In November 1986, it was disclosed that the United States had, in August 1985, and subsequently, participated in secret dealings with Iran involving the sale of military equipment. There appeared to be a linkage between these dealings and efforts to obtain the release of U.S. citizens held hostage in Lebanon by terrorists believed to be closely a**ociated with the Iranian regime. After the initial story broke, the Attorney General announced that proceeds from the arms tansfers may have been diverted to a**ist U.S.-backed rebel forces in Nicaragua, known as contras. This possibilty enlarged the controversy and added questions not only of policy and propriety but also violations of law.
These disclosures became the focus of substantial public attention. The secret arms transfers appeared to run directly counter to declared U.S. policies. The United States had announced a policy of neutrality in the six-year-old Iran-Iraq war and had proclaimed an embargo on arms sales to Iran. It had worked actively to isolate Iran and other regimes known to give aid and comfort to terrorists. It had declared that it would not pay ransom to hostage takers.
Public concern was not limited to the issues of policy, however. Questions arose as to the propriety of certain actions taken by the National Security Council staff and the manner in which the decision to transfer arms to Iran had been made. Congress was never informed. A variety of intermediaries, both private and governmental, some with motives open to question, had central roles. The N.S.C. staff rather than the C.I.A. seemed to be running the operation. The President appeared to be unaware of key elements of the operation. The controversy threatened a crisis of confidence in the manner in which national security decisions are made and the role played by the N.S.C. staff.
It was this latter set of concerns that prompted the President to establish this special review board on Dec. 1, 1986. The President directed the board to examine the proper role of the National Security Council staff in national security operations, including the arms transfers to Iran. The President made clear that he wanted ''all the facts to come out.''
The board was not, however, called upon to a**ess individual culpability or be the final arbiter of the facts. These tasks have been properly left to others. Indeed, the short deadline set by the President for completion of the board's work and its limited resources precluded a separate and thorough field investigation. Instead, the board has examined the events surrounding the transfer of arms to Iran as a principal case study in evaluating the operation of the National Security Council in general and the role of the N.S.C. staff in particular.
The President gave the board a broad charter. It was directed to conduct ''a comprehensive study of the future role and procedures of the National Security Council (N.S.C.) staff in the development, coordination, oversight and conduct of foreign and national security policy.'' See Appendix A., Executive Order No. 12575.
It has been 40 years since the enactment of the National Security Act of 1947 and the creation of the National Security Council. Since that time the N.S.C. staff has grown in importance and the a**istant to the President for national security affairs has emerged as a key player in national security decision making. This is the first Presidential commission to have as its sole responsibility a comprehensive review of how these institutions have performed. We believe that, quite aside from the circumstances which brought about the board's creation, such a review was overdue.
The board divided its work into three major inquiries: the circumstances surrounding the Iran-Contra matter, other case studies that might reveal strengths and weaknesses in the operation of the National Security Council system under stress, and the manner in which that system has served eight different Presidents since its inception in 1947.
At Appendix B is a narrative of the information obtained from documents and interviews regarding the arms sales to Iran. The narrative is necessarily incomplete. As of the date of this report, some key witnesses had refused to testify before any forum. Important documents located in other countries had yet to be released, and important witnesses in other countries were not avaiable. But the appended narrative tells much of the story. Although more information will undoubtedy come to light, the record thus far developed provides a sufficient basis for evaluating the process by which these events came about.
During the board's work, it received evidence concerning the role of the N.S.C. staff in support of the contras durng the period that such support was either barred or restricted by Congress. The board had neither the time nor the resources to make a systematic inquiry into this area. Notwithstanding, substantial evidence came before the board. A narrative of that evidence is contained at Appendix C. The board found that the issues raised by the Iran-contra matter are in most instances not new. Every Administration has faced similar issues, although arising in different factual contexts. The board examined in some detail the performance of the National Security Council system in 12 different crises dating back to the Truman Administration. Former government officials participating in many of these crises were interviewed. This learning provided a broad historical perspective to the issues before the board.
Those who expect from us a radical prescription for wholesale change may be disappointed. Not all major problems - and Iran-contra has been a major one - can be solved simply by rearranging organizational blocks or pa**ing new laws.
In addition, it is important to emphasize that the President is responsible for the national security policy of the United States. In the development and execution of that policy, the President is the decision maker. He is not obliged to consult with or seek approval from anyone in the Executive Branch. The structure and procedures of the National Security Council system should be designed to give the President every a**istance in discharging these heavy responsibilities. It is not possible to make a system immune from error without paralyzing its capacity to act.
At its senior levels, the National Security Council is primarily the interaction of people. We have examined with care its operation in the Iran-contra matter and have set out in considerable detail mistakes of omission, commission, judgment and perspective. We believe that this record and an*lysis can warn future Presidents, members of the National Security Council, and national security advisers of the potential pitfalls they face even when they are operating with what they consider the best of motives. We would hope that this record would be carefully read and its lessons fully absorbed by all aspirants to senior positions in the National Security Council system.
This report will serve another purpose. In preparing it, we contacted every living past President, three former Vice Presidents, and every living Secretary of State, Secretary of Defense, national security adviser, most Directors of Central Intelligence, and several chairmen of the Joint Chiefs of Staff to solicit their views. We sought to learn how well, in their experience, the system had operated or, in the case of past Presidents, how well it served them. We asked all former participants how they would change the system to make it more useful to the President.
Our review validates the current National Security Council system. That system has been utilized by different Presidents in very different ways, in accordance with their individual work habits and philosophical predilections. On occasion over the years it has functioned with real brilliance; at other times serious mistakes have been made. The problems we examined in the case of Iran-contra caused us deep concern. But their solution does not lie in revamping the National Security Council system.
That system is properly the President's creature. It must be left flexible to be molded by the President into the form most useful to him. Otherwise it will become either an obstacle to the President, and a source of frustration; or an institutional irrelevance, as the President fashions informal structures more to his liking.
Having said that, there are certain functions which need to be performed in some way for any President. What we have tried to do is to distill from the wisdom of those who have participated in the National Security Council system over the past 40 years the essence of these functions and the manner in which that system can be operated so as to minimize the likelihood of major error without destroying the creative impulses of the President.