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CIA Bugged Shah, Book Says

September 29, 1987

WASHINGTON (AP) _ The United States authorized the bugging of the late Shah of Iran’s hospital room while he was in this country, according to a new book on the CIA.

The book also says Secretary of State George Shultz initially turned down a Cabinet job when President Reagan took office in 1981 because he mistakenly thought he was being offered the job of Treasury secretary.

Although largely focusing on the late CIA Director William J. Casey, Washington Post assistant managing editor Bob Woodward’s book provides glimpses inside the spy agency even before Casey took over the top job in 1981.

The book, ″VEIL: The Secret Wars of the CIA,″ went on sale in bookstores Monday after excerpts appeared over the weekend.

Meanwhile, Prince Bandar bin Sultan, the Saudi ambassador to the United States, refused to comment on the book’s allegation that he arranged with Casey for the Saudi Arabian intelligence service to conduct three covert operations. Among them was a 1985 assassination attempt in Beirut against a suspected Hezbollah terrorist leader, in which the target escaped injury but 80 innocent people were killed.

″The ambassador will not comment on something attributed to a deceased man,″ said Habib Shaheen, director of information at the Saudi embassy, referring to Casey.

The book said that when the deposed Shah of Iran came to the United States for cancer treatment in October 1979, the Carter White House overruled the objections of then-CIA Director Stansfield Turner and ordered the CIA to bug the ruler’s hospital room.

Turner argued that by law the CIA could not gather intelligence in the United States, the book said, but ″he was given a written order″ because the White House wanted to learn what the Shah’s intentions were.

Turner, the book said, ″swallowed hard and authorized the electronic surveillance of the Shah’s three private rooms on the 17th floor of a New York City hospital, though he still thought it improper.″

The book also describes maneuvering among aides to President Reagan who were angling for top jobs in the new administration during the 1980 transition period, and told of a bungled approach to Shultz about taking the State Department job.

Reagan, it said, decided he wanted Shultz as his secretary of State and called him, mistakenly thinking that groundwork for the offer had been laid with Shultz in earlier conversations by his aides.

Reagan, according to the book, was vague in making the offer, saying, ″I’m interested in having you join my Cabinet.″ Shultz, who had held the top jobs at Labor and Treasury during the Nixon administration, had been told that he was on the list for the Treasury job this time and turned Reagan down, thinking that was what was being offered, the book said.

Michael Deaver, then a close aide to Reagan, was with the president-elect when he made the call and did not learn of the mix-up until months later, Woodward wrote. Reagan then offered the State Department job to his second choice, Alexander Haig.

Haig, now a candidate for the Republican presidential nomination, served in the post for a 1 1/2 years before resigning. He was succeeded in July 1982 by Shultz.

The book also fills in details about the CIA’s relationship with Bashir Gemayel, the head of the rightist Phalangist Party in Lebanon, who was paid CIA money regularly and considered ″a major asset″ by the agency.

In 1982, the book says, Israel’s defense minister, Ariel Sharon, asked Casey to provide $10 million in secret CIA paramilitary support to Gemayel to further Israel’s effort to drive the Palestine Liberation Organization out of southern Lebanon.

President Reagan signed a top-secret order, called a ″finding″ that authorized $10 million in covert aide to Gemayel, the book says.

But Gemayel was elected president of Lebanon in April 1983, and the CIA, reluctant to have a head of state on its payroll, severed its formal relationship with Gemayel.

Gemayel sent a secret message to Casey asking for covert security and intelligence assistance. Reagan then approved a finding for the support operation that called for an initial expenditure of about $600,000 that could grow to as much as $4 million a year, the book says. But Gemayel was assassinated on Sept. 14, 1982, nine days before he was to take office, and the covert-assistance program was not put into play.

In another discussion of intelligence operations, the book says that during the Carter administration and early in Reagan’s first term, ″the CIA had a deep-penetration spy, a colonel on the Polish General Staff, who provided a steady flow of intelligence out of Warsaw on the intentions of the Poles and the Soviets.″

It said knowledge of this colonel’s reports was strictly limited, and that the name of the colonel was not even included on the reports that went to President Carter. Col. Wladysla Kuklinski and his family were spirited out of the country when exposure was threatened, shortly before the Polish government’s crackdown on Solidarity trade union activists, and his existence as a CIA ″asset″ was later reported.

Among other secret spy assets of the CIA, according to the book, was a senior official of the Indian government. It said the unnamed official passed information on weapons the Soviets supplied to India.

Among the book’s other disclosures is that the CIA had extensive spy sources inside the Egyptian government who reported that President Anwar Sadat ″smoked dope and had anxiety attacks.″

Intelligence reports also told the CIA that ″Crown Prince Fahd of Saudi Arabia did a good deal of drinking, contrary to the strict proscriptions of his Muslim religion.″

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