Profits of War
By Ari Ben-Menashe
Allen & Unwin, 1992
pp 394 $24.95
Reviewed by Mark Delmege
"In gratitude for the use of Australian soil for the transfer of arms to Iran, Richard Babayan, a contract operative of the CIA, received a check for $6 million US from Earl Brian, who was acting on behalf of Hadron, a CIA 'cut-out'. Babayan travelled to Perth and stayed at the home of Yosef Goldberg, an Australian businessman of Israeli origin who was well connected to Israeli intelligence and to the local Labor Party headed by Brian Burke, then premier of West Australia. Babayan handed the check to Goldberg, who in turn gave it to Alan Bond in his role as the guardian of the John Curtin Foundation funds."
As I read these words, a radio news bulletin announced that Alan Bond had just been cleared by a jury. He had successfully appealed against a finding of corruption for his role in the Rothwells Bank rescue that had sent him to jail earlier this year.
In 1991 Ari Ben-Menashe fought for his freedom in a US court after being held for a year on what he says was a trumped up charge. He, like Bond, was later released.
Ben-Menashe began his expose, after his release, when he assisted Seymour Hersh with his book The Samson Option, and Gary Sick with his book October Surprise. Profits of War is Ben-Menashe's story. He lays before us his life, his loves and most importantly his career as an Israeli agent during the 1980s.
His early life as an Iraqi Jew, in Iran, equipped him well for service with Israeli intelligence. In the 1970s he had success as a code breaker of Iranian communications and by 1980 he had a role with the Israeli team at the "October Surprise" negotiations with Iran and the American Republicans.
The Iranians needed military supplies to cope with the Iraqi invasion. Reagan's re-election team wanted the US embassy hostages held until after the election to deny then President Carter any electoral gains. And the Israelis, who feared Iraq's nuclear ambitions, had no wish to see Saddam Hussein enhance his power with a military victory over Iran and happily played middleman, assisting both with the arrangements.
The deals of 1980 set the scene for the events that followed. Israel and the CIA created a "dollar machine" by selling massive amounts of military equipment to Iran, estimated by Ben-Menashe at $82 billion. Weapons were sucked up from all corners of the globe, shunted through various front companies and sold to the Iranians at inflated prices.
This continued until 1987 when the Israelis made the Iran-Contra operation public. Ben-Menashe was sacked, but he anticipate events and spirited away some of the profits first. He was soon recalled for higher duties by Israel PM Yitzhak Shamir.
Israel and South Africa had long co-operated in developing their nuclear he relationship soured when South Africa continued to sell weapons to Iraq, after the end of the Iran-Iraq war. As Israel loosened the ties it looked elsewhere for suppliers of essential chemical and nuclear materials.
Ben-Menashe's first mission as "special consultant on intelligence" with the Israeli Prime Minister's Office was to negotiate for the necessary items with Abimael Guzman, leader of the Shining Path guerillas in Peru.
Meanwhile, the CIA was also arming Iraq with conventional and chemical weapons. The latter through South America. Another mission by Ben- Menashe to that part of the world saw a US-backed coup in Paraguay, and his role as bully boy attempting to put a stop the chemical weapon sales.
Mark Thatcher and Carlos Cardoen appear as rivals and bring Alan Bond once more into the picture. Following an Israeli intelligence officer's visit to the head of ASIO in Canberra, Alan Bond withdrew from his business interests with Cardoen, and his telephone interests in Chile.
By this time covert US/Israeli arms deals had created a billion dollar slush fund and Ben-Menashe and two other Israelis had become the signatories for all the monies.
Publishing tycoon Robert Maxwell took advantage of this situation by expanding his business empire with the use of loan guarantees. These were provided by Shamir, with the blessing of the CIA, and backed by the arms profits.
But in 1989 an operation was compromised when it leaked that Israel was negotiating with the PLO for the release of Israeli soldiers in Lebanon. Once again Ben-Menashe sees himself being made a scapegoat and begins moving around the slush money. This has the effect of undermining Maxwell's loan guarantees and Shamir is furious.
Soon after Ben-Menashe looses his protection. He finds himself in jail, set up by the CIA, disowned by his employer and abandoned by his wife. His days as procurer and bully boy for the prime minister were over.
When it was time to divvy up the slush fund money, Maxwell reneged on a deal and cut the Americans out of their (by then $780m) share. In 1991, $80 million of Israel's half was transferred from Australian banks to Eastern Europe. Another $100million was diverted to an Israeli political party. And the remaining Israeli share of $600 million... we are left to assume, Ben-Menashe has a hand in that too!
The story seems fantastic, but it is rare for an insider of Ari Ben- Menashe's stature to spill the beans like this. It is a strong, well written book that can't but help widen the reader's understanding of the forces that shape world affairs.
Ben-Menashe's credibility however is not enhanced by his claim that weapons, bound for Iran, were stored on Stirling Island, near ect of his story to be consistent he must be referring to the Stirling Naval base on Garden Island. A small slip, but one that his Australian publishers should have picked up.
He says he is not proud of his role in these events and has written this book to atone, and as "both a memoir and expose".
Staff from the WA Royal Commission took an interest in Ben-Menashe's claims and met with him a number of times earlier this year. They didn't comment in their public report and the West Australian press remains sceptical of his various claims of arms shipments through West Australia.
Government inquiries have been held overseas following allegations by Ari Ben-Menashe. If evidence can be found for his claims of an Australian connection, one feels that an inquiry in Australia will also be in order.