Ousted from the CIA by President Carter, George W.H. Bush would return to the center of national politics as Vice Presidential candidate on Ronald Reagan’s ticket in 1980. The lesson of Nixon’s secret sabotage of Johnson’s peace plan to steal the presidency from the Democrat candidate had not been lost on the Republicans, particularly on a deep-political animal like Bush. Like Johnson in 1968, Carter was hoping to tip the balance in his favor and win a second Democrat term by securing the release in October 1980 of 52 hostages who had been captured in Tehran’s U.S. embassy one year prior, in retaliation for Carter’s unhappy decision to grant political asylum to the Shah fleeing the Islamic Revolution. Negotiations with Iran were about to succeed, and the return of the hostages was imminent, but Carter’s “October Surprise” was sabotaged by a team of Republicans including George Bush and Robert Gates, with the help of an Israeli intelligence officer who acted as intermediary with Iran, and set a meeting in Paris in October 1980. Presenting Iran with an overbid on Carter’s deal, the Bush team reached a secret agreement to delay the release of the hostages in exchange for illegal arms sales to Iran. Iran was then at war with Iraq, which was officially receiving arms from the U.S. Deprived of his October Surprise like Johnson before him, Carter lost the elections. The hostages were finally returned on January 21st, 1981, the very day of Reagan’s inauguration, giving him a boost of popularity from the start. Weapons began to be shipped to Iran in February 1981.

Reagan's Presidency was the “golden age” of the military-industrial complex. William Casey, who moved from Reagan’s Campaign Manager to Director of the CIA, turned the CIA back into the tool of imperialism that it was at its beginning. He relied on the CIA’s competitor the DIA (Defense Intelligence Agency), to force the CIA into supporting his policy by publishing a document entitled « The Soviet Role in Revolutionary Violence », which convinced Reagan and shaped his militaristic foreign policy. Thanks to the Strategic Defense Initiative, a space defense plan better known as “Star Wars”, the defense budget exploded, reaching for the first time $1 Trillion.

President Reagan was also the oldest President in the history of the United States. Subject to long naps but with a short attention span, he delegated most of his powers, leaving Bush to act on his own initiative in many areas. According to White House Press Secretary James Brady, “George [was] involved in all the national security stuff because of his special background as CIA director” (quoted by Webster Tarpley, 1991). Through a series of directives, Bush was placed at the control center of all secret operations. He therefore played a key decision-making role in the so-called Iran-Contra scheme, which involved two distinct operations: firstly, the secret arms sales to Iran, which continued after the release of the hostages; and secondly, the shuffling of the profits from these sells to support the Contras, terrorists groups opposed to the Nicaraguan revolutions.



The sale of arms to Iran, which violated an official embargo, was effectuated through Israel, who saw the benefit of having its two worst enemies, the Iraqis and Iranians, brutally killing each other. In sum, Iran secretly received 128 American tanks, 10,000 artillery shells, 3000 air to air missiles, 4,000 guns and nearly 50 million cartridges. Simultaneously, 24 U.S. arms firms exported weapons legally to Baghdad, including biological weapons. Iran and Iraq fought for eight years (1980-1988), much to the benefit of the Israeli-American military-industrial complex, and the operations would help forge deep links between American and Israeli intelligence services. In 1981, for example, photos obtained by the American KH-11 spy satellite made it possible for Israel to destroy the French-made Iraqi nuclear center in Osirak, on June 7th, 1981.



The profits generated by the sale of arms to Iran will be siphoned off to Latin America to support the Contras, militias opposed to the Sandinista revolutionaries in Nicaragua (named in memory of Augusto Sandino, the democratic President assassinated in 1934). The Contras had no support among the Nicaraguan people, and brought a reign of terror to the villages. Alerted by reports of cruelty, including murder, rape, torture, mutilation, kidnapping and racketeering, the Carter administration had discontinued U.S. support for the Contras. In 1982 Congress passed the Boland Amendment, completed in 1984, which prohibited any governmental entity to support, directly or indirectly, paramilitary operations in Nicaragua. But the National Security Council and the CIA circumvented the ban, secretly training, arming and funding the Contras in Honduras, thereby maintaining a Nicaraguan civil war that would claim 30,000 lives. Delivery of weapons to the Contras came in large part from Israel as well: some had been confiscated from the Palestine Liberation Organization during the invasion of Lebanon in 1982. Others were purchased in Poland and Czechoslovakia and smuggled through Yugoslavia. In Latin America, the shipments went through Honduras, Bolivia and Panama. On October 25th, 1984, the Associated Press disclosed a manual written by the CIA for the Contras, entitled Operaciones guerra de guerrillas in sicológicas (Psychological Operations in Guerrilla Warfare). The manual explains how “Armed Propaganda Teams” can build political support for the Contras through intimidation, violence and manipulation of information. It recommends “selective use of violence for propagandistic effects” and stresses that, in order to “neutralize” politicians, “if possible, professional criminals will be hired, to carry out specific selective jobs”. To turn the people against the socialist government, it is recommended that they “[lead] demonstrators into clashes with the authorities, to provoke riots or shootings, which lead to the killing of one or more persons, who will be seen as the martyrs; this situation should be taken advantage of immediately against the Government to create even bigger conflicts”. It is this same technique that will be employed, but without success, against Venezuelan president Hugo Chavez on April 11th, 2002.



The press’ unveiling of the “Iran-Contra” scandal will bring it to an end in 1986. A congressional committee will indict a “cabal of zealots” as having nothing but a “disdain for the law”, among whom would be Lieutenant Colonel Oliver North of the National Security Council. Bush, who had learned to tread softly, narrowly escaped charges, despite evidence of his direct contact with the Cuban Felix Rodriguez, one of the key men in the Nicaragua operations. Rodriguez was, as documented above, a veteran of the Bay of Pigs, and a suspect in the Kennedy assassination. Once President, Bush pardoned all those indicted in the investigation, and his Presidential pardon canceled the trial in which he would have been called to testify.



The covert operations of the Reagan-Bush administration also had important repercussions in the Republic of Panama, a country ostensibly liberated from the Columbians in 1903 by the Americans, an effort allowing the U.S. to control the future of the Canal Zone. In 1978, Jimmy Carter signed a treaty with President Omar Torrijos providing for the transfer of the Canal Zone to the Panama government and the evacuation of American occupation troops by the end of the 20th century. But the CIA maintained close ties since 1968 with the right arm of Torrijos and Chief of Intelligence, Major Manuel Noriega, whose power relies heavily on narcobusiness. Eight months after the accession to power of the Reagan-Bush team, July 31st, 1981, Torrijos’ staff plane explodes in midair, and Noriega is placed the supreme commander of the armed forces and the Chief Executive of the country. While the NSC and the CIA extend their actions against the Sandinistas in Nicaragua, Noriega aided the delivery of arms to the Contras. The aircraft being used to deliver weapons to Panama would depart from the airport in Mena, Arkansas, later to return under military protection with cocaine purchased from cartels in Colombia. One of the key figures involved in this double trafficking was an Israeli man named Michael Harari, former head of covert operations at Mossad. He had become essential to Noriega since 1982, ensuring his safety through a team of Israeli security personnel and enemy surveillance, as well as money laundering services through Swiss banks. Harari’s main CIA contact was Felix Rodriguez. In this way, the CIA became a major player in the explosion of cocaine trafficking and consumption in the 80s. Before that, it had facilitated the trafficking of heroin from Asia in the 70s, during the wars in Vietnam and Afghanistan, as was revealed by journalist Gary Webb in 1997 (Dark Alliance: the CIA, the Contras, and the Crack Cocaine Explosion, 1999).



In an attempt to defuse the Iran-Contra scandal, the Reagan-Bush administration decided to turn against Noriega. In 1987 he was formally charged with drug trafficking and racketeering in the United States. The Senate Subcommittee on Terrorism, Narcotics and International Operations concluded that, “the saga of Panama’s General Manuel Antonio Noriega represents one of the most serious foreign policy failures for the United States. […] It is clear that each U.S. government agency which had a relationship with Noriega turned a blind eye to his corruption and drug dealing, even as he was emerging as a key player on behalf of the Medellin Cartel”.1 In December 1989, under pretext of the execution of an American soldier by Panamanian soldiers, President George Bush sent 26,000 troops to Panama as part of Operation Just Cause, causing thousands of deaths, mostly civilians, and the exodus of 20,000 or 30,000 refugees.