The October Surprise: The Iranian Hostage Rescue Mission, and the 1980 Presidential Election
The October Surprise:
The Iranian Hostage Rescue Mission, and the 1980 Presidential Election
By Don Hopkins, December 1988.
I. Iran under the Shah
The Shah of Iran, Mohammed Reza Pahlavi, came to power in 1953, thanks to a CIA-supported coup. The Shah's friendship and cooperation was extremely important for American foreign policy -- it gave the U.S. much influence in the region.
Iran is in extremely strategic position, adjacent to the Soviet Union and Persian Gulf countries. It also has enormous amounts of oil and money.
In accordance with the Nixon Doctrine, the United States sold weapons to the Shah, who used them to maintain the stability of his regime, and protect US interests. Arms were an extremely important part of Iranian-American relationship.
In 1977, President Jimmy Carter issued Presidential Directive #13, which declared arms transfers were to be viewed as exceptional departure from foreign policy. Human rights were an important issue to Carter, and he wanted to cut down on the amount of arms the U.S. was supplying to the rest of the world. When Carter called the Shah's Iran an "Island of Stability", he had no idea what was in store for him.
Iran was an extremely lucrative arms market. American companies were doing swift business there. The Shah had scads of money from selling oil, and loved to spend it on weapons.
Albert Hakim, an Iranian-born arms merchant, was selling millions of dollars worth of arms to the Shah in the 70's. In 1983 testimony, he boasted of arranging Iran arms deals, setting up swiss bank accounts, and paying off Iranian officials. 
General Richard Secord worked at the time in Air Force Military Advisory Group. His job was to represent US arms merchants before the Shah. Hakim and Secord were in cahoots, and ran a company called Stanford Technologies Trading Group International. They eventually became deeply involved in the events of the Iran-Contra Scandal.
II. The Fall of the Shah of Iran
The Iranian people hated the oppressive rule of the Shah, and the brutalities of his secret police, SAVAK. They felt extreme bitterness and contempt towards the America, because of the weaponry and moral decadence the U.S. supplied in abundance.  
They finally revolted against the oppressive rule of the Shah, who fled Iran into exile in Egypt, on January 16, 1979. On February 1, Ayatollah Khomeini returned to Iran from exile in France, causing forty-five thousand Americans to flee the country.
The fall of the Shah discredited Nixon Doctrine. America was not able to preserve peace by stocking Iran with arms. A country that was once such a valuable political ally turned into the arch enemy.
On February 14, revolutionaries invaded the American embassy and took hostages, demanding the return of the Shah, but released them in several days.
The Shah came to America for medical reasons, with the approval of President Carter, to seek treatment. This provoked the Iranian mobs, and on November 4, 1979, the American Embassy was captured and hostages were seized.
The students who had taken over the embassy demanded the return the Shah to Iran, for trial and execution, and threatened that if their demands were not met, the hostages would go on trial and be executed themselves. But even if Carter wanted to, he couldn't give in to their demands and legally extradite the Shah.
The Iranian government claimed not to have control over the students, but they certainly used the crisis to their own advantage. They received world attention, mobilized Iranian public opinion, and eradicated ties to the West. Their main concern was not the return of the Shah -- they were using the hostage situation to achieve internal political objectives.
III. Carter's Response
From the beginning, President Jimmy Carter gave the hostage crisis a high profile. It was the focus his and his country's attention, day after day. But that was exactly wrong approach to take if he wanted to get the hostages out, without making it seem like he conceded to terrorism. Not only did the Iranians benefit from the publicity, but the constant crisis took time away and attention from other important problems, like the Soviet invasion of Afghanistan, and the 1980 presidential election.
What Carter should have recognized was that there were different factions in the Iranian government competing with each other for power, and the hostage situation would go on as long as the Iranians could use the situation to their political advantage. If there was not as much attention on the hostage crisis, it would have not been as useful a propaganda tool.
The President threatened a military response if the hostages were harmed or put on trial. The threat was deterrent, not coercive. Such threats are most effective at keeping somebody from doing something they haven't already done. The threat worked. Iran stopped saying they were going to put the hostages on trial and execute them.
Carter considered several courses of military action. He decided not to mine Iranian ports, as that would interfere with other countries, and might provoke the Iranians to harm the hostages. He did however order that a rescue plan be drawn up, but he hoped it wouldn't have to be used.
The other effective measures he took were to freeze Iranian monetary assets, and to impose an arms embargo and economic sanctions. His goal was to get other countries to go along with the embargo and sanctions.
IV. The Hostage Rescue Mission
On April 23, 1980, an abortive Iranian hostage rescue mission took place, conducted under the utmost secrecy. The plan was to storm the American embassy in Tehran, and bring home the hostages.
8 helicopters, 6 C-130 transport planes, and 93 Delta force commandoes secretly invaded Iran. They were to rendezvous at a place in Iran they called Desert One, move out to another point called Desert Two, and then go on to Tehran to rescue the hostages. But Delta force never made it to Desert Two or Tehran. The mission was aborted after three of the eight helicopters failed, on the way to Desert One. The operation was a miserable failure, resulting in an accident that caused the loss of 8 American lives. Later investigation revealed a surprising level of negligence.   
Just before the rescue mission took place, several other countries had finally agreed to level economic sanctions on Iran. Some of them agreed to the sanctions because they thought that if they did, the U.S. would not take any military action. They were quite irate when they heard about the rescue mission after the fact.
At least three central figures in the Iran-Contra Scandal were involved with the Iranian hostage rescue mission: Secord, Hakim, an North.
General Richard Secord helped to organize the abortive rescue mission. After the first mission failed, he was the head of the planning group that eventually decided against another rescue attempt. Because the whereabouts of the hostages were unknown, the second rescue attempt (the October Surprise that the Reagan-Bush campaign was so worried about) never happened.
Secord was later suspended from his Pentagon post because of the EATSCO probe. EATSCO is a company that belongs to Edwin Wilson, the CIA operative who is currently serving time in a federal maximum-security prison for, among other things, secretly supplying 43,000 pounds of plastic explosives to Kadaffi. 
In 1981, he became Chief Middle East arms-sales adviser to Secretary of Defense Casper W. Weinberger. 
Albert Hakim is a wealthy arms merchant, an Iranian exile, and CIA informant, who had a "sensitive intelligence" role in 1980 hostage rescue. He worked for the CIA near the Turkish boarder, handling the logistics of the rescue mission in Tehran. Hakim purchased trucks and vans, and rented a warehouse on the edge of Tehran to hide them in until they were needed for the operation. Unexpectedly however, he skipped town the day before the rescue mission.    Later on, in July, 1981, Hakim approached the CIA, with a plan to gain favor with the Iranian government by selling it arms. 
Oliver North led a secret detachment to eastern Turkey. He was in the mother ship on the Turkish border awaiting the cue from Secord to fly into Teheran and rescue the hostages.   After the first aborted rescue mission, he worked with Secord on a second rescue plan.
According to the October Surprise theory, Secord, North and Hakim did not intend Desert One to carry through. The miserable failure of Carter's Desert One rescue attempt may have been deliberate.
V. The 1980 Presidential Election
The CIA helped the Reagan-Bush campaign to win the 1980 presidential election. Congressional investigations have revealed that active-duty CIA officers were working with the campaign. 
Former agents of FBI and CIA used to gather political information from their colleagues still active in the two agencies. Under the direction of Reagan's campaign chairman, William Casey, Reagan's forces had infilterated Carter's camp with one or more spies.  Casey and Bush were very popular with the CIA. William Casey operated an old-boy network of spies, and George Bush was director of the CIA during the Nixon Administration.
The CIA was down on Carter. Many agents were outraged by Carter-appointed CIA director, Stansfield Turner. He had had removed about 600 people from their jobs in covert operations, and he disciplined Theodore Shackley and Thomas Clines, two popular and powerful agents who were involved with some unsavory operations. (They were mixed up with Edwin Wilson, who sold explosives to Libya, and was associated with Secord through EATSCO.)
The spies associated with the Reagan-Bush campaign played an important role on the Debategate scandal. The Reagan campaign had somehow acquired copies of briefing books used by Carter to prepare for the 1980 presidential debate.    
On October 20, 1980, almost a week before the Carter-Reagan debate, Wayne H. Valis, a former aide to Mr. Reagan, sent debate briefings acquired from Carter's campaign staff, to Jim Baker, and David R. Gergen. 
When the Debategate scandal broke in 1983, Edwin Meese 3rd and Michael K. Deaver denied any knowledge of political espionage in the 1980 presidential race. Neither of them remember anything about Carter's briefing book, or have any documents or records pertaining to the incident. 
Meese insisted that the House subcommittee investigating the conduct of the 1980 presidential campaign have only limited access to the documents the White House wanted to provide, for fear that the committee would stumble upon important but unrelated documents.  An attempt to set up a criminal investigation was blocked by the Justice Department. 
The Reagan-Bush campaign was afraid Carter would rescue the hostages and win the election. Before the election, there were many rumors and security leaks about "October Surprise" hostage rescue attempt. Richard Werthlin, Reagan-Bush 1980 presidential campaign pollster, determined that an "October surprise" would end their chances of winning the election. 
On April 20, 1980, days before the actual mission, Mike Copeland ran a hypothetical hostage rescue story in the Washington Star that almost exactly predicted the real thing.
Members of the Reagan-Bush campaign formed the October Surprise Working Group, to keep Carter from bringing hostages successfully home.  Richard Allen, Reagan's foreign policy advisor, was the head of the group. The group included William Casey, Reagan's 1980 campaign manager, who was later appointed CIA director. Casey was at the heart of the Iran-Contra Scandal, and died before he could testify. The group also included Vice Presidential candidate George Bush, who was eventually elected President of the United States in 1988.
Bush did not have any campaign or public appearances from the 21st to the 27th of October, a week before the election.  (Why would they want to keep him out of sight before the election, like they did Dan Quayle?)
According to the October Surprise theory, members of the Reagan-Bush campaign cut a secret deal with the Ayatollah Khomeini, to keep the hostages from being released before the November 4, 1980 presidential election.
Richard Allen met with Robert McFarlane, and an alleged Iranian emissary, in early October 1980, in Washington D.C. They allegedly made a deal to delay release of the hostages until after the election.  McFarlane and Allen acknowledge the meeting, but deny that a deal was cut.
Barbara Honegger, a researcher with the Reagan-Bush campaign in 1980, recalls being told then that "Dick cut a deal." i.e. Richard Allen.   Mansur Rafisadeh, former Chief of SAVAK (the Shah's secret police), and CIA informer, said CIA elements loyal to Reagan arranged a deal to keep the hostages in Iran until Reagan was in the White House.   Abol Hassan Bani-Sadr, president of Iran at the time of the alleged deal, said the meeting took place some time during the last two weeks in October 1980, and that Allen and McFarlane met with Hashimi Rafsanjani, speaker of the Iranian parliament, who was the main Iranian contact in subsequent secret arms trading revealed by the the Iran-Contra Scandal.  
An investigative subcommittee chaired by Representative John Conyers, Jr. (D-Mich.) is looking into contacts between Iran and the 1980 Reagan-Bush campaign. 
VI. The Release of the Hostages
In October 1980, the Carter Administration finally negotiated an agreement between the US and Iran, to unfreeze Iranian assets for the return of the hostages. As a result, the Iran-United States Claims Tribunal is set up at the Hague. 
On October 22, the Iranians' persistent demand of U.S. weapons was suddenly dropped.  Bani-Sadr says the demands were dropped because there were two separate agreements: the official one with Carter in Algeria, and the secret one with the Reagan campaign, that the hostages should not be released during Carter's Administration. In return, Reagan would give them arms.
On Jan 20, 1981, Ronald Reagan was sworn in as President of the United States. The hostages were released moments afterwards.
VII. Arms Shipped to Iran
There were shipments of U.S. arms to Iran well in advance of the Iran-Contra scandal. Iran desperately needed spare parts and ammunition. Their arsenal consisted of mainly of weapons that had been supplied by the US during the Shah's regime.
On Jan 25, 1981, a number of Arab countries announces they were convinced that the US was committed, unofficially, to releasing about half the military spare parts contracted for by the Shah. 
On July 8, 1981, Presidential Directive #13 was formally rescinded by Reagan Administration. The U.S. went back to the arms exporting policies of Nixon and Ford.
Mansur Rafisadeh said that once Reagan was in office in 1981, shipment of arms started from Tel Aviv to Iran, and high-level Israeli officials said that Reagan knew and approved of the arms dealings.  According to Bani-Sadr, the arms exchange was organized by CIA agents, former SAVAK secret police, and Israelis.
An Argentina cargo plane crashed on the Soviet-Turkish border on July 18, 1981, revealing an arms deal between Israel and Iran -- in direct defiance of the US embargo on arms supplies to Khomeini's regime.      The cargo was 360 tons of American-made tank spares and ammunition.
The spares were for M-48 tanks, which America supplied both to Israel and, in the Shah's day, to Iran. The deal involved 12 plane loads of weapons being shipped from Tel Aviv to Teheran via Larnaca in Cyprus.
Three loads, openly documented as tank spares (at the insistence of the Israelis), were delivered on July 12, 14, and 17. The plane was intercepted on its return from the third run. As it was flying over Turkey, it veered to starboard and headed into Soviet territory, where it allegedly (according to the Soviets) made dangerous maneuvers and collided with a Russian plane. Western intelligence sources believe it was shot down by a MiG-25 armed with air-to-air missiles.
On August 21, 1981, the State Department said the Israelis told the US that any further sales to Iran would not involve American made equipment, for which they would need American approval.
July 21, 1983, Iraq's foreign minister said that huge quantities of American weapons are pouring into Iran. Shipments made directly or through neutral countries had been going on for months and years without interference by Washington. The arms were likely to prolong the war.
VIII. Iran-Contra Scandal
When the Tower Commission investigated the covert sale of arms to Iran, it limited itself to the transactions that took place after 1985.  But it is a fact that covert sales of American arms to Iran took place well before 1985.
One counterargument to October Surprise theory is as follows: It's unlikely that they'd be stupid enough to do something like that, because it would give the Iranians an excellent opportunity to blackmail the Reagan Administration. Trading arms to gain the freedom of hostages is one thing, but trading arms to keep hostages in captivity for political gains is nothing short of treason.
Another argument along the same lines would say that covertly diverting the proceeds from Iranian arms sales to the Contras, in direct defiance of a law passed by Congress, was too treasonous to be plausible. But as much as it has been covered up, the Iran-Contra Scandal is a reality, and many of the key participants are the same people involved in the October Surprise.
Iranian blackmail would explain why the Reagan Administration got involved in the foolish arms for hostages swap. Profits from the arms sales went to the Hezbollah, but hostages were not released as a result of those sales. Could it have been hush money? Why didn't they just say no? The only thing we can be sure of at this point in time is that the people involved have a damn good reason to plead the fifth.
Books (by author):
 American Hostages in Iran
The Conduct of a Crisis
Warren Christopher, et al
Yale University Press, New Haven and London, 1985
 The Iran-Contra Connection
Secret Teams and Covert Operations in the Reagan Era
Jonathan Marshall, Peter Dale Scott, Jane Hunter
South End Press, Boston, MA, 1987
From the Shah to the Secret Arms Deal
An Insider's Account of U.S. Involvement in Iran
Former Chief of SAVAK
William Morrow and Company, Inc., New York, 1987
 The Iranian Rescue Mission: Why It Failed
Paul B. Ryan
Naval Institute Press, Annapolis, Maryland, 1985
 All Fall Down: America's Tragic Encounter with Iran
Random House, 1985
Articles (by date):
 "Five to get out fifty"
The Economist, v274, Feb 23, 1980, pp. 14
 "Iran Raid: Deep footprints in the sand"
The Economist, v275, May 3, 1980, pp. 33
 "War (and other local difficulties) dog Arab Summit"
Mohammed Heikal London Sunday Times, Jan 25, 1981, pp. 9
 "Mystery Aircraft crashes inside Soviet Union"
Michael Binyon, Moscow, July 22 London Times, July 23, 1981, pp. 8g
 "Crash reveals Israel's arms deal with Iran"
London Sunday Times, July 26, 1981, pp. 2
 "Britain asks Moscow for details of plane crash"
London Times, July 27, 1981, pp. 6g
 "Soviet planes accused of interception in Turkey"
London Times, July 28, 1981, pp. 10g
 "The Iran Rescue Mission: The Untold Story"
David C. Martin
Newsweek, July 12, 1982, pp. 16
 "Meese and Deaver Say They Knew of No Spying in 1980
New York Times, July 19, 1983
 "Iraq Says U.S. Weapons Pour Into Iran"
New York Times, July 21, 1983, pp. A3
 "Reagan Offer on Papers Is Made But Rejected in Campaign
New York Times, July 31, 1983
 "Learning From Iran: Pointers from Carter's top
Newsweek, v106, July 1, 1985, pp. 30
 "Shia Stoops To Conquer: Book review"
The New Republic, v193, July 8, 1985, pp. 17
 "The Hague, Hostage Aftermath"
Atlantic, v257, Jan 1986, p. 22
 "Hakim Boasted of Iran Arms Deals in 1983 Testimony"
Robert L. Jackson and Gaylord Shaw
LA Times, Dec 9, 1986, sec. I pp. 22 col. 3
 "Oliver North's Strange Recruits"
The New York Times Magazine, Jan 18, 1987, pp. 20
 "CIA Contacted by Arms Middleman in 1983, Source Says"
LA Times, Feb 12 1987, sec. I pp. 20 col. 1
 "The nightmare from a forgotten past (1980 origins of
Iran Contra scandal)"
New Statesman, v114, July 3, 1987, pp. 20
 "Examining the loose ends in the Iran-Contra affair"
U.S. News & World Report, Oct 26, 1987, pp. 22
 "The October Surprise"
Executive producer, Eric Schwartz
The Other America's Radio, 1987
Santa Barbara, CA
 "The Bloody Border"