William J. Casey

William Joseph Casey was born March 13, 1913, in Elmhurst, Queens, New York. He attended St. John's University and Fordham Law School, becoming a corporate and tax attorney. During World War II he served in the Office of Strategic Services (OSS) under William "Wild Bill" Donovan, rising to head the OSS's Secret Intelligence operations in Europe and coordinating the infiltration of agents into Nazi-controlled territory. After the war he became a wealthy lawyer and author of tax shelter guides. President Nixon appointed him Chairman of the Securities and Exchange Commission in 1971, a post he held through 1973. He managed Ronald Reagan's 1980 presidential campaign. Reagan appointed him Director of Central Intelligence in January 1981, and he served as DCI until resigning due to illness in January 1987. He died May 6, 1987, at a hospital in Glen Cove, New York, having suffered a seizure in December 1986 and subsequently undergone brain surgery. He was subpoenaed to testify before the Senate Iran-Contra investigating committee but died before he could appear.¹

October Surprise

The central allegation against Casey is that he served as the principal American negotiator in secret meetings with Iranian representatives in Spain and France in 1980, during which the Reagan campaign agreed to delay the release of 52 American hostages held in Iran until after the November 4 election in exchange for promises of arms and the release of frozen Iranian assets. The allegation is the subject of the October Surprise affair.²

Multiple sources identified two probable meeting locations: Madrid in July 1980 and Paris in October 1980. A U.S. Embassy cable indicating Casey was in Madrid "for purposes unknown" in summer 1980 was withheld from the House October Surprise Task Force by Bush administration officials and only surfaced through journalist Robert Parry's reporting in 2011. Casey's personal calendar for October 20, 1980, showed an 8 a.m. Metropolitan Club appointment in Washington, which the House Task Force cited in its January 1993 report finding "no credible evidence" of a deal. Former French intelligence chief Alexandre de Marenches, through his biographer's sworn testimony, indicated he had arranged meetings between Casey and Iranians in Paris in October 1980.²³

A separate Senate Foreign Relations Committee investigation found that Casey had engaged in "potentially dangerous" unauthorized efforts to collect intelligence on the Carter administration's hostage-release negotiations, confirming Reagan-campaign intelligence operations against Carter's Iran policy without concluding a deal had been struck.³

Casey died before he could be formally questioned under oath. He was subpoenaed to testify at the Iran-Contra hearings, which were examining a separate but related set of covert arms deals with Iran from 1985-1986.¹

KH-11 and Israeli Intelligence

Casey was an enthusiastic supporter of the KH-11 imagery-sharing program with Israel from the moment he took office, ordering that Israeli liaison officers be provided with a private office near CIA headquarters to ensure all essential intelligence was turned over. After the Israeli bombing of the Iraqi nuclear reactor at Osirak bombing, Casey authorized a review that found Israel had significantly expanded the agreement, requesting and receiving extensive KH-11 coverage of western Russia.⁴

Launching the Contra War

Reagan approved the intelligence finding for covert operations in Nicaragua in December 1981, and sent Casey to present it to Congress. Halting Sandinista arms shipments to El Salvador was the official reason Casey gave, but the operation's scope extended far beyond border policing. According to one account, Casey himself leaked news of the Contra project to Newsweek to ensure it could not be abandoned, reasoning that stopping it would look like another Bay of Pigs.⁵

The Secret 1982 Agreement

In early 1982, Casey and Attorney General William French Smith signed a formal Memorandum of Understanding that exempted CIA assets from drug crimes reporting. Crimes committed by people "acting for" an intelligence agency no longer needed to be reported to the Department of Justice, and drug offenses were specifically removed from the list of crimes the CIA was required to report. For thirteen years, the CIA and Justice had what Inspector General Hitz called "a gentleman's agreement to look the other way." Robert Parry argued the timing proved premeditation: "That could only have been done for one purpose. They were anticipating what eventually happened. They knew drugs were going to be sold."⁵

Protecting Drug Traffickers

Casey decided not to raise allegations of Noriega's cocaine trafficking with him "on the ground that Noriega was providing valuable support for our policies in Central America." Oliver North wrote that Casey did not want the Contras' "unofficial funds" coming into U.S. banks because Treasury agents on the lookout for drug money would grow suspicious. A former CIA station chief testified that the unspoken policy was that "we were going to play with these guys. That was made clear by Casey and Clarridge."⁵

High Frontier correspondence

Daniel O. Graham, the retired lieutenant general who directed the Defense Intelligence Agency from September 1974 to January 1, 1976, wrote to Casey about High Frontier, the space defense group he had founded in 1981. On January 8, 1982 Casey wrote to Graham that the High Frontier prospectus was "very well done and deserving of close attention" and that he found "something of a disconnect" in its budget paragraphs, from a $35 billion figure to a higher $50 billion figure.⁶ Casey wrote to Graham on December 20, 1982 that he had enjoyed Graham's talk at the National Strategy Information Center breakfast and offered to arrange for Graham to exchange ideas with CIA officers knowledgeable about space and missile technology.⁷

On July 23, 1986 Graham wrote to Casey enclosing a paper titled "Is the KGB Sabotaging SDI?", written after the loss of the shuttle Challenger, and urged Casey and Edwin Meese to "leave no stone unturned" in getting answers. A cover memorandum dated July 28, 1986, titled "Possible Soviet Sabotage of Our Space Program," carries Casey's instruction: "Please take the lead in drafting a response from me to General Graham."⁸ Casey replied on August 16, 1986, acknowledging Graham's letters of July 23 and 29, 1986, and rejected Graham's sabotage theory. He wrote that "we do not believe the U.S. space launch failures you cited were due to Soviet action," that the failures had been traced to "errors or procedural problems," and that "none of the investigations found any evidence of Soviet involvement."⁹ On December 8, 1986 Graham wrote to Robert M. Gates, then deputy director of the CIA, praising his assessment of Soviet strategic defense efforts, with a copy to Casey.¹⁰

National Intelligence Study Center

Casey is listed on the advisory board of the National Intelligence Study Center in Washington, alongside Graham and Paul Nitze. The board of directors of the center included Ray Cline. The center's invitation to an exhibit of intelligence books, dated November 3, 1983, carries these lists.¹¹

Recruitment of James D. Theberge to the Senior Review Panel

The Senate Select Committee on Intelligence, in its October 24, 1991 report on the nomination of Gates, named Casey as one of three CIA officials involved in the recruitment and selection of James D. Theberge for the Senior Review Panel, with Deputy Director John McMahon and Executive Director James Taylor.¹² The report states that "the Committee's documentary evidence makes clear that Director Casey was the CIA official most instrumental in recruiting Mr. Theberge."¹² The report records that Theberge disclosed his consulting work for a Cardoen subsidiary in the personal history statement he submitted to the CIA in December 1985, and that he was hired on a three-days-per-week basis.¹² CIA visitor records held in the reading room list Theberge as meeting the director at headquarters in November 1984 and, as "Ambassador Theberge," calling on the director on September 23, 1985.¹³ A routing sheet of August 12, 1985 confirms a courtesy call on the director at 1100 hours on August 14, 1985, twelve days after Theberge left his post in Chile, stating that he "has completed his tour in Chile and has no particular items to discuss."¹⁴ In a memorandum of August 19, 1985 titled "Soviet Game Plan," Casey told the Vice Chairman of the National Intelligence Council: "You will get in touch with Theberge, talk about the project generally, see what he has to contribute and perhaps have him do some work on the Latin America phase of it."¹⁵