September 18, 2000
Iran-Contra & Wen Ho Lee
By Robert Parry
Over the last few years,
Republicans have trumpeted
suspicions that Democratic
fund-raising abuses in 1996
somehow helped communist
China steal nuclear secrets
jeopardizing U.S.
national security. Leading conservatives
accused President
Clinton and Vice President Gore of
“appeasement” and
possibly treason.
The extreme Republican
rhetoric, which rose in the months after President
Clinton survived impeachment
over the Monica Lewinsky case in 1999, set
the stage for the
harsh nine-month imprisonment of Los Alamos nuclear
physicist Wen Ho Lee,
who was released on Sept. 13 after a plea bargain
and an extraordinary
apology from a federal judge.
Yet, ignored amid the
dark suspicions about the Clinton-Gore administration
and the embarrassing
collapse of the Lee case was another startling set of
facts pointing in
a very different direction: to illegal U.S.-Chinese intelligence
collaboration implicating
the Reagan-Bush administration.
Little-noticed evidence
from the Iran-contra files reveals that it was the
Reagan-Bush administration
that opened the door to sharing sensitive
national security
secrets with communist China in the 1980s.
This clandestine relationship
evolved from China’s agreement to supply
sophisticated weapons
to the Nicaraguan contras beginning in 1984, a deal
with the White House
that entrusted China with one of the government’s
most sensitive intelligence
secrets, the existence of Oliver North’s contra
supply network.
In the years after
that secretly brokered deal, the Republican administration
permitted trips in
which U.S. nuclear scientists, including physicist Wen Ho
Lee, visited China
in scientific exchange programs. Those visits
corresponded with
China’s rapid development of sophisticated nuclear
weapons, culminating
in the apparent compromise of sensitive U.S. nuclear
secrets by 1988.
Seven years later,
in 1995, a purported Chinese defector walked into the U.S.
Embassy in Taiwan
and turned over a document. Dated 1988, the document
contained detailed
information about U.S.-designed nuclear warheads.
The document showed
that Chinese intelligence possessed the secrets of
the W-88 miniaturized
nuclear bomb by the last year of Ronald Reagan’s
presidency. China’s
first test of a light warhead similar to the W-88 was
conducted in 1992,
the last year of George H.W. Bush’s presidency.
In other words, the
secrets of the W-88 – the central concern about Chinese
nuclear espionage
– had been compromised before the Clinton-Gore
administration began.
Logic would dictate then that any serious investigation
into how Chinese intelligence
maneuvered into a position to glean U.S.
nuclear secrets should
focus on the Reagan-Bush years when the secrets
were lost, not the
Clinton-Gore years.
China’s Missile Shipment
An examination of the
Reagan-Bush time frame – and particularly the
Iran-contra files
– reveal how Chinese military intelligence ingratiated itself
with the U.S. government.
In 1984, the Reagan-Bush administration was
desperately seeking
a source of anti-aircraft missiles that could be smuggled
to the Nicaraguan
contras, a CIA-backed operation that was seeking to
overthrow the leftist
Sandinista government of Nicaragua.
By late 1984, the U.S.
Congress had prohibited additional U.S. military
support for the contras,
who had developed an unsavory reputation for
rampaging through
Nicaraguan villages, raping, torturing and murdering as
they went. One contra
director acknowledged the practice of staging public
executions of Nicaraguan
government functionaries. [For details, see Robert
Parry’s Lost History.]
Despite this congressional
contra-aid ban, the White House was determined
to secure surface-to-air
missiles that the contras could use to shoot down
Soviet-made attack
helicopters that had become an effective weapon in the
Nicaraguan government’s
arsenal. Operatives working secretly with Oliver
North, a Marine officer
assigned to the National Security Council staff, settled
on China as a source
for SA-7 missiles.
In testimony at his
1989 Iran-contra trial, North called the securing of these
weapons a “very sensitive
delivery.” For the Chinese missile deal, North said
he received help from
the CIA in arranging false end-user certificates from
the right-wing government
of Guatemala. North testified that he “had made
arrangements with
the Guatemalan government, using the people [CIA]
director [William]
Casey had given me.”
But China was opposed
to the Guatemalan government, which was then
engaged in a scorched-earth
war against leftist guerrillas. Because the
Guatemalan army had
massacred tens of thousands of Indians – including
the annihilation of
entire villages considered sympathetic to the guerrillas –
China was not willing
to sell missiles to Guatemala.
To resolve this problem,
the White House brought the Chinese communists
in on what was then
one of the most sensitive secrets of the U.S.
government: the missiles
were not going to Guatemala, but rather into a
clandestine pipeline
arranged by the White House to funnel military supplies
to the contras in
defiance of U.S. law. This was a secret so sensitive that not
even the U.S. Congress
could be informed, but it was to be shared with
communist China.
In fall 1984, North
enlisted Gaston J. Sigur, the NSC’s expert on East Asia, to
make the arrangements
for a meeting with a communist Chinese
representative, according
to Sigur’s testimony at North’s 1989 trial. “I
arranged a luncheon
and brought together Colonel North and this individual
from the Chinese embassy”
responsible for military affairs, Sigur testified.
“At lunch, they sat
and they discussed the situation in Central America,”
Sigur said. “Colonel
North raised the issue of the need for weaponry by the
contras, and the possibility
of a Chinese sale of weapons, either to the
contras or, as I recall,
I think it was more to countries in the region but clear
for the use of the
contras.”
North described the
same meeting in his autobiography, Under Fire. To avoid
coming under suspicion
of being a Chinese spy, North said he first told the
FBI that the meeting
had been sanctioned by national security adviser Robert
C. McFarlane. Then,
North went ahead with the meeting to gain the help of
communist China.
“Back in Washington,
I met with a Chinese military officer assigned to their
embassy to encourage
their cooperation,” North wrote. “We enjoyed a fine
lunch at the exclusive
Cosmos Club in downtown Washington.”
North said the Chinese
officials saw the deal, in which China supplied SA-7
missiles, as a way
to “stick it to the Soviets,” China’s chief rival in the
communist world. North
said the Chinese communists also saw the
collaboration as a
way to develop “better relations with the United States.”
Possession of this
knowledge – one of the Reagan administration’s most
politically dangerous
secrets – put Beijing in position to leverage U.S. policy
in the future.
With China’s assistance
on the missile deal secured, the shipment went
forward, although
with additional delays. Contra leader Adolfo Calero began
calling the ship carrying
the missiles “the slow boat from China.”
North noted that CIA
officers in the field soon got wind of the weapons
transfer. “So many
cables were coming in that [CIA director] Casey ordered
his stations to stop
reporting on this shipment,” North wrote.
When the missiles finally
reached Guatemala, the Guatemalan army was so
nervous about them
falling into the hands of leftist guerrillas that the army
gave the missiles
a military escort across the country.
The shipment hit another
snag when it reached Honduras. The Honduran
government balked
at distributing the missiles to the contras in their
Honduran base camps
near the Nicaraguan border.
“When they [the missiles]
were delivered to Honduras, it was, as I
remember, right on
the heels of a vote in which the Congress had voted
down again the president’s
request for [contra] aid, and the Honduran
government seized”
the shipment, North testified at his trial.
“I wrote a memo to
the national security adviser [McFarlane] and asked him
to have the president
call the president of Honduras … and ask him to
release that supply
of weapons because the resistance [the contras]
desperately needed
it,” North said.
Reagan agreed, but
his personal intervention prompted a subtle demand
from Honduran president
Roberto Suazo for a quid pro quo arrangement in
which Honduras would
receive increased U.S. aid in exchange. The
diplomatic minuet
dancing around this sensitive quid pro quo issue
apparently drew in
Vice President Bush during a visit to Honduras as
Reagan’s personal
intermediary.
Eventually, Honduran
authorities agreed to deliver the Chinese missiles to
the contras. In the
following months, the Reagan-Bush administration
increased aid levels
to Honduras.
As Iran-contra special
prosecutor Lawrence Walsh later wrote in his book
Firewall, “quid pro
quo exchanges had been commonly discussed at
policy-making levels
and had been almost routinely carried out.”
Also in connection
with third-country contra assistance, Reagan promised to
back trade legislation
sought by El Salvador, where North’s resupply
operation was based,
and the president granted concessions to Guatemala
and Panama, two other
countries helping out the contra cause, Walsh wrote.
Bush’s role in the
quid pro quos remained one of the last unanswered
questions of the Iran-contra
scandal.
After his election
defeat in 1992, Bush pardoned six Iran-contra defendants
effectively shutting
down Walsh’s investigation. In early 1993, Bush also
ducked Walsh’s request
for an interview that would have questioned Bush
about his personal
involvement in various parts of the scandal.
One of the interview
topics was to have been “Bush’s knowledge of or
involvement with Central
American or other countries in exchange for their
support of the contras,”
according to Walsh’s final report on the Iran-contra
affair. [See Vol.
1, p. 480.] One of those “other countries” could have been
communist China, where
Bush had served as the chief U.S. diplomatic
representative in
1974 and 1975.
With the quid pro quo
questions blocked by Bush’s mass Iran-contra
pardons and his refusal
to be interviewed, no additional light was shed on
what communist China
got out of the missile sale to the contras, what
China’s “better relations
with the United States,” as Oliver North put it, had
won for the People’s
Republic.
Page 2: Nuclear Secrets
In the years that followed,
U.S. nuclear scientists held a
number of meetings
with their Chinese counterparts to discuss
areas of mutual interest.
While the Americans
were under restrictions about what information could
be shared, it has
never been clarified exactly why these meetings were held
in the first place
– why the risk was taken that some U.S. scientist might
willfully or accidentally
divulge nuclear secrets.
These scientific contacts
in the 1980s sowed the seeds of the Wen Ho Lee
case.
In 1995, after the
Chinese agent delivered the so-called “walk-in” document
indicating that U.S.
nuclear secrets had been compromised by 1988,
investigators for
the U.S. Energy Department began focusing on U.S.
scientists who had
traveled to China during the 1980s. The investigators
developed a list of
a dozen names, including a lead suspect, Wen Ho Lee, a
Taiwanese-born naturalized
U.S. citizen.
As The Washington Post
reported, “Lee was at the top of the list because he
had traveled to China
in 1986 and 1988, and because he and his wife, Sylvia,
had taken an active
role in greeting visiting Chinese scientists” who toured
nuclear labs in the
United States. [WP, Sept. 17, 2000]
By 1998, amid the impeachment
drive to oust President Clinton, Republicans
on Capitol Hill got
wind of these investigations.
The Republicans eagerly
sought to link the espionage suspicions to
allegations of improper
Chinese donations to the 1996 Clinton-Gore
reelection campaign.
Democratic fund-raiser Johnny Chung had been
accused of funneling
a $30,000 donation from a Chinese military intelligence
front to the campaign.
By early 1999, word
was spreading about a Los Alamos espionage suspect
with an Asian name.
In March 1999, “Chinagate” exploded as a scandal with
front-page stories
by Jeff Gerth and James Risen of The New York Times
about possible Chinese
espionage at the Los Alamos nuclear lab.
Soon, Wen Ho Lee was
identified as the chief suspect and was fired for
transferring sensitive
classified material to his personal office computer.
On May 25, 1999, a
select House committee headed by Rep. Christopher
Cox, R-Calif., released
an 872-page report in three glossy, bound volumes.
The report described
how the Chinese government supposedly stole nuclear
secrets while the
Clinton administration dragged its feet on investigating.
The Cox report did
what it could to implicate the Democrats and absolve the
Republicans. A chronological
chart about the alleged espionage covered two
pages [p. 74-75] and
packed all the boxes describing evidence of espionage
into the years of
the Carter and Clinton administrations.
Nothing sinister appeared
in the 12-year swath of the Reagan-Bush years,
other than a 1988
test of a neutron bomb built from secrets that the report
said were believed
stolen in the “late 1970s,” the Carter years.
Only a careful reading
of the text inside the boxes revealed that the principal
security breaches
under review, particularly the stolen secrets of the W-88
miniaturized nuclear
bomb, occurred “sometime between 1984 and 1992,”
the Reagan-Bush years.
The first test of the lighter warhead occurred in
1992, the last year
of the Bush administration.
The illogic of blaming
secrets apparently lost during a Republican
administration in
the 1980s on Democratic fund-raising in 1996 didn’t stop
the stampede of media
pundits who latched onto the Republican allegations.
In spring 1999, “Chinagate”
filled a void in Clinton scandals left by Clinton’s
impeachment acquittal
in the Senate.
Dan Quayle, the former
vice president who then was testing the waters for a
presidential run,
accused the Clinton-Gore administration of “appeasement”
of China in “espionage
involving our most critical secrets.” [NYT, Sept. 16,
2000]
Other conservatives
saw a new opening for fund-raising. Larry Klayman’s
Judicial Watch sent
out a solicitation letter seeking $5.2 million for a special
“Chinagate Task Force”
that would “hold Bill Clinton, Al Gore and the
Democratic Party Leadership
fully accountable for election fraud, bribery and
possibly treason.
… Chinagate involves actions by President Clinton and
Vice President Gore
which have put all Americans at risk from China’s
nuclear arsenal.”
Eventually, more tempered
assessments emerged. A panel of intelligence
officials reviewed
the evidence and came away with far less certainty about
the significance of
Chinese espionage than the Cox committee believed.
The Chinese advances
“have been made on the basis of classified and
unclassified information
derived from espionage contact with U.S. and other
countries’ scientists,
conferences and publications, unauthorized media
disclosures, declassified
U.S. weapons information, and Chinese indigenous
development,” the
panel reported.
The intelligence experts
could not decide which sources had been most
important or what
the Chinese had gained from the various strategies.
In June 1999, a study
by the President’s Foreign Intelligence Advisory Board
– chaired by former
Sen. Warren Rudman, R-N.H. – concluded that the
spying probably was
less than “widely publicized.” Rudman’s panel also
found that the W-88
secrets were in the hands of other federal agencies by
1983, so the leak
could have come from elsewhere than Los Alamos.
The board also judged
that suspicions had unfairly settled on Wen Ho Lee
because of his Chinese
heritage.
Finally, on Sept. 7,
1999, The New York Times, which had stoked the
“Chinagate” scandal
six months earlier, retreated from its overheated
coverage. The new
article by William J. Broad noted that the evidence was
much more tenuous
than the Cox report had represented.
“A review of the dispute,
based on months of interviews and disclosures of
weapons and intelligence
secrets, suggests that the congressional report
went beyond the evidence
in asserting that stolen secrets were the main
reason for China’s
breakthrough,” Broad wrote.
Though the intense
spy fever had broken, its consequences had not played
out. The Justice Department
obtained a 59-count indictment against Wen Ho
Lee for mishandling
classified material and arranged to have him held in
solitary confinement
with his cell light on at all times. The 60-year-old
scientist was allowed
out of his cell for one hour a day and allowed to shuffle
with leg shackles
around a prison courtyard.
After nine months of
incarceration, a key FBI witness against Lee
acknowledged overstating
some of the evidence and infuriated U.S. District
Judge James A. Parker.
At a court hearing on Sept. 13, Parker accepted
Lee’s plea bargain
to a single count of mishandling classified material and
freed the scientist.
The judge said he had
been “led astray” by the U.S. government and
apologized to Lee
for the “demeaning, unnecessarily punitive conditions”
under which Lee was
held.
Parker allowed Lee
to go free with no additional prison time. Still, federal
prosecutors said they
will compel Lee to make a full explanation of why he
downloaded the classified
data. After the plea bargain, some of Lee’s
associates offered
a fairly innocuous explanation. They said Lee felt he
needed the data so
he could continue to do unclassified work if he lost his
job at Los Alamos,
The Washington Post reported. [WP, Sept. 17, 2000]
Remaining Questions
Still, the larger suspicions
of “Chinagate” remain a backdrop of the 2000
election, with President
Bush’s son seeking to reclaim the White House for
the Republicans. Though
not alluding directly to the espionage allegations,
Texas Gov. George
W. Bush’s campaign has run ads showing Vice
President Gore meeting
with saffron-robed Buddhist monks in 1996, an
allusion to the Chinese
fund-raising issue that sparked the “Chinagate”
firestorm.
Given the likely role
of former President Bush in his son’s administration,
another question that
begs answering is why the Reagan-Bush
administrations allowed
exchanges between Chinese and U.S. nuclear
scientists in the
1980s and whether those arrangements were linked to
China’s secret support
for the contras.
Was President Reagan’s
willingness to scratch the back of governments
that lent a hand to
the contras a factor in the cozy, albeit secret, U.S.-China
relationship? Was
there a U.S.-China quid pro quo – as there apparently was
for other countries
– and, if so, what did the quid pro quo entail?
While those questions
might never be answered, there can be no doubt that
the Reagan-Bush administration
did share at least one very sensitive secret
with the communist
Chinese: that the White House was defying U.S. law in
1984 by arranging
military shipments to the contras.
That secret stayed
hidden from the American people and from the U.S.
Congress until the
Iran-contra scandal was finally exposed two years later.
______
In the 1980s, Robert
Parry broke many of the Iran-contra stories for The
Associated Press and
Newsweek.