Russia's Prime Minister and the October Surprise

By Robert Parry


On May 12, U.S. reporters rushed out stories about Russia's new prime minister-designate Sergey V. Stepashin and the new crisis confronting Russia's democracy.

But the reporters didn't mention Stepashin's role in a troubling chapter of American "lost history," an omission suggesting that Russia's is not the only democracy in trouble.

In 1992-93, as chairman of the Supreme Soviet's Committee on Defense and Security Issues, Stepashin oversaw an official investigation into what Moscow's intelligence files revealed about Republican secret activities in 1980 aimed at undercutting President Carter's desperate efforts to free 52 American hostages held in Iran.

The long-simmering allegations of Republican sabotage were known as the "October Surprise" controversy, named after GOP suspicions that Carter was hoping to free the hostages right before the November elections.

Instead, according to a variety of Iranian officials and foreign intelligence operatives, Republican emissaries, led by Ronald Reagan's campaign director William J. Casey, negotiated a secret deal to delay the hostages' freedom. The hostages were freed on Jan. 20, 1981, minutes after Reagan was sworn in.

Stepashin undertook the review of Russia's intelligence files at the request of Rep. Lee Hamilton, D-Ind., who was head of a congressional task force assigned to examine the controversy in 1992. Hamilton sent Stepashin the request on Oct. 21, 1992, presumably because some members of the bipartisan House task force suspected that the October Surprise story might have originated as Soviet "disinformation."

By fall 1992, under pressure from then-President George Bush and other Republicans, Hamilton already had settled on a finding that there was "no credible evidence" to support the charges that the Reagan-Bush campaign had sabotaged Carter's hostage negotiations.

But on Jan. 11, 1993 � just two days before Hamilton was scheduled to announce his conclusions � Stepashin reported back with the results of his internal Russian investigation.

Translated by the U.S. Embassy in Moscow and forwarded to Congress, Stepashin's six-page report stated that Moscow possessed detailed information about secret initiatives undertaken by the Reagan-Bush campaign to negotiate a delay in the hostages' freedom.

Stepashin's findings implicated George Bush, Ronald Reagan, William Casey and Robert Gates in the pre-election machinations. "William Casey, in 1980, met three times with representatives of the Iranian leadership," Stepashin's report read. "The meetings took place in Madrid and Paris."

At the Paris meeting in October 1980, "R[obert] Gates, at that time a staffer of the National Security Council in the administration of Jimmy Carter, and former CIA director George Bush also took part. � In Madrid and Paris, the representatives of Ronald Reagan and the Iranian leadership discussed the question of possibly delaying the release of 52 hostages from the staff of the U.S. Embassy in Teheran."

Stepashin's report also described President Carter's secret offers to Iran. One key meeting occurred in Athens in July 1980 with Pentagon representatives agreeing "in principle" to deliver "a significant quantity of spare parts for F-4 and F-5 aircraft and also M-60 tanks � via Turkey," according to Stepashin's report.

In return, Iranians "discussed a possible step-by-step normalization of Iranian-American relations [and] the provision of support for President Carter in the election campaign via the release of American hostages."

Stepashin wrote matter of factly about this geopolitical bartering. Heobserved that both the Reagan campaign and the Carter administration "started with the proposition that [Iran's leader] Imam [Ruhollah] Khomeini, having announced a policy of 'neither the West nor the East,' and cursing the 'American devil,' imperialism and Zionism, was forced to acquire American weapons, spares and military supplies by any and all possible means."

The Republicans just won the bidding war. Nevertheless, President Carter had the constitutional authority to conduct negotiations with foreign powers. The Republican campaign did not.

Stepashin also described how the Reagan administration fulfilled its debt to Iran. "After the victory of R. Reagan in the election, in early 1981, a secret agreement was reached in London in accord with which Iran released the American hostages, and the U.S. continued to supply arms, spares and military supplies for the Iranian army," Stepashin wrote.

The deliveries were carried out by Israel, often through private arms dealers, his report said. Spares for F-14 fighters and other military equipment went to Iran from Israel in March-April 1981 and the arms pipeline stayed open into the mid-1980s.

"Through the Israeli conduit, Iran in 1983 brought surface-to-surface missiles of the 'Lance' class plus artillery of a total value of $135 million," Stepashin's report stated. "In July 1983, a group of specialists from the firm, Lockheed, went to Iran on English passports to repair the navigation systems and other electronic components on American-produced planes."

The tap for Iranian-bound arms opened wider in 1985, with the Iran-contra shipments.

Stepashin's report matched other information that the House task force possessed. The Israelis, indeed, had shipped U.S. military spares to Iran in the early 1980s, with the acquiescence of senior Reagan administration officials.

But the task force finessed the evidence of secret Reagan-approved arms shipments in the early 1980s by arguing that the deliveries did not prove a "quid pro quo" dating back to 1980.

Hamilton's task force also had received multiple corroboration about October Surprise meetings from senior Iranian officials, French intelligence officers and intelligence operatives from Israel and other Middle East nations.

[Since then, Palestinian leader Yasir Arafat has admitted to former President Carter that Republicans also approached the Palestine Liberation Organization with a plan to delay the hostages' release.]

Still, the House task force rejected the October Surprise charges, accepting the denials � and strained alibis � of senior Republicans, including President Bush, who was running for vice president in 1980 and was seeking reelection as president during the task force investigation.

By early January 1993, Hamilton had shipped the dismissive findings to the government printing office. The task force report was slated for release on Jan. 13.

So, the arrival of Stepashin's report on Jan. 11 added a new complication. The two days offered inadequate time for any serious examination of the Russian material. The record shows only that a U.S. Embassy political officer was dispatched to press the Russians for more details.

The Russians stood by their report, but would not divulge the intelligence sources and methods. They simply declared that the information came from Stepashin's Committee on Defense and Security Issues, roughly the equivalent of the Senate Intelligence Committee.

Offering Hamilton a possible way out, the U.S. Embassy officer speculated that Moscow's report might be "based largely on material that has previously appeared in the Western media."

Though supported by no evidence, the embassy speculation was included in the "confidential" cable to Hamilton. The suggestion was quietly accepted by the task force. Still, nearly as serious as the October Surprise charge was the fact that the Russians were claiming that they held sensitive evidence implicating two U.S. presidents [Reagan and Bush] and two CIA directors [Casey and Gates] in serious crimes of state.

If true, the Soviets were in a position to blackmail top U.S. officials for 12 years. The full October Surprise story also remains politically sensitive today given the status of Bush's son, Texas Gov. George W. Bush, as the Republican front-runner for the 2000 election.

But Stepashin's report did not change Hamilton's plans. On Jan. 13, 1993, Hamilton and other task force officials announced the "debunking" of the October Surprise story. No one made any mention of Stepashin's report or the other evidence that contradicted the official findings.

The task force simply stuck Stepashin's report into a box that was stored away with other documents from the October Surprise investigation.

In late 1994, nearly two years later, I received permission to review the unclassified records from the task force.

I was led to dozens of boxes stored in a former Ladies Room of an obscure office off the Rayburn House Office Building parking garage. In the boxes, I found not only the unclassified records, but a number of secret documents that apparently had been left behind by accident. One of the classified records was the "confidential" embassy cable containing the translation of Stepashin's report.

While a stunning example of secret U.S.-Russian cooperation in the post-Cold War era, the Stepashin report still begged the larger question of whether it was based on solid intelligence from the KGB's own sources in Europe, North America and the Middle East, or whether it was simply "blow back" from Western media reports as the U.S. Embassy speculated.

In the weeks after discovering Stepashin's report, I contacted a well-placed government source in Europe who had close ties to senior Russian officials. At my request, the source inquired through his Moscow contacts about the basis for Stepashin's report.

Later, the source called me back. He said the Russians were insisting that the intelligence was their own and that the information was reliable. The source chuckled at the notion that the Russians would just repackage some Western news clips and palm them off on Congress.

Noting the Russian need for U.S. financial assistance in early 1993, the source added that the Russians "would not send something like this to the U.S. Congress at that time if it was bullshit." Instead, the Russians considered the Stepashin report "a bomb" and "couldn't believe it was ignored."

Little did the Russians know that not only did the House task force ignore the Stepashin report, but actually stuck it in a box that was piled unceremoniously on the floor of a former Ladies Room off a congressional parking garage.

With President Boris Yeltsin's decision to appoint Stepashin as Russian prime minister, the Stepashin report is relevant again today. The questions now are twofold:

Did the House task force behave irresponsibly in 1993 by ignoring an important piece of evidence in a major federal crime � a conspiracy between senior Republicans and Iranians to prolong the captivity of kidnapped American diplomats, a move intended to fix the outcome of a presidential election?

Or did the now-designated prime minister of Russia unfairly lodge false allegations against presidents Reagan and Bush as well as CIA directors Casey and Gates?

The answers could be important not only as a test for the health of the Russia's democratic institutions but those of America as well.

[For details on the House task force report and its unusual logic, see Robert Parry's Trick or Treason. For the full text of Stepashin's report, see Parry's The October Surprise X-Files.]

Copyright © 1999 Consortium For Independent Journalism.
All rights reserved.
Republisheded with the permission of the
Consortium For Independent Journalism

Online Journal Home Bush Special Reports Media Church & State Racism CNP Kangas

Copyright © 1998-2001 Online Journal. All rights reserved.