The dangerous game of private, back-channel diplomacy has long corrupted American elections. How the 1980 October surprise still haunts American politics.
As Russia provocatively tests its nuclear arsenal, Donald Trump’s back-channel conversations with Vladimir Putin and Benjamin Netanyahu and Elon Musk’s direct line to the Kremlin signal an ominous echo of past October surprises.
These eleventh-hour manipulations of foreign policy for partisan electoral gain can undermine American democracy — and lead indirectly to the deaths of thousands of people.
The seditious shenanigans of Trump and Musk are reminiscent of one of the most consequential October surprises in American history, meticulously documented in Craig Unger’s new book, Den of Spies: Reagan, Carter, and the Secret History of the Treason That Stone the White House. This long-ago episode is unknown to most Americans, but had an impact on the US and the world in the years since.
Unger reveals how Ronald Reagan’s 1980 campaign manager, William Casey, a former World War II spymaster, orchestrated a treasonous scheme with Iran to delay the release of 52 Americans already held hostage for a whole year — until two months after the election — thereby ensuring Carter’s defeat.
The operation, involving arms dealers and double agents, wasn’t just about winning an election; it had dire consequences for decades to come, including the Iran-Contra scandal and other attempts to circumvent constitutional guard rails in the conduct of foreign policy.
Drawing on 30 years of investigation and newly uncovered documents, Unger exposes how this secret operation set a dangerous precedent for private citizens subverting the government’s control of foreign policy as well as subjecting American citizens to more months of humiliating incarceration for political gain — a pattern of heedless self-serving that continues to threaten American democracy today.
Apple Podcasts
Google Podcasts
RSS
Full Text Transcript:
(As a service to our readers, we provide transcripts with our podcasts. We try to ensure that these transcripts do not include errors. However, due to a constraint of resources, we are not always able to proofread them as closely as we would like and hope that you will excuse any errors that slipped through.)
Jeff Schechtman: Welcome to the WhoWhatWhy podcast. I’m your host, Jeff Schechtman. We like to think that our presidential elections represent the purest expression of American democracy. History tells us otherwise. From the Hayes/Tilden election of 1876 to Kennedy/Nixon in 1960, to the current concerns about 2024, elections have often been shaped by forces operating in the shadows.
Perhaps no election better exemplifies this than 1980. The Iranian hostage crisis had gripped the nation for 444 days. President Carter’s inability to free the hostages seemed to personify the weakness and malaise that many felt about America at the time. The story we thought we knew was that Ronald Reagan’s decisive victory represented a restoration of American strength and pride.
But what if that narrative was built on a foundation of treason? What if Reagan’s campaign manager, William Casey, a former World War II spymaster, had orchestrated an illegal operation with Iran to keep the hostages until after the election?
What if the entire Reagan Revolution was predicated on a crime that would echo through American foreign policy for the next 44 years? The echoes of this history reverberate today: Bob Woodward’s recent conversations about Donald Trump’s back channel conversations with Putin, reports of Trump urging Netanyahu to resist ceasefire deals that might help his opponents, and even Elon Musk’s alleged private discussions with Putin about Ukraine all represent private citizens conducting their own foreign policy in violation of the Logan Act, just as William Casey did in 1980.
The implications were staggering then and remain so today. In 1980, a presidential campaign secretly negotiated with a hostile foreign power to prolong the captivity of 52 American citizens for political gain. Minutes after Reagan took the oath of office, the hostages were released, a choreographed finale to a dark conspiracy and set a dangerous precedent for future campaigns.
My guest renowned investigative journalist, Craig Unger, has spent three decades investigating this story. He’s faced lawsuits, professional ostracism, and personal attacks, but he never gave up. Now with access to never-before-seen documents, including the archives of legendary investigative journalist Robert Parry, he’s able to reveal the full scope of what’s become known as the October Surprise.
He details all of this in his new book, Den of Spies: Reagan, Carter, and The Secret History of the Treason That Stole the White House. And it is my pleasure to welcome Craig Unger here to the WhoWhatWhy podcast. Craig, thanks so much for joining us.
Craig Unger: Thanks for having me.
Jeff: It is a delight to have you here. Talk a little bit about the political climate in the world, in the country back on November 4th, 1979 when these hostages were captured. And a little bit about what was going on with respect to the Carter administration, to foreign policy, and really the context for what was about to unfold.
Craig: The Iranian Revolution had just taken place, and that was a momentous event in world history. Iran under the Shah had been a very, very important proxy for the United States in the Middle East. It was not just an important military power in geostrategic terms, it had lots of oil, and it basically did what we wanted it to do. So suddenly we had lost that, and the Shah was at sea. He was in exile. He was looking for a new home.
Henry Kissinger, David Rockefeller, the Chase Manhattan Bank, and others who were very close to the Shah wanted him in the United States. Jimmy Carter didn’t want that. He knew that would create a real crisis in Iran. And they finally convinced Carter to admit him to the United States for medical reasons. And when that happened, all hell broke loose, and Iran had seized 52 American hostages. There were actually more initially.
And the battle for Carter’s presidency as the 1980 election began, the most important issue was, would Carter bring the hostages home before the election? In which case there’d presumably be a wave of patriotic fervor, or if not, he would be seen as a very weak president who allowed America to be humiliated.
Jeff: There was also this sense of Carter already being a weak president and a sense of malaise in the country. And the failure to get the hostages out simply added to what the preconception was and made it worse.
Craig: Absolutely. I have a friend of mine, Hendrik Hertzberg. Hendrik Hertzberg was Carter’s speech writer and wrote his famous malaise speech. And it did not go over well. Americans, as Reagan showed us, like the sunny optimism and the genial smile, and Carter was basically desperately trying to get out of a fix. And there was very high inflation at that time which made things much worse.
Jeff: Talk a little bit about the efforts that Carter undertook to try and get the hostages released. What did he do even before Operation Eagle Claw, the failed rescue attempt in the desert?
Craig: He had two main overtures in terms of negotiating. One is he had people in the CIA reaching out through the Palestinian Liberation Organization, which was then run by Yasser Arafat. Arafat, wanting to be an intermediary and helping release the hostages. So he was reaching out that way. And I don’t think this was discovered until fairly recently, and I write about it in my book.
But Bill Casey, who was Reagan’s campaign manager, as the election campaign got underway, he intervened and was thwarting that outreach. But the most important outreach came through two Iranian brothers, the Hashemi brothers, Cyrus and Jamshid Hashemi. They were Iranian businessmen. They dealt arms, they were arms dealers. And they went to the Carter administration and to the State Department and said, “Look, we can help you. We have powerful connections in the new government, and we can help you win release of the hostages.”
And what Carter didn’t really know, and a lot of my work and the work of Bob Parry and others has been to show that the Hashemi brothers were secretly double agents. They were secretly working for Bill Casey when they went to Jimmy Carter. So they were really sabotaging the Carter administration outreach.
Jeff: Talk about what the Carter administration reaction to their offer was.
Craig: They did verify the Hashemi brothers were well connected in Iran, and they tried to use them. And the Hashemi brothers were trying to set up meetings, but nothing was really working. They tried through a nephew of the Ayatollah Khomeini. There was a lot of talk, but no action. And it went on and on for months until April when the Carter administration decided this was going nowhere. And that’s when they tried the rescue operation known as Operation Eagle Claw.
Jeff: Talk about William Casey, who he was, how he fits into this story.
Craig: Casey is one of the greatest characters I’ve ever been able to write about. I write about him as a sort of a cross between James Bond and Mr. Magoo. And he mumbled. In fact, his nickname was Mumbles. He spat when he talked, no one could understand a word that he said. When he was in progressional testimony after he became head of the CIA, it was almost comical because he would be asked the question under oath, and he had replied something like, “Aaagrr.” And no one could understand anything.
Even President Reagan famously said he could never understand what Casey said, and you can only ask him to repeat himself so many times, otherwise it’s rude. So he would just nod when Casey was talking and smile. And he also went in 10 different directions at once. Everything he was doing was compartmentalized even though he had been a great, great spy in World War II with the Office of Strategic Services.
And after the Americans landed on the beaches of Normandy and D-Day, he put together the intelligence necessary for our troops to know exactly where the Germans were, what were the strategic missions they should undertake, where they could infiltrate the Germans, and so forth. And he did a terrific job. But officially after World War II, he was not in the intelligence world. He was a Washington lawyer.
He became head of the Securities and Exchange Commission under Nixon. He also served as head of the Export-Import Bank. But he secretly kept alive a network that he brought out again, once the hostage crisis reared its ugly head. And it took me years to put all this together. But I went to Israel [and] I talked to the head of Israeli military intelligence, and he said, “Oh yes, Bill Casey, I was talking to him in ’79 and ’80.” Casey wasn’t in the government then. And earlier you mentioned the Logan Act, which is a law that prohibits private citizens from interfering with our foreign policy. And that’s exactly what Bill Casey was doing.
Jeff: The idea of using this crisis to the benefit of the Reagan campaign. Talk a little bit about how that idea evolved with Casey and his network.
Craig: It’s hard to know exactly when they realized how long they would be asking the Iranians to detain the hostages. But it was certainly true by July of 1980, that’s when Casey met in Madrid with Mehdi Karroubi, a highly placed Iranian cleric. And that’s when the negotiations really began in terms of face-to-face conversations that were very, very secretive. Between us, I think Bob Parry and I punctured three alibis for Bill Casey.
One of the amazing things about all of this is Casey was running a victorious presidential campaign. Now that’s a 24/7 job. You’re in the media spotlight constantly. And to sneak away to Europe, to Madrid and to Paris that Casey apparently did, and to do a covert operation like this is phenomenal. And that’s where you see Casey as one of the greatest spies in American history.
Jeff: Talk about the role of Israel in this.
Craig: This was really taboo because Israel played a huge role in this. And I realized it was only after writing the book that I could say quite clearly and in one sentence, Israel played a key role in a covert operation that sabotaged an American presidential election. And that’s violating our sovereignty. That’s not what allies do for each other. And they got away with it. And I think it’s one reason there was so much disinformation going on.
I began reporting on this in 1991, that’s 33 years ago. And suddenly all these rogue intelligence operatives would come out of the woodwork. Some of them were arms dealers- freelance arms dealers, some of them were liars. And they hooked a lot of reporters. And from the beginning, I was aware this was happening, but I didn’t understand it really.
And a lot of reporters like me, we found ourselves in this murky, shadowy world where you didn’t know who to believe. And the truth is, you had to interview these arms dealers- and I’m talking about illegal arms dealers. People who are willing to send TOW missiles to Iran when it’s under embargo, that kind of thing. That world is very, very secretive. People by their nature are liars. It’s a little like investigating the mafia or organized crime.
The people who know most about it are themselves criminals. They have firsthand experience. Those are the firsthand sources. So you can’t really investigate without talking to them, but you have to understand they may be lying to you and have to hear them out and corroborate or refute what they’re saying.
Jeff: What was the impetus for Israel to participate in this? What was their issue with Carter and the Carter administration, particularly post Camp David?
Craig: There were two main issues. One, as you say, was Camp David. Carter had just finished the Camp David Accords in 1978. And to me, it was his greatest triumph. That is Carter’s often seen as this weakling of a president, but here you had him twisting the arm of Menachem Begin, the Israeli Prime Minister, and Anwar Sadat, and getting them to an agreement that has lasted, I think it’s now 46 years that treaty has held. They both won Nobel prizes over it, both Begin and Sadat. But Israel did so very reluctantly. They gave back the Sinai of Egypt, and they were pissed off at Carter, and they did not want him reelected. And Begin made that very, very clear time and again.
The other issue was Iran was about to be attacked by Iraq. And though Israel, like the United States, had no fondness at all for the Islamic fundamentalists in Iran, they saw Saddam Hussein as being much worse in a way. He was attacking Iran and if he were to win, suddenly he would become the great powerhouse in the Middle East with oil, not just from Iraq, but also from Iran. And that would pose a real threat, not just to Israel, but to the entire Western world. So they wanted Iran to be able to defend itself against Iraq, and they couldn’t do that without weapons.
Jeff: And this is what Casey was offering to them?
Craig: Absolutely. When you look at the military forces in the Middle East, both Israel and Iran, they had powerful militaries that were essentially equipped with American arms. So Israel was in a position to help Iran. That is, they both had F-4 fighter jets. They had C-130 cargo planes. Those planes need spare tires so they can land. They need all sorts of equipment, all sorts of spare parts. So Israel was in a position to bail out Iran, but it had to be done in ultra secrecy. Remember, at the time, Iran referred to the United States as the Great Satan. Israel was a little Satan. They were chanting in the streets, “Death to America.” So aligning with Iran or sending them weapons was completely taboo and would’ve been seen as treasonous.
Jeff: What did Reagan himself know about what Casey was up to?
Craig: I wish I could give you a better answer. I’ll tell you as much as I know. He was asked about once, I think he was on the tarmac about to board a plane or Marine One, the White House helicopter. And someone asked him precisely that question. He just yelled back, “Oh, no, I was doing something exactly the other way.” Reagan was someone who seemed to know the big picture, but didn’t sweat the details.
And the most precise evidence I can find that Reagan knew what was going on, came in a letter that John Connally wrote to Nancy Reagan. And I’m presuming Nancy spoke to her husband occasionally and told him what was going on. But Connally had gone to the Middle East in the summer of 1980, and he went on a tour and met with a lot of the heads of states in various Middle Eastern countries, including Anwar Sadat and so forth.
He was traveling with Ben Barnes and Connally had been governor of Texas. Ben Barnes had been the Lieutenant Governor of Texas. And Barnes came forth with this a year or so ago, and said that they were– As they met with these various heads of states in the Middle East, the one message Connally would give would be, “Don’t release the hostages. You’ve got to keep them till after the election because Reagan will be nicer to Iran than Carter would be.” So that message was conveyed and Connally wrote about it to Nancy Reagan. So I suspect Reagan may certainly have known from that.
Jeff: Talk about the risk that Casey was taking, that this would all come out, that it could blow up, the consequences of that, and what Casey was thinking about in taking this risk.
Craig: It was a humongous risk. This is arguably an act of treason, and it certainly appears to violate the Logan Act, which dates back to I think 1799. I think it’s never actually been used to prosecute anyone, but it is clearly a statute, and Casey seemed to be violating it, no question. I also think they would’ve lost the election instantly if it had been exposed. His career would’ve been over, the presidential campaign, and Carter probably would’ve been reelected.
Jeff: Talk a little bit about Casey’s thought process, as best we know it, relative to not just the Reagan campaign and getting Reagan elected over Carter, but also the long-term implications of all of this with respect to American foreign policy. Casey had to have a clear understanding of that.
Craig: Absolutely. The word that pops to mind is Manichaean in the sense that Casey saw things in black and white. There were no shades of gray. He started off with fighting the Nazis, and one could make a good case that that’s pretty black and white. But in the Cold War, he wasn’t just for containing the Soviet Union. He was a proponent of rollback. He wanted to topple regimes all over the world. And the CIA had been doing that in the immediate postwar era. After all, they had installed the Shah of Iran in 1953 in a coup d’état that was enormously effective. It was brilliant and just a terrific coup d’état that changed the balance of power in the Middle East and gave the United States a much more sure footing. It also provided oil to the entire Western world for a generation. So when that ended with the Iranian Revolution, that provided enormous motivation to move forward with the October Surprise.
Jeff: Talk about the way that this story was first reported as it began to leak out as there were stories and rumors about what had transpired here. Explain a bit about the way it was reported initially and what happened after that.
Craig: It was quite extraordinary. And I think if you look today at what’s going on with The Washington Post and The LA Times, and how they can be quashed, this was my first hand experience. And I’ve written six books now on the Republican Party’s assault on democracy. This one was personal because I was personally involved. I had a front-row seat and I was really a participant in it. And throughout the ’80s, there were occasional pieces. One in The New York Times, a couple in the Miami Herald that hinted about the October Surprise.
President Banisadr had been ousted by Ayatollah Khomeini during the October Surprise. He survived assassination attempts and fled to Paris. And he’d given an interview saying that this had happened. He was one of my sources as well. I saw him in 2016 before he died. So, there had been a few stories like that that had dribbled out. But in 1991, Gary Sick, who had been on President Carter’s National Security Council, and he’d been the Iran point man, published a story in The New York Times in which he outlined the October Surprise.
And I think it still holds up brilliantly today. And I used it in many ways as a roadmap to do more reporting, to get into the real details, to set the scenes, to be able to write a narrative. So there was this one op-ed piece, that’s what triggered me getting involved. I wrote a huge investigative piece for Esquire Magazine that appeared about six months later.
And suddenly the race was on for reporters like me. I started reporting in the days of Watergate and the Pentagon Papers, the My Lai Massacre, those were the investigative stories that if you got it out, they would win the national attention. It would change the national conversation, even change the course of history. And I thought this was my chance to do one of those stories. So I did it for Esquire. It got a good reception. I was then hired by Newsweek, presumably to lead their investigation. But while I was there, suddenly everything went dark. Everything did a 180. The story was killed.
Sources popped out of the woodwork who would explode in the faces of various journalists. Newsweek, back then, was owned by The Washington Post company, and still had some of the glow surrounding it, the aura surrounding it from Watergate of doing this great, great investigative journalism. But throughout the ’80s I think Reaganism took hold in Washington. A lot of people were entranced by the glamor of [the] Reagans. And suddenly, I think a lot of journalists began cozying up to the powers that be.
And Newsweek at that time had another reporter who had a little more clout than I did, and his name was Henry Kissinger. So Newsweek just went in reverse. And to my astonishment while I was there, they had three stories in a row saying the October Surprise didn’t happen. It didn’t happen. It didn’t happen. And if you know anything about news, news is when something happens, it’s not when nothing happens. And yet they were burying this story, and that happened all over the country to the entire press corps.
Jeff: Talk about your commitment to this story and the way you stayed with it for 30 years.
Craig: I found it shocking because by ’91 or so, I had enough material that I knew it had happened. I was in that weird state where I had enough knowledge to convince myself, but I knew it wasn’t enough to convince the rest of the world, and I needed to do more reporting. And I found it shocking. One of the hostages actually wrote me since the book came out, and he talked about having his life and the life of other hostages being used as barter in a geopolitical transaction.
And they were just nothing more than pawns who were being used for the partisan political gain of the Republican Party. And that is a case of putting party before country, party before country. And I think that’s happened again and again with Trump with his ties to Putin, also with his ties to Israel, to Bibi Netanyahu.
Jeff: The broader framework also is the way in which all of this impacted American foreign policy for so many years, that there was a through line that led directly to Iran-Contra near the end of Reagan’s term, and to foreign policy even after that.
Craig: Absolutely. Iran-Contra had been reported on this, and it was a national spectacle. I’m old enough that I remember Watergate, and to me that was the beginning of binge-watching. There was nothing more fun than getting home from work and watching the testimony over this. And for some reason, it was just like a great dramatic narrative being played out in real-time and it wasn’t phony baloney, but I think the Republicans learned how to sort of master those situations.
And when the Iran-Contra was investigated, Oliver North, who was really the villain, made himself almost into a matinee idol and became a media celebrity over this. And [we] really never got to the bottom of Iran-Contra. If you follow Iran-Contra, most people thought it started in 1984. Well, as we learned, that was not the case. The origin of Iran-Contra was really the October Surprise in 1980, and that’s when the arms channels from Israel to Iran began.
Jeff: When you look at this in the context, and you alluded to it a little while ago, the context of what we’re seeing today with Trump and Putin and Netanyahu, talk a little bit about how you view this having lived through this experience.
Craig: The big difference between Trump today and what we went back on in 1980 is in 1980, it was incredibly covert. With Trump, almost everything is overt. It’s so overt that no one believes it. When Trump said in 2016, at a campaign rally, “Russia, if you’re listening, send me those emails.” He was asking for the Russians to intervene, and they did help him.
Recently, of course, Bob Woodward reported that Trump has had seven talks with Putin since he left the presidency. So that kind of stuff is pretty wide open today, and it’s almost as if they’re trying to make us numb about it, so we don’t react to it. But in fact, it is a heinous crime if one of the parties, especially the one who’s not in office, is abrogating foreign policy and, again, putting party over country and sabotaging our foreign policy so they can help win the election.
And I think this has happened far more than Americans realize. We love to think of ourselves as the greatest democracy on Earth. But the October Surprise was not even the first of these. There was one in 1968, and the election was Nixon against Hubert Humphrey. At the time the Vietnam War was still going on when Lyndon Johnson was president, but he was really trying to end the Vietnam War with peace talks in Paris. And he got a third party, a woman named Anna Chennault, to intervene and tell South Vietnam that they should boycott the peace talks in Paris. And sure enough, they did.
So the last week before the election, the Democrats had egg on their face. Here, they were trying to have real peace negotiations in Paris, and they couldn’t even get their allies to the peace table. So that happened in ’68. After that happened, of course, Nixon was elected, but when he was running for reelection in ’72, he was scared that Lyndon Johnson had secretly taped him, and that they had papers exposing the Anna Chennault affair. So Nixon put together a team of burglars, and he had them break into the Brookings Institute in Washington in an office residential complex known as the Watergate.
And there you have the Watergate scandal in ’72. In 1980, you have what we’re talking about right now. In 2000, you had the Brooks Brothers riots in Miami, in which they intervened and stopped the final recount. So it went to the Supreme Court, which the Supreme Court elected George W. Bush and put him in office. And in 2016, of course, we have Donald Trump. So this has happened again and again, and to me, it’s really torn our democracy to shreds.
Jeff: One of the things that’s particularly frightening about it in the current context is that in an age when communication is so much easier, when things can go on behind the scenes, whether it’s by Zoom, or whatever the technology might be, this is even easier to do today. It doesn’t require the trip to Madrid that it took Bill Casey to make. It’s even easier today.
Craig: Right, and it’s particularly scary with the likes of Elon Musk controlling what may well be the most powerful social media platform, I think, in the world.
Jeff: Craig, when you look at this total story today, is this case closed? Is this done as far as you’re concerned?
Craig: I’m pretty much finished with it. People can differ with me, but I think it’s proven. I think the case is proven. And in the book I published certain documents, for example, that show the receipts, literally. The invoices of weapons that were sold by the Hashemi Brothers to Iran. And they’re printed in my book. And you can see that there are parts for a C-130 cargo plane, and it’s being sent by Jamshid Hashemi, who uses one of his aliases in this receipt. But that’s been confirmed that it’s him.
And the documents came from President Banisadr which means they got to Iran. You can see the whole transaction from start to finish on those documents. Also what’s very upsetting in all this is there were congressional investigations. And that document in particular was upsetting because that went to Congress. Congress had that document. And to give you an idea of how lousy the congressional investigation is, how much of a whitewash it was, they had those documents.
They were originally in Farsi and they had them translated, and they filed them in cardboard boxes, which they put in an storage room in an abandoned ladies’ room, and they left it under the tampon dispenser, and they just let it sit there for years and years and years until Bob Parry, my late colleague and a wonderful reporter, until he discovered them and took them out, and they’ve never been published until now.
Jeff: Craig Unger, his book is Den of Spies: Reagan, Carter, and the Secret History of the Treason That Stole The White House. Greg, I thank you so much for spending time with us here on the WhoWhatWhy podcast.
Craig: Thank you, Jeff. I enjoyed it.
Jeff: Thank you. And thank you for listening and joining us here on the WhoWhatWhy podcast. I hope you join us next week for another radio WhoWhatWhy podcast. I’m Jeff Schechtman. If you like this podcast, please feel free to share and help others find it by rating and reviewing it on iTunes. You can also support this podcast and all the work we do by going to whowhatwhy.org/donate.
