The Enterprise (Iran-Contra)

The Enterprise was the informal name given by Oliver North and other participants to the private covert operations network that conducted the two interlocking elements of the Iran-Contra Affair: the sale of American weapons to Iran and the resupply of the Nicaraguan Contras during the period when Congressional Boland Amendment prohibitions barred U.S. government agencies from providing the Contras with military assistance. The Enterprise was organized by Richard Secord, a retired Air Force major general, and Albert Hakim, an Iranian-born American arms dealer, through a network of corporate entities that held accounts, purchased weapons, and managed logistics outside official U.S. government channels. Oliver North, serving on the National Security Council staff, provided the White House political authorization and operational direction.¹

Structure and Legal Entities

The Enterprise's primary operating entities were:

Stanford Technology Trading Group International (STTGI), a Secord-Hakim joint venture registered in the United States, served as the principal contracting entity for weapons purchases and the public face of the network's commercial operations. STTGI held contracts and managed some weapons transfers.

Lake Resources S.A., a Swiss shell company established by Hakim, served as the Enterprise's primary financial account. Iranian payments for weapons were deposited into Lake Resources accounts; disbursements to Contra supply operations and to Secord's and Hakim's other activities were made from those same accounts. The Swiss account structure provided both secrecy and distance from American banking oversight.

Additional entities included Udall Research Corporation (another Hakim vehicle) and Energy Resources International. Monzer al-Kassar, a Syrian arms dealer, was paid approximately $1.2 million by Secord to facilitate the movement of weapons from Israel to Contra forces through Eastern European sources.¹

North maintained a private communications channel with Secord using KL-43 encryption devices, through which operational details were coordinated outside normal NSC channels. North's notebooks, seized during the investigation, documented the Enterprise's activities and formed a critical part of Walsh's evidence.²

Iran Side

The arms-for-hostages dimension of the Enterprise began in August 1985, when Israel shipped 96 TOW anti-tank missiles to Iran as the first transfer in the arrangement. The United States replenished Israel's stocks. Adnan Khashoggi provided bridge loans to finance the early transactions; Manucher Ghorbanifar, an Iranian arms dealer and former SAVAK officer, served as the Iranian intermediary.

Subsequent transfers included 408 more TOW missiles in September 1985, a failed HAWK missile shipment in November 1985 that became an operational embarrassment requiring CIA aircraft for the logistics, and multiple TOW shipments in 1986. Approximately 2,000 TOW missiles and other weapons were transferred to Iran in total. The Enterprise generated the profits from the markup between its acquisition costs and the prices charged to Iran.¹

In October 1986, Albert Hakim conducted unauthorized negotiations in Geneva with a representative of Iranian speaker Hashemi Rafsanjani (identified in documents as "the Relative") that produced a Nine-Point Plan expanding U.S. commitments to Iran far beyond what North, Poindexter, or Reagan had authorized. The Geneva negotiations, when discovered, alarmed NSC officials who felt Hakim had made policy commitments without authorization.²

Contra Side

Enterprise revenues from the Iran arms sales were to be diverted to Contra resupply. North's April 1986 memorandum to National Security Adviser John Poindexter - "the diversion memo" - documented the plan and was the document that Poindexter approved. CIA Director William J. Casey was aware of and supported the arrangement.¹

The Contra supply operation was conducted through Ilopango Airbase in El Salvador, where CIA Hangar No. 4 was turned over to the Enterprise's operations in 1985. Felix Rodriguez, a former CIA officer with connections to Donald Gregg (then serving as National Security Adviser to Vice President George H.W. Bush), coordinated aircraft and logistics at Ilopango.

The Contra resupply network used multiple aircraft and crews. Eugene Hasenfus, a cargo handler with prior Air America experience, was aboard a Fairchild C-123K transport when it was shot down by Sandinista forces over Nicaragua on October 5, 1986. Hasenfus survived, was captured, and provided the Nicaraguan government with information about the network that broke the Contra supply operation into public view.³

Finances and the Diversion

Walsh's investigation documented that the Enterprise generated approximately $48 million in revenues from the Iran weapons sales. Of this amount, only approximately $3.8 million was delivered to Contra supply operations. The remainder was retained in Enterprise accounts, disbursed to Secord and Hakim, used for operational expenses, and in part used to pay Oliver North a salary supplement - the basis for one of the criminal charges against Hakim.

The large gap between revenues and Contra deliveries was a finding of significant consequence: it indicated that the Enterprise was operating substantially as a profit-making private venture rather than purely as a mechanism for funding the Contras, as its participants had represented to congressional investigators.¹

Collapse and Investigation

The Enterprise collapsed in the fall of 1986 from two nearly simultaneous exposures. The Hasenfus shootdown on October 5, 1986, exposed the Contra supply network. On November 3, 1986, a Lebanese magazine, Al-Shiraa, published an account of the U.S. arms sales to Iran, prompted by information from an Iranian official. Within weeks, the entire structure became the subject of the Tower Commission investigation, parallel congressional inquiries, and eventually the Independent Counsel investigation of Lawrence Walsh.

North shredded documents and altered computer records in November 1986 in an attempt to conceal the Enterprise's activities, an act that formed part of the obstruction charges against him. Poindexter approved North's diversion memo and then destroyed it. Walsh's investigation eventually produced 14 criminal cases and 11 convictions; the Bush Christmas Eve 1992 pardons of Caspar Weinberger, Robert McFarlane, Elliott Abrams, Clair George, Alan Fiers, and Dewey Clarridge blocked the final phases of the prosecution.²