
Q I want you to describe for me what you did and
what you saw during that period of time in Israel.
A Okay. We got to the hotel. Checked in. The
rooms were already set up for us. Then Ghorbanifar went to a
meeting, and I don’t know what time he got back, three or
four hours later, whatever. The next day, we went to
Nimrodi’s office.
Q We being whom?
A Ghorbanifar and I. Then we went to Nimrodi’s home
and swam in the pool and did that for two days waiting for
Schwimmer, who was in I think China, and then Schwimmer came
back, landed at the airport, went to Nimrodi’s house and then
they called for somebody, I think Kimche.
Q Kimche?
A I think so. They came and there was a very short
meeting and that was it.
Q You were at Nimrodi’s office first?
A Yes.
Q Any conversation that you recall?
A No. there were lots of other people there.
Q At the office?
A Yes.
Q But you can’t recall anything that was said or
done at that —
A No. Nothing to do with Iran or the U.S. It was
just, you know, conversation and then we went to have lunch.
I’m not sure where we had lunch, whether at his house or
what, but we spent the next two days at the hotel walking
around .
Q When you say we, it was you and Ghorbanifar spent
the next two days?
A He had lots of meetings and then he would come
back.
Q Did he tell you what the meetings were about?
A They were tirying to — ■
Q They being —
A Israeli, intelligence.-
Q Right .
A They were trying to check his bona fides and he
was giving them I guess information which they could confirm
or deny, and I think it went on and on, but that’s
basically —
Q Your impression was that Ghorbanifar was being
debriefed during this period of time by Israeli intelligence?
A They were checking him out.
Q He was providing them with information that. they
would check out?
A I think so.
Q That’s what he told you?
A Correct.
Q You were not present when he was being debriefed?
A No.
Q Do you know what Israeli intelligence he was
giving this information to?
A Do not.
Q Were you yourself giving information to anyone?
A No, nobody talked to me.
Q All right. Again, do you have any recollection of
knowing or learning during this period of time about
Ghorbanifar’s previous relationship with Israeli
intelligence?
A None whatsoever.
Q Ghorbanifar didn’t enlighten you in that regard?
A Did not, no.
Q You spent time at Nimrodi’s home?
A Correct.
Q Do you recall anything about conversations that
took place when you were at Nimrodi’s home?
A No. There were no conversations. I mean there
was talk about —
Q You couldn’t have been underwater at the pool the
entire time. You must have been talking about something.
A His daughter was getting married, you have to come
to the wedding, have some great Israeli food and, you know,
but it was no business.
- DORNAN: You didn’t discuss what sort of
business he was in or anything? Did you learn about his
background?
THE WITNESS: He was — let me see. They were
involved with desalination plants or something like that, I
think he was telling me they have, you know, the finest
technology and, you know, you ought to sell some of our
plants to the Arabs, you know.
BY MR. KERR:
Q Schwiiraner arrives on the scene toward the end.
Were you present when he was with Ghorbanifar and Nimrodi?
A Yes .
Q What were they talking about in your presence?
A They wanted to send spare parts to Iran.
Q They being the Israelis?
A Yes, but they couldn’t do it without U.S.
government approval.
Q Spare parts for munitions?
A Don’t know. Spares. They had to get U.S.
approval and they were going to try to do that .
Q Did they say how they would try to get U.S.
approval?
A
Q
with?
A
Q Anything further that you recall about what was
said in your presence during the course of these meetings in
Go to Washington.
Did they say who in Washington they were dealing
No.
Israel?
A
of you?
No. That’s really it.
- DORNAN: Were they reluctant to speak in front
THE WITNESS: They were, yes.
BY MR. KERR:
Q Why?
A I was an American.
- DORNAN: Did you wander off sometimes and they
conducted their business?
THE WITNESS: No, the meeting was outside on the
patio, and probably it lasted 20 minutes. It was —
Schwimmer was exhausted, had just flown back from China and
he wanted to go home, and the meeting, I presume it was
Kimche they waited for. They introduced him, but the name I
never recalled, but it looks like when I look at the
pictures, and the most — it was a short meeting. That’s not
to say they didn’t have another meeting after that. I don’t
know, but it was an unbelievably short meeting. Schwimmer
wanted to go home and that was it. Next morning we left for
Paris, like 5:00 in the morning.
BY MR. KERR:
Q You and Ghorbanifar on the same plane again?
A Yes.
Q What did you talk about on the ride back from
Paris?
A He was excited that maybe the U.S. would approve.
Q Approve what?
A The Israelis supplying spares.
Q And why did he think that was going to happen?
A Just the fact that they would go to Washington.
He felt good about it.
Q Do you have any recollection of Ledeen’s name
coming up at all, flying into or out of Tel Aviv?
A Never .
- DORNAN: During your time in Israel, did you
get much time with Ghorbanifar to discuss the business deals
you had gone there for?
THE WITNESS: Yes, we had some time. We took long
walks. We had I think dinner one night out at one of the
restaurants overlooking the water.
- DORNAN: By the end of this trip, what was
your impression of Ghorbanifar? •
THE WITNESS: When we met in January of ’85, it
was a very good chemistry, you know, exceptionally good
chemistry. He is a very, you know, considerate person,
always asked about your family, the kids, I mean it is
important to him, whereas lots of other people would never
ask, you know, how is your wife? How are the kids doing? He
was always very considerate, and we developed a relationship,
and that’s why I pursued it.
Iranian arms middleman Manucher Ghorbanifar, who is involved in the US arms sale to Iran; prob. taken in Marabella.
- DORNAN: You felt by this time that he could
deliver and he was somebody you could trust?
THE WITNESS: No question. I believed if anybody
could deliver he might be able to deliver. Get this contract
done, get some business out of the country because you need
to know somebody, you know, to get these things done in Ira.n,
more so than any other place because it is a revolutionary
government. It is impossible to do business.
I love this part where Dad mentioned he absolutely trusted Ghorbanifar. Unlike all the American propaganda and how he supposedly ‘lied and or failed’ the lie detector exams from the crooked Americans, I by no means would never take the word of anything if its coming from the United States Government. Talk about a country and goverment of dishonesty, its United States that’s for sure! Whereas Ghorbanifar, was known on a personal level, especially between my father and even myself. I sadly, have not yet met Ghorbanifar in person myself, but in the 1980s I did speak with him on the phone numerous times when he called for Dad. Plus, I remember Dad telling me past stories about how sensitive and personal Ghorbanifar was about my mom, who was/is handicap and in wheelchair and how he too had been teased about his ‘looks/eyes’ as what I personally have dealt with too, that he/Ghorbanifar became more human to us, and more real, unlike those ‘Americans’ who wanted to discredit him from the get go. Thank god, my father wasn’t ignorant like those other goverment folks.
- DORNAN: Did you talk in any detail about his
Iranian contacts?
THE WITNESS: He talked about he had great friends
in the prime minister’s office.
BY MR. KERR:
Q Did he identify who his friends might be?
A No.
Q All right, you fly back into Paris when?
A On the 22nd.
Q All right, and do you and Ghorbanifar part ways at
that point or what happens?
A I then — yes, I go then on the 23rd to New York.
Q When do you next have contact with Ghorbanifar?
A I don’t have it down, but I think it was in
August.
Q In August? Let me stop you then. You were aware
that Khashoggi on July 1 sent a letter to Mr. McFarlane
enclosing a rather lengthy paper; correct?
A Way after the fact. I was not aware — I got it. I
don’t know when, but long after the fact.
Q You were not aware at the time that this letter
was being drafted for McFarlane?
A That’s correct. I didn’t know anything about it.
I was not involved whatsoever.
Q Well, let’s start by identifying the document.
Let me ask to have marked as Exhibit 3 the Khashoggi letter
of July 1 with its enclosure.
BY MR. KERR:
Q If you would look at Exhibit 3, you provided me
with this document; correct?
A Correct.
Q When, did you come into possession of Exhibit 3?
A Maybe the fall of ’85. I don’t remember, but long
after.
Q Was any explanation given to you of why you
weren’t being made aware of this document when it was being
produced?
A No. I have never been involved in anything- like
this with him whatsoever. I mean, he does — he maybe sends
lots of things out. I have never been involved in it.
Q Do you know who drafted either the letter or the
attached memorandum?
A Don ‘ t know .
Q You don’t know who in Khashoggi’s organization did
this?
A Do not know.
- DORNAN: Who would normally do that sort of
thing, do you know?
n’t know.
BY MR. KERR:
Q Do you have any knowledge of the role Robert
Shaheen may have played in preparing these documents?
A I don’t know. I don’t think — he may have been
involved, but I don’t think so. I really don’t know.
Q How did you come into possession of this document?
A I don’t know, Khashoggi may have said, you know, I
sent this to McFarlane on how to solve the Middle East
problem, and I said I have never seen it, so he gave it to
- It is not unusual, okay?
(Discussion off the record.)
BY MR. KERR:
Q When the document came into your possession, you
did review it, I take it; right?
A I skimmed it, yes.
Q The letter to McFarlane says that Khashoggi has
had a number of approaches from Iranian officials. Do you
know what he is referring to in that regard?
A I can only think of Ghorbanifar. He may have met
other people through Ghorbanifar which I don’t know about.
Q He says that I have managed to channel them, these
approaches, through a single senior individual who is in
charge of Iranian intelligence in Western Europe. Do you
know who he is referring to there?
A I think he is referring to Ghorbanifar, but I’m
not sure.
Q Was it your understanding that Ghorbanifar was in
charge of Iranian intelligence in Western Europe?
A Well, way after the fact, I heard somebody, you
know, mention that he may be, you know, involved with Iranian
intelligence, but I don’t know.
- DORNAN: Ghorbanifar never made such claims?
THE WITNESS: No.
- DORNAN: Or hints?
THE WITNESS: No, but I felt he was important. He
was always on the go. Always meeting in Paris with mullahs
and people from Iran.
BY MR. KERR:
Q All right, do you know how Khashoggi arranged for
delivery of this material to McFarlane?
A Do not know.
Q All right, do you have any knowledge of the
response McFarlane made to the material once he received it?
A I think in the hearings I think he gave it to
somebody to read. That’s the only thing I know about it.
Q All right, as of 1985, did you have any knowledge
of McFarlane’s response to this material?
A None whatsoever.
Q I take it from what you have said you played no
role in the drafting of this material yourself?
A None whatsoever.
Q As of the trip to and from Tel Aviv with
Ghorbanifar, what discussions, if any, had you had with
Ghorbanifar about the role he could play in trying to obtain
the release of American hostages?
A Never came up.
Q As of the time of that trip, what discussions, if
any, had you had with Ghorbanifar about munitions, U.S.
munitions going to Iran?
A Never mentioned .
(Discussion off the record.)
- KERR: We’ll break now and get together at
quarter of 1:00.
(Whereupon, at 11:55 a.m., the deposition was
recessed, to be reconvened at 1:00 p.m. this same day.)
AFTERNOON SESSION (1:00 p.m.)
Whereupon,
ROY FURMARK
My Dad: Roy M Furmark
resiimed the stand and, having been previously duly sworn, was
examined and testified further as follows:
EXAMINATION (Continued)
BY MR. KERR:
Q Let me pick up the events as you recall them.
After your return to Paris from Tel Aviv, what is the next
event that you recall with regard to the Iran arms
initiative?
A I remember being in Marbella on Khashoggi’s yacht,
and Ghorbanifar came aboard and was excited, but he said he
needed $1 million to make a prepayment to get the transaction
going. {below are pictures of AK’s Yacht}
Q All right, now let’s try to place that in time.
When would that event have occurred?
A The end of July, I think.
Q And you base that thought on what? Your travel
records?
A Yes, because it was right after Khashoggi’s
birthday party, and I’m not sure^Mw many days after.
Q And his birthday was when?
A The 25th of July.
Q And your travel records show you being in the
right part of the world?
A No, I missed the birthday party.
Q But you were on his yacht?
A Yes.
Q When were you in that part of the world from your
travel records?
A I would say — it doesn’t show here, but I would
say it was more like the end of July because we had –I know
I got there a few days after the party.
Q And this would have been the first time you had
seen or talked with Ghorbanifar since Tel Aviv?
A I think so, yes.
Q And you were there when Mr. Ghorbanifar appears at
the yacht?
A Yes.
Q Tell me what happened.
A He was excited that, you know, that the thing was
going to go forward, but he couldn’t go forward because he
needed SI million to make a prepayment.
What thing is it that’s going forward at this
point?
A The transaction.
Q What did you understand that transaction to be?
A Spare parts .
Q Did you know anything more about them, what kind
of spare parts?
A No, I didn’t.
Q But it was your understanding it was spare parts
as opposed to weapons?
A Correct.
Q Did Mr. Ghorbanifar ask Mr. Khashoggi to do
anything?
A They were chatting about the transaction, and he
agreed to in effect make the bridge financing of $1 million.
Q He being Khashoggi?
A Khashoggi.
Q The records that we have indicate that
Mr. Khashoggi put up approximately $1 million on or about the
7th of August, 1985. Were you present when Khashoggi
actually posted the $1 million?
A When you say “posted” —
Q Gave a check to Ghcrbanifar, anything of that
kind?
A I think it was a — he was going to instruct his
bank to transfer the money, I think, to transfer the money to
an account .
Q You would have known that because he would have
said that to Ghorbanifar in your presence?
A I don’t remember exactly how. That’s my
recollection.
Q Do you have any further knowledge about this
particular transaction, the $1 million transaction? \
A No, other than he got a check from Ghorbanifar.
Q Were you present when that check was given? Did
you see the check change hands?
A I don’t think I saw the check. I don’t recall,
you know.
Q All right, again, the records that we have
suggested that Khashoggi posted the million dollars on or
about August 7 and got the million dollars back on or about
August 29, 1985?
A I knew the August 7 date, but I didn’t know the
date when he got it back. What was the date that he got it
Q According to our records, on or about August 29,
1985.
Did you acquire any additional knowledge about the
transaction for which this million dollars went?
A No.
Q Did you have any additional meetings in August
when this was discussed?
A No.
Q Where were you in August of ’85?
A I was in Marbella, Spain, shows August 1st through
the 8th, then I went to New York.
Q And you remained in New York until when?
A September 1, I went back to London. London,
Paris. Looks like I flew New York, London, and then I went
to Paris, and I was in Paris September 2 and 3, then I went
back to London on the 4th, then I went to Zurich on the 5th
and was there through the 6th, then I went back to New York,
I guess. New York, London, then back to New York.
Q And you remained in New York for the remainder of
September?
A No, then I went back to London on the 9th, and I
was there through the 10th, 11th, 12th and 13th. I was in
London on the 17th and 18th, looks like.
Q All right, in terms of meetings or discussions
relating to the Iran initiative, what meetings or discussions
did you have in September?
A None .
Q Were you aware or were you not that Khashoggi was
asked to cause another bridge financing arrangement to be
entered into?
A I did not know about it.
Q When did that come to your attention?
A Way after. Probably after all this thing broke, I
learned sometime that he did two transactions, but I didn’t
know anything about it .
Q So you were not aware in September —
A Of the 54 million transaction. No.
Q Let’s stop on that transaction for a moment. At
some point you did develop some familiarity with this
transaction, correct, sometime last year that you learned
about that transaction?
A Sometime in ’86, yes.
Q From your prior testimony, you indicated that you
believe that the source of Khashoggi’s funds was another
company. You testified to the Senate Select Committee that
you thought Khashoggi borrowed the $4 million from an English
firm, Lonrho. What was the basis of your information?
A Mr. Khashoggi.
Q What did he tell you?
A That’s where he got the funds from.
Q What is Lonrho?
A Lonrho is a major English trading company with
extensive holdings in Africa, major commodity trading house.
Also owns all the hotels, the D.K. Levitt hotels they bought
in Mexi-co and stuff. It is a big, big company, and that’s
the same company that tried to buy Herod’s if you remember,
and then lost out to the Egyptian.
Q Do you know anything about the terms under which
Khashoggi borrowed his money?
A Do not, no. All I think is when they had all the
trouble with Lonrho recently, I think it made me refer back
to it, but I don’t know.
Q You mentioned a meeting with John Shaheen that
occurred on or about October 3, I believe you said?
A Yes, I think October 3.
Q In October, did you have contact with anyone else
with regard to the Iran initiative?
A No.
Q You had no contact with Ghorbanifar in October?
A Yes, we did.
Q When in October did you meet with Ghorbanifar?
A Well, I would say, you know, the tail end of
October, because we were getting a crude oil contract, and we
were putting together a company, Ghorbanifar, Khashoggi and
Furmark, and I went to Hamburg in October to deal with a
company called Mabanaft because they were going to be the
contracting party and we would sell the oil to Shell. Iran
would sell it to Mabanaft, Mabanaft would sell it to Shell.
We had put together a draft agreement between us .
Q Run through where you were in October for me,
please .
A All I have, okay, is October 20 to the 24th, New
York, London, 20th, London, Hamburg the 21st, 22nd Hamburg,
23rd Hamburg, 24th London, New York.
Q Ghorbanifar was in the United States October 7, 8,
perhaps October 9. Did you meet with him at all during that
period of time?
A We had dinner one night, I think.
Q And that would have been where?
A In New York City.
Q Is this you and Ghorbanifar?
A We had dinner one night, and another time he was
in New York we had dinner, he and I, and he had a lady friend
with him.
■ Q Both dinners would have been in October of ’85?
A I’m not sure, I don’t have it marked.
Q Do you remember what you and he would have talked
about?
A Well, the night we had dinner alone, I’m not sure
what month it was, but you know, it was basically pursuing
all the business we were trying to do through him.
Q Did you have any discussions about the Iran
initiative?
A No. I don’t recall that, because I had not heard
anything really since, you know, the August, and I didn’t
know about the September transaction. You must realize that
these guys don’t tell you anything. I think I told you that
earlier. If you ask they get suspicious. That’s a standard
Middle East trait, okay?
Q Ghorbanifar was in Dubai in late October. He was
in Dubai October 29, October 30, that period of time. Did
you know he was going to Dubai?
A No.
Q As I mentioned earlier, Ghorbanifar was in contact
with Ledeen in October of 1985, but if I understand your
testimony, you didn’t know Mr. Ledeen at that point?
A No.
Q Let me drop back to one other matter. The .
relationship, the business relationship that had included
Mr. Hashemi, you and Mr. Khashoggi sold out your interest in
that venture to Hashemi sometime before October of ’85; is
that correct?
A No, it was the end of July.
Q Tell me what happened in that regard.
A Well, first of all I think Mr. Khashoggi felt that
Mr. Hashemi could not deliver. I think he believed that
Mr. Ghorbanifar in the end could deliver oil contracts,
counter trade contracts, and my experience, okay, with
Hashemi was in July and June. I was negotiating a crude oil
contract with Shell for European Mercantile, which is
Hashemi’s company. Prior to that, we were negotiating with
Tampimex the same contract, and in the Tampimex transaction,
our profit was half of what the profit would have been with
Shell.
I used my relationship with Shell to get them to
go along and we drafted lots of contracts, drafts ready for
signature where we would have had about SI. 15 a barrel profit
on a hundred thousand barrels a day, which is about $40
million of profit, whereas with Tampimex the profit would
have been about 60 percent of that. I just was flabbergasted
that he wouldn’t sign with Shell and they were ready to sign,
having the credit of Shell and the profit that we would have
with Shell; and when he didn’t sign I knew there was no oil,
and it had affected my relationship with Shell and I had told
this to Khashoggi. Then little did we know was that Hashemi
was warming up to Fritz Ingram of Tampimex, and in the end,
there was a confrontation between Khashoggi and Hashemi as to
you buy me out, I will buy you out, you know, I’m not going
to do all this work and you make all this money, Khashoggi,
I’m doing all the work, so Khashoggi agreed to return the
shares and he got back his $500,000. I returned my shares
and was supposed to get my expenses back, which I never got.
We ■ found out later that simultaneously Hashemi
sells half the company to Fritz Ingram for a reported $2
million, so that was like the end of August. I would say the
end of August, first week of — end of July, rather, first
week of August.
Q Okay, in terms of events in the fall of 1985, when
did you get clued in again on things around the Iran
initiative?
A I never knew about the November transaction. In
fact, when Time magazine did a story and they showed the
November transaction, I spoke to the reporter and I said, you
know, it is wrong. I never heard of anything Khashoggi was
involved in. I never knew about it.
Q How frequently were you in touch with Khashoggi
during this period?
A Fairly frequently.
Q But he never clued you in?
A He never clues anybody in, unless if I was working
with him on it I would know about it, but he is not one to —
his conversation with me was, you know, how are we coming on
the oil contract with Ghorbanifar? But I never knew about —
just like I never knew about the February transaction.
Q To what extent were you dealing with Ghorbanifar?
A When I could locate him or see him, I was pushing
him on the things I wanted to do . I wanted a special
contract with NIOC to handle one of their problems they had
with an oil company. Trying to get an oil service company to
buy to service Ghorbanifar, trying to get some, trying to get
a contract out of Iran and through Ghorbanifar because there
is that potential, but unfortunately, he didn’t spend much
time on the commercial side.
Q He being Ghorbanifar?
A Right. One of his Paris friends says, you know,
politics pops up and he forgets about commercial business
completely, but he was, you know, he said he was going to get
it, he was going to get it, but he never got it. He never
got any contracts.
Q Were you aware that Ghorbanifar was dealing with
representatives of the U.S. government in the fall of 1985?
A In the fall of ’85?
Q Yes.
A No.
Q He didn’t mention that to you?
A No.
Q Shifting gears a bit, with regard to Khashoggi,
were you aware that he was negotiating with Ernest Miller and
Donald Fraser and various companies that they are related to
such as Sarsvati International?
A No.
Q You were not familiar with those negotiations?
A No.
Q And the various loans that Khashoggi obtained
through the Miller-Fraser connection in the fall of ’85, you
were not privy to?
A Never knew about it.
Q Turning to January 1986, you mentioned that’ when
Ghorbanifar was in the U.S. to take the lie detector test for
the CIA, you met with him and Mr. Ledeen .
A Yes.
Q Take me through what happened there.
A He called me —
Q He meaning Ghorbanifar?
A Yes. He said come on down to Washington and have
dinner with me, so I went down on a Saturday I think it was.
I think we stayed at the Four Seasons hotel, and we then went
to Scott’s, and there I met Mr. and Mrs. Ledeen.
Q That’s the first time you had met Ledeen?
Q What kind of introduction was made? What did
Ghorbanifar say about his relationship with Ledeen?
A He said he was a professor and he was an expert en
terrorism, and the next morning on television he was on one
of the programs, you know, which I turned on, and his wife
was there, and they kept — and of course Ghorbanifar said I
was very close to Khashoggi, and so the conversation, you
know, centered on Khashoggi and his life and having been on
the yacht, having been on the plane, and there was a lady
friend of Ghorbanifar ‘ s there, and so the conversation’ was,
you know, social, and a few dances, they have music there,
good food, I don’t know if you have been there, and that was .
it.
Q Was there any discussion with Ledeen about what he
and Ghorbanifar had been doing together?
A No.
Q Was there any discussion about the status of the
Iran initiative at that dinner?
A No.
Q Now, your meeting with Ghorbanifar was simply that
dinner that evening?
A No, then I had brunch on Sunday before I went back
to New York, and the three of us had brunch.
Three being —
The lady friend, walked up to someplace.
What was the nature of the conversation at that
brunch?
A You know, he mentioned, I’m not sure when he
mentioned it, but he said he was going to take a lie detector
test, and he was going to Ledeen’s house or somebody’s house
in the afternoon, Sunday afternoon, and he said we’re making
progress.
Q Progress as to what?
A I knew he was meeting with the U.S. government
officials. Who I don’t know, but Ledeen had arranged it.
Maybe the name McFarlane came up, you know. With all this
publicity and all the televised hearings, there are so many
names that get thrown into the picture which it would not
have been before, but that was all.
Q All right, in terms of the state of play, he
didn’t describe any further what was going on?
A No.
Q Did you have any other contact with Ghorbanifar in
January of ’86?
A I think I went back on Monday to see him, because
I went back to New York because my dad was in intensive care
in the hospital, and then I think I went back to see him in
the afternoon, Monday afternoon, maybe Tuesday afternoon, I’m
not sure.
Louis Anders Furmark: Roy Furmark’s Father
Q Back to D.C.?
A Yes.
Q What happened then?
A He wanted to, you know, asked me to come down and
I was there and nothing happened.
Q What would you talk about?
A How everything was going .
Q Did he say anything more about the lie detector
test or the business he was trying to do with the U.S.
government or anything like that?
A He told me one thing, I’m not sure when he told
me, but he told me that — maybe this was on Saturday — that
a ship was going to be boarded or something, an American
freighter, and that was a signal to the people he was seeing
as his bona fide. I’m not sure of the exact timing, but that
I remember him telling me, that he I guess told them in
advance of the Iranian patrol boat going to board an American
freighter; and that apparently then happened because I read
it in the paper, and that was a signal as to his bona fides.
Q Anything further said about the nature of the
matters being negotiated with the U.S.?
A No.
Q All right. With regard to Khashoggi, what were
you and he doing in January of ’86?
A I see myself going to London the end of January
and then going to Zug, New York, London on the 27th. 28th,
London to Zug and Switzerland, and back on the 30th to’ London
and the 31st, London to New York.
Q Moving on to February of ’86, at some point you
learned that Khashoggi lent $10 million to Ghorbanifar in
February of ’86. Did you know that at the time?
A No, no. No. Didn’t know it whatsoever.
Q When did you learn of it?
A Months later.
Q Can you place the context in which you learned of
the $10 million transaction?
A It could have been — I’m just guessing. May. I’m
just guessing.
Q Let me —
A April, May.
Q Let’s see if we can’t connect it up in other
ways. You were paid $88,500 by Khashoggi on April 15, 1986;
correct?
A Yes.
Q Why were you paid that sum by Khashoggi?
A Well, Khashoggi has been, you know, sending me
money for a number of years. I do lots of things for -him. I
have been expecting $100,000 from him for a while. On the
Hashemi thing, he got his $500,000 back, I didn’t get any
money back on my expenses, and I do lots of things for him.
You know, when I need money I ask him for it.
Q Was it your understanding that the $88,500 was
related to an arms transaction or business transaction that
Khashoggi entered into with Ghorbanifar in February?
A I didn’t know about the transaction in February.
Q I’m trying to jog your recollection. Let me give
you some facts. According to our record, Khashoggi was paid
$12 million on April 11 as repayment for the loan that he had
made back in February. Two days, four days later, April 15,
you get paid $88,500. There’s a coincidence in terms of the
money coming into Khashoggi’s hands and a payment to you. Is
there a relationship between the $88,500 and the February
arms transaction?
A In my opinion there’s not. I think Khashoggi pays
money out when he gets cash in. That’s how he operates. He
gets a chunk of money in, he pays money out. I have down
that he got $3 million on February 26, 1986, and he got the
balance on the 11th. This is what they told me.
Q They being —
A Khashoggi .
Q Khashoggi’s accountants?
A Yes. No, wait, they got $6 million on the 2&th cf
February. Is that what you have?
Q No, I don’t, but —
A Then they got the balance on the 11th of April.
Q The $88,500, that’s not a round number. What does
it correspond to? Why $88,500 as opposed to 90?
A Lots of times he said he would send me money and I
get smaller amounts. I have no idea how the $88,500 was
determined. I then got, a month later I got another $88,500.
Q Yes, I will come to that in a moment. The $88,500
does not represent any agreed-upon sum?
A Not to my knowledge.
Q Nor does it tie directly to the arms transaction?
A As far as I’m concerned, no.
Q Well, has Khashoggi told you anything to the
contrary?
A No.
Q And as to why he sent you $88,500, what is the
explanation? Why did he send you that 88,500?
A I have been trying to have him send me money for a
long time. I think as I said —
Q How much money and for what reason?
A I’m just trying to recover the expenses I never
got out of Hashemi, which is over $200,000.
Q Have you ever invoiced Khashoggi, sent him a bill?
A No. Occasionally, you know, if he asks for it. A
lot of times I ask him and he sends me money because I’m
doing lots of different things for him.
- GENZMAN: How was that money paid to you?
THE WITNESS: By bank wire.
- GENZMAN: Was there any note that was sent
along?
- KERR: We have the wire here.
1 MR. GENZMAN: Is there any verifying documents
2 that were sent along?
3 THE WITNESS: No, no.
4 BY MR. KERR:
5 Q The way this transaction worked was that the money
6 was simply wired into your account, you didn’t receive any
7 explanatory material on it?
8 A No, I get money wired in on various occasions from
9 him.
10 Q Let me show you the Furmark Corporation checking
11 account records for the period ended March 31, 19 86. The
12 I reference to the Khashoggi wire is contained in the backup
13 material for that statement. The statement will be Exhibit
14 4.
15 (Exhibit 4 identified.)
16 BY MR. KERR:
17 Q Exhibit 4 is a bank statement and some of the
18 backup material for the March 31 period for the Furmark
19 Corporation?
20 A It is March 31, ending April 30 ’86.
21 Q And the wire transfer record is attached; correct
Q And you have no other documentation on what this
88,500 payment was for; is that correct?
A It is money that he was sending me.
Q Mr. Khashoggi does business differently than other
folks, but even sugar daddies usually give you an explanation
for what was going on. What was the reason for the $88,500
coming your way?
A Because I needed the money. I was in trouble
financially.
Q Was this tendered as a loan or what?
A No, no. He has been sending me money for a’ number
of years. He asked me to go here, to go there. I’m no
longer on retainer to him.
Q How is it carried on the books? This is payable
to the Furmark Corporation, I take it?
A It is income.
Q By Furmark?
A Yes.
- GENZMAN: Had you asked him for a payment
around that time?
THE WITNESS: I asked for $100,000 and he said he
would send me $100,000 in March, beginning of April. It
1 didn’t come.
2 MR. GENZMAN: When you asked him for that amount
3 at that time, what was the purpose?
4 THE WITNESS: Because I needed it. The money came
5 in and it was paid out to keep me going.
6 MR. GENZMAN: Did you indicate why he should be
7 paying you this amount from his end other than that you
needed it?
9 THE WITNESS: No: It is not unusual for him to do
10 that.
11 BY MR. KERR:
12 j Q Was there any understanding between you and
13 Mr. Khashoggi with regard to a percentage payment of any kind
14 I that you would receive in connection with the Iranian arms
15 transactions?
16 A No .
17 Q At any time?
18 A I did not know about this transaction at all.
19 Q Whether or not you knew about this transaction,
20 did you ever have an agreement with Khashoggi that you would
21 receive payment for any Iranian arms transactions with
22 Ghorbanifar?
A I was getting my money on the oil deals. 10
percent of the oil contract with this new company.
Q Did you ever have any agreement with Khashoggi
that you would be paid money in connection with the Iranian
arms transactions? Yes or no?
A Mr. Khashoggi and I did not have any arrangement
that he was going to give me anything.
Q All right, similarly with regard to
Mr. Ghorbanifar, did you have any arrangement with
Mr. Ghorbanifar relating to the Iranian arms transactions?
A No.
Q And with regard to the February $10 million lean
by Khashoggi, you didn’t learn about that until much later in
1986?
A That’s correct. I never knew about it.
Q In February/March of ’86, take me through where
you were during that period.
A Well, in February I went to London on the 2nd, and
then I went to Dubai on the 4th. I was in Dubai, I came back
on the 11th to Paris. I was in Dubai from the 4th to the
11th.
Q Okay, then you came back to Paris. What happens
A I was in Paris for four days and I went to London,
and then I went back to New York and then I came back to
Paris on the 20th. I was there through the 28th.
Q Where did you go there?
A Then I went to Geneva. I was there until the ^
4th. Then —
Q Were you meeting with Khashoggi in Geneva?
A We had a meeting in Geneva with Khashoggi; J think
that may have been the time when he brought his oil company ■
people from California, because we were going to get oil from
Iran for a refinery in Hawaii. I think that may have been
the time.
Q You left Geneva when, the 4th?
A Yes .
Q Where did you go then?
A Paris .
Q You stayed in Paris —
A Until the 9th, and then I went to London for a
couple of days.
Q Take me through the rest of the month. Where were
the rest of ‘your travels in March?
A On the 19th I went to Paris, the 20th in Paris.
The 21st I went to Monte Carlo. I was in Monte Carlo until
the 2 3rd and then I went London, New York.
Q Okay, let me just go through a couple of events.
On the 4th and from the 4th through the 5th and 6th,
Khashoggi picked up Manny Floor, and he and Floor and Robert
Shaheen went down to the Cayman Islands to meet with Donald
Fraser and Mr. Miller. Were you aware from your meeting with
Khashoggi just before the 4th that he was going to Cayman
Islands to discuss a series of loan transactions with Fraser
and Miller?
A Never knew about it .
Q When you spoke with Khashoggi later on in March,
he did not relate to you what had happened at his meetings in
early March with Fraser and Miller; is that correct?
A Never .
Q Floor flew out to Geneva March 17 through 18 to do
the paperwork on these loan transactions that had been
negotiated in the Cayman Islands. Did you meet with Floor at
all during that period of time?
A No, sir.
Q Again, you don’t have any knowledge of the loan
transactions that Floor was working on?
A None whatsoever.
Q As a result of the Geneva meetings, the board of
Triad America was reconstituted. Did you have any knowledge
of those events at that time?
A No, sir.
Q In March of 1986 was your office broken into?
A I don’t know whether it was March or February. It
was broken into over the weekend.
Q Describe to me what happened in that break-in.
A Well, Monday morning we got there, and the lock
was off. It was obvious somebody had been through all the
papers. They didn’t take anything that I knew of. They
didn’t take any equipment or anything like that. We reported
it to the building. The building came up and installed a new
lock.
Q Did you relate this break-in to Mr. Ghorbanifar?
A I told Khashoggi and Ghorbanifar that somebody
broke into my office. I had no idea who did it.
Q Did you suggest to either of them that you thought
the break-in had been done by U.S. officials, either CIA or
someone else?
{I remember this time very well. I was with my Dad when we saw the door was broken, the door knob, and it was a mess. He/Dad was very angry and upset and he knew automatically it was due to the U.S Government! Despite his testimony here, he absolutely knew it was either the CIA or FBI and he was angry!}
A I didn’t know who did it. I had no idea.
Q Did you suggest to either of them that that was
the likely source of your difficulty?
A I think, you know, Ghorbanifar, I think maybe he
thought maybe it was the CIA that did it, but I didn’t know,
and I don’t think I said who did it because I didn’t know.
Q Did you suggest to Ghorbanifar that he lodge a
complaint with federal officials about this break-in?
A No, sir.
Q Were you aware that he had caused such a complaint
to be made?
A I think after the fact, yes.
I Q How did you learn of it after the fact?
A I think I may have read it in the report.
Q Other than the report, do you recall discussing it
with Ghorbanifar?
A I think I remember him telling me that his lady
friend in California was harassed or something like that, and
he thought my office break-in was connected or something, but
that was the extent of it.
Q Did you ever discuss this break-in with Michael
Ledeen?
A No.
Q Other than that dinner that you described with
Ledeen, have you had other occasions to meet with Ledeen,
meet with or talk to?
A I think I may have talked with him on the
telephone, because I called him to invite him to a dinner in
Washington when the OSS was presenting an award, and he
couldn’t go. He had another dinner.
Q All right. We’ve discussed the payment that you
received in April. You did or did not know in April that
Khashoggi was being repaid for his February loan?
A I did not know.
Q All right —
A I did not know about the transaction.
Q When next did you have conversations with
Ghorbanifar or Khashoggi about the Iranian initiative?
A I would have to say that it is in June.
Q What causes you to say that?
A Because Khashoggi, you know, told me that, you
know —
Q Well, something is triggering a recollection.
What’s the event?^ What causes you to recollect something
happening in June?
A Well, he was under pressure and the transaction
wasn’t completed and he hasn’t gotten any money.
Q And he tells you about that at that point?
A And he asked me to stay in close touch with
Ghorbanifar, find out what’s happening.
Q Let’s back up. He made a loan of about $15
million or a payment to Lake Resources on or about May 10,
- Does that correspond to your recollection?
A I was told May 15, but —
Q Did you know he was doing that at the time he did
it:
A Did not.
Q When did you first find out that he had made such
a payment?
A I would say in June, sometime in June I was over
there and he was — he knew, you know, that the shipment had
been made, but he had not been paid.
Q Take me through your travels in June. Where were
you?
A I was in London, Paris, Paris for three days, went
to Nice —
Q Give me the dates. You were in London, Paris,
when?
A June 1, New York, Paris, via London, and I was in
Paris on the 2nd, 3rd and 4th and then I went to Nice, to
Monte Carlo again, on the 5th, and I flew home to New York on
the 6th from Nice to New York.
Then on the 18th I went New York to Paris, and I
stayed in Paris for a week, then I went on the 26th to Nice,
then on the 27th I went to Marbella, Spain, to Adnan’s_
house. On the 28th, I went to Nice on the 28th, and I was
there on the 30th. I was there July through the 7th. .On
July 8 I went Nice, Paris, London, Paris. I had a meeting at
the airport in London, then I came back to Nice on the 9th.
I was in Nice the 9th, 10th, 11th and 12th. I went to Geneva
on the 13th, and I went on the 14th to Paris. I stayed in
Paris through the 24th of June — July rather.
Q Let’s stop there for a minute. Nice is where
Ghorbanifar has his home?
A He lives in the next town.
Q When you were in Nice, were you visiting with
Ghorbanifar?
A A couple of occasions he came to see me.
Q Why else would you have been in Nice?
A No, I was just waiting, you know. I was the
contact between he and Khashoggi.
Q So the reason you were in Nice was to make contact
with Ghorbanifar?
A You know, and find out what was happening, because
Khashoggi was very concerned.
Q Using the schedule you have given me as a way of
trying to place when you were brought into this matter. again
by Khashoggi, give me your best estimate of when you were
there.
A I would say middle of June.
Q Let’s use another event. You were paid S8000 and
change by Khashoggi on June 5 .
A Right.
Q What was that payment for?
A Well, he asked me to go down to Dubai, and I went
down in February.
Q Again, how does that relate to the payment of
$8000?
A Well, I said I never got anything on the trip down
to Dubai and I need some money, send me something, so he said
send me something and I sent him an invoice.
Q Did you send an invoice for $8,038.51?
A I sent it to his office.
That represented your expenses to Dubai?
Yes.
What this is is a reimbursement of those expenses;
correct?
A Right.
Q In addition, you received a $60,000 payment- from
Manucher Ghorbanifar on June 16; is that correct?
A Correct;.
Q What was that payment for?
A That was either an investment on his part or a
loan on his part. To me, there’s a company called
Alternative Power, APC, Alternative Power, which was in the
development of a cogeneration power plant in Pennsylvania.
At a shareholders’ meeting, the chairman of the board wanted
to in effect turn over the project to Bechtel Corporation. I
did not want that to happen .
I wanted to keep- the — we have a license to use
the Saarberg technology in Pennsylvania exclusively, and I
told them I wouldn’t permit it, so he said, well, then, why
don’t you buy our shares back and it came to $60,000, and I
tried to get the money from various people, and Ghorbanifar
knew some of the things I was doing, and I chatted with him
about it, and he then sent me the $60,000 — came into my
account — and based upon a contract between the selling
shareholders and myself, the money was paid to the selling
shareholders’ lawyers in escrow, and then they turned over
the shares . Ghorbanifar was supposed to send additional
money for the development of the project which he never did.
Q Let me show you what will be Exhibit 5, which is
the bank statement for Furmark Corporation of June 30,’ 1986.
It has attached to it an agreement of June 13, 1986 between
yourself, Mr. Weisser, Roag AG and Vipema?
A Vipema .
Q And APC, which is the buyout agreement referred to
earlier.
(Exhibit 5 identified.)
, BY MR. KERR:
Q Going through the items, there is a credit slip
showing a $60,000 credit wired into the Furmark Corporation
account by Manucher Ghorbanifar on June 16 and that’s the
$60,000 amount that you utilized to effect the buyout of the
stock; correct?
2 A Correct.
3 Q There’s also a credit confirmation showing
4 $8,038.51 wired into this account by Mr. Khashoggi, and
5 that’s the amount that corresponds to the reimbursement of
6 your Dubai expenses; correct?
7 A Correct.
8 Q Again, just so we’re clear, the $60,000 amount
9 Ghorbanif ar paid to Furmark Corporation on June 16 was. not
10 related to the Iranian arms transaction; is that correct?
11 A No way.
12 Q Similarly, the $8000 amount that Khashoggi paid
13 was not related to the Iranian arms transaction?
14 A No .
15 Q Now, when Khashoggi talked to you in June about
16 the problems he was having, give me your fullest and most
17 complete recollection of what it was that Khashoggi told you
18 had happened and the nature of the problems he was having.
19 A He told me that he had, you know, bridge financed
20 $15 million and he had not been paid any money, and he was
21 concerned.
22 Q What did he ask you to do?
A He said just stay on top of Ghorbanifar, find out
what’s happening, keep me posted, push him.
Q And you then went to meet with Ghorbanifar?
A I would be, you know, wherever I was waiting for
him to call me, or to see him. I mean, I sat in Nice maybe
for a week and maybe I talked with him once. He came to see
me once, you know. I just was sitting waiting.
Q What did Ghorbanifar tell you when you saw him?
A Said he was having problems.
Q Did he describe the nature of the problems?
A No.
Q Can’t give me any more information than that?
A No, he didn’t even tell me about the McFarlane
trip.
- GENZMAN: When did you first learn about the
McFarlane trip?
THE WITNESS: Sometime in July, middle of July. I
learned that in Paris.
- GENZMAN: Who told you at that time?
THE WITNESS: It was either Ghorbanifar or one of
his Iranians’ in Paris. I think it was Ghorbanifar. He was
upset, under great pressure.
BY MR. KERR:
Q Let’s try to come at this a couple of different J
j4f 1
ways .”n 8.1 million was paid to Khashoggi by Ghorbanifar
apparently in two slices, a 3 million slice and a 5 million
slice, and that payment was made on or about July 24, 1986?
A Well, the first payment was the 3 million paid in
July, and then the 5 million was paid in August, I think.
Q Is that what your records show?
A That’s my understanding.
Q Ours suggests that they both got paid on July 24,
but it makes no never mind to me .
A I know it was two separate payments. That’s my
understanding of it.
Q No disagreement about that. The only disagreement
was the dates?
A The first payment was 3 million.
Q Right. It was your understanding, was it not,
that Ghorbanifar had given three checks in the amounts of 1
million, 11 million and 6 million to Mr. Khashoggi?
A Right.
Q What was happening was that when money came into
Ghorbanifar’ s account, it was being allocated against these
checks; correct?
A Right.
Q And so apparently some European custom allows for
partial paydown of checks?
A Right. I never heard of it before.
Q All right, but you were familiar with the fact,
certainly by July, that Khashoggi had three checks totaling
$18 million in his hands; correct?
A I think so. •
Q What was your understanding as to who the
beneficiaries of the three checks were, and start with- the
$1 million check.
A I thought the $1 million check was Khashoggi.
Q The $11 million check?
A I thought it was the lenders of the 10.
Q You thought that to be Canadians; correct?
A Not at that time, but in September.
Q Certainly by September when you talked to
Khashoggi, he had attributed the $10 million to his Canadian
lenders; correct?
A Correct.
Q And the $6 million was to the other lender;
correct?
A Yes .
Q Did you ever learn the identity of the other
lender?
A No.
Q Was the nature of the other lender ever
characterized to you by nationality, sex, business —
A I thought it was Arab, you know, whatever that
means .
Q But Khashoggi has never identified that lender to
you:
No.
A
Q Has he ever suggested to you as it was a member c:
the Saudi royal family?
A No . He has never said anything to me. You see,
the way — when the money came in, they paid off the $6
million first, so that was, you know, never in the
conversation. Pay off the 10 was always where the pressure
was; to get the money to pay off the 10.
Q Now, with regard to the events in July, take me
through what happened in July. You had meetings with
Khashoggi and others about this debt. Where were the
1 meetings, what took place, who was present?
2 A Well, in July I was sitting in Nice, okay, from
3 the 1st until the 12th, at a hotel called the Beach Regency,
4 and I may have — I may have seen Ghorbanifar maybe once or
5 twice in that period of time. I don’t know what day he may
6 have come over for lunch. I was just waiting and Khashoggi
7 would call, I would call him, I hadn’t heard anything, I
8 would call Ghorbanifar, don’t know where he is, don’t know
9 what’s happening. I was just sitting, waiting, the whole
10 time.
11 Then I was going to see Khashoggi in Geneva ‘on the
12 13th, and then I was told he wasn’t coming so I went to
13 Paris. Then Khashoggi did arrive in Geneva and called me up
14 I and I said I don’t know, I’m trying to find out where
15 Ghorbanifar is. You only know when he calls you or you see
15 him because you never know where he is. Then I was in Paris,
17 you know, from the 15th to the 24th, and I believe I may have
18 seen Ghorbanifar in Paris.
19 I’m not sure that was the time his health was in
20 bad shape, he was under unbelievable pressure because he knew
21 that Khashoggi ‘s checks were worthless that he gave him
22 unless he could get this back on the track. I believe that
it was during this period of time that he went — I’m told he
went to Tehran, then to Damascus, then to Beirut to
accelerate or to assist in getting the release of Father
Jenco because he knew unless a hostage was out, Khashoggi
would get no more money, no more shipment and Khashoggi would
be out his money. He was taking medication, high blood
pressure, pains — he was in terrible, terrible shape with
the pressure because here, you know, Khashoggi, who he had
developed a relationship with, was out $15 million.
Q All right, did you and he discuss anything about
the problem? Did he attribute the problem to anything’ in
particular?
A Then they got — then he explained to me about the
pricing problems .
Q Did that occur in July?
A I think maybe it was in July or August. It may
have been after the first payment that they had a microfiche
on pricing and they checked it out and there were anywhere
from, you know, 300 percent to 600 percent inflation on the
various items. That was part of the problem.
Q Did he attribute the overpricing to any particular
motive?
A He made the comment that, you know, some of t:
funds may have gone to the Contras,
Q Did he tell you what he based that on?
A No.
Q Did he tell you who he was dealing with in the
U.S. government?
A I heard the name North.
Q What did he tell you about North?
A He was, you know, he only had the highest
compliments for him, you know, whenever he talked about h:
but other than that, no details.
Q Did he give you any further e.xplanation of why
thought money might have been generated out of this
transaction that was being used for the Contraa
A No.
- GENZMAJN: Who was giving you this
information?
THE WITNESS: Ghorbanifar.
BY MR. KERR:
Q Now, your role at this point was basically to keep
1 an eye on Ghorbanifar for Khashoggi; is that right?
2 A That’s right.
3 Q Were you asked at this time to do anything
4 vis-a-vis the U.S. government yourself?
5 A No.
6 Q Take me through events in which you participated
7 in August relating to this matter.
8 I A I was in New York until I guess the 11th, and then
I
9 I I went to Paris and I was there until the 18th, and then I
10 j had to go to Oklahoma City. I was there for two days and I
11 came back. Basically, I think Ghorbanifar was desperate
12 I because Khashoggi no way is getting his money, and he was
13 doing everything he could to try to get the contract
14 completed.
15 Q All right. Did you meet with Khashoggi and
16 Ghorbanifar while you were in Paris?
17 A I think so, yes. I don’t have any dates, but it
18 is my recollection.
19 Q Can you describe for me what was discussed between
20 you and Khashoggi and Ghorbanifar in August in Paris?
21 A I think basically, you knbw, Ghorbanifar said the
22 problems he has and until he gets it right, Khashoggi isn’t
going to get his money.
Q Any further discussions of diversion of funds cr
overcharges?
A Yes, I think, you know, it was mentioned that the
inflated pricing — but it was not, you know. The main thing
was how could Khashoggi get his money back. How can he get
it back on the track.
- GENZMAN: Did Ghorbanifar specify exactly what:
the problem was? Did he go into detail?
THE WITNESS: Yes. Not at that point, okay?
- GENZMAN: Not at that point?
THE WITNESS: He told me, you know, I don’t know,
go ahead, but when I went to see Casey in the CIA he said,
you know, that 5 3 parts that were delivered were either
defective or next generation or old generation or whatever,
and that had a value of $3 million, and that 299 parts were
never delivered which had a value of 7 million one.
And that’s why Iran didn’t pay Ghorbanifar and
that’s why the checks Khashoggi had deposited never got
covered because they prepaid $15 million and let’s say for
800 items, whatever the number is, I don’t know — and some
of the items delivered were defective or different generation
1 which didn’t fit into their system, but 299 items were never
2 delivered, which were paid for with the $15 million deposit.
3 So that’s when I went to see Casey — was, you got
4 to complete the contract so Ghorbanifar can be paid by Iran
5 so Khashoggi can get his money, and that is the basis of
6 going to see Casey.
7 BY MR. KERR:
8 Q All right, how frequently were you meeting with
9 Ghorbanifar and Khashoggi in August of ’86 regarding this
10 matter?
11 A In August?
12 Q Yes.
13 A Maybe once or twice. I mean, I don’t have it
14 down, but I’m just sitting and waiting and waiting and
15 waiting. That’s the Middle East game is sit and wait. I
16 would go to have a meeting with somebody and it could be
17 three days before they call you.
18 Q All right, let’s move into September. What
19 happened in September? Why don’t you run through where you
20 were in September first?
21 A On the 10th, New York, London; then London on the
22 11th. 12th I went to Paris and on the 13th, Paris, London,
back to New York.
Q During that period, did you meet with Ghorbanifar
and Khashoggi?
A I presume so, but I don’t have any record, but I
presume that I may have saw — I know Ghorbanifar went to the
hospital. I’m not sure when, and it could have been maybe
this time he was in the hospital in London, but it could have
been another month. I don’t know, and I presume I may have
saw Khashoggi, but I don’t have it down, unfortunately..
Q At some point it was suggested to you that you try
to get in touch with Casey or you made that suggestion-. Tell
me how that came about .
A I didn’t make the suggestion. They knew I knew
Casey through Shaheen.
Q “They” being both Ghorbanifar and Khashoggi?
A Yes. And I think, you know, earlier, they were
thinking about that they would need some help in Washington
and they had mentioned to me — Ghorbanifar thought he would
maybe get it resolved. And basically, the checks which
Khashoggi had were worthless unless the contract was
completed and Iran paid money into Ghorbanifar’ s account so
he could get his money. Ghorbanifar said he was cut out of
the transaction. They were dealing with another individual.
Q When did that come to your attention?
A- Maybe it was September or October, you know. It
was prior to the meetings, okay, with Casey.
Q First meeting was October 7, so it was before
that?
A Because I was — in October, I was in London on
the 2nd, 3rd, 4th, 5th and the 6th I went to New York and I
saw Casey on the 7th.
Q Right.
A And so the reason for me going was to alerf Casey
and the government that the contract had not been completed.
Q I understand that. Before we get to that, who
suggested to you that you see Casey or did you suggest it and
what instructions were you given?
A Khashoggi asked me to go and see Casey. He told
me to tell Casey the situation, which was what I just said,
that Ghorbanifar is now cut out. The only way that Khashoggi
can get paid is if Ghorbanifar is involved in the completion
of the contract so he can get his money with the checks of
Ghorbanifar which the bank is holding.
Q And what was it that Khashoggi thought Casey could
1 do under those circumstances?
2 A Well, I think Khashoggi thought that once they had
3 examined that, the contract was not completed, they would
> 4 complete the contract.
5 Q And why was it Khashoggi thought Casey had
6 anything to do with this transaction?
7 A Well, Khashoggi thought or knew it was an American
8 transaction through his conversations with Nir as well as
9 what Ghorbanifar was telling him.
10 Q This was the first time Nir has come into the
11 picture. What do you know about Khashoggi ‘s relationship
12 with Nir?
I
13 I A I don’t know anything.
14 I Q Nir is in the U.S. in September of 19 86. Were you
15 aware of that?
16 A No, sir.
17 Q And were you ever privy to any of the
18 conversations that Khashoggi had with Nir?
19 A Never .
20 Q What did Khashoggi tell you about Nir or his
21 relationship with Nir?
22 A Nothing.
KERR: Let’s take a break for a minute.
(Recess. )
BY MR. KERR:
Q Let’s move to October. At Khashoggi’s request,
you set up a meeting with Mr. Casey for October 7, 1986; is
that right?
A Yes.
Q Did you actually talk to Casey on the phone before
that meeting on October 7 or did you simply schedule it
through his secretary or what happened?
A Through his secretary.
Q Through his secretary. So there was no
conversation between you and Casey until the time of the
meeting; is that correct?
A That ‘ s correct .
Q The meeting took place at the Old Executive Office
Building?
A Yes.
Q Was anybody present besides yourself and
Mr. Casey?
A No.
Q Can you describe for me in as much detail as you
recall what was said between you and Mr. Casey at the October
7 meeting?
A I said I was there at the request of Mr. Adnan
Khashoggi and I said that he had been doing the bridge
financing for Ghorbanifar in the transaction involving Iran,
and that Mr. Ghorbanifar was now out of the picture. I
explained to him the bridge financing mechanism and that
Mr. Khashoggi can only be paid if the Americans deliver the
rest of the goods, and then Iran will pay Mr. Ghorbanifar
into his account and then Khashoggi will be paid. That’s
basically, you know, what I told him.
Q How long did the meeting last?
A Maybe half an hour.
Q All right, did Casey affect any prior knowledge of
this transaction; did he show that he knew about it?
A No, he said to me — I had mentioned that the
money was paid into Lake Resources , and he said he never
heard of that account. He said I don’t think it is one of
our accounts. He said this is not my operation. Sounds like
it is an Israeli operation. Then I told him that it was
being handled by North, and he said, well, I will look into
it, and then he got on the phone. He was going to call
Poindexter and have him come over and Poindexter was not
there .
He knew Ghorbanifar. He recognized Ghorbanifar
right away. But as to the transaction, he said it sounds
like an Israeli operation. As to Lake Resources, he didn’t
think it was one of his accounts and he said he would look
into it. Then as I left, he said I would appreciate it if
you would see one of my guys and give them all the details of
everything that you know about it, which I said I %rould do.
Q What did you tell Casey about the Canadians at
that first meeting?
A I told him that it was in Khashoggi ‘ s mind .
Khashoggi had financed it through Canadians, which is what I
was told, and I told him that Ghorbanifar was thinking about
talking to some members of the intelligence committee. I
mentioned two names . I mentioned Senator Moynihan and
Senator Leahy.
Q Now, the story of the Canadians; you were relating
what had been told you by Khashoggi?
A That’s correct.
Q What had Khashoggi told you as of that time about
the Canadians?
A Khashoggi told me he was under great pressure. He
borrowed the money from — he gave the names Miller and
Fraser, and he was under lots of pressure.
Q what kind of pressure?
A Financial pressure. I learned after, you know,
that he put up collateral. I didn’t know it at that time and
going to — when I went to another hearing, he told me that
in effect, the Canadians had only facilitated the borrowing
for him.
(Discussion off the record.)
BY MR. KERR:
Q Let me show you a memorandum that Director Casey
prepared, apparently of your meeting. This has previously
been marked as Allen Exhibit 74. I would like you to look at
it and see if it gives you any further refreshed recollection
of what happened at that first meeting you had with
Mr. Casey.
A Well, I don’t think I ever mentioned the loan was
repayable in 30 days. I said it was long overdue, and they
were putting on lots of pressure on Khashoggi. I didn’t say
without any collateral. I didn’t know, but Khashoggi had
borrowed the money so we presumed it to be his signature.
The Lake Resources was in there. I didn’t — he believes the
members of the group were talking to Leahy, Cranston and
Moynihan. Ghorbanifar was talking about talking to these
three. 6 3 pieces defective and 299 were missing. He has the
same.
Q Looking at that memorandum, do you have any
further or fuller recollection of what was said between you
and Casey?
A Well, first, the Canadians put in $10 million, not
$15 million.
Q I know what reality is today. Do you think’you
told him $10 million on October 7 and he just got it wrong?
A I told him $10 million. That was what was
missing. I mean, you know, the thing was that the final
message was, the only way to handle this matter was to supply
the rest of the equipment. We discussed how you go about it,
you know, finalize the contract that’s been prepaid for, or
if you are not going to deliver, refund the money, and he
said he would look into it and get back to me, and —
Q All right, did he, in fact, get back to you?
A Allen called me for a meeting and I came down, I
think, on the 16th.
Q Before the meeting on the 16th did you hear
anything from anybody else on this matter?
A No.
Q Are you familiar with a telephone number, area
code ^^^^^^^^^^^^H
A Right .
Q Whose number is that?
A Mine .
Q Do you have a recollection of having a
conversation with Lieutenant Colonel Oliver North on or about
the 9th of October regarding this matter?
A Never .
Q So to the best of your recollection, you and North
never talked; is that right?
A That’s right. In fact — on what day?
Q The 9th of October?
A I was in London, but I never talked to him.
- KERR: Well, let me just mark for reference
purposes Exhibit 6. It is an exhibit from the notebooks of
Colonel North from October 9, 1986. It is a note that was
taken at a luncheon that North had with Director Casey on the
9th.
(Exhibit 6 identified.)
BY MR. KERR:
Q As you note, there’s a reference to you and your
telephone number, but it is your recollection that you never
spoke with Colonel North; is that correct?
A I never spoke to him and I was in London on that
9th. I never spoke to him.
Q At any point in time?
A At any point in time.
Q All right, with regard to Allen, Allen called you,
and what did he ask you to do when he called you?
A To set up a date.
Q To meet?
A To meet. He asked me to come down on, I think it
was the 16th, and I came down to Washington to meet in the
executive office building.
Q All right, and you met Allen and you also dealt
with Casey that day; is that right?
A Right.
Q You met Allen at the Old Executive Office
Building?
A Correct.
Q And you met Allen without Casey being present?
A Correct.
Q Let’s deal with Allen, then, first. What do you
recall happened in the conversation between you and Allen?
A I began, you know, going over in detail the bridge
financing transaction. I told him that Khashoggi had done
this on three previous occasions, and I told him that
Ghorbanifar is no longer involved and Khashoggi can’t get
paid unless they complete the contract. We had a short
meeting because Casey was flying up to New York to go to
Governor Smith’s dinner and asked me if I wanted a ride back
and I said yes, so when he was ready to go, that was the end
of the meeting.
Then they took me to wherever Casey was going and
we went to National Airport and his wife was there, and the
three of us flew up to New York in a plane and then he went
out to Long Island or wherever he was going and I went home.
But the meeting with Allen was just beginning to go through
the detail; he asked me questions, what I knew, but then the
meeting was cut short and he said he would like to meet
again.
Q Let me review with you some things that Allen
relates as having been told to him by you on October 16.
Let’s see how it corresponds with your recollection.
Allen said that at the meeting on the 16th, you
said that the idea of providing Iran with military equipment
in exchange for American hostages originated in the summer of
1985, and that you, along with Ghorbanifar, traveled to Tel
Aviv in August of 1985 where you met with a number of Israeli
officials, including Mr. Nir, the Israeli special assistant
prime minister for combatting terrorism. Do you recall
relating that to Mr. Allen?
A No, sir, because I went in June.
Q Okay, so there’s a transposition of dates, and the
actual trip to Tel Aviv was in June of ’85?
A Right.
Q Beyond that, did you meet with Nir?
A No, never. No, I met him after the whole thing
blew up and after the Tower Report was done. Only time.
1985?
right?
But you did not meet with Nir in the summer of
A I did not meet with Nir.
Q And you did not tell Mr. Allen that; is that
A I did not.
Q Then Allen goes on to say that you said that after
a number of false starts in late ’85 and early ’86, Khashoggi
agreed to finance another arms transaction in May of 1986,
just prior to Bud McFarlane’s secret visit to Tehran. He
borrowed the money from a number of Canadian financeers. On
the basis of a signature loan, he borrowed 15 million at 15
percent, agreeing to pay principal and interest in 30 days.
Do you recall telling Mr. Allen that?
A No. I never said he borrowed it for 30 days and I
never said he borrowed it for whatever that rate was . ” And I
don’t know where he got the false starts. I had no idea of
any false starts. I never knew about the November
transaction.
Q You were aware, were you not, that Allen was
making notes while you were meeting with him?
A He was making some notes, yes.
Q His handwritten notes correspond to his written
notes. For example, the Tel Aviv trip is down in his notes
as August of ’85.
A To be fair to Allen, I have pinpointed the Tel
Aviv trip now in June. I thought maybe it was in July, you
know, I didn’t tell him exactly that it was August. I may
have said the summer of ’85 because I really had not gone
into detail. I was trying to give him as much information as
I could so they could have everything that I had.
Q With regard to the Canadians, Allen says that you
told him at the meeting on the 16th that the Canadian
entrepreneurs have investments in oil, gold, mining and real
estate; reportedly are aggressive, tough-minded individuals
with influential contacts in Washington. They have told
Khashoggi that unless some payment on the principal is
forthcoming, they will begin to inform individuals like.
Senators Leahy, Moynihan and Cranston around 15 October about
this back channel deal with Iran and how they have been
swindled.
Furmark stated he was not authorized to state the
names of the Canadian investors, asserted that we should not
underestimate the determination of the Canadians . Claimed
they have a reputation for dealing roughly with those who do
not meet their obligations. Khashoggi allegedly is trying to
get them to extend the 15 October deadline, was unsure
whether he would be successful in this effort. Do you recall
relating those things to Mr. Allen?
A I don’t know that descriptive, but my
understanding was that they were determined to, you know, get
the money, and that Adnan was under extreme, extreme
pressure, but it was not — it was Ghorbanifar who was
talking about the three senators, not the Canadians, as them
being, you know, rough or tough or whatever the language
was. They were determined to get their $10 million back, was
my understanding. They were putting tremendous pressure on
Mr. Khashoggi .
Q And you related that to Mr. Allen?
A Yes .
Q And basically what you were telling Mr. Allen was
that unless the Canadians got satisfied by getting
Mr. Khashoggi satisfied, the Canadians were going to bring
this thing public?
A They were going to sue Khashoggi and therefore
Khashoggi would have to, in turn, bring the U.S. government
involvement in.
Q How were things left with Allen at the conclusion
of this?
A He was going to call me because he wanted more
information, and Casey said, you know, we’re leaving and they
collected me and went up to another building where Casey was,
and when he came out, went into a car to the airport. Then
he called me for another date and he came up to New York.
Q With regard to the meeting of October 16, our
documentary references to the meeting are Allen Exhibit 78
and Exhibit 80.
With regard to Casey, you flew to New York with
him; is that right?
A Right.
Q What did you and Casey talk about on that plane
ride?
A We talked about Ghorbanifar and we talked about
comparing this to a commercial transaction. Somebody prepays
the money for a thousand items, you only deliver 500; if you
can’t deliver the whole thing, deliver a partial delivery.
And so I was suggesting to Bill Casey that, you know, try to
send a small shipment so that Ghorbanifar may be able to take
another 5 million to take the pressure off Khashoggi.
And he, you know, indicated he would look into it,
and he indicated just sit tight, and we talked about
Ghorbanifar. He failed the lie detector test, and I said,
that may be, but I said, he is the individual who did the
transactions, and he is the individual that got Weir and
Jenco out; he set the McFarlane trip up. He’s the guy that
did these things, and now Khashoggi is in trouble because he
can’t pay him, and Mr. Casey —
Q Give me some sense of the degree to which Casey
was indicating to you that he was familiar with this
transaction, that he thought the government had a
responsibility for the transaction —
A No, he did not indicate that the government had
any responsibility for the transaction. He indicated that he
was working on the problem, and he said, you know, $10′
million is a lot of money, and he could understand why
Khashoggi, as rich as he is, still $10 million is a lot of
money. And we went back and forth, and he said, just give me
some time.
And his wife was there and we talked about, you
know, Mrs. Shaheen and other people, how my family was, how
my business was, what was happening, talking about
alternative power, which he was very intrigued with because
we discussed it at the first meeting and he thought maybe
there was potential in Latin America for lots of cogeneration
and he was going to help. So it was, you can only talk so
long about Ghorbanifar and about Khashoggl’s money, and then
his wife — it is a small little plane, you know, and he
said, you know, just sit tight and —
Q Did he give you any notion of how long he wanted
you to sit tight or did you tell him how long you thought you
could sit tight?
A No, he kind of indicated toward the end of the
month .
Q You thought he thought he could do something for
you by the end of the month?
A I thought toward the end of the month, rnayb^. He
said, I’m not involved in this but I will see what I can do.
Q Did he give you any better notion of who was
involved with this thing?
A No, other than, you know, at the first meeting I
mentioned North, and then he called Poindexter up to have him
come over to discuss it. I did not say, well, what happened
when you met with Poindexter. I was appreciative that he was
seeing me and trying to help me and help Khashoggi out with
his problem. He could have Just as well, you know, have not
seen me or put me off. He’s not that kind of a person. He
asked how my family is, and it was, you know — how other
people were .
Q After you got off the airplane on the 16th of
October, I assume you called Khashoggi and reported in to
him?
A Probably.
Q What did you tell Khashoggi at that point?
A I told Khashoggi that it is being worked on and we
just got to, you know, do nothing. Keep everybody quiet.
Hopefully something can get done.
Q At this point, does Khashoggi tell you anything
more about the Canadians?
A No.
Q There’s a subsequent meeting with you, Allen and
George Cave, correct; that happens about the 22nd of October?
A Correct .
Q That was a meeting also arranged by Allen?
A Yes .
Q It happens in New York?
A Yes.
Q Where does it take place?
A I meet them at, I think the Roosevelt Hotel where
they are staying, and George Cave was introduced as like
and some other name, and then we go to Chrysalis, a
restaurant on 46th Street not too far away. We have a nice
meal, a few drinks and chat and talk, and during that time,
in between eating, Charles Allen is taking some notes and it
is during that meeting that Cave tells me that he was
involved in the logistics, as he says, of the transaction ._
And it is at that meeting he tells me these are Hawk misses,
which I never knew. We start again and we go through the
thing, and basically, you know, the same story is told.
We go into the bridge financing, how it is done,
getting the post-dated checks, getting — in the case o”f
February, you get 20 percent to cover financing costs and
other expenses, and in the May 15 transaction a total of 18
million, which is 20 percent. And that mark-on was,
according to Khashoggi, approved by Ghorbanifar and the
Iranian government that they could add on that much to cover
financing costs because it took in the first transaction,
February 10 to April 11, you know, 60 days before that got
concluded, and Khashoggi had to induce people to lend money
to him, so I don’t know what the profit arrangement was, so
we went into, at that time, the inflated pricing and —
Q What were you told, if anything, by Allen and Cave
on the inflated pricing?
A They had no comments .
Q They are extracting information from you, but not
returning any?
A But, I mean, Allen thought, you know, Ghorbanifar
did a good job. Cave, they were all complimentary, you know,
about Ghorbanifar and what he has been able to do, et cetera,
and they didn’t go into any details, really, what happened in
this, why it didn’t get concluded. They knew that
Ghorbanifar said so many pieces were not delivered, so
therefore you can’t get paid. They know all those details,
okay. And they asked me what I thought of Ghorbanifar, what
else I knew. I told them whatever I knew. I was trying to
be helpful, to let them know everything I knew, however small
it was.
Q Did you get any sense from them as to how or when
this problem was going to get resolved?
A No. They said they were going to go tomorrow and
brief the director, the next day they would brief the
director on the meeting, and —
Q Okay.
22 A I kind of told the same story each time I met
them, so I’m not sure what more — they got more detail.
They got the precise details of what I knew, okay?
Q Do you recall discussing with Mr. Allen and
Mr. Cave the Hashemi suggestion that he could deliver
American hostages in exchange for his indictment being
quashed?
A I don’t recall. I’m not saying — did they bring
it up or —
Q I’m looking at Allen’s notes and he says you told
him about Hashemi’s promise to deliver the hostages if the
indictment was lifted and that you told him about Khaslioggi
and Hashemi parting ways in August of ’85 —
A Yes, I probably did, because he was asking me did
I know whether Ghorbanif ar was involved with Hashemi . I
think he asked me those questions and I said I really don’t
think so. Afl a matter of fact, I feel that Ghorbanif ar could
not stand Hashemi. I had that feeling.
Q All right, now the notes also indicate that you
told Allen and Cave that Ghorbanif ar believed that the 15
million, that $15 million had gone to Nicaragua. Was the
meeting on the 22nd of October the first time when you had
raised the diversion issue?
A Yes. When I saw Casey, it was just the general
solve the problem because you must remember, in February, we
learned later that there was unaccounted-for funds in the
February transaction but Khashoggi got paid. And so I was
just hoping that once they analyzed that, they had not
delivered all the parts and they had defective parts, that
somebody would say, yes, let’s complete this so Khashoggi can
get paid and then we won’t have problems with Ghorbanifar.
That’s what I thought, you know, would have been the result,
you know. That would be the perfect result that they would
analyze and realize that they had this problem not completing
the contract. If somebody else brings it up, maybe they will
review it and do it.
Q Circling back on Hashemi, apparently you were
asked about the sting operation in April of 1986, and
according to Allen’s notes, you told Allen that Ghorbanifar
was not involved in that operation.
A To my knowledge. He asked me that question.
Q And then there’s a reference, something to the
effect that you said Hashemi had set up the Israelis with Sam
Evans?
A What I said was that Hashemi would do anything to
1 get rid of the indictment that he had, and I don’t know
2 whether I used the word “set up,” but I said that was his
3 goal in life was to get his indictment, you know, withdrawn.
4 Q Did you have knowledge about what Hashemi had
5 actually done?
6 A No, none whatsoever.
7 Q The reference here that you told them that
8 Ghorbanifar had spent one and a half million of his own money
9 on this project. Did you make that representation?
10 A I think Ghorbanifar said that he was going to have
11 to spend, I’m not sure of the amount, additional monies on
12 the project.
13 Q What knowledge had you had about Ghorbanifar’ s
14 investment of his own funds? Had he invested funds, to your
15 knowledge?
16 A No, but all I know is he had no money. He was
17 always broke.
18 Q There’s also a reference that you told him on the
19 22nd that Mr. Khashoggi had had the Canadians fly out of
20 Europe to meet with him in the last few days. Is that true?
21 A I think that the Canadians were very close to
22 Khashoggi during these crucial days. I don’t know whether he
1 asked him to fly. That I don’t recall.
2 Q Did you participate in any meetings with the
3 Canadians?
4 A No.
5 Q What was Khashoggi telling you about them other
6 than the fact they wanted their money?
7 A They were trying to foreclose, you know, on his
8 collateral, which was worth $35 million or $25 million, he
9 owed them 10. He would have not only lost the 10, but he
10 would have lost the differential. In fact, I even questioned
11 him how could you have such an agreement whereby they
12 foreclose and take it all?
13 He said, well, that happens a lot, but you know —
14 nonnally they get the money and the differential goes back to
15 the party who put the collateral up after it had been paid.
16 So I think he was talking about losing not only 10 but the
17 whole collateral, which was about 25 or 30 million.
18 Q There’s also a reference towards the conclusion of
19 his notes that you say a leak will occur and that McFarlane,
20 Poindexter and North know everything. Do you recall
21 discussing those items with you?
22 A A leak will occur?
1 Q Yes .
2 A You know, I don’t know whether I actually said a
3 leak will occur because I did not know a leak would occur,
4 and I may have said to him that Poindexter and North knew
5 everything because that’s what Ghorbanifar told me. Now I
6 don’t know how I could say McFarlane knew everything because,
7 you know —
8 Q There’s another reference here that you said a
9 leak would not be good, especially for things south of the
10 border. Do you recall discussing the impact of a leak on
11 Nicaragua or anything else south of the border?
12 A I said “south of the border,” I didn’t say
13 “Nicaragua”?
14 Q South of the border is in quotes, yes.
15 A You know, I don’t recall. I may have said it.
16 Q Okay. I will tell you what. Why don’t you take a
17 quick look through Allen’s handwritten notes made on the 22nd
18 and read through it, see if it gives you any further
19 recollection of what you would have discussed with Allen and
20 Cave at that meeting.
21 A All right, now, there’s no way I would have said
22 “latest deal started April of ’86.” I didn’t know.
1 Q He is not the only one that says that. Mr. Cave
2 says the same thing as having been discussed by you at that
3 meeting, so isn’t it a fact that by this time, you had
4 discussed with Khashoggi what had happened and you knew that
5 this deal had been done in April of ’86 7
6 A No. I never knew that. He had an April meeting
7 with Amir and Israelis. I never knew about any meeting on
8 the 2nd. I never said anything about the 30-day loan. You
9 get paid after the shipment is made and they inspect it and
10 then they pay it.
11 The first five million, I never knew that. “I knew
12 it was one and four and that’s what they got paid. I never
13 knew of any markup of a million.
14 Q So what you are saying is that these notes by
15 Allen, which apparently he was taking contemporaneously while
16 talking with you, don’t reflect things that you were telling
17 him?
18 A I never knew there was a $6 million payment in
19 August and September. All I know is a million and a four
20 million, and Khashoggi got paid five million and put up five
21 million. It may be that they knew about it because through
22 their intelligence or what, but I never knew.
1 Q All I can ask you to do is tell me where these
2 notes differ from your recollection of what you and Allen
3 were talking about.
4 A It says “stayed at Nimrodi ‘ s house.” We stayed at
5 the hotel.
6 Q Cave makes the same reference that you stayed at
7 Nimrodi ‘s house, but that’s not what you recall having told
8 them; correct?
9 A I may have been visiting his house in the daytime,
10 but they took us to the Hilton Hotel and we stayed there.
11 Q Okay.
12 A First flight to point Tango.
13 Q That would be Tehran.
14 A That may be their code name. It is hard to read
15 everything that clearly.
16 I told them all about Hashemi because they asked.
17 This says “believed the 15 million went to Nicaragua.” I
18 think what I said was that Gorba thought a substantial part
19 of that went. I never said 15 million. Then there would be
20 no money for whatever the transaction was. Gorba would not
21 return Hashemi’s calls. I was told that. That would have
22 nothing to do with — I mentioned, I think, Hashemi’s brother
was in Danbury prison. I may have. I don’t think I said
Hashemi set up the Israelis. That could have been the case,
because I don’t know.
I see Delta is Damascus, I guess, and point Bravo
Q Beirut. Point Bravo?
A Bravo?
Yes, I don’t know what this is, I guess “pressure
on Gorba” — I don’t know what that last word is. I guess it
means until he gets it done.
Q I think it is supposed to be unbelievable.
A Okay. They tried to get him out
Okay, yes, somebody
called the PM’s office and said we’re not delivering because
the minimum hasn’t been paid, and that hurt Ghorbanifar,
according to him, with the HM when they had already paid in-
advance.
Q This would be the Iranian prime minister?
A Yes. He was in the hospital, okay? ‘when I saw
Bill on the plane —
Q Mr. Casey?
A Yes, Bill Casey. Ghorbanifar told me that the
1 Iranians were planning more kidnappings or they were planning
2 some activity. I don’t think I used the word “kidnappings,”
3 and some factions were going to do that. I told Bill on the
4 plane, I’m just telling you what I heard.
5 Khashoggi was saying, you can’t do anything,
6 kidnappings, you know. In fact, it says the condition that
7 he is involved that they do nothing to anybody, not only
8 Americans, but nobody. It says “Roy’s concept,” “G” is
9 “agency.” Ghorbanifar? CIA?
10 Q I don’t know. It doesn’t correspond to your
11 recollection. That’s what I’m trying to find out.
12 A I was saying, you know, he released the two
13 hostages, he received Bud in his elevation. Had they picked
14 up Reed in Cicippio?
15 Q As of that date? I believe so.
16 A I know Ghorbanifar said it is people who are in
17 the business — it is not his people, just trying to get
18 money. Some of this I don’t understand, but basically, it is
19 a lot of things that we discussed. Ghorbanifar used to call
20 Nir Adams. Really it was Tel Aviv, Adams was calling Tel
2 1 Aviv .
22 Now, solution to the pricing problem, two
shipments of TOWs, 500 TOHs and Zebras. I never heard of
- What I may have said was that they had agreed that, yes,
it was overpriced and so we’ll send 500 TOWs, I think, to
offset the pricing problem. And that was what I had been
told, but I never heard of Zebras and two shipments and 500
TOWs and stuff like that.
Q Well, on that score. Cave indicates that your
suggested solution to the problem was to let Ghorbanifar
handle the shipment of the remainder of the Hawk spare parts,
that the proceeds from that would allow him to take care of
the Canadian pressure, and that there would then be a ~
shipment of 500 TOWs for one hostage and another shipment for
the second hostage. Do you recall proposing that?
A Never said it at all. Our solution was just to
complete this contract and if you want to work with somebody
else, Ghorbanifar is finished, but just complete the
contract. The thought of my solution was that we’ll give
hostages for shipments, you know —
Q You were not proposing that?
A No. I wasn’t proposing anything other than to
make partial shipment or refund the money or whatever, but I
was — in no way did I do what you said. They would make a
partial shipment, Gorba said he could get another 5 million
out, then there would only be 5 million they had to collect
and it would take a lot of pressure off. Canadians believe
money has been stolen. That they have been — I can’t read
the word .
Q “Swindled”? Is that the word?
A Maybe that’s it. Now he has this thing under
Ledeen. Roy met once or twice; leaks would not be good
especially with anything south of the border. This thing
with Ledeen I can’t understand.
Q You can’t relate to that comment?
A We’ve always said we wanted to make money after
peace was in the area. That was the whole reason to show the
support for Khashoggi supporting Ghorbanifar.
Somebody’ s|
Q Look like
that mean anything to you at all?
A No.
Okay.
Who isl
The^^^^^Bl know^^^^^^^^^^^^^^K but
We covered lots of it, either at that meeting or
50 million. Does
at the first meeting.
Q Well, these notes were taken by Allen during the
course of the meeting on the 22ncl of October. You have told
me the things that don’t square with your recollection. Does
looking at these notes give you any further recollection of
what you discussed with him at that meeting?
A No, I think, you know, we were eating and talking
and eating and drinking and talking, and they would ask me
questions and I would give them, you know, whatever reaction
I had or what I had heard or whatever to try to get them as
much input into, you know, the situation.
Q Our documentary references to the October 22
meeting are Allen Exhibits 81 and 82.
THE WITNESS: Can we take a break?
- KERR: Sure.
(Recess. )
THE WITNESS: I want to comment with reference to
the notes that he may have just picked a few words out where
I said this could be a possibility or this or that, you
know.
- KERR: Sure. I understand.
1 BY MR. KERR:
2 Q Now, after the meeting on the 22nd, apparently you
3 called Mr. Allen on the 5th of November and asked him for a
4 meeting on an urgent basis. Do you recall doing that?
5 A I said I want to talk with him on the phone . He
6 said, don’t talk on the phone. Come and see me.
7 Q What prompted the call? Why were you calling?
8 A I think Ghorbanifar told me that Secord is deeply
9 involved in this thing. — I’m trying to think. I think
10 that was — that Secord was involved; this was the 7th?
11 Q The 6th, I think, is when the meeting actually
12 took place.
13 A I met him at a hotel.
14 Q Right.
15 A I had a sandwich. I think that’s the first time I
16 brought Secord ‘s name up because I didn’t know about it until
17 then. Let me just see. On the 7th —
18 Q Let me run through what Allen says. He says you
19 called him on the 5th to request an urgent meeting in
20 Washington; that you then met with him on the afternoon of
21 the 6th at the Key Bridge Marriott Hotel. Does that refresh
22 your recollection?
A Yes.
Q All right, in terms again, what caused you to make
that call? What had happened? Had Khashoggi said you have
to do something? Why was it urgent for you to meet with
Allen?
A I’m not sure. I’m just trying to think. Is that
the day when I gave him the Ghorbanifar’s bank account
number?
Q Ves.
A He asked me to get the number, and I got the
number from Ghorbanifar, and he said, don’t talk on thd^
phone, come down. So that’s when I gave him the number and
that’s when I told him that I learned from Ghorbanifar that
Secord is deeply involved in this transaction. I think at
that meeting, you know, I disclosed the names of Fraser and
Miller to him.
Q Right .
A I don’t think I called him that urgent. I think I
told him I have the Ghorbanifar number and he said, let’s
don’t talk on the phone, come down, and that’s why I went
down, and then we probably rehashed the whole thing again
about the pressure that Khashoggi was under. Talking about
1 retaining lawyers, I think, getting a lawyer in Washington.
2 Q His notes reflect the following?
3 A I did not know the name of who Adnan was talking
4 to as far as legal counsel.
5 Q The first item mentioned in Allen’s notes of the
6 conversation with you, something to the effect that unless
7 payment is made, Canadians retaining law firm that handled
8 case involving President Nixon have given Roy until Monday or
9 will file suit. Oo you recall making that representation to
10 Mr. Allen?
11 A Well, I don’t think that is clear. I think Adnan
12 said they were going to retain lawyers, and you know,
13 proceed. He was under unbelievable pressure.
14 Q Do you recall identifying the law firm?
15 A I did not know the law firm.
16 Q Do you recall telling him it was a law firm that
17 had a connection with President Nixon?
18 A Well, the only law firm that I know of with Nixon
19 is Mudge, Rose in New York, you know, and that name —
20 Q With regard to other things that he — in the
21 notes he said you said you weren’t certain against whom the
22 suit would be filed.
A It would be against Khashoggi and Khashoggi would
have to in turn sue — you know, bring somebody else into it,
whether it was Lake Resources, the government, somebody who
had the money, and there’s a question of who, you know.
First of all, you can’t just sue the government. You have to
get permission to sue the government, is my understanding.
Q With regard to this lawsuit, who told you that the
lawsuit was going to be filed?
A Mr . Khashoggi .
Q What did Khashoggi tell you in that regard?
A He said that they were going to retain Washington
counsel .
Q You say “they. ” Talking about Fraser and Miller?
A The lenders .
Q Well, you identified the lenders in this
conversation as Fraser and Miller.
A Right .
Q Were you telling Allen that Fraser and Miller had
retained counsel and were about to file suit?
A Khashoggi said they were going to retain counsel
in Washington to begin proceedings .
Q All right. Now, Allen in his notes says that you
1 gave the following direction, and it appears that you were
2 suggesting that the United States pay $10 million into
3 Ghorbanif ar ‘ 3 account at Credit Swiss at account number
4 ^l^m^^ main branch Geneva, care of the name of a
5 banker. Do you recall giving that suggestion to Mr. Allen?
6 A I gave him the number because he asked me to get
7 the number and I got if from Ghorbanifar and gave it to him,
8 but in my own mind, I never dreamed that they would ever
9 refund any money. The way to do it is to complete the
10 shipment.
11 Q Do you recall making a demand or a suggestion to
12 Allen that the United States put $10 million into this
13 account?
14 A I said if you are not going to do it, maybe you
15 are going to refund the money, but he asked for the account
16 number I got it for him; he said he needed it. I did not
17 demand that he put the money in. I gave him the account
18 number because he requested it. He didn’t have it from his
19 intelligence and if they were going to do anything for him,
20 they needed an account number.
21 Q There’s a fairly elaborate description of how
22 Ghorbanif ar’ s account had been attached by the Canadians. Do
you recall going through that description?
A That his account had been attached?
Q Who gave you that information?
A Mr. Ghorbanifar.
Q He told you that the account had been attached by
the Canadians?
A Yes.
Q And he is talking about the same Canadians, Fraser
and Miller?
A Yes . The Canadians , yes .
Q So you had had a conversation with Ghorbanifar
about the Canadians?
A Yes . He told me that his account has been
attached, I think, by whatever it was, the Canadians.
Q All right, when you did have this conversation
with Ghorbanifar?
A Probably on the telephone. I may have been with
him. I don’t show going anyplace in November other than the
16th I went to Aruba, down to the Caribbean, and last time I
was in London looks like it was the 11th, according to this
here, so maybe it was on the telephone or maybe he had told
me — he said his account had been blocked or they have done
1 something, they have blocked his account, attached his
2 I account. The exact language I’m not sure, but his account
3 was frozen in effect.
4 Q All right, apparently during the course of this
5 conversation, you told Allen that you had been led to believe
6 that Director Casey was going to clean this matter up by
7 early November. Do you recall relating that to him?
8 A I don’t know whether it was in those exact terms,
9 but Casey was trying to help us and he told us, you know, sit
10 tight until the end of — until November.
11 Q And this was now November and you wanted some
12 action, I take it.
13 A Well, we wanted to know what was happening, you
14 know.
15 Q Do you recall characterizing Mr. Miller to
16 Mr. Allen as being real sleazy and corrupt?
17 A No. I said that they are tough lenders and they
18 want their money, but “sleazy” is not a word in my
19 vocabulary. I don’t use it, I don’t think I use it because I
20 had only met Miller once, and that was in the lobby of a
21 hotel.
22 Q Do you recall discussing the swami, the California
swami, with Mr. Allen?
A Yes .
Q What do you recall in that regard?
A I wa? asked the question about the swami and I
told him that I think that Miller was an adherent to the
swami ‘s religion.
Q Let me show you Mr. Allen’s handwritten notes of
the meeting on the 6th of November. Let’s go off the record
to give you a chance to review them and we’ll see if they
give you any further recollection of your conversation with
Mr. Allen.
(Discussion off the record.)
BY MR. KERR:
Q You’ve had a chance to review Mr. Allen’s notes of
the meeting on November 6 . During the course of that review
two items came up. There’s a reference to the Bank of
Montreal being the bank of the two Canadians, and the bank
which had attached in some fashion or another
Mr. Ghorbanifar’s account in Switzerland. From your
comments, I take it that you do not have any recollection of
having mentioned the Bank of Montreal to Mr. Allen?
A I don’t recall the Bank of Montreal. I don’t
1 think any bank was ever mentioned.
2 Q The other item that you raised was the item
3 related to General Secord. Mr. Allen’s notes make reference
4 to Mr. Secord as being involved in the financing of these
5 transactions with North and you said that would not have been
6 a comment that you made; is that correct?
7 A I was told Secord was deeply involved. I didn’t
8 know that he was involved in the financing. I didn’t know
9 what his real role was. I knew he was involved.
10 Q Who had told you that Secord was involved?
11 A Mr. Ghorbanifar.
12 Q Do you remember what more he told you in that
13 regard?
14 A No, I think that’s all he said because I think he
15 knew that by mentioning the name, it was enough for the
16 people involved.
17 Q Coming back to the $10 million, there’s a
18 reference to pay $10 million in these notes, and Mr. Allen’s
19 typewritten summary of the notes says that you said that
20 somehow $10 million should be paid into Ghorbanifar ‘s account
21 at Credit Swiss and gives the account number. So we’re
22 clear, were you or were you not telling Mr. Allen that to
avoid publicity resulting from a suit to be filed by the
Canadians, arrangements should be made to pay $10 million
into Ghorbanif ar ‘ s account?
A No, I never said that. The reason we have the
account number is because Mr. Allen asked if I could get it.
Q Why would Mr. Allen want the account number?
A He just wanted to know Ghorbanifar’s account and I
spoke to Ghorbanif ar and he gave me the account number.
Q You don’t recall Allen telling you any other
reason why he wanted that account number?
A He just felt he needed it for his intelligence.
He asked for it. I said, sure, I will try to get it for
you. I called and Ghorbanif ar gave it to me.
Q You do not have a recollection of telling Allen on
the 6th of November that in essence, time had run out, the
case would be going public by the next week or so when the
Canadians were going to file suit and the only way to avoid
this operation being exposed to the public was a payment into
Ghorbanifar’s account of $10 million?
A No. If anything, I told him, you know, the way to
do it is to make a partial shipment, you know, deliver on the
contract. I never told him to pay money. He asked for the
1 account. It is not for me to tell Allen or anybody what to
2 do. I can only make suggestions. The alternative that they
3 have is to complete the contract or make another partial
4 shipment and make a settlement, you know, but —
5 Q All right, are there any other items in those
6 notes which are at odds with your recollection of what you
7 would have told Allen?
8 A Well, he has a few words, okay, and I don’t
9 understand a lot of his handwriting, and I don’t know, you
10 know, I can go through it —
11 Q I’m really looking for those things of
12 significance that strike your eye. If there’s anything there
13 that you can say, I didn’t say that or, you know, I don’t
14 recall saying that. That’s what I’m looking for. I’m trying
15 to find out if this memorandum ia basically an accurate
16 reflection of what you and he discussed at that meeting?
17 A I don’t know what the L.A. Times thing says. Knew
18 three or four weeks. I don’t know what that is?
19 A You don’t remember anything about a story in the
20 Los Angeles Times or conversations that you were having with
21 the L.A. Times at this point?
22
This is —
Q November 6, 1986.
A This is three or four weeks ago.
Q That would have been early October 1986?
A And in reference to what?
Q I don’t know. I wasn’t at the meeting.
A Certainly nothing to do with this. This was still
very private. How did the L.A. Times know?
Q I don’t know. Did you have any knowledge of the
L.A. Times being onto this story as of October of 1986?
A I think the L.A. Times may have been onto a story
regarding Hashemi and they may have come to me and asked me
some questions about it. That may have been it, but as far
as them knowing about this, I don’t think anybody — that
would be October 7 .
Q Mid-October.
A I think at this meeting, you know, he was asking
who would be sued. I said I don’t know, the lawyers will
determine that, but if Khashoggi gets sued he would have to
bring in Lakeside and whoever else, whether it be the U.S.
government or somebody, you know. His view was that Nir
always paid into this account; it is a U.S. government
account. It was in his mind this was a U.S. government
account .
Q What Nir said was what Khashoggi told you he said?
A In here, when you say “Canadians,” this is
conversations with Khashoggi because I did not talk to the
Canadians, so he, rather than — he is using Canadians where
I may have said Khashoggi said this, that the Canadians would
do this, so he has eliminated and put a few words in it.
Q I have no problem with that. These are his notes
for purposes of writing a memorandum. I’m putting them in
front of you to see if I can either refresh your recollection
or find out where your recollection differs from his notes.
A It says “G told Canadians this last week.” I
don’t know, I just don’t know what it means. It says
“Nice.” Maybe Nice was in Ghorbanifar when he spoke to me.
Q Ghorbanifar was in Nice?
A Maybe. I don’t know. Well, it was always the
Canadians were going to sue Mr. Khashoggi. Mr. Khashoggi,
then, to defend himself, would have to bring in Lake
Resources and the appropriate parties, and that would be
determined by lawyers. I don’t know what –^^^^^^^Hissue,
I just don’t know.
Q You don’t recall talking to him about the fact
that once Secord’s name came up it would expose the
Nicaraguan efforts of the administration at the same time the
Iran initiative is exposed?
A I really don’t recall because I didn’t know much
about Secord at all until I saw the hearings, and his role
was not given to me until Ghorbanifar told me just before
going down.
Q All right, let’s not spend any more time on this
unless there’s something that either refreshes your
recollection or is other than your recollection.
To make sure we have it covered in the recofd, the
documents we have of the meeting on November 6 are Allen
Exhibit 83 and Exhibit 84.
As of November 6, 1986, had you had any
conversations regarding the Khashoggl money problem with
Michael Ledeen?
A I think I chatted with him once when I was in
London and he was in Paris for a minute on the phone. He was
at somebody’s house.
Q This would be in October —
A I don’t recall.
Q Do you recall the nature of the conversation?
A No. It was just I was talking with somebody else
and he got on the phone for, you know, 30 seconds.
Q Do you have a recollection of Ledeen talking to
you in this period of time and suggesting to you that these
problems were going to be worked out and you and
Mr. Khashoggi ought to sit tight for a while?
A No. I don’t think anything like that. It was,
you know, 10 seconds. It was a very quick conversation, and
he said, Mr. Ledeen wants to say hello to you when I called
and that was it. I don’t recall what he said.
Q As of this period of time, had you had occasion to
be with Ledeen again? Had you had dinner with him or done
business with him?
A No.
Q After the meeting with Allen on the 6th of
November, what was the next involvement that you had relating
to this matter?
A Well, I think — on, like, November 22 or 23 —
Q How about the 24th?
A Or 21st, okay, there was in the newspaper an
announcement by the CIA that they had been paid $12.2 million
in the Iran transaction. So on Monday morning, I called
Mr. Cassy up, MIT TaTcy up, and I said, Bill, your numbers
are all wrong. You were paid a lot more than that and he was
all shook up. What do you mean, he said, can I please come
and see hin and bring the information that I have. So he
said, come down late in the afternoon; so I went down, went
to Langley. I don’t know, I got there maybe 5:00.
Q This would be on the 24th?
A 24th of November.
Q Right.
A And we then went through the dates Khashoggi put
his money in and the dates he got paid.
Q “He” being the CIA?
A Yes, and like on February 10, Khashoggi paid $10
million and he then was paid on the 11th $3,250,000 or
whatever it was and on May 15 Khashoggi put $15 million in,
and on May 16 he got paid $6,250,000, and there was
unaccounted a difference of $15 million, and it was at that
point for the first time I knew there was an unaccounted
difference, and as of that point I said Ghorbanifar thinks
some of this unaccounted-for difference has gone to the
Contras .
Q You had already told Allen and Cave that?
A But in the first meeting with Casey, it was just a
general — what the problem is and hope I can help Khashoggi
to get it resolved, but it was on the 24th is when after
calling and saying listen, your numbers are all wrong, you
were paid a hell of a lot more than that; and he said what do
you mean, are you sure, and I said yes, so I said can I
please come down with the information I have?
We went through the dates of Khashoggi ‘s payment
and the dates he got his money, and Khashoggi paid $25
million, and he got $10 million, so there was a difference of
$15 million, and he said he doesn’t know what the money is
whatsoever or anything like that. It was at that point in
time and he got his papers, to double-check everything, and
to see the press release or whatever they sent out, and it
was at that point in time he tried to call Don Regan; and Don
Regan wasn’t there, and then he called North on the phone and
said, there’s a guy here says you owe him $10 million, and
North said tell the man that the Iranians or the Israelis owe
them the money. Then he called somebody at CIA archives or
something, to find out what he has on Lake Resources, the
account, and the response was to me that it came into our
system from Furmark. We got the name in the system, and then
he talked for a while to Cooper at Justice.
Q What did he talk to Cooper about?
A About Lake Resources, and then when it was over he
said, would you like to talk to Meese about the money? I
said Bill, you are the government. Here’s the problem.
Khashoggi is owed the money and I’m dealing with you. You
are the government, and someone has to resolve the problem
for Khashoggi. He believes that the government was involved
in the transaction. He was led to believe that, and the
meeting was over basically.
Q What did Casey say he was going to do about it,
though?
A He didn’t say anything. I said, you know, you
have the problem. You know the problem. So then of course
he got money, 2.2 like the end of October or November for the
second channel’s business, so the 10 of the 12 he announced
was from Khashoggi and the 2 was from the second guy, so he
could see where Khashoggi paid 15 and 10 or 25, he got 10,
left 15 unaccounted, and we did say maybe there’s some
transportation costs, but not 15 million, he agreed; but he
said, Roy, I don’t know where the money is. I don’t know
what’s happened to it. That was it. Then of course I went
1 home and next morning I saw it on television that the
2 president and Meese had made an announcement.
3 Q About the diversion?
4 A About the diversion, yes.
5 Q You had a series of telephone conversations with
6 Casey after the 24th, did you not?
7 A I had one where he told me there was only $30,000
8 in the account.
9 Q When was that?
10 A I don’t recall.
11 Q Couple of days after the 24th?
12 A It was a couple days after that.
13 Q He called you or you called him or what happened?
14 A I think I had called him, because I had been
15 subpoenaed, and I said I have been subpoenaed, so he said you
16 just follow us, you know, in this thing and then by the way,
17 there’s only $30,000 in the account. I’m not sure it was
18 that conversation, but —
19 Q Did he say how he learned about the $30,000 in the
20 account?
21 A No, I didn’t ask him. He just said there’s only
22 $30,000 in the accouniL, * r\. r^ X~’ ‘ r,” ,\
Q How many other conversations did you have with
Casey after the 24th?
A He called me once to get the name of — called me
at home to get the name of the German company which has its
technology for cogeneration for atmospheric fluidized
combustion burning, and he may have called me one time to —
or maybe it was the same conversation, the president was
making a statement.
Q Anything further said in those conversations about
the money problem?
A No. It was just, you know, very short.
Q Did you have any other occasions to meet with or
talk to Mr. Casey before his death?
A No, I don’t think so. The last time I saw him was
on the 24th. Other than these telephone conversations, I did
not go and see him.
Q Did you have any further conversations or meetings
with anybody else from the CIA?
A Allen called me. I think it was in ’86.
Q ’86 or ’87?
A ’87, I’m sorry, and I was up in Nova Scotia, in
Nova Scotia seeing some people, and I returned the call and
1 he said one of the CIA overseers or whatever the boarders
2 that oversees it wanted to talk to me, so he wanted to let me
3 know that he was going to call me; and I said I would be
4 happy to talk with them. He said they want to know about
5 your dealings with the CIA. But I never got a call from that
6 person .
7 Q You never got a call from that person or entity?
8 A No. When talking with Allen, I commented on the
9 Senate intelligence report, which quotes me as saying that
notes
10 the l iwB^ m went to Nir, you know, and he said he wondered
11 where that came from. He said he gave the notes to Cave
12 because he to go on a trip and Cave did the report, but he
13 said he doesn’t remember that, you know, in the meeting on
14 the 22nd, and that was all. I think someone has been in the
15 hospital or something, and that was the end of the
16 conversation and I haven’t heard from him since, and I
17 haven’t called him and no one from the overseer board
18 contacted me.
19 Q Any other contacts with CIA personnel?
20 A No.
21 Q Now, in December 1986, you met with Khashoggi to
22 review the financial transactions in order to help you
1 prepare for your testimony before the House Intelligence
2 Committee. Do you recall that meeting?
3 A Yes.
4 Q What did you review with Khashoggi at that time?
5 A Well, I had been to the Senate beforehand.
6 Q Right .
7 A The Canadian ambassador wanted to see me, and I
8 was going down to see the House Intelligence Committee, and
9 so I said, I told him I said I will come and see you when I
10 am finished, so I told Khashoggi I’m going down to see the
11 Canadian ambassador. Tou have to tell me about the role of
12 the Canadians, exactly what it is, and he then told me that
13 whereas with the Senate intelligence, we talked about the
14 Canadian investors, when I went to the House intelligence, I
15 stated what Khashoggi had just told me the day before or two
16 days before or whatever, that the Canadians had facilitated
17 the loan for him through a Cayman Island financial
18 institution without giving me the name of the institution,
19 and that Miller and Fraser were working with him, they had
20 facilitated the loan, which he had put up collateral of a
21 company which had shares in Barrick and Burke, and the
22 collateral was worth 25 million when it was put up and now it
1 was worth about 35 million. That’s what I told the House and
2 the Canadian ambassador.
3 Q When you used the word “facilitate,” what did you
4 understand that to mean?
5 A Help arrange, you know, arrange for the loan, do
6 the paperwork, whatever. Facilitate. Get the loan for him.
7 That’s the word he used, facilitate.
8 Q It was or was not your understanding that they had
9 utilized monies under their control to make this loan?
10 A He just said that they facilitated the loan. Then
11 later, okay, he said that they were handling money for a
12 Saudi group, which that money was used for this loan.
13 Q Later being when?
14 A In ’87.
15 Q When in ’87?
16 A You know, about the time of the article in the New
17 York Times.
18 Q That would be February of ’87?
19 A Is that the date? Yes.
20 Q And give me a little more detail, what did he tell
21 you at that point about the Canadian — Fraser and Miller
22 were doing what?
A They were working for or they controlled money or
did something for a Saudi group of friends of his . It was
that money which was the money that was used.
Q That money being the $10 million?
A Right.
Q All right. Did he give you any indication of what
entity had actually put up the money?
A No.
Q And you continued to understand that the
collateral for the loan was the Barrick equity?
A It was Barrick, but through another company.. I
forget the name of the company.
Q I understand.
You met Mr. Fraser for the first time in March of
1987?
A In Paris, yea.
Q What were the circiimstances that caused you to
meet Fraser?
A I was at Khashoggi’s apartment, and he was there
having a meeting, and I was introduced to him and I said two
words to him.
Q You didn’t have a chance to chat with him?
1 A No.
2 Q How about Mr. Miller?
3 A I met him a few times at Khashoggi’s apartment.
4 Q Have you had any discussions with him about his I
5 role in these transactions?
6 A No.
7 Q None?
8 A No.
9 Q Did anyone —
10 A He has always asked me, okay, where did I get his
11 name from, and I said, Mr. Khashoggi. Who authorized, ‘you
12 know, for me to use Miller and Fraser’s name, and I told
13 him. He has asked me that a few times.
14 Q All right, I think we’re almost done. Let me pick
15 up a couple other things.
16 A The collateral he put up was in another company
17 that owned shares of Barrick.
18 (Discussion off the record.)
19 BY MR. KERR:
20 Q An article appeared March 10, 1987, out of Paris
21 by the New York Times of an interview that you and
22 Mr. Khashoggi gave to a New York Times reporter. Do you
recall that interview?
A I didn’t give an interview.
Q Were you present when the interview was given?
A Yes.
Q And you did make comment from time to time to the
reporter?
A
Q
A
No.
You just sat there?
It was not for me to make any comments to what
Mr. Khashoggi was saying.
(Discussion off the record.)
BY MR. KERR:
Q Let me ask you some things that supposedly
happened during the course of that interview. The article
says Mr. Khashoggi said at the interview that he masterminded
a deliberate deception of Mr. Casey last fall when Mr. Casey
was still head of the CIA, by inventing a group of angry
Canadian investors who were supposedly threatening to
disclose the administration’s secret arms sales to Iran
unless they were immediately reimbursed for a $10 million
contribution to a $15 million arms sale to Iran last May.
Did Mr. Khashoggi make that statenie.nt at the interview?
A I think Mr. Khashoggl said that the Canadians were
not the investors but that a Saudi friend, it was his money
that was used through the Canadians .
Q Did Khashoggi tell the reporter that Mr. Casey had
been deliberately misled?
A I don’t recall those %ford8.
Q Did Mr. Khashoggi tell the reporter that there
were in fact no Canadian investors?
A I think he said it was — that they were not
investors, it was his Saudi friend trtiose money was used, but
they were used through the Canadians.
Q All right, so your understanding of trtiat was being
told to the reporter is the Canadians were in fact involved?
A Right.
Q But in the capacity of being —
A Facilitators.
Q Facilitators and managers of the money of this
Saudi investor. Who was the Saudi investor?
A I don’t know.
Tou have never been told?
Never been told.
Mow the interview, according to the newspaper, was
set up by you .
A Well, Safire, who I know from, you know, John
Shaheen days and Bill Casey days, had called and wanted to
have an interview with Khashoggi, and Khashoggi said sure,
have him come over, and he arrived and Adnan met him.
Q You were there?
A Yes.
Q The thrust of the story is that Khashoggi had
engaged in a scam, a deception, crudely put, a blackmail
attempt using you on Casey. Has that the story that
Khashoggi was trying to put out at that time?
A I don’t believe that when I went to see Casey that
what he was telling me was nothing but the truth, because he
was under unbelievable pressure. The Canadians, you know,
had the collateral and they were, you know, trying to get
paid; whether they were acting on behalf of somebody, I only
learned that when I went to visit the Canadian eunbassador.
Now I have learned that it was a Saudi, the source was from a
Saudi friend of his through the Canadians .
Q Is it your understanding today that Mr. Khashoggi
had indeed been threatened with a lawsuit by these Canadian
investors in October, November of 1986?
1 A I believe that. I believe that he was under great
2 pressure.
3 Q’ No, I’m not talking pressure. Had a lawsuit been
4 threatened?
5 A He told me.
6 Q Does that continue to be his story?
7 A He has — his position today is that with all of
8 the hearings going on, that the truth will come out and that
9 he will get his money back.
10 Q Okay —
11 A And he has I think since refinanced the $10′
12 million loan. I’m not sure if he has done it completely or
13 partially or what, but the pressure is off.
14 Q We have deposed Mr. Fraser. He denies any
15 involvement whatsoever with a loan related to the Iran arms
16 transaction. The only basis you have for believing
17 Mr. Fraser to be involved, I take it, is what Mr. Khashoggi
18 has told you; is that correct?
19 A Tes.
20 Q Tou have no independent knowledge of that?
21 A No independent knowledge. Other than I think
22 Ghorbanifar knew about their involvement.
Q And related their involvement to you?
A Yes I think so, yes. I mean —
Q Ghorbanifar’s knowledge in all likelihood is based
on what Khashoggi told him; right?
A Somebody froze the account.
Q He told you that somebody froze his account; is
that right?
A Yes.
Q He told you the Canadians had done it?
A That’s right.
Q You yourself don’t know whether his account was
ever frozen; is that correct?
A Whatever I have been told —I’m trying to give
you everything I know, same thing I did with the CIA when I
visited with them, everything I know. I was, as somebody
said, a messenger. I was trying to, you know, assist my
government in everything I knew that could help them in this
transaction.
Q All right, when was the last time you spoke with
Mr. Khashoggi?
A I spoke with him today.
Q Did you speak with him regarding matters you and I
1 have discussed today?
2 A No, I told him I’m going down and I told him that
3 I don’t have a lawyer, and he said, well, you know, you’ve
4 got nothing to worry about. Just tell them everything you
5 know. You don’t need a lawyer.
6 Q Did you and he discuss anything about the
7 substance of your testimony?
8 A No, definitely not. Definitely not.
9 Q In preparation for today’s testimony, did you
10 discuss the Canadians with Mr. Khashoggi?
11 A No.
12 Q Have you had occasion to be interviewed by the
13 independent counsel or appear before the grand jury that the
14 ^-MMOTCcounsel is utilizing?
15 A No, I spoke with somebody at independent counsel
16 and they said they just wanted to have the bank statements,
17 show what happened to the money that I got from
18 Mr. Khashoggi. They didn’t know about the money from
19 I Ghorbanifar.
20 Q Okay, with regard to the independent counsel then,
21 the only conversations you have had with him relate to these
22 bank statements; is that right?
1 A That’s all.
2 Q Have you been interviewed by the FBI on these
3 matters?
4 A No.
5 Q Now, apart from the $60,000 payment from
6 Ghorbanifar that we have looked at earlier today, have you
7 ever received any other monies from Ghorbanifar?
8 A No.
9 Q And apart from the $80,000 plus payment and the
10 $8000 expense reimbursement from Khashoggi, are there any
11 other monies you received from Khashoggi in 1986-87?
12 A I don’t believe so, but I will double check it.
13 But I don’t believe so.
14 Q How about this year?
15 A No, I don’t believe so. Off the record.
16 (Discussion off the record. )
17 BY MR. KERR:
18 Q I understand. To make things as clear as I can,
19 you do not attribute any money you received from either
20 Ghorbanifar or Khashoggi at any time to the Iran arms
21 transactions; is that correct?
22 A Ghorbanifar, you saw where I got the money from.
1 Khashoggi sent me the money. The fact that it may have come
2 from the transaction, I don’t know where he got the money
3 from.
4 Q But there is no relationship between any payments
5 that you have received from Ghorbanifar and Khashoggi and
6 your involvement in the arms transaction?
7 A Definitely not.
8 Q Do you have Icnowledge of the Canadians Fraser and
9 Miller making any effort to get Khashoggi to change, modify
10 or otherwise vary his story about the pressure that they
11 brought to bear on him?
12 A I don’t know.
13 Q Khashoggi has never discussed that with you?
14 A No.
15 Q You are aware, are you not, of an interview that
16 Manny Floor gave a series of Midwestern newspapers about a
17 trip to the Cayman Islands in March of 1986?
18 A I never knew he went to the Caymans.
19 Q Did either Mr. Shaheen, Robert Shaheen, or
20 Mr. Khashoggi ever talk to you about their reaction to
21 Floor’s statements in the newspaper?
22 A Never.
Q You are not familiar with expressions of dismay or
disappointment that Mr. Shaheen made to Mr. Floor after that
story was published?
A No, no, but off the record, he is always attacking
anybody , you know .
Q Robert Shaheen is?
A But 1 don’t know about what was in the press, and
I have never seen, never heard anything about it.
Q The reason I raise it is that story said quite
bluntly — and we’ve since deposed Mr. Floor — that Fraser
and Miller were in the Cayman Islands, that the 10 million
was loaned at that time, specifically for the Iran arms
transaction, and Mr. Shaheen apparently reacted unhappily to
that story once it came out, but that has not been discussed
with you?
A I have never heard it before this time.
Q 7ou were interviewed by the Royal Canadian Mounted
Police?
A When I met with the Czmadian ambassador, they came
in and asked me lots of questions .
Q Do you recall telling them anything different from
what you have told me today?
A None whatsoever.
Q Old they ask you anything different from what I
have asked you today?
A They had a list of names and companies which they
asked what I knew about, and most of them Z never heard of.
Q All right. Have you had any connection with
Vertex?
A: No.
Tou have not?
None.
Have you had any connection with any entities
o%med by Miller or Fraser?
A None .
Q Has Khashoggi offered you any monetary reward if
your efforts to obtain repayment of this money came to
fruition?
A Nell, he once said trtien Z get the money, I’m going
to give you a nice bonus.
Q Did he put a percentage or price tag on the bonus?
A No, he said at least count on a htuidred thousand,
but I hope he gets the money back.
Q And as to the accosmiodation that he has reached
with the Canadians or whomever, you don’t know the details of
that accommodation?
A No.
Q Give roe one minute and I think we can get you get
out of here.
(Discussion off the record.)
BY MR. KERR:
Q Have you had any dealings with Euro-Commercial?
A No.
Q You have not?
A No .
Q Are you familiar with the company?
A I have just read in the press.
Q Apart from Casey and the other CIA folks that you
had discussions with, did you discuss these matters with any
other U.S. government official?
A No.
Q No?
A NO.
Q Now, we asked you to produce certain documents to
us . Am I correct that you have produced all documents that
were responsive to the subpoena?
1 A yes .
2 MR. KERR: Okay. I think we’re done.
3 (Whereupon, at 4:35 p.m., the deposition was
4 concluded.)
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m^^^”^’
189
NOTARY PUBLIC 6
CERTIPVA^T’or NOTARY POBLIC t REPORTER 18 9
I, KATHIE S. WELLER the officer before whom
the foregoing deposition was taken, do hereby certify
that the witness whose testimony appears in the
foregoing deposition was duly sworn by me; that
the testimony of said witness was taken in shorthand
and thereafter reduced to typewriting by me or under
my direction; that said deposition is a true record
of the testimony given by said witness; that I am
neither counsel for, related to, nor employed by
any of the parties to the action in which this
deposition was taken; and, further, that I am not
a relative or employee of any attorney or counsel
employed by the parties hereto, nor financially
or otherwise interested in the outcome of this action.
Notary Public in and for the
District of Columbia
My Commission Expires NOVEMBER 14, 1989
W
\f%K -^—^^^^
190
I
i
July 1. 1985
Dear Mr. McFarlane:
Since the early part of this year, I have had a number of approaches
from Iranian officials who, although they do not admit to being disloyal
to their government, believe that It is being forced Into policies Mrhlch
are taking their country into even deeper chaos than it is already in.
For reasons which will be clear to you once you find time to read the
attached paper, I have not gone as far as I could have gone in the
development of these contacts, but I have managed to channel them
through a single senior individual who is in charge of Iranian intell-
igence in Western Europe.
The remarks of this individual begin on page 33, following an e.xplana-
tory note by myself on page 32. They consist of a translation (from
French into English) of a report he gav« mc explaining his conv^tion
that the USG is ‘profiting’ from the present situation in Iran, and the
Iraq Iran war; a report (translated from Farsi into English) outlining
the current political divisions in Iran; an abbreviated transcription of
^ taped conversation he had with me on the subject of how he and his
colleagues are now in desperate need of ‘outside help* which must
come from one such as myself rather than from the CIA or some other
Western intelligence agency. These papers I would treat as “Confiden-
tial* according to your government’s system of security classification.
The others in my possession, which I will convey to you in the event
you find interest in the ones I now enclose, should be regarded as
TOP SECRET, and shown to others in your government on a strict
“Need to Know” basis.
As for blue bound booklet as a whole, I have put it together, with the
Iranian materials (Part III) as part of it, because 1 would not want
you have you read these materials except in a conte.xt wherein I have
an opportunity to explain the premises which underlie m^ present
tUaking. There is a question here of perspectives, and you will
^fi^eciate that mv own, rather than those of the Iranians, .ire the
^Bl which determine what “I will and wilt’liol be willing lo do in
PP^ing the role which they envisage for me.
While I am at it, let me say that I have followed from afar your own
role .in your government’s current crisis. As you will sjee from the
attached paper. I am not entirely in agreement with it. but I do ad-
mire the competence you are showing as you apply it.
With mv verv best wishes, I am
UNCLniiW
Sincerely yours.
Adnan M. Khashoggi
191
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UNCUSSIFIEO
PanialW Oeciasylied/F.eleasea on IftfCJ W5
under pfcvi5io’iS oi E ‘JjtS
by K jotinson National Seuu^ Council
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192
yNCUSSiFlES
ROY M. FURMARK
200 HICKS STREET
BROOKLYN, NY 11201
February 18, 1987
Senator David L. Boren
Chairman
Senate Select Committee on Intelligence
Washington, D.C. 20510
Dear Senator Boren:
The following sentence which appeared in the Senate Select Committee on
Intelligence – Report on Preliminary Inquiry – “According to the memorandum,
Furmark also presumed that $2 million of the $8 million fjaid by the Iranians to
Chorbanifar went to Nir, as agreed to at a meeting among the financiers, Chorbanifar,
and Nir in May.” is not true and was never said by me. I know of no meetings
between Financiers (Khashoggi), Chorbanifar, and Nir in May or at any time in
1986 and was never told by anyone of any such meeting(s).
I have always stated that Mr. Khashoggi was paid eight million dollars by
Mr. Chorbanifar after he received the funds from the Iranian Covernment in the
summer of 1986 and that Mr. Khashoggi is still owed 10 million dollars. This was
stated by me in my meetings with Mr. William Casey, Mr. Charles Allen and Mr. Ceorge
Cave. Furthermore I testified to these facts before the Senate and House Intelligence
Committees.
I was never asked in the Senate or House Committee hearings about the above
quoted sentence. Had I been asked by the Senate Committee I would have flatly
denied ever making such a statement which to the best of my knowledge is not true.
Furthermore, Nir was never mentioned in the October 22, 1986 meeting.
I am surprised that I was not, contacted about this sentence prior to publication
in view of my testimony to your ,comrqittee.
I would greatly appreciate it if the Committee would review this matter and make
the appropriate revision to the report.
Very truly yours.
f Released nnJltl^J^S
iv K jotifison Nalionji SccM, Council
Roy M. Furmark
Manucher Ghorbanifar
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