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Profile: Donald Regan
Donald Regan was a participant or observer in the following events:
The Capital Assistance Act of 1982 is introduced by Sen. E.J. (Jake) Garn (R-UT) and three co-sponsors under the title, “A bill to provide flexibility to the Federal Savings and Loan Insurance Corporation and the Federal Deposit Insurance Corporation to deal with financially distressed institutions.” [Library of Congress, 5/20/2008; Library of Congress, 5/20/2008] The bill provides the following:
Amendments to the National Housing Act and the Federal Deposit Insurance Act so that the Federal Savings and Loan Insurance Corporation (FSLIC) and the Federal Deposit Insurance Corporation (FDIC) may buy capital certificates from institutions that they regulate, for the purpose of either increasing or maintaining the capital of those institutions.
Criteria that qualifying institutions must meet to receive this assistance. The criteria differ from those required by the Net Worth Guarantee Act importantly in requiring a prior net worth of three percent of assets, instead of two percent in the House version.
Parameters of the initial capital certificates, and provision for the subsequent modification of those parameters at the discretion of the FSLIC and FDIC.
Restriction of aid to cases in which this course of action is less costly than liquidation of the institution would be. [Library of Congress, 5/20/2008] The most important difference between the Capital Assistance Act (CAA) and the Net Worth Guarantee Act (NWGA) is that the CAA is meant to avoid the need for a Congressional appropriation of funds. Instead of establishing a Treasury account to be drawn on to fund the assistance, as does the NWGA, the CAA would permit the assisting agencies, FSLIC or FDIC, to give the thrifts promissory notes in exchange for the thrifts capital certificates. [New York Times, 5/15/1982] The Capital Assistance Act of 1982 is evidently the bill that Rep. Wylie promised several days previously would be introduced into the Senate, on the occasion of the approval by the House Banking Committee of the Net Worth Guarantee Act without the amendments that Wylie had offered for that bill. The new bill in the Senate has several features of Wylie’s amendments. [New York Times, 5/12/1982] According to Sen. Garn, Treasury Secretary Donald T. Regan also contributed to the new bill.
Eventual Fate - On August 19, while under consideration in the Senate Banking Committe, the key provisions of S.2531 will be incorporated into S.2879 and passed to the floor of the Senate the next day. Bill S.2879 will be passed by the Senate on September 24, and ultimately incorporated into H.R.6267, the Garn-St Germain Depository Institutions Act of 1982. [Library of Congress, 5/20/2008; Library of Congress, 5/20/2008]
In January 1985, the CIA delivers a secret report about the criminal BCCI back to the Treasury Department. In an extraordinary departure from standard procedure, the report is hand-delivered by a CIA agent and printed on plain paper with no markings to indicate it came from the CIA. The report is given to Douglas Mulholland, a Treasury official serving as the CIA’s main link to that department. Mulholland then hand-delivers the report to Treasury Secretary Donald Regan, and calls its contents “dynamite.” It is not known what is in the report, but the Treasury Department sends back word that it wants to know more. However, as Time magazine reporters Jonathan Beaty and S. C. Gwynne will later relate: “Suddenly, and for no apparent reason, Treasury lost all interest in BCCI.… Someone had… gotten to Regan and Mulholland, and the message had been unambiguous: back off.” The Treasury Department takes no action against BCCI, even though the evidence of the bank’s involvement in money laundering by this time is overwhelming. [Beaty and Gwynne, 1993, pp. 325-328]
A major meeting to codify the arms-for-hostage deal with Iran takes place in Ronald Reagan’s private White House quarters, after Iranian officials sent requests to open negotiations with the US through backchannel sources. Reagan, recovering from intestinal surgery and wearing pajamas and a bathrobe, is joined by Vice President Bush, Secretary of State George Shultz, Defense Secretary Caspar Weinberger, White House chief of staff Donald Regan, and National Security Adviser Robert McFarlane. McFarlane, passing along information he has received from Israel (see 1981), says the Iranians will see to it that Hezbollah releases four American hostages in return for US and Israeli arms. McFarlane has long supported arms sales to Iran, and is most supportive of the deal; Weinberger and Shultz, who support dealing with Iraq, are firmly against it. But the deal will go through (see September 15, 1985). [Time, 11/17/1986; New Yorker, 11/2/1992]
Senior White House officials attend a National Security Planning Group (NSPG) meeting on the subject of Central America. Attending the meeting are President Reagan, Vice President Bush, Secretary of State George Shultz, Treasury Secretary James Baker, Defense Secretary Caspar Weinberger, CIA Director William Casey, and White House Chief of Staff Donald Regan. The interests of the Nicaraguan Contras are represented by Assistant Secretary of State Elliott Abrams (see September 4, 1985), NSC officer Oliver North (see December 6, 1985 and April 4, 1986), and senior CIA official Alan Fiers (see Late 1985 and After). According to minutes of the meeting, North reminds the group that under the 1986 Intelligence Authorization Bill, the State Department can legally approach other countries for non-military funding for the Contras. During the ensuing discussion, Reagan asks, according to the minutes: “What about the private groups who pay for ads for the contras? Have they been contacted? Can they do more than ads?” This indicates that Reagan is well aware of the private, illegal funding being channeled to the Contras. Fiers will later give a somewhat different version of events in his testimony to the Iran-Contra grand jury (see July 17, 1991), recalling Reagan asking about “Ollie’s people” working with the Contras and asking if they could help with funding. Fiers will recall the question causing tension among the group, and then someone quickly responding, “that’s being worked on.” After the meeting, North becomes more outspoken in his descriptions of his illegal funding of the Contras. [Final Report of the Independent Counsel for Iran/Contra Matters: Chapter 25: United States v. Elliott Abrams: November 1986, 8/4/1993]
Entity Tags: William Casey, Contras, Caspar Weinberger, Alan Fiers, Donald Regan, Ronald Reagan, Elliott Abrams, James Baker, George Herbert Walker Bush, George Shultz, Oliver North, Reagan administration
Timeline Tags: Iran-Contra Affair
Attorney General Edwin Meese. [Source: Doug Mills / Bettman / Corbis]Attorney General Edwin Meese undertakes an internal fact-finding investigation focused on President Reagan’s involvement in the November 1985 sale of Hawk missiles to Iran (see 1985). Meese is apparently not interested in finding facts, because he refuses a request to assist from the FBI, and takes no notes during his interviews of administration officials.
'Shredding Party' - Additionally, during his investigation, National Security Council documents are altered or destroyed, including a presidential finding from December 1985 that retroactively authorized US missile sales to Iran (see November 24-25, 1985 and December 5, 1985); National Security Adviser John Poindexter will later admit to destroying this document. Lieutenant Colonel Oliver North holds what is later called a “shredding party,” destroying thousands of documents that would likely implicate White House officials in a criminal conspiracy to break the law (see November 21-23, 1986). The Iran-Contra investigative committee will later fault Meese for departing from “standard investigative techniques” during his investigation.
Document Linking Iran Arms Sales, Contra Supplies Survives - Meese also finds a potentially explosive document in the desk of North, the National Security Council staffer who managed the Iran arms deals. The document, an undated memorandum apparently from April 1986, outlined “a planned diversion of $12 million in proceeds from the Iran arms sales to the Nicaraguan contras” (see April 4, 1986). Meese’s investigation now diverges onto two tracks, one a continuation of the Hawk shipments, and the second an investigation into who knew about, and who had approved, the diversion.
Reagan Courting Impeachment? - Meese confirms from North that the $12 million had indeed been given to the Contras, and informs Reagan, Chief of Staff Donald Regan, and Vice President Bush. Reagan is reportedly shocked by the revelation, in part because he knows he could face impeachment for violating the Boland Amendment (see October 10, 1984). Meese informs the cabinet the next day. Apparently Meese does not want to know if any senior White House officials knew of the diversion, because he does not ask them about it. When Poindexter informs Meese that before December 1985, his predecessor Robert McFarlane handled the Iran arms sales “all alone” with “no documentation,” Meese accepts his word. Several White House officials present at the meeting—Reagan, Regan, Bush, Poindexter, Secretary of State George Shultz, and Secretary of Defense Caspar Weinberger—all know that Poindexter is lying, but none correct him. After the meeting, Shultz tells his aide, Charles Hill: “They may lay all this off on Bud [McFarlane].… They [are] rearranging the record.” Investigative counsel Lawrence Walsh will later write: “The Select Committees viewed this as an isolated error. It was not.”
'Case for Deniability' for Reagan - In Walsh’s opinion, Meese is not conducting an investigation at all, but instead is “building a case of deniability for his client-in-fact, President Reagan.” Walsh will characterize Meese’s actions as “an effort to obstruct a congressional inquiry.” In 2006, authors Lou Dubose and Jake Bernstein will write, “The two strands of an illegal policy came together in that memo.” The authors refer to the US arms sales to Iran and the diversion of the profits from those sales to the Contras. [New York Times, 11/19/1987; United States Court of Appeals for the District of Columbia Circuit, 8/4/1993; PBS, 2000; Dubose and Bernstein, 2006, pp. 66]
Entity Tags: Charles Hill, Edwin Meese, Caspar Weinberger, Ronald Reagan, Robert C. McFarlane, Oliver North, Federal Bureau of Investigation, George Herbert Walker Bush, George Shultz, Jake Bernstein, Contras, Donald Regan, Lou Dubose, Lawrence E. Walsh, John Poindexter
Timeline Tags: Iran-Contra Affair
President Reagan testifies before the Tower Commission. His chief of staff, Donald Regan, had previously told the commission that the US had not given its approval for the August 1985 sale of TOW missiles to Iran via Israel (see August 6, 1985 and August 20, 1985), but Reagan shocks both Regan and White House counsel Peter Wallison by admitting that he had indeed approved both the Israeli sale of TOWs to Iran and had agreed to replenish the Israeli stocks. Reagan uses the previous testimony of former National Security Adviser Robert McFarlane as a guide. After Reagan’s testimony, Regan attempts to refocus Reagan’s memories of events, going through the chain of events with Reagan and asking questions like, “Were you surprised” when you learned about the TOW sales? Reagan responds, “Yes, I guess I was surprised.” Regan hammers the point home: “That’s what I remember. I remember you being angry and saying something like, ‘Well, what’s done is done.’” Reagan turns to Wallison and says, “You know, I think he’s right.” [Cannon, 1991, pp. 630-631]
President Reagan testifies for a second time to the Tower Commission (see January 26, 1987). His testimony is incoherent and confused; some observers outside the White House begin speculating that Reagan suffers from Alzheimer’s disease or senile dementia. Commission investigators note that while the Meese investigation claimed Reagan did not know of the August 1985 shipment of missiles to Iran (see August 20, 1985 and November 21-25, 1986), Reagan himself claimed in his previous testimony he did know of the shipments. When asked to clarify the inconsistency, Reagan shocks onlookers by picking up a briefing memo he had been given and reading aloud, “If the question comes up at the Tower Board meeting, you might want to say that you were surprised.” [PBS, 2000] White House counsel Peter Wallison is stunned. “I was horrified, just horrified,” he later recalls. “I didn’t expect him to go and get the paper. The purpose of it was just to recall to his mind before he goes into the meeting” what he, Wallison, and Chief of Staff Donald Regan had agreed was the proper chain of events—that Reagan had not known of the shipments beforehand, and had been surprised to learn of them. [Cannon, 1991, pp. 631-632]
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