MIAMI -- The Carter administration considered an arms dealer's offer to trade up to $10 million in military spare parts for the 52 American hostages held at the U.S. Embassy in Tehran, The Miami Herald reported.
Newly declassified government documents show the plan was canceled because U.S. officials believed the man who offered the deal, an Iranian-born arms broker in New York, did not have the backing of Iranian President Abolhassan Bani-Sadr, the Herald said Sunday.
Carter could not be reached Sunday for comment.
The documents included memos from the CIA to Carter's deputy National Security Council chief David Aaron and from the State Department by Deputy Assistant Secretary of State Harold Saunders.
In a CIA memo to Aaron dated Oct. 3, 1980, an unidentified agency officer reports a conversation the previous day with Long Island resident Houshang Lavi in which the arms dealer submitted a seven-page list of military jet parts and made his offer.
The list was attached to the memo, which said Lavi 'wished to arrange the delivery to Iran of $8 (million) to $10 million of F-14 spare parts.'
If the United States provided the supplies and met Iran's other terms -- unfreezing Iranian assets, forgiving other claims against Iran and promising not to interfere in Iran's internal affairs -- then Lavi 'would arrange the swap of all the hostages upon the delivery of the spare parts,' it said.
The CIA memo said Lavi's plan was endorsed by Bani-Sadr. But the newspaper said that in a recent telephone interview from his Paris home, Bani-Sadr denied being aware of Lavi's plan or ever being in contact with Lavi.
The CIA officer recommended against pursuing the offer. The memos indicate that Carter officials ended their contacts with Lavi Oct. 29, 1980, after a foreign ambassador in Tehran reported Bani-Sadr was unaware of the Lavi offer.
The documents said Lavi became involved with the Carter adminstration after first contacting the campaign of independent presidential candidate John Anderson.
They gave no indication whether Lavi also contacted President Reagan's campaign, although during the waning days of the Carter administration, Reagan's advisers said they met with a person who identified himself as an envoy of the Iranian government.
The Reagan advisers said the envoy offered to surrender the hostages to Reagan in a bid to ensure Carter's defeat, but that they considerd the offer improper and dismissd the unidentified envoy as a fraud.
It also remains unclear whether Lavi ever sold parts to the Iranians. A 1983 lawsuit filed in Brooklyn by the Swiss company Alcari S.A. accuses Omega Industries, a firm owned by Lavi's brothers, of failing to fulfull $1.2 million in financial obligations that the Lavi company contracted as part of a plan to sell $15.2 million in military supplies to Iran in 1981.
Lavi and his brothers never have been accused by U.S. authorities of selling weapons to Iran, and one of Lavi's brothers denied in a telephone interview that they had, the Herald said. The lawsuit has not yet come to trial.
The documents detailing Lavi's contacts with the Carter administration were declassified recently by the State Department and turned over to Rep. John Conyers, D-Mich., chairman of the House Judiciary criminal justice subcommittee, as part of Conyers' investigation into whether the 1980 Reagan campaign made a secret arms-for-hostages deal with Iran.
The documents refer to Lavi only by his last name, but Conyers aide Frank Askin said he was certain it was Houshang.
It appears to have been the Lavi contacts that sparked concerns within the 1980 Reagan campaign that Carter was about to spring an October surprise that would bring about the release of the hostages and sweep him to a second term, the Herald said.
On Oct. 15, 1980, Chicago television station WLS reported negotiations were under way between U.S. and Iranian officials to release the hostages in exchange for military spare parts.
A 1984 congressional investigation of how Reagan campaign officials ended up with Carter administration briefing books said the leak to WLS reporter Larry Moore almost certainly came from a 'highly placed member of the U.S. intelligence community' somehow associated with the Reagan campaign.
'The suggestion was that publicizing the secret hostage negotiations would have delayed a pre-election release of the U.S. hostages in Iran, to the benefit of the Reagan ... campaign,' the report said.
