American Scandal - Iran Contra: Bud | 1

Episode Date: November 27, 2018

In July of 1985, the National Security Advisor to President Reagan, Robert “Bud” McFarlane puts a plan in motion that could change the course of history and turn the Reagan administration upside down. Need more American Scandal? With Wondery+, enjoy exclusive seasons, binge new seasons first, and listen completely ad-free. Start your free trial in the Wondery App, Apple Podcasts, Spotify or visit https://wondery.app.link/rUic7i1hMNb now.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

You're listening to the first episode of this American Scandal season. With Wondery+, you can binge the remaining episodes, listen to new episodes early, and explore more exclusive seasons completely ad-free. Start your free trial of Wondery Plus in the Wondery app, Apple Podcasts, or Spotify today. It's February 9th, 1987, 11 p.m. Robert Budd McFarlane, the former National Security Advisor to President Reagan, is locked away in his home office in Bethesda, Maryland, a suburban community on the edge of Washington, D.C., furiously typing away.

Bud's wife, Jonda, has already gone upstairs to bed, but Bud can't sleep. He has a lot on his mind. For weeks, he's been mired in a political scandal that's rocked the Reagan administration to its core, a scandal that threatens to take down the president and everyone around him. It involves backroom deals and shady arms dealers, offshore bank accounts in the Cayman Islands, and illegal covert operations. They're calling it the Iran-Contra affair. Bud is known for being tightly controlled, even intense. But all day long, he's been feeling unhinged

as he hears voices of newscasters swirling through his head. Good evening. Tom, officials here are calling it the worst scandal of the Reagan presidency and costing him a top advisor. The president was still maintaining today that his Iranian arms deal was not a mistake. The attorney general said later former National Security Advisor McFarland had also been aware of the scheme. A major turning point was a few weeks back during

Reagan's State of the Union address. Bud hasn't been able to get it out of his mind. I took a risk with regard to our action in Iran. It did not work, and for that I assume full responsibility. The goals were worthy, but we did not achieve what we wished, and serious mistakes were made in trying to do so. Serious mistakes, with Budd's name all over them. His misdeeds are public knowledge now, and people in Congress want to exact their pound of flesh. In just a few hours, Budd is scheduled to appear before the Tower Commission, an investigative body appointed by Congress to look into the Iran-Contra scandal. He'll be forced to answer difficult questions about his activities,

potentially illegal activities, during his time in the White House. Bud is a Marine. Marines are trained to fight, not navigate a swamp of media scrutiny and partisan politics. His entire life, all he wanted to do was serve his country. Now he feels like he's failed. And if he does go down, all his ideas for international relations will never be heard. So he types and types deep into the morning, essays covering everything from arms control with Russia

to diplomatic relations in the Middle East. Recommendations for his former boss, President Reagan, who didn't want to listen, even when Bud had his ear. Maybe he'll listen now. Bud writes something else, too. A handwritten note to his wife, Jonda. The woman with whom he spent the last 33 years of his life, asking for her understanding and forgiveness. He gets up from his desk, walks to the kitchen, and puts the stack of papers on the counter with the letter to his wife on top.

Then he pours himself a glass of red wine, reaches in his pocket, and pulls out a bottle of pills. Valium. He puts one in his mouth and uses the wine to wash it down. And then another. And another. Methodically until every pill in the bottle is gone. In all, Bud swallows 30 tablets.

He bows his head and says a quick prayer before heading upstairs. When he climbs into bed, Jonda is still awake. She can sense something is different. Bud, what's wrong? Nothing. Bud reaches over and takes her by the hand. I just want to hold you for a little while. Okay?

Good night. Good night. Jonda kisses him on the cheek. It's all part of their nightly routine. But tonight, Bud knows it might be the last. He turns off the light, closes his eyes, and waits. In the past decade, Boeing has been involved in a series of scandals and deadly crashes waits. save the company's reputation. Make sure to listen to Business Wars wherever you get your podcasts. From Wondery, I'm Lindseyra was never supposed to be a scandal.

It was never supposed to go as far as it did. It was supposed to help make America more safe and secure. But here's the thing about the characters in this story. Many of them are unreliable narrators. It's not that they're liars, although there is plenty of lying in this story. But the way people remember events can be selective, and most of the characters in the story wish things had turned out differently. Robert Bud McFarlane isn't as well-known as some of the other players involved. Bud worked behind the scenes, but it's impossible to tell the story of Iran-Contra without bringing him in. Because Bud is the man who started it all. Iran-Contra is the story of two covert operations in two seemingly unrelated countries on opposite sides of the globe,

Iran and Nicaragua. Two countries, two operations, but one scandal that nearly brought a president to his knees. It's a scandal that implicated the highest offices of government. It would result in a seven-year investigation and three months of nationally televised hearings that asked fundamental questions about the nature of democracy. How could a complex, highly involved operation like this happen without congressional oversight? Just what did the president know and when? Is he accountable or can laws be broken in the name of the greater good? That's what we'll be exploring in this five-part series, Iran Contra. This is Episode 1,

Bud. It's early morning on October 23rd, 1983, in Beirut, Lebanon, three years before Bud McFarlane swallows those pills. Two Marines stand guard outside the main entrance of the Battalion Landing Team Headquarters, otherwise known as the BLT. It's a four-story building on the edge of the tarmac of Beirut's International Airport and home to a large force of U.S. Marines who are inside the building asleep in their bunks. Lebanon is in the midst of a violent civil war, and the Marines have been sent there by President Reagan to help keep the peace. Marines have been sent there by President Reagan to help keep the peace. It's a dangerous mission, but the barracks are well fortified,

surrounded by barbed wire, sandbag barricades, and most importantly, a six-foot-tall steel fence. The sergeant-at-arms, along with his sentry, stand at the ready just outside the building's main entrance. Looking out into the early morning light, it's quiet. Airport traffic doesn't start to pick up until sunrise. So when twin beams from what looks like a delivery truck appear in the distance, the sergeant is surprised. Hey, are we expecting any deliveries today? Not that I know of, sir. The truck continues into an asphalt parking lot 200 yards away from the BLT and stops, then turns north and begins driving towards the marine compound. Slowly at first, but then it picks up speed. As it approaches the barbed wire fence on the perimeter,

the driver suddenly floors it and the truck barrels through. The sergeant quickly grabs his radio as the truck weaves its way through a maze of sandbag bunkers. A large truck is bearing down on me. Then he turns to this entry. Lock and load your weapon. Yes, sir. On my command. The truck picks up speed, heading straight for the entrance.

Fire. The bullets have no effect on the truck's progress as it smashes through the gate and into the heart of the building's lobby where it finally skids to a stop. 2,500 pounds of TNT leave behind a smoldering crater 40 feet wide, 30 feet deep, and hundreds of peacekeepers dead. It's 2 a.m. in Augusta, Georgia. Bud McFarland is asleep in a hotel room when he gets the call. Marines are dead in Beirut. He doesn't know all the details, but he does know this.

The U.S. military is under attack. He's only six days into his new job as national security advisor to President Reagan and on his first trip with the president in this role. Bud was a compromise choice for the national security position. He's loyal, polite, and efficient, but a threat to no one. It's a job he doesn't feel completely prepared for. He told several close friends a few days earlier, this job is way beyond me. They should have gotten someone better like Kissinger. Now, faced with an actual crisis situation, Budd quickly leaps into action, calling the president

and secretary of State George P. Schultz, who decide to return to Washington immediately. At 8.37 a.m., President Reagan makes a statement from the South Lawn, expressing grief for the peacekeepers and their families, and then assures the public they will not allow someone of such a bestial nature to drive the United States out of the region. At 9 a.m., Bud and President Reagan enter the Situation Room for an emergency meeting. The president's cabinet is waiting. Reagan gets right to the point. Priority number one, find out who's responsible and smoke them out. It doesn't take long for the intelligence to report that Iran is behind the terrorist attack,

and Bud knows exactly where the terrorists are. The Bekaa Valley, a fertile region about 100 kilometers east of Beirut. Bud knows Lebanon well. He came to the White House directly from Beirut, where he worked on the ground. He knew many of the Marines who were killed by the truck bomb. And more importantly, he knew what happened to them could have been prevented if only people had listened. For months, he has tried to get the Reagan administration He knew what happened to them could have been prevented if only people had listened.

For months, he has tried to get the Reagan administration to take a more proactive stance, to get the Marines off of the airstrip and turn them loose on terrorists operating in the region. But no one listened. Many of the cabinet didn't want to get involved. Reagan deferred to his team of advisors. The result was paralysis. And now, 241 dead American servicemen. In the past, Bud was on the outside looking in, but now he's the national security advisor. His recommendation to the president is firm, launch an airstrike, take them out. But there are other voices in the room, louder voices. Two in

particular, Secretary of State George Shultz and Secretary of Defense Caspar Weinberger. The two men couldn't be further apart. Shultz with his gray thinning scalp and light eyes, Weinberger with brown hair and dark piercing eyes. But more importantly than their appearance, the two men don't particularly like each other, and they disagree on everything. Schultz sides with Budd. He believes the U.S. should strike back. He's a former military man, like Budd,

and he isn't afraid to use force. But Secretary of Defense Weinberger vehemently disagrees. The Vietnam War taught Weinberger the military should only be used as a last resort and only with a national political consensus. His suggestion? Get the Marines out of there as soon as possible. Bud all but begs the president to take action, but Reagan doesn't listen. He sides with Weinberger and within a matter of months, the peacekeeping force is withdrawn. When asked by Newsweek what prompted the U.S. to pull out of Lebanon, Budd tells them, paralysis.

In Budd's eyes, the Beirut bombing is a crippling defeat at the hands of terrorists, a catastrophe that can never happen again. The price is too high. Budd is a soldier, and he learned a different lesson from Vietnam during his two tours of active combat duty. In the face of a dangerous enemy, there's only one thing to do. Fight back. So Bud steals himself. He resolves to break the political standstill crippling the country. But to do that, he'll need the president's trust. When Ronald Reagan ran for president, he employed a simple campaign slogan, let's make America great again. And it resonated with the American people.

Reagan beat Jimmy Carter in a landslide. Reagan's victory was, in no small part, due to his foreign policy ideas, ideas authored largely by Bud McFarlane. foreign policy ideas. Ideas authored largely by Bud McFarlane. From the very beginning of his tenure as National Security Advisor, Bud knows he's the odd man out. Reagan's cabinet is filled with wealthy men like George Shultz and Caspar Weinberger, titans of business who came into their jobs with money, fame, and power earned in the private sector. But not Bud. Bud is a career public servant. But Reagan sees something in Bud. And Bud is determined to prove the president chose the right man for the job. Bud has always dreamed of making a difference in the international realm. He served in Korea,

Japan, and Vietnam, is a fierce patriot, and wants to serve his country. But none of Reagan's advisors are sure he has the abilities or the skills to serve his country. But none of Reagan's advisors are sure he has the abilities or the skills to negotiate his way through the strong personalities who surround the president. His methods are quiet. He listens rather than confronts. But over the next few months, Bud earns Reagan's trust. He is loyal and knowledgeable with well-thought-out foreign policy ideas. And most importantly, Bud is humble. He ingratiates himself to the president. Soon, he and his wife are invited to private dinners in the White House dining room with the president and the first lady. As Bud's friendship with the

president deepens, Reagan values more and more what Bud has to say. They have one-on-one meetings three to four times a day. He has walk-in privileges in the Oval Office. And Bud begins to proudly sign his memos, Robert McFarland for the president. Soon it's clear to everyone that Bud is Reagan's top man. And a lot of people wonder why. Maybe it's because Bud's policy ideas helped put Reagan in the White House. Or maybe it's their shared worldview of America as a shining city on a hill, their shared conviction that terrorism and communism, the two greatest threats to democracy, must be eliminated. Or maybe there's a simpler explanation. Maybe Reagan just likes Bud McFarlane. He's a likable guy. Bud's staffers say his working credo is,

there is no limit to what a man can accomplish if he doesn't mind who gets the credit. But Bud's credo, and his influence over the president, is about to face its first test. Bud warned Reagan of the terrorist threat in Lebanon. He begged him not to withdraw U.S. troops. And Reagan should have listened. Because just five months after the Beirut bombing, the terrorists in Lebanon strike again. It's March, 1984, and the morning sun is rising in Beirut.

The situation on the ground is bad. Lebanon is still a war zone. Less than a month ago, the U.S. ordered all non-essential staff to leave and return to the United States. But William Buckley is not non-essential staff to leave and return to the United States. But William Buckley is not non-essential personnel. Buckley is a CIA station chief. He stands by the window of his 10th floor apartment, sipping coffee and talking on a secure line. For months, Buckley has been working tirelessly to free American hostages captured by the Iranian-backed terrorist group Hezbollah. Getting a plan off the ground has been slow, painstaking work. But yesterday, finally, Buckley caught a break.

It was a good proposal. Well done. Thank you, sir. Now get out there and get to work. Yes, sir. A rush of excitement floods through his veins. Buckley's proposal, the plan for the CIA to work with Israeli special forces on a hostage rescue mission, is a go. Shortly after 8 a.m., he leaves his apartment and heads for the American embassy. Buckley is excited to get moving. He's anxious to move this plan forward. And maybe that's why he ignores protocol. to move this plan forward.

And maybe that's why he ignores protocol. Maybe that's why he decides to take his own car, even after the embassy officials have instructed him not to. Whatever the reason, on this day, March 16, 1984, Buckley breaks the rules. He crosses the street, gets in his car, and fires up the engine. As he turns out of the lot, a white Renault pulls in front of him and slams on its brakes. Behind him, a second car speeds in and blocks his path. A man runs up to his driver's side window. Buckley cries out, what the hell is this? The man responds by shoving a gun to Buckley's head. He forces Buckley into the Renault and floors him. Buckley, the CIA station chief who

had been sent to Beirut to fight terrorism, is now a terrorist's hostage. In March of 1984, the terrorists release a video. The tape makes its way from the Middle East to Washington, D.C., where it lands on the desk of CIA Director William Casey. Casey, with his balding crescent of white hair and oversized glasses, doesn't look like an intelligence mastermind. But Casey, the venture capitalist-turned-CIA director, is a multimillionaire known for his brilliance and strategic vision. He knows the terrorists behind this are backed by the leader of Iran, a man with no love for America, a country he calls the Great Satan, Ayatollah Khomeini.

The tape sent to Casey by the terrorists shows Buckley emaciated, beaten and bruised, pleading for his life. Casey takes the tape to the White House and plays it for the president, who breaks down in tears. Casey nearly does too. He feels personally responsible for William Buckley's capture because Casey is the man who sent Buckley to Beirut. But at least he's still alive. Casey wants his agent back. But there's something else looming over Bill Casey in the summer of 1984. He's been diagnosed with terminal brain cancer. The doctors don't know how much time he has left. If Casey wants to save Agent Buckley, he will have to move fast.

Bud McFarlane wants to be like his former boss, Henry Kissinger. Bud works side-by-side with the former Secretary of State in the Nixon White House. From Kissinger, Bud learned firsthand that a national security advisor can make an impact on the global stage. Kissinger's overtures to China made him a foreign policy legend. And that's exactly what Bud wants to do in Iran. He wants to re-establish diplomatic relations. Bud knows Bill Casey wants those hostages back. And diplomacy is a tried and true way to make that happen. So Bud takes the idea to Casey and makes his pitch. Re-engage Iran by opening channels with the anti-Khamenei, anti-terrorist Iranians. Casey jumps at the idea, and they create a report on the feasibility of establishing diplomatic relations with Iran.

But when they deliver the report to Reagan and his cabinet, it's shot down. That's in large part because Reagan listens to the advice of Secretary of State George Schultz and Secretary of Defense Caspar Weinberger. In a rare moment of unity, Schultz and Weinberger reject Budd's idea. But just because they agree on what not to do doesn't mean that they can find common ground on how to deal with a growing problem in the Middle East. Once again, nothing is getting done. Once again, paralysis. Schultz and Weinberger have been fighting it out ever since the Beirut bombing. And now, in the wake of Buckley's kidnapping, the debates over Lebanon have reached a fever pitch. In late 1984, an unnamed source at the White House tells the New York Times,

the clash between Schultz and Weinberger and the inability to go anywhere to get disputes settled produced paralysis. Though there's no proof, it's not hard to imagine that the source is Bud McFarlane. Schultz is in charge of diplomacy. Weinberger is in charge of the military. But Bud is in charge of national security. And to keep America safe, he needs Schultz and Weinberger to get on the same page. Bud believes diplomacy must be backed by military strength. And if diplomacy breaks down, Americans will not be safe. Bud and Casey invite Schultz and Weinberger to a weekly breakfast meeting. The two foes begrudgingly accept.

The foursome, which Bud ironically names the family group, meets once a week in the Pentagon dining room, or sometimes in a restaurant or cafe in Foggy Bottom, a neighborhood just north of the Washington Mall. Budd brings a well-prepared, clearly laid out foreign policy agenda to every meeting, which they discuss over the meal. But over the course of the next couple months, these discussions often turn into just arguments.

And not always arguments over foreign policy. Sometimes, Schultz and Weinberger even bicker about the breakfast menu. Meanwhile, the situation in Lebanon escalates. And then, a year after William Buckley is captured, six more Americans are kidnapped by terrorists. Schultz and Weinberger, like Bud and Casey, and like all of the men in Reagan's cabinet, agree on the end goal. They want the hostages home. They just disagree

on the best way to get there. But when Reagan's advisors find themselves at cross-purposes, they tend to eat their own. And in February of 1985, Bud McFarlane is about to learn the hard way that no one has a bigger appetite than the president's new chief of staff, Don Regan. On January 5th, 2024, an Alaska Airlines door plug tore away mid-flight, leaving a gaping hole in the side of a plane that carried 171 passengers. This heart-stopping incident was just the latest in a string of crises surrounding the

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Listen to The Rise and Fall of Diddy exclusively with Wondery Plus. It's early morning in February 1985. Bud opens the door to his office. He sets his briefcase down on his desk. But before he even has a chance to grab a cup of coffee, it's the hotline to Don Regan's office, the president's new chief of staff. Don? Get up here, right now.

It's whispered in Washington that Don Regan thinks hail to the chief refers to the chief of staff. whispered in Washington that Don Regan thinks hail to the chief refers to the chief of staff. Don's called brash, imperious, and obsessed with preserving the image of his own power. And it's an image he crafts with delicate precision. Bud sees it every day in his top-of-the-line tailor-made suits and his neatly groomed, slick-back hair. Bud's heard all the rumors, and he knows why Don's upset. Last night, there was an incident in East Germany. A U.S. Army major was killed on a routine inspection mission in the Soviet zone.

Bud didn't notify Don. Bud's barely made it through the door to Don's office when the tirade begins. God, this is outrageous. I don't have to learn what's going on from the news, and I'm not going to put up with this. You're right, Don. I am sorry. I take full responsibility for it. Better be sorry. I'm not going to take this kind of insubordination. Insubordination. Strange choice of word from a man who is not Bud's superior. But Bud shakes it off and tries again. Don, like I said, I am sorry. It won't happen again. Bud turns to leave, but Don won't let it go. You don't seem to realize you work for me around here. This stops Bud in his tracks.

He turns back to Don and stares him down. No, I don't. I work for the president. Like hell you do. You work for me. Get that straight in your head or you'll be out of here. Don, you're right. I'll be gone by the end of the day. And with that, Bud turns to walk away, closing the door behind him. Hey, come back here. I'm not finished with you. Bud walks back down to his office to get ready for the first meeting of the day,

when the hotline rings again. Bud, all right. Let's handle this like grown-ups. I shouldn't have gotten upset. Don, if that's an apology, I accept. But you need to understand, I will do my best to keep you informed and to send items through you to the president. But there are times where that's just not possible. Bud can almost hear Don fuming on the other end of the line.

Understood. Things between Bud and Don are off to a rocky start. But Bud has bigger issues to deal with than a new chief of staff trying to establish a pecking order. Budd hasn't given up on his plan to re-establish diplomatic ties with Iran. What he doesn't know is that in a few months' time, an offer will make its way to his desk, a deal that might very well change the course of history and turn the Reagan administration upside down. On August 3rd, 1985, President Reagan summons Bud to the Oval Office. For the past few weeks,

Reagan has been mulling over a very important deal that might help Reagan achieve one of his top priorities, getting the U.S. hostages back safely. Reagan asked Bud to walk him through it one more time. So Bud goes over the details again. In July of 1985, the Israeli foreign minister reached out to Bud Reagan asked Budd to walk him through it one more time. So Budd goes over the details again. In July of 1985, the Israeli foreign minister reached out to Budd through an intermediary with an offer. The Israelis have been in touch with a group of moderate anti-Khamenei Iranians who share a common goal with the U.S. and Israel,

a stable Middle East and an Iran friendly to the West. As a show of good faith, these Iranians have promised to secure the release of all seven U.S. hostages. But in return, the Iranians want a show of good faith as well. They want weapons. To keep America's hands clean, Israel will act as the middleman. They will sell the Iranians missiles, which they previously purchased from the U.S. The U.S. will then replenish Israel's supply. There's nothing illegal with the U.S. giving weapons to its ally Israel, but Reagan and Budd both know that's not exactly true. Their intent is to get the weapons to Iran in exchange for the release of captured Americans. Trading arms for hostages is a violation of Reagan's own stated position on terror.

The U.S. does not negotiate with terrorists. Not to mention, he could get both of them in a whole lot of trouble. The Iranian arms deal, as it will come to be called, ventures onto some shaky legal ground. Reagan is torn. On the one hand, he wants the hostages back safe and sound. On the other, he's vowed to never negotiate with terrorists. But America isn't exactly negotiating with terrorists. Israel is. Reagan stares at the carpet for a moment before looking up at Bud.

I want to go ahead with it. I think it's the right thing to do. it. I think it's the right thing to do. Bud nods. At last, some forward movement. The arms for hostages deal is officially a go. Bud gets right to work. Later that same afternoon, on a secure conference call, he notifies Reagan's cabinet. CIA Director Bill Casey is enthusiastic in his support, but not everyone shares Casey's excitement over the deal. Schultz and Weinberger again find themselves on the same side. They adamantly oppose arms for hostages, but neither will stand in Budd's way. They can't, because Budd has President Reagan's authorization. When Budd calls Reagan's chief of staff to tell him of the developments, there's no doubt Don Regan is fuming on the other end of the line. Not because of arms for hostages. Don supports that deal, or at the very least,

he tolerates it. What Don doesn't tolerate is insubordination. Bud is already on thin ice with Don Regan, and with the Iran deal already in motion, it's clear Bud has gone over Don's head again. In August 1985, a story appears in Parade magazine. A story that insinuates Bud McFarlane is cheating on his wife. Bud doesn't flinch under the scrutiny. He knows it's not true. He also knows exactly where it came from, and he decides to confront Don Regan head on. He invites him to lunch at a little cafe near the Biltmore Hotel. When Don sits down across from him, Bud cuts to the chase. He asks if he's the one behind the leaks. Don flatly denies it. He says neither he nor any of his staff have anything to do with the story. But the rumors about Bud don't go away. Stories continue to appear in print again and again. Whether Don is behind the story or not, Bud knows Don wants

him out of the picture. Bud also knows he's not going anywhere. He's survived the Viet Cong. He can outlast Don Regan. But there's another problem coming down the pike, a problem Bud doesn't see coming, one involving CIA Director Bill Casey. Casey is a secretive man. In August of 1985, he still hasn't told his colleagues about his cancer diagnosis. Maybe he doesn't want anyone to make a fuss or question his judgment. But Casey has another secret, a secret he does not share with Bud, the president, or anyone else. A secret Bud is going to wish he had known about before he put everything in motion. On August 3rd, 1985, right after his conference with the cabinet, Bud notifies his contact in Israel.

The deal is on, approved by the president. He instructs his Israeli contact to send word to his contact in Iran, a man by the name of Manakir Gobanifar, a shadowy figure with a round puffy face and inscrutable dark brown eyes. Gobanifar is an Iranian arms dealer and a former agent of the Iranian Secret Service. By the time Reagan has authorized the Iranian arms deal in August 85, Gurbanov has a well-documented reputation for being untrustworthy. But Bud doesn't know that. And neither does President Reagan.

One person definitely does, though. Or at least, he should have known. CIA Director Bill Casey. In July 1984, just over one year before the arms for hostages deal began, the CIA issued a burn notice for Gubanafar. That's intelligent speak for being blacklisted. The CIA concluded that Gubanafar was only interested in one thing, lining his pockets. As the director of the CIA, Casey should have known that his own agency doesn't trust Gubanifar.

And if he does know, he doesn't tell anyone. Not President Reagan. Not Bud McFarland. So Bud charges forward with the deal. Bud taps his right-hand man in the National Security Council, Lieutenant Colonel Oliver North, to manage the operation. In a matter of weeks, it's up and running. On August 30, 1985, Israel makes the first shipment of 96 missiles to Iran. One hostage is set to be released in exchange. Bud had asked for CIA Station Chief William Buckley to be the first, but at the last minute, the Iranians claimed Buckley's condition was so bad, transporting him was impossible. So they release another hostage

instead. When the news reaches Washington, Casey is furious, and now Bud is deeply concerned. The U.S. government asked for Buckley, and the Iranians agreed. But now they were changing the deal. But no one presses pause. On September 15th, the Israelis make a second shipment. The very next day, Bud gets more concerning news from Lieutenant Colonel North. The Israelis were supposed to deliver 100 missiles. Instead, they sent 408. When Bud asked North why the Israelis sent more than was agreed on,

North's answer is concerning. Iran's price went up. At the national security briefing on September 16th, Budd privately expresses concerns to President Reagan. Budd tells the president that the fact that the Iranians keep changing the deal is a bad sign. He thinks they're being extorted. But Reagan's position doesn't change. One hostage was released. There are six more to go. The deal is still worth pursuing. And so, in November of 1985,

500 Hawk missiles are set to make their way from Israel to Iran. It's supposed to be a simple operation. Like the last two deliveries, the Israelis will package the weapons in wooden crates, load them up on cargo planes, and make the seven-hour flight from Israel to Lisbon, Portugal. Once the Israeli planes are approved by custom officials on the ground there, the planes will take off and fly 5,000 miles to Tehran, where Gurbanov and the Iranians will be waiting to receive the shipment. But the operation does not go as planned.

Instead, it's a complete and total disaster. Custom officials in Lisbon unexpectedly refuse to let the Israelis land, so the planes turn back and fly home to Tel Aviv. The Israeli foreign minister calls Bud in a panic. The lives of hostages are at stake. If the Iranians suspect foul play, they might do them harm, maybe even kill them. If the Iranians suspect foul play, they might do them harm, maybe even kill them. Budd turns to Oliver North for help. North enlists the help of the CIA to help Israel deliver the 500 weapons. But something there goes wrong, too. When the Iranians open the crates, there are only 18 missiles inside.

And each of them carries the Star of David etched on the casing. In addition, they wanted anti-aircraft missiles, but these missiles aren't what they requested. The Iranians are convinced Israel did it on purpose. To them, it's an act of sabotage and insult. There's also the matter of Manakir-Gurbanifar. While the Hawk shipment went sideways, the money traded hands from Iran to Israel before the shipment took place. Gurbanov is the middleman, which means even though the 500 weapons were never delivered,

Gurbanov still took his commission to the tune of $1 million. When word of the botched arms delivery reaches the higher-ups at the CIA, Director Bill Casey is in a tough spot. delivery reaches the higher-ups at the CIA, Director Bill Casey is in a tough spot. Technically, he needed written approval by the president to authorize a covert operation. That didn't happen, and that technical detail is what will elevate the Iranian side of this scandal from the improper to the potentially impeachable. For a covert operation to take place, two things have to happen. One, the president is required to sign a finding, a confidential directive authorizing the covert op. As in, the president finds a covert action to be in the interests of national security. Two, the finding is supposed to be delivered to Congress.

They don't have to approve it, but they have to be told about it. They don't have to approve it, but they have to be told about it. Before the November 1985 Hawk mission, Reagan didn't sign a finding, and he didn't notify Congress. And when the CIA got involved, Casey didn't request one. No one did. What Reagan did do is verbally approve the transaction. But without a signed piece of paper, everyone could end up in hot water with possible investigations into the White House and into the CIA, or worse, possible articles of impeachment. Under pressure from his CIA colleagues, Casey goes to Reagan to obtain a retroactive finding.

A retroactive finding isn't, strictly speaking, even a thing. But it's something, and it might give the CIA and the president legal cover. So Reagan signs the finding, but it never makes its way to Congress. After this arms shipment disaster, the Iranians are furious. They feel they've been duped by Israel. But the biggest worry on the minds of Reagan and his cabinet are the six remaining hostages.

If Iran's anger shifts from Israel to the United States, the consequences for the hostages could be lethal. In late November 1985, Bud is despondent, and he's embarrassed. He had hoped that making inroads to Iran would place him in the company of men like Kissinger. He wanted Pastere to see him as a strategic thinker with a grand geopolitical vision, the wanted Pasteri to see him as a strategic thinker with a grand geopolitical vision, the man who brought stability to the Middle East. But in the aftermath of the failed Hawk missile shipment, Bud's dreams of grandeur are beginning to fade. In their place, the nagging suspicion that he's been played for a fool.

I'm Jake Warren, and in our first season of Finding, I set out on a very personal quest to find the woman who saved my mum's life. You can listen to Finding Natasha right now exclusively on Wondery+. In season two, I found myself caught up in a new journey to help someone I've never even met. But a couple of years ago, I came across a social media post by a person named Loti. It read in part, three years ago today that I attempted to jump off this bridge, but this wasn't my time to go. A gentleman named Andy saved my life. I still haven't found him. This is a story that I came across purely by chance, but it instantly

moved me. And it's taken me to a place where I've had to consider some deeper issues around mental health. This is season two of Finding. And this time, if all goes to plan, we'll be finding Andy. You can listen to Finding Andy and Finding Natasha exclusively and ad-free on Wondery+. Join Wondery in the Wondery app, Apple Podcasts, or Spotify. On November 24th, the president gathers his cabinet at the White House for an emergency meeting

about the failed Hawk missile shipment. The question on the table, kill the Iran deal or press on? President Reagan is torn. The Iran arms deal goes against his own policy on terrorism. It also violates the Arms Embargo Act and enters into some seriously murky legal waters. But on the other hand, American lives are at stake.

There are still six hostages wasting away in Iran. Besides, Israel botched the delivery, not the U.S. If Reagan wants to mend the bridge with Iran and continue the deal, there is still a chance the Iranians might be game. Bill Casey agrees. The risk is high, but in his mind, it's worth the reward. But Bill Casey is in the minority. Bud, the man who set the Iran deal in motion,

has had enough. He wanted to make headway with Iran. But Gorbanifar and his cronies are not who they said they are. They're not to be trusted. Bud does not mince words. The deal is not working. Time to call it off. And Schultz and Weinberger side with Bud this time. The arms deal is dubious at best, and at worst, potential grounds for impeachment. Reagan knows he's flirting with a legal gray area. But his concern for the captive men wins out. He says, I can answer to the charges of illegality, but not to the charge that big, strong President Reagan

passed up a chance to free hostages. But Weinberger won't back down. He presses the issue. This deal is illegal, period. In a tense moment, Reagan uses some of his famous charm to lighten the mood. He quips, if he goes to jail, visiting hours are on Thursdays. But nobody laughs. Weinberger's reply is foreboding. Oh, you won't be alone. At the end of the meeting, Reagan begrudgingly defers to his cabinet, and a consensus is reached.

Until we have a better idea of who we are dealing with, no more arms sales, no more talks with the Iranians. The Iran operation is officially dead. But there's still the issue of the hostages. Everyone agrees the U.S. will have to find another way to get them back. In the meantime, someone needs to meet with Gurbanov to politely call off the deal. The last thing Reagan wants is the Iranians to turn on the U.S. and cause harm to the hostages.

Reagan asks Bud if he'll handle it. Budd, the good soldier, says yes, sir. Then he gets on a plane and flies to London to meet with the Iranians face to face. It's early December, 1985, inside a dark apartment in an old Victorian building in London's West End. Bud McFarland sits at a table in front of a shelf of dusty books. Standing behind Bud is a gaggle of U.S. officials, including Lieutenant Colonel Oliver North. On the opposite side of the table is Manikur Gurbanafar. The mood in the room is tense. Bud breaks the silence and leads off the meeting.

Mr. Gurbbonnefar, I am here as a representative of the United States with specific instructions. The U.S. entered into this deal with the hope that your associates wanted to open up a diplomatic channel with the U.S. We held up our end of the deal. When your people are ready to talk about real change, we'd be glad to continue the conversation. Gurbanovar says nothing. Instead, he stares, his dark eyes cutting through Bud. So Bud presses on. Mr. Gurbanovar, whenever your colleagues are ready for this, they should say so. Until then, we have no interest in continuing this deal.

Gurbanovar continues to stare as his face slowly turns a bright red. And then he blows his tongue. You're idiots. The U.S. has no right to make a mess of things and walk away. The people I'm dealing with are not to be crossed. Gurbanafar leans in close to make sure Bud gets the message. They need arms to fight the Iraqis. And if they don't get them, there will be hell to pay.

I don't like being threatened, Mr. Gurbanafar. I'm not the threat. If I take this news back to my colleagues, they'll go mad. They'll say, to hell with the hostages. Let Hezbollah kill them. Bud stands and heads for the door. I'm sorry. We don't have anything else to talk about.

If your position changes, let me know. And with that, Bud officially closes the door on the arms for hostages deal. Right after the sit-down with Gurbanov far, in the streets just outside, Oliver North tries to get Bud to reconsider. North admits Gurbanov far is a shady character. But he also reminds Bud, if the goal is really to establish diplomatic relations with Iran, Gurbanov far might be the only path forward. Bud quickly puts North in his place.

Gurbanov far is not to be trusted. He's proven all he wants are weapons and money. Besides, the president has already made his decision. The deal is dead. But in reality, the Iran arms deal has plenty of life left, because back in Washington, President Reagan is beginning to waver. Ronald Reagan's favorite joke is the one about the little boy who asks Santa for a pony. When Christmas morning finally comes, all he gets is a pile of manure.

The boy's response? There must be a pony in here somewhere. When Bud returns to Washington after his London trip, he meets with the president and his cabinet in the Oval Office. Bud tells the president, Shut down the Iran initiative, Mr. President. Shut it down once and for all. If there's a way to get the hostages back, this is not it. And again,

the cabinet comes to Budd's defense. Even Budd's nemesis, Don Regan, agrees with him this time. He says, I think we should listen to Budd. But Reagan does not listen. Reagan is still looking for the pony in the pile of manure. That's in no small part because Bill Casey is there to convince him to keep going. Casey agrees it's risky business. But, he tells the president, most things worth doing are. Weinberger makes the same case he's made before. It's illegal. End of story.

Schultz backs him up. But Reagan doesn't show his cards. His last words in the meeting are hard to read. Well, okay. Weinberger is confident Reagan will back off. So confident that later that day, he writes in his notes that the baby has been strangled in his crib. But Weinberger is wrong. Reagan may not have said it directly in the meeting,

but he has no intention of walking away from the Iran deal. And Bud knows it, deep down. He knows Reagan is a sentimental man, a big-hearted, emotional man. And Bud knows the president will never give up on the hostages. Bud has tried everything. Now there's only one thing left to do. In late 1985, there are rumors in the press that Bud's departure from the National Security Council is imminent. But the press wrongly assumes Don Regan is the root cause. Don is a symptom, but not the disease.

For Bud, in the end, it comes down to a feeling that, even though he understands foreign policy better than most of the other members of the cabinet, President Reagan is not listening to what he has to say. Budd will later tell the New York Times he could have done more. He could have gone into the Oval Office as many times as it took to convince Reagan to stop the Iran operation. He could have gone to the press. He could have leaked the story or written an anonymous op-ed. But Budd didn't do any of that. Instead, he did what he felt was his duty, the duty of a public servant who disagrees with the action of a president. As 1985 winds to a close, Bud resigns.

I have a statement I wish to read to you. It's with deep regret and reluctance that I have accepted the resignation of Bud McFarlane as my assistant for national security affairs. Let me say that I shall never forget the sacrifices that you and your family have made in the service of your country. But before you get too comfortable, I should warn you that I'll probably be calling on you from time to time for your wise counsel and advice.

In Bud's absence, the arms for hostages deal evolves, and then it intensifies. Unbeknownst to Bud, his right-hand man, Oliver North, has been developing a new plan, a secret plan. It starts with a bank account in the Cayman Islands. It involves dubious quid pro quos and the illegal transfer of weapons. And it will end in the jungles of Nicaragua, where a growing communist threat is rearing its head. It's a plan to kill two birds, terrorism and communism, with one stone. A plan that's so simple, it's genius. A plan called the Diversion.

From Wondery, this is episode one of six of Iran-Contra for American Scandal. On the next episode, we'll take a trip to Central America and follow Lieutenant Colonel Oliver North as he carries out another covert operation deep in the jungles of Nicaragua. To listen to the rest of this season of American Scandal, start your free trial of Wondery Plus in the Wondery app, Apple Podcasts, or Spotify. With Wondery Plus, you can listen to other incredible history podcasts like American History Tellers, History Daily, Tides of History, and more. Download the Wondery app today.

History Daily, Tides of History, and more. Download the Wondery app today. Thank you. Consultant is Malcolm Byrne. Executive producers are Stephanie Jens, Marsha Louis, and Hernan Lopez for Wondery.