October Surprise

Did representatives of Ronald Reagan’s Republican presidential campaign secretly negotiate with Iran to delay the release of American hostages to gain political advantage during the election?


On January 20, 1981, Ronald Reagan was sworn in as the 40th president of the United States. Within minutes of his inauguration 52 hostages being held in Iran were released, ending 444 days of captivity. Days later, as the hostages returned home, shipments of arms, which had been halted by Jimmy Carter since Islamic revolutionaries took over the American Embassy in Tehran, began arriving in Iran, channeled through Israel.

The crisis had captured the headlines and the hearts of the American public for over a year. President Jimmy Carter’s negotiations and a disastrous attempt to free the hostages had proved fruitless. But with Reagan taking office and the hostages on their way home, virtually simultaneously, it seemed like the beginning of a new era. The significance of the timing of the hostage release would not be explored until years later. And while it may have been the beginning of a new era, some believe it was ushered in with deception, dirty tricks, and even treason. Did Reagan’s affable exterior hide a dark secret?


The popularity of the Carter presidency had foundered during the prolonged hostage crises; double-digit inflation, high unemployment and a severe energy shortage also took a toll. But as the election approached, polls showed Carter and Reagan in a virtual tie. The pre-election release of the hostages would almost certainly have benefited Carter’s reelection hopes—at the expense of Ronald Reagan and his supporters.

Republicans feared Carter might manipulate the hostage crisis to give his campaign a last minute boost just before the November election. Reagan’s running mate George Bush (the elder) cynically called it Carter’s “October Surprise.” But some think it was Reagan who pulled off the surprise by thwarting Carter’s attempts to free the hostages.


Many of the allegations of Republican malfeasance rest on the testimony of a collection of shady characters—arms dealers, self-proclaimed espionage agents, and Middle-eastern businessmen of questionable reputation.

A pair of Iranian brothers, Cyrus and Jamshid Hashemi, claimed first-hand knowledge of meetings in Washington, D.C., Paris and Madrid between representatives of the Reagan campaign and the radical Muslim leader of the Iranian revolution, Ayatollah Khomeini.

Cyrus died of what appeared to be leukemia in 1986, just a few months after participating in a U.S. Customs sting operation that netted several international arms dealers. But to this day Jamshid Hashemi, himself an arms dealer and now a U.S. citizen, claims they were in a meeting where Reagan campaign manager William Casey negotiated an agreement with the Iranians that the hostages would not be released before the election. In exchange Casey promised that once in office the Reagan Administration would release frozen Iranian bank accounts, and begin shipping arms and military spare parts, badly needed by Iran for its war against Iraq.

But there are others, such as former Iranian president Abolhasen Bani Sadr, PLO leader Yasir Arafat, and French intelligence chief Alexandre deMarenches who have their own stories which lend credence to the allegations.

The French intelligence chief deMarenches told his biographer that he had helped Casey arrange a meeting in Paris with Iranian officials in 1980. Reportedly Yasir Arafat told Jimmy Carter in the mid-90s about being approached by the Republicans with an offer of arms for the PLO in exchange for influencing the Iranians to keep the Americans hostage until after the election.

While some details given by the various participants in the alleged scheme differ—some say George Bush attended the secret meetings—virtually all agree that the central figure was William Casey. Casey was no ordinary campaign manager. He was a spymaster more than qualified to pull off the deal to delay the release of the hostages. But did he? “It would be just like him,” said a former colleague.


William Casey was no James Bond. He was disheveled and mumbled most of his sentences. But in the real world of espionage he was renowned for his relish of cloak-and-dagger operations. He was an operative in the OSS, the World War II era forerunner to the CIA, and was involved with the CIA from its inception. Reagan made him director of the intelligence agency a week after taking office. When Casey died of a brain tumor in 1987 he took to his grave many secrets, which must have come as a relief to some. Reportedly he was involved in clandestine Republican plots from Watergate to Iran-Contra.

But as Reagan’s campaign manager he turned his investigations, and possibly his cloak-and-dagger skills, not towards America’s enemies, but Reagan’s opponent—U.S. President Jimmy Carter. In a scandal which came to be known as “Debategate” a copy of the briefing book that Jimmy Carter was using to prepare for a debate with his Republican challenger somehow found its way to the Reagan debate preparation team. Though he denied it, many suspected Casey was behind the theft.

According to Hashemi and others, Casey cultivated sources inside the Carter administration, the FBI and the CIA to gather information not just on Carter’s presidential campaign, but Carter’s attempts to free the hostages. Some even suggest that Casey was able to sabotage the rescue attempt in April of 1980 that left eight soldiers dead in Iran, Jimmy Carter’s foundering reputation even more damaged—and the hostages in even more danger.

Three men involved in the failed rescue attempt would later become well known as players in the Iran-Contra scandal which clouded Reagan’s second term—Retired Air Force Maj. Gen. Richard Secord, Iranian-born businessman Albert Hakim, and Marine Lt. Col. Oliver North. All were convicted on felony counts related to the Iran-Contra operation. That deal, which promised arms funneled through Israel in exchange for the release of hostages, was remarkably similar to the alleged deal which kept American hostages captive until Reagan became president.



According to Bani Sadr, a moderate who was Iran’s first popularly elected president, he was at odds with Khomeini in 1980 over delaying the release of the hostages, and he threatened to expose the Republican scheme. According to Bani Sadr Khomeini insisted he keep quiet and promised to talk more with official envoys of the Carter administration, the only ones legally authorized to negotiate. But Khomeini evidently had already made his deal with the Reagan camp.

In October, just days before the presidential elections, Jimmy Carter waited expectantly as the Iranian parliament met to vote on whether or not to release the hostages. Bani Sadr and others had assured him the hostages would be released. But a number of parliament members, radical Muslim clerics, boycotted the meeting and parliament adjourned without voting on the hostage situation. Carter’s hopes for a resolution to the crisis before the election were crushed, and the hostages would spend nearly three more months in captivity.

In the election that followed Ronald Reagan beat Jimmy Carter by a remarkable margin, considering the October polls. Carter continued to negotiate with the Iranians for the release of the hostages for the rest of his term. But ironically by the time he flew to Germany to greet the newly freed hostages on January 21, 1981, he was no longer president. Ronald Reagan had moved into the White House the day before.

Many of the former hostages openly blamed Carter for not getting them out sooner. Carter accepted the blame, but it would not be until years later that some would wonder whether their ordeal was prolonged several months by the political campaign of his opponent.


In the following years rumors of the deal surfaced in the media. Witnesses to the alleged events told stories that, if proven true, could shake the foundations of government and likely affect the political landscape for decades.

But not until 1991, after Ronald Reagan had left office and his vice president, George Bush, had taken over the presidency, was an official investigation launched. At the request of a growing number of people, including Jimmy Carter and some former hostages, first the Republican-controlled Senate Foreign Relations Committee, then a nominally bi-partisan House October Surprise Task Force reviewed the allegations. Both concluded that there was no evidence of Republican wrongdoing. One by one, witnesses were discredited. Alibis for the key players, including Casey and George Bush, were established—at least to the satisfaction of the committees.

In October of 1992, as the House panel was nearing the end of its investigation, Lee Hamilton, the Democratic head of the committee, appealed to an unlikely source in one last attempt to gather information—the Soviet Union.


The response didn’t come until January of ’93, after the committee had absolved the Republicans. But when it finally arrived it seemed to be a stunning confirmation of the October Surprise allegations.

The Soviet report was prepared by Sergei Stepashin, then the head of the Soviet equivalent of the Senate Intelligence Committee, and later Russian prime minister. It said that Soviet intelligence services had detailed information about the clandestine meetings between the Reagan camp and Khomeini representatives. According to the report William Casey, George Bush and others, including another future CIA director, Robert Gates, met several times with the Iranians, in Madrid and Paris.

Stepashin also revealed that the Carter administration had offered not only to unfreeze Iranian bank accounts, but send Iran much needed military spare parts in return for the release of the hostages. But the Reagan campaign offered even more. According to the Soviet report the hostages were pawns in a bidding war. The prize was not the lives of the hostages, but the presidency of the United States.

Whether the report was too hot to handle or too late to consider, the committee stood by its conclusion that there was no credible evidence of Republican wrongdoing. The Soviet report was buried along with other documents related to the investigation in a basement storeroom in Washington, D.C. As far as the government was concerned, the case was closed.


Following the recent death of Ronald Reagan, he was remembered as an optimistic idealist, an icon of conservative values, and the president who defeated communism. But there will always be some who think the Reagan legacy started with a treasonous deal designed to win an election.

copyright©Jim McCluskey 2002-2012