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The following review (with a correction) of Ari Ben-Menashe's Profits of War (New York, Sheridan Square Press: 1992. 410 pages. Index. $24.95, cloth) by Ronald Bleier, New York, N.Y. appeared in Middle East Policy Volume II, [Winter] 1993, Number 3, pp. 169-172. (The title: "The Money Machine" was NOT carried by MEP in accordance with its standard practice.)

The Money Machine

by Ronald Bleier

A Review of Ari Ben-Menashe's Profits of War: Inside the Secret U.S. - Israeli Arms Network

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According to Ari Ben-Menashe, Iran spent $82 billion in its war against Iraq from 1980 to 1988. Where did Iran get its weapons? Who profited and what was done with the profits? These are some of the questions addressed by this very readable kiss-and-tell account of the author's years as a spy for the Israeli intelligence services.

Here are some of the other issues Ben-Menashe sheds light on, sometimes in detail, others merely in passing: why and how the Iran/contra scandal broke in the first place; Israeli nuclear weapons development; Israeli "black operations" in support of Palestinian terrorist acts; Israeli involvement in black-on-black violence in South Africa; and the U.S., Israeli and British role in subverting sanctions against South Africa; the reasons behind the exposure of Jonathan Pollard's activities; Robert McFarlane's role as an Israeli mole feeding top secret information to Menachem Begin's office; Oliver North's role in "delivering" to Rudy Guiliani the indictments of arms dealers to Iran; Robert Gates' role in selling arms to the contras and insuring the supply of chemical weapons to Iraq; Israel's illegal resale of American weapons; and more.

The author claims that as an operative of the most elite unit of Israel's security services, the External Affairs Department of the IDF/Military Intelligence division, he played a key role in implementing the huge Israeli effort in supplying weapons and war materiel to Iran. According to Ben-Menashe, Israel began selling equipment to Iran for enormous profits, almost from the beginning of the hostage crisis -- even against the wishes of the Carter administration.

Ben-Menashe is an advocate of the "October Surprise" theory whereby officials of the Reagan campaign conspired with the Iranians to delay the release of the American hostages in return for American a rms sales. According to Ben-Menashe, William Casey, Robert Gates, Robert Mcfarlane, Donald Gregg and also George Bush were some of the American participants. Ben-Menashe claims that Hojjat El-Islam Mehdi Karrubi was the high Iranian government official who met with Casey, Bush and others.

According to Ben-Menashe even the exposure of the Iran/contra scandal in November 1986 provided barely a minor hiccup in the provision of Israeli-brokered U.S. arms to the warring country. Not long after the scandal broke, Robert Gates, a high CIA official at that time, reassured worried Iranian and Israeli officials that the arms would continue to flow despite the scandal. Indeed, according to Ben-Menashe, in February 87, Israel provided, with direct U.S. assistance, one the largest weapons shipments to Iran including thousands of TOW missiles; more than 100 tanks, and hundreds of thousands of Katusha rockets.

According to Ben-Menashe the profits from sales to Iran ran into the billions. In one deal in late 1983, Israel realized a $39 million profit for 4,000 TOW missiles. In another, for 19 old and damaged F-5Es from Ethiopia, Israel paid $1.5 million per aircraft (including $1 million to Israel Aircraft Industries for refurbishing) and resold them to the Iranians for $4 million each.

According to Ben-Menashe, the huge profits from the arms sales went to covert agencies in the U.S. and Israel. In Israel, the Mossad controlled the money and for the most part it went to three main causes. The first was to finance covert intelligence operations. He claims that some of the money went to AIPAC which funnelled it to American Congresspeople. For this reason, Ben-Menashe charges, the role of Israel was downplayed and obscured in the Iran/contra hearings. He also charges that funds coming from the same source went to the British Jewish Reform Movement, where it helped to influence conservative politicians.

Also, in a sensational, (and typically undocumented) charge, Ben-Menashe claims that some of these profits of war were funnelled to Palestinian organizations to stage terrorist attacks. He says that Rafi Eitan, Begin's counter-terrorism advisor, (no relation to Lt. Gen. Rafael Eitan, former chief of general staff of the IDF), decided in 1985 to generate anti-Palestinian sentiment. Accordingly, through the smokescreen of a Jordanian ex-army officer, Eitan, in a "black operation" paid the Abu Nidal Palestinian terrorist group to stage the Achille Lauro hijacking.

Also, according to Ben-Menashe, in addition to funding covert operations, profits from the arms deals went to funding the Likud political party and also into settlement building in the occupied territories. He also gives some of the details and the names of the intermediaries who profited from the arms trade to Iran. A "major player" in the network, says Ben-Menashe, was Nick Davies, the Londo n Daily Mirror's foreign editor. In one deal, Ben-Menashe claims Davies made more than $1.5 million. Ben-Menashe also admits that he kept some of the money for himself, as protection against the day when his head too would roll.


According to Ari Ben-Menashe the Iran-contra scandal which broke in November 1986, was a direct result of the unusual, "unity" government in Israel that was formed as a result of the indecisive elect ions in Israel of 1984 which led to the revolving Labor - Likud prime ministership. Thus, when Labor Prime Minister Shimon Peres replaced Shamir, he found that he was cut out of the huge sums coming from the Iran arms trade because Likud intelligence operatives wouldn't cooperate with him. He therefore decided to open a separate second channel. According to Ben-Menashe, the infighting between the two rival Israeli channels led to the scandal becoming public.

At a certain moment, Shamir leaked the information about the second channel in order to shut it down. Oliver North's famous trip to Teheran with Robert McFarlane (who Ben-Menashe claims was kicked off the National Security Council because it was discovered that he was a mole for the Israelis) was stymied because of the first Israeli channel's intervention with their "friends" in Teheran. Ben Menashe claims that he himself made a number of efforts to leak the story to Time and others tried to give it to the NYT and to Newsweek but no American publication would touch it. Finally, on behalf of the Israelis, the Iranians leaked the story to a small Lebanese paper, Al-Shiraa.

Israel, a Nuclear Power

Ben-Menashe writes that at the end of 1987 he was offered a job "at the highest level -- as a special intelligence consultant to the Prime Minister's Office." As a result he was given top secret files on Israel's history and capabilities as a nuclear power to read as background. In this way he learned that by the mid-80s, Israel had over 300 nuclear weapons in its arsenal. Many nuclear tests were conducted in cooperation with South Africa until 1979 when Israel conducted a number of tests in the Indian Ocean "without South African supervision," including the 1979 test which accidently be came public.

He also claims to have learned from the same top-secret files that during the 1973 war, "Moshe Dayan ordered the arming of all thirteen nuclear bombs and put 24 B-52s bombers on standby." In response the Soviets targeted Israeli cities (though not Jerusalem) with nuclear missiles and President Nixon announced an all out military alert. Other writers -- though not Ben-Menashe -- have argued that Israel's nuclear demonstration during the war was a form of nuclear blackmail, a way of demanding U.S. help which Secretary of State Kissinger had been slow in providing.

According to Ben-Menashe, it was the Iranians who spurred the Israeli bombing of the Iraqi nuclear reactor. Ben-Menashe claims that Israel used a guided bomb to target the Iraqi nuclear reactor. The bomb was led to its target by a radio homing device that was put in place by a French worker who was bribed by the Mossad. The original plan called for the Israelis to keep secret the fact that they were responsible. However, Prime Minister Begin, correctly judging that the successful raid would boost his re-election campaign, decided to make Israeli responsibility public.

The Threat from Iraq

In the winter of 1989 Americans reading their morning papers found that the FDA had declared that three grapes from Chile were tainted with cyanide. As a result the whole Chilean export fruit crop to the U.S. worth $850 to $900 million was threatened. According to Ben-Menashe, this "news" had nothing to do with health or agricultural factors but everything to do with politics and with the U.S.- Israeli struggle over exports of chemical and unconventional weapons and materials to Iraq.

In one of the most exciting sections of his book, Ben-Menashe traces his effort to put a halt to this trade. He writes that he had obtained a promise from Chilean General Matthie who, in a power struggle in the wake of Pinochet's defeat in a plebiscite, was working to stop the chemical trade with Iraq. When the Americans learned of Matthie's plans, Robert Gates implemented the attack on the Chilean fruit industry and in short order General Matthie lost out, the chemical trade continued and the ban on Chilean fruit was reversed.

Apparently it was his overzealousness in trying to stop American efforts to promote and maintain Iraq's nuclear and chemical weapons trade that angered Ben-Menashe's Israeli and American masters. He says he threatened to divulge the American involvement in Promis, a computer program which enabled governments to track activists. According to Ben-Menashe, Israeli and American involvement in the sale and promotion and bugging of Promis lead to the torture and deaths of tens of thousands of activists in Central America, South Africa and elsewhere.

In a dramatic meeting with Prime Minister Shamir, Ben-Menashe is accused of "exceeding his authority" and of stealing money. He denies neither charge. Ben-Menashe was arrested in late 1989 and imprisoned for 11 months until November 1991 when he was found not guilty of illegal sales of arms to Iran. According to him, he might have been found guilty were it not for an anonymous friendly person in the Mossad who -- against the wishes of the Israeli government, provided the U.S. court with convincing evidence that he had been, indeed, an Israeli agent for many years. (This evidence is reproduced in an appendix to the book.)

One of Ben-Menashe's important contributions is to point out that the revelations of the Iran-Contra scandal came from those who were involved in the scandal rather than from Congress, or from regulatory agencies or the media. Even the rare public report is for the most part ignored as was the case, as the author reminds us, with the March 9, 1982 column in the NYT by Leslie Gelb that disclosed that Israel was secretly supplying Iran with American-made arms.

The weakest part of the book for this reader was the section towards the end devoted to his claim that Yitzhak Shamir had a secret plan to solve the Palestinian issue: namely by making Jordan a Palestinian state. He claims that a "radical camp" of the PLO actually took this Israeli offer seriously. Ben-Menashe seems equally off target when he makes other comments on the Palestinian issue. One such example is when he writes that Shamir and Rafi Eitan opposed the Camp David accords because they didn't adequately address the Palestinian issue. The more widely received version, consistent wi th Shamir's public statements, is that he opposed the return of Sinai in return for a peace treaty with Egypt.


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