Panels Probing Mysterious Death of Iran Affair Figure

ISGP SECTION: Suspicious deaths index

June 13, 1987 | WILLIAM C. REMPEL | L.A. Times Staff Writer

NEW YORK — Congressional committees probing the Iran-Contra scandal are investigating the mysterious death in London last summer of Iranian weapons dealer Cyrus Hashemi, who had sought unsuccessfully to become a key middleman in the arms-for-hostages trade, The Times has learned.

Also, sources say, a U.S. government informant who had worked with Hashemi claims that Customs Service officials told him the arms dealer may have been "bumped off" by government agents to protect the then-secret Iran initiative. Documents filed in federal court here this week support the accounts by these sources, who spoke on condition of anonymity.

According to sources in Washington and London, a Senate investigator has made two trips to England to meet with government and medical authorities familiar with the Hashemi case.

Hashemi, a rival for roles ultimately assumed by Adnan Khashoggi and Manucher Ghorbanifar in the Iran operation, died suddenly on July 21, 1986, three months before the secret arms deals were disclosed. Officially, death was attributed to a rare and virulent form of leukemia that was diagnosed only two days before Hashemi died.

Since then, persistent questions have been raised about the accuracy of those autopsy results and whether chemical or radiation injections or sprays could have caused similar symptoms.

"There are lots of sophisticated methods (of assassination) these days," a committee source said. "Given all the circumstances, we'd be ignoring our responsibility if we didn't follow up what is, at the very least, a mysterious death of an important link" in the Iran arms affair.

At the time of his death, the 47-year-old Hashemi was acting as a confidential customs informant in a $2.5-billion "sting" operation that led to the arrests of a retired Israeli general and two Khashoggi business associates. Their case is still pending.

A customs official, although expressing skepticism about suggestions of exotic foul play in the death, conceded this week: "A mystery writer couldn't have done better."

Offered Hostage Help

Hashemi first emerged as a controversial character in early attempts at clandestine relations between the United States and the revolutionary government of Iran. In 1980, after 52 hostages were seized at the U.S. Embassy in Tehran, Hashemi offered to help negotiate for their release.

"He claimed to be a cousin of Hashemi Rafsanjani (now leader of the Iranian Parliament)," recalled Lloyd Cutler, legal counsel to President Jimmy Carter at the time. "We met with him in New York, but nothing important came of it."

However, Hashemi did open contacts with officials in Tehran and went on to use those contacts to sell U.S. arms to Iran in 1981 and 1982. He and two of his brothers were indicted in 1984 for their roles in those transactions. One went to jail, but Cyrus and and the other brother fled to England, contending that the sales were part of their effort to open channels necessary to help get hostages released.

Boasted of U.S. Gratitude

Until Hashemi became a fugitive, he had boasted to friends and associates that the American government was so grateful for his help in the hostage negotiations that he was the White House choice to succeed the Ayatollah Ruhollah Khomeini as the head of Iran's government.

Hashemi was barred thereafter from returning to the United States, where his son attended school and where he said he had millions of dollars in real estate investments. But he apparently found, in the American hostages held in Lebanon, a new opportunity to improve his strained relations with the U.S. government.

In June, 1985, Hashemi sent a message to William J. Casey, director of the CIA, offering to help obtain the release of hostages in exchange for his indictment's being dropped.

That message was relayed at a turning point in the Iran dealings. It was sent through a mutual friend of Casey, from Hamburg, West Germany, where Hashemi had gone to introduce a joint-venture partner, Khashoggi, to Iranian businessman Ghorbanifar. Hashemi proposed that the three men could work together on a number of business deals--including a plan to sell arms to Iran with official U.S. approval.

In a series of communications through John Shaheen, long-time friend and business associate of Casey, Hashemi told the CIA chief that he had contacts in the Iranian Foreign Ministry.

Change in Iranian Policy

Those contacts, Hashemi said, were willing to help gain the release of U.S. hostages and to consider a change in Iranian policy toward the United States in exchange for the freedom of pro-Iranian prisoners held by Kuwait, the sale of anti-tank missiles and the dismissal of Hashemi's indictment.

According to previously classified White House documents summarized by federal prosecutors in New York last week, U.S. officials refused to meet immediately with Hashemi or to drop the charges, but they did request that officials of an unnamed third country meet with him and his Iranian contacts.

Two weeks later, sources have told The Times, Hashemi and Khashoggi flew to Israel and met with Prime Minister Shimon Peres.

But Hashemi's campaign to orchestrate a deal to trade arms for hostages--and to trade his assistance for dismissal of the indictment against him--sputtered and died. Khashoggi backed out of his joint venture agreement with Hashemi in August and, unbeknown to Hashemi, entered into a White House-sanctioned Iranian arms deal in partnership with Ghorbanifar, the man Hashemi had introduced to him in Hamburg.

Hashemi had been cut out, but records and sources say that, for a while, he continued trying to negotiate a sanctioned arms deal.

Became Customs Informant

By December, 1985--as the third shipment of Khashoggi-financed U.S. arms was being sent to Iran via Israel--Hashemi had turned to the Customs Service, the agency that had made the earlier case against him. In return for acting as a confidential informant on an arms-smuggling sting, Hashemi wanted help with his indictment.

Hashemi now wore a microphone and brought undercover customs agents to meetings with his business associates in Paris, London and New York. His primary associate, London-based American attorney Samuel Evans, was Khashoggi's top legal adviser. Another, Nico Minardos of Beverly Hills, was a former Khashoggi executive.

Together, Evans and Minardos introduced Hashemi--and the undercover agents--to more than a dozen businessmen in Europe and Israel. On secretly recorded tapes made by the Customs Service, Evans and Minardos insist that their plan to sell arms to Iran could occur only with official U.S. approval. Hashemi and the undercover agents dismissed that possibility, however, saying that the U.S. government would consider any such sales to be against the law.

17 Businessmen Indicted

In April, 1986, Evans and Minardos were among 17 international businessmen named in a conspiracy indictment that accused them of trying to sell $2.5 billion in U.S. arms illegally to a terrorist country. No arms were ever shipped, however.

Also among those indicted was Israeli war hero Avraham Bar-Am, a retired brigadier general. Efforts by Hashemi to snare Khashoggi in the sting had been unsuccessful.

Customs Service wiretaps disclosed that Hashemi had asked Evans to see if Khashoggi wanted to participate in the bogus arms deal. But Khashoggi, in a possible attempt to keep Hashemi from competing with his own U.S.-sanctioned deals, sent back word via Evans that arms deals with Iran were too dangerous.

The trial of Evans, Bar-Am and the others, delayed by subsequent disclosures that the White House was shipping the same weapons to Iran that the businessmen were accused of conspiring to sell, is now scheduled for October in federal court here.

Certain to be a key witness in that trial is Hushang Lavi, an Iranian-born businessman of Long Island, N.Y., who had worked with Hashemi in the sting. Lavi posed as a representative of the Iranian mission to the United Nations in meetings with Hashemi, Evans and Minardos in New York that were videotaped by hidden cameras.

'Knew Too Much'

Circumstances surrounding Hashemi's death apparently frightened Lavi, sources say, and he immediately contacted customs agents for reassurance. Lavi told the London Observer that customs agents had said an unnamed American agency "got rid of" Hashemi because he "knew too much" about the U.S. government's own secret arms shipments.