he bans and the secrecy, Israel was able to charge Iran a high price, and make quite a profit; this profit went into the "Iran Contra" slush funds.

{p. 44} AT 12:30 P.M. on January 16, 1979, four helicopters had lifted off from the grounds of Tehran's Niavaran Palace, their rotors sweeping aside the snow. There was nothing to indicate to a would-be assassin which aircraft carried His Imperial Majesty Mohammad Reza Pahlavi Aryamehr, Shahanshah of Iran, King of Kings, Shadow of the Almighty, Center of the Universe.

The Shah's departure from Iran would bring about a tumultuous upheaval in the Middle East. It would also lead to a new threat to the existence of Israel, and ultimately bring my country into fierce conflict with the United States.

{p. 45} Oil production had come to a standstill. Scores of freighters lay idle in the Persian Gulf, waiting for customs officials to return to work. Moscow had sent an aircraft to pick up 70 Soviet oil researchers and their families. Arnericans and other foreign nationals crammed onto U.S. Air Force planes. Iran was out of control; for each fanatical white-shrouded protester the troops had shot down, another had sprung up to

fill the gap.

As their Imperial Majesties walked toward their silver and blue Boeing 707, two officers spontaneously turned to face each other, holding up a copy of the Koran for them to pass under. Then, as the street mobs shouted with joy and smashed the statues erected in his honor, the King of Kings, a small parcel of Iranian soil tucked in his pocket, took the controls of the aircraft and flew off into the sunless sky. The Shah's rule was over.

Israel decided to act fast to protect its interests. On board one of the last flights that El Al made into Tehran before the airport was closed were 48 Israeli aircrews, all wearing civilian clothes.

A few days later, with the full cooperation of the commander of the Iranian Air Force - who was later executed - 48 F-14 jets were flown out of Iran to an air force base in northern Sinai. (They were later sold by Israel to the Taiwanese.) As proof of the Carter administration's blindness, the U.S. had delivered these planes to the Shah in September 1978, even before the U.S. Air Force was supplied with its own. The Shah, whose regime was crumbling around him, had paid through the nose for them. The U.S. was relieved that the F14s had not fallen into the "wrong hands." The Israelis had corrected the situation.

{The following begins with some quotes from later in the book, to introduce the background to the Iran-Iraq war.}

{p. 172} While publicly mouthing words of peace, Peres had privately agreed to participate in the American double-game of arming both the Iranians and the Iraqis.

{p. 126} From March 1981 to the end of 1987 Iran spent the incredible sum of more than $82 billion on equipment sent from the United States, Israel, Europe, South America (especially Brazil and Argentina), and South Africa. The Iranians gratefully received it all - old tanks, aircraft (including old French Mirages from Argentina), TOWs, electronics, radar systems, small arms, artillery, Hawk air-to-ground

missiles, Chinese Silkworm missiles, North Korean Scud missiles, Katusha shells captured in Lebanon by Israel, cannons - hundreds of thousands of tons of weaponry, whether it came straight from the factory or was the remnant of some long-dead war. Vast profits were made by the middlemen.

Iran, maintaining an army of approximately 800,000 men, faced a formidable Iraqi military force which was adding to its already well-equipped arsenal from the Soviet Union and France. Iraq was soaking up sophisticated weapons - MiG fighters, SU fighters, and French Mirage 2000s. Like the Iranians, they too were spending a fortune. As arms suppliers, the Western world and the Soviet Union could rub their hands together in glee.

As someone has pointed out, if a question had been put to a computer about what needed to be done to: 1) get the Arabs off Israel's back; 2) part the Arabs from their money; 3) keep the Iranians contained - and part them from their money; 4) keep the oil flowing; 5) make sure the world recycled its old military equipment; 6) keep the Soviets happy; and 7) make a lot of arms dealers and defense contractors rich,

it could not have come up with a better solution than the Iraq-Iran

war.

{p. 68} It would be in Israel's interest to flood Iran with military equipment, but we had to be cautious. Much of the material we had was American, and if that went to Tehran without the release of the hostages and Carter's okay, there could be serious repurcussions in the U.S. Congress with its Democratic majority.

{p. 91} ... the U.S. embargo against Iran covered even commercial engines. The embargo had not been lifted, but now, to boost the airline, the Iranians were not only looking for spare parts for the old fleet but hoping to buy British Tristars.

I added up the bill. The grand total was one billion dollars, give or take a million. Israel's profit - 50 percent. The slush fund looked like it was going to do very well.

The Iranians screwed up their faces at the price. They knew Israel was ripping them off. But they had little choice.

{p. 120} In February 1987 a "contribution" was made to the West Australian Labor Party by our U.S. counterparts in the CIA. In gratitude for the use of Australian soil for the transfer of arms to Iran, Richard Babayan, a contract operative for the CIA, received a check for $6 million U.S. from Earl Brian, who was acting on behalf of Hadron, a CIA "cut-out." Babayan traveled to Perth and stayed at the home of Yosef Goldberg, an Australian businessman of Israeli origin who was well connected to Israeli intelligence and to the local Labor Party headed by Brian Burke, then premier of Western Australia. Babayan handed the check to Goldberg, who in turn gave it to Alan Bond in his role as the guardian of the John Curtin Foundation funds. This money was passed on by one of Robert Maxwell's companies in Australia to be held by the Pergamon Press Trust Fund in Moscow. Babayan later corroborated the details of this operation in a sworn affidavit.

Despite the high costs involved, profits were still made on the sales to Iran. At various times the fund reached peaks of more than $1 billion. At its height it stood at $1.8 billion, with money constantly coming in and going out - a huge turnover that would have made a successful conventional enterprise very envious. The Likud leaders running the government intended to use the money for three main purposes.

The first was to finance activities of Yitzhak Shamir's faction of the Likud Party. Between 1984 and 1989 no less than $160 million was funneled to Shamir's faction, handled by the deputy minister in the Prime Minister's Office, Ehud Ulmart, who was very close to the prime minister. Other funds were contributed to the whole Likud Party, especially to its 1984 and 1988 election campaigns. That amount totaled about $90 million.

Second, the slush fund helped finance the intelligence community's "black" operations around the world. These included funding Israeli-controlled "Palestinian terrorists" who would commit crimes in the name of the Palestinian revolution but were actually pulling them off, usually unwittingly, as part of the Israeli propaganda machine.

A key player in some of these operations was {p. 121} the former Jordanian Army Col. Mohammed Radi Abdullah, the man who was with Pearson and Davies when I made our approach to Davies. Today in his early 50s, Radi was decorated by King Hussein of Jordan for his bravery in the 1967 Middle

East war. However, his family fell out with the king because they were not willing to participate in the mass slaughter of Palestinians by the Jordanian Army in 1970. The family emigrated to London. The colonel married a woman related to Saddam Hussein and went about setting up a number of companies, including shipping offices in Cyprus and Sicily.

Radi became known as a businessman who championed Arab and Palestinian causes in Europe. But he missed his homeland and the days when he was lauded as a hero. He fell to the ways of the West, started drinking heavily and spent a fortune on gambling and women.

In the mid-1970s, to recoup his losses, Radi went to work for Pearson, who was supplying intelligence information to Israel. With Radi's unwitting help, Pearson began to acquire intelligence about Palestinian organizations in Europe. The way he did it was by selling arms to those organizations.

An arms dealer named John Knight, who ran a company called Dynavest Limited, located at 8 Waterloo Place, London SW1, and another dealer who operated out of Sidem International Limited, Appleby House, 40 St. James' Place, St. James' Street, London SW1, acquired arms from Yugoslavia. They would sell them to Radi, who would in turn sell them to the Palestinian terrorist, Abu Nidal, and other Palestinian groups. Radi was unaware of Pearson's Israeli connection, as were the others involved.

While it may seem curious that Pearson, a man working with Mossad, was encouraging a Jordanian to sell weapons to Israel's enemies, it was actually all part of a very cunning plot. In doing business with these groups, Radi learned what they were going to use their weapons for and unsuspectingly passed the information on to Pearson. Pearson, in turn, passed on to Mossad the intelligence about the movements of the groups and the number of weapons they had.

Based on Radi's unwitting tips, over a two-month period 14 or 15 Palestinians were wiped out. Word went out among the {p. 122} Palestinian groups that Radi was working for Israeli intelligence and, fearing for his life, he took a trip to Baghdad and presented his case to Abu Nidal himself. Abu

Nidal believed his story that he had been used - which he had - and put the word out that Radi was "clean." The blame was placed on Yasser Arafat's group - Palestinian factions at that time were warring among themselves.

Radi went back to his drinking and womanizing, and the money he made selling arms for Pearson all drained away. At that very vulnerable point, in 1978, Pearson stepped in again and offered Radi a 200,000 loan. This time, Pearson made it quite clear to him that the money was coming from an Israeli source. The desperate Radi accepted the loan and was recruited to work for an antiterrorist group in

Israel run by Rafi Eitan.

The group's methods were rather unconventional, one could say heinous, but it had operated successfully for years. An example is the case of the "Palestinian" attack on the cruise ship Achille Lauro in 1985. That was, in fact, an Israeli "black" propaganda operation to show what a deadly, cutthroat bunch the Palestinians were.

The operation worked like this: Eitan passed instructions to Radi that it was time for the Palestinians to make an attack and do something cruel, though no specifics were laid out. Radi passed orders on to Abu'l Abbas, who, to follow such orders, was receiving millions from Israeli intelligence officers posing as Sicilian dons. Abbas then gathered a team to attack the cruise ship. The team was told to make it bad, to show the world what lay in store for other unsuspecting citizens if Palestinian demands were not met. As

the world knows, the group picked on an elderly American Jewish man in a wheelchair, killed him, and threw his body overboard. They made their point. But for Israel it was the best kind

of anti-Palestinian propaganda.

In 1986, Radi was involved in another slush-fund black operation - the well-documented attempt to blow up an El Al plane. Or at least what was publicly perceived to be an attempt. In fact, it was a cold, calculated plan conceived by Rafi Eitan to discredit the Syrians. At a secret meeting in Paris, Eitan told Radi that he wanted to implicate the Syrian Embassy in London in terrorism and have all the Syrian diplomats thrown out of England.{p.123}

Radi had a 35-year-old cousin, Nezar Hindawi, living in London, who had two things going for him - he was friendly with the Syrian Air Force intelligence attache in London; and he had a problem with an Irish girlfriend who told him she was pregnant. Radi went to his cousin and offered him $50,000. At the same time he told Hindawi that he wanted him to do some work on behalf of Palestine that would also rid him of his troublesome girlfriend.

"This money I'm offering you," Radi told Hindawi, "is from our Syrian brothers on behalf of the Palestinians. We want to blow up a Zionist plane. All you have to do is make sure the girl gets onto an El Al plane with explosives in her bag."

Radi arranged for his cousin to meet the Syrian intelligence officer, and Hindawi later came away with the clear impression that what he was doing was for the Arab cause. In accordance with his briefing, Hindawi told his 32-year-old girlfriend, Ann-Marie Murphy, a chambermaid at the Hilton Hotel on Park Lane, that he loved her and wanted to marry her. He was eager to introduce her, his future bride, to his

old Palestinian parents who lived in an Arab village in Israel. He told her to go and visit them and receive their blessing. Then, when she arrived back in England, they would get married. Overjoyed, she agreed to go, not realizing that the address he gave her in Israel was bogus.

As far as Hindawi knew, the woman was going to be sacrificed. All he had to do was tell her that he wanted her to take a bag of gifts to his parents. But because he didn't want to risk her being stopped for having too much carry-on luggage, he would arrange for a "friend" who worked at the airport to pass her the bag when she entered the El Al departure lounge. She would pass through the regular Heathrow security checks and then be given the package containing the bomb.

Hindawi had been told that a Palestinian cleaner would pass the deadly package to Ann-Marie. In mid-April 1986, he kissed her goodbye and watched her walk through passport control to what he expected would be her death, along with that of all the other 400-plus passengers on board the

El Al jumbo jet.

In the El Al departure lounge, an Israeli security man dressed in casual clothes - the "Palestinian cleaner" - passed the girl the parcel. She took it. But within seconds she was asked to submit to {p. 124} a search. The security people, who were in on Rafi Eitan's plan, could not afford any accidents. When the bag was opened, plastic explosives were found in a false bottom.

Ann-Marie was rushed off to be interrogated by British security. Sobbing, she told the story of the rat of a

boyfriend. Police arrested Hindawi at the London Visitors Hotel, between Notting Hill and Earl's Court, after his brother convinced him to give himself up. He spilled the beans and told them that a Syrian intelligence officer had asked him to carry out the task.

But Radi was not implicated. He was under MI-5 protection. As a result, Margaret Thatcher closed down the Syrian Embassy in London. Rafi Eitan had had his way, Hindawi was jailed for 45 years, and Ann-Marie went home to Ireland where she gave birth to a daughter.

These were the kinds of black operations our slush fund was financing.

The third and last main purpose for the slush-fund money was to finance the housing projects in the West Bank and Gaza Strip for Jewish settlers who had been taking over Palestinian land there. Since many members of the U.S. Congress saw these housing projects as a provocation that would impede peace in the Middle East, a lot of U.S. aid to Israel prohibited the use of the money for building in the West Bank. As part of the coalition, the Labor Party, keen to participate in a peace conference, was also against a government project for West Bank housing.

The answer, as far as Likud was concerned, was to draw on the slush fund. Tens of millions of dollars were used in the West Bank and the Gaza Strip to help build the foundations for new Jewish settlements and to buy the land from the Arabs.

Although much land was simply confiscated and more taken through condemnation for government purposes, many Arabs, forbidden by the PLO to sell land to the Jews in the West Bank, nevertheless did so at inflated prices, even though they were putting their lives at risk should they be caught.

What they did was sell to various foreign Jewish front companies that were actually financed by the Joint Committee. Many West Bank Arabs became wealthy selling their land, taking the

{p. 125} money and emigrating to other countries. As far as Likud was concerned, it was money well spent, because it was encouraging the Arabs to emigrate, while leaving land for the Jews to move onto. Their houses would also be subsidized by the slush fund.

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