Appendix II

Intelligence and the war in Bosnia 1992 – 1995: The role of the intelligence and security services

... the United States would turn a blind eye. The station chief reported this immediately to his headquarters.[1]

On 16 April 1994, Galbraith spoke with the religious leader of the small Muslim community in Zagreb, Iman Sefko Omerbasic, who later informed the Iranian ambassador that American diplomats had urged him to purchase arms for the ABiH. The CIA managed to gain access to a report of this discussion, and they suspected that Galbraith was engaged in a secret operation.[2]

On 27 April 1994, the Croatian Minister of Foreign Affairs, Granic, visited the American ambassador, Galbraith. The Croatian government wished to reinstate the Iranian pipeline. Granic was still opposed to the supplies and urged Galbraith to say no. The following day, President Tudjman wished to discuss this with Galbraith. Tudjman wanted a formal answer to the question of how the Clinton administration would respond to a resumption of the supplies. Granic had expected Tudjman to accept a resumption of the supplies, as Zagreb wanted good relations with Washington. Galbraith, who was as frustrated as Holbrooke, thought that the supplies should be resumed. The next day, Galbraith had a brief discussion with Tudjman, who conveyed to him the Croatian request to consent to a resumption of the supplies.[3]

Later that day, Galbraith reported to the State Department: 'This matter is time-urgent.' He was referring to the fact that the Croatian prime minister, Mikica Valentic, was due to depart for Teheran on 29 April. Without an American 'green light' the trip was cancelled. Galbraith proposed using disguised Iranian Boeing 747s for the supplies. Half of the consignment of arms would be destined for Croatia and the other half for the Bosnian Muslims.[4]

The die is cast in Washington

Galbraith approached Alexander Vershbow, the Assistant Secretary of State for Bosnia, who passed the problem on to the Deputy Secretary of State, Strobe Talbott, and to Lake. Both understood the dilemma: the disadvantage was that Iran would be drawn into the region. This could have major consequences and could even cause the sudden collapse of the Muslim-Croat Federation. The advantage was that it would finally assure assistance to the Bosnian Muslims.

Meanwhile, State Department lawyers assessed the operation. They came to the conclusion that encouraging a foreign government to procure arms from Iran was not a secret action.[5] Talbott and Lake decided to inform Galbraith that he had no instructions: 'a deft way or saying that the United States would not actively object.'

On 27 April 1994, Lake and Talbott discussed this with Clinton on board Air Force One. It was then decided to give a green light to the arms supplies from Iran to Croatia. The opponents were thereby overruled: Christopher was confronted with a fait accompli, and CIA director Woolsey was not informed at all.[6] According to Redman, Lake had 'come around' and he was the man behind the idea of supplying arms to the ABiH. The 'No instructions' instruction to Galbraith and Redman came from Lake.[7] Doubts remained about Iran's possible role, but the complete change in policy rapidly became clear.[8]

At first Galbraith did not understand the 'no instructions' message. He wondered whether it meant that he should give Tudjman the green light. He phoned the Europe chief of the National Security Council, Jenonne Walker, who then consulted Lake. Walker then phoned Galbraith back: 'no instructions' was what Lake had said to her but 'Tony [Lake] was smiling when he said it.'[9] On 28 April 1994, the architect of the Muslim-Croat federation, Charles Redman, accompanied by Galbraith, visited the Croatian president, Tudjman. Redman told him that Washington would have no objection to a clandestine channel through which arms would be transported to Bosnia. They told Tudjman specifically that they had 'no instructions' on this sensitive subject. Lake had again impressed upon the two American diplomats on 2 May that it was unnecessary to report on their 'no instructions' discussion with Tudjman to the State Department.[10]

Tudjman did not understand this message at first, was confused and asked for clarification on the following day. Galbraith then said to him: 'focus not only on what I had said yesterday but what I had not said.' Redman was clearer: 'We don't want to be the ones who say no to this.'[11] That was all Tudjman needed to hear and after talks with Izetbegovic he decided to take immediate action. From 29 April to 2 May 1994, the Croatian prime minister, Valentic, and the Bosnian deputy prime minister visited Teheran for consultations with President Ali Akbar Rafsanjani. A tripartite agreement was drawn up for arms supplies and humanitarian assistance to Bosnia.

Resumption of the arms supplies

The first consignment from Iran landed in Zagreb on 4 May, with sixty tons of explosives and military equipment on board. The arms were transported in Croatian army trucks along the Adriatic coast to Bosnia. The first consignment was probably an Iranian gift. Subsequently it appeared that Teheran wanted hard currency for the supplies. On 6 May, Ali Akbar Velayati visited Zagreb to discuss the further logistics arrangements. He travelled on to Sarajevo to present a cheque for $ 1 million to Izetbegovic. Because the supplies attracted too much attention at Pleso Airport in Zagreb, the flights subsequently went mainly to the Croatian island of Krk. Shortly after Iranian cargo aircraft had landed there, a number of Croatian helicopters arrived to continue transporting the load after dusk. Moreover, Albania was prepared to act as a transit port.[12]

In the summer of 1994, the first reports started to arrive that the Croats and Bosnian Muslims had again travelled to Teheran to reach a new agreement. According to British diplomatic sources, a secret agreement was reached in Teheran between the Iranians and Croats in June 1994. The foundation for this was laid in May, during the Croatian prime minister's visit to Teheran. The following agreement was reached: Iran purchased five oil tankers and three cargo vessels from Croatia worth $ 150 million. Teheran was to pay this amount as follows: 25 percent in oil; 50 percent in cash and 25 percent in credit. In exchange, Iran would be provided unhindered access to Bosnia via Croatia. In this way, Teheran would initiate a flow of humanitarian relief and arms to Bosnia.[13] One consequence of the new US policy was that the British intelligence and security services stood alone in this phase because the American services no longer provided intelligence on violations of the embargo.[14]

Not everything went smoothly with the supplies in practice, because a helicopter (an MR-8 MTV-I) exploded at Zagreb airport in the night of 4 December 1994. It was President Izetbegovic's personal helicopter, which was completely filled with ammunition and explosives. The official statement to UNPROFOR was that a tanker had exploded, and the European Monitoring mission, ECMM, was told that a pyromaniac had committed suicide.[15]

The American assistant secretary Vershbow admitted to Dutch diplomats in July 1994 that he was aware of Islamic supplies and that part of the arms were handed over as 'bounty' to the Croats. He also expected that once the arms embargo had been lifted, a part of the American supplies would remain behind in Zagreb to ensure the cooperation of the Croats. He acknowledged that this could have negative consequences for UNPROFOR and the UN's refugee organization, UNHCR, but they would just have to be 'redeployed' somewhere else.[16] It was apparently that 'simple'.

The American division on the Croatian pipeline remains

After this secret agreement to resume arms supplies, the ball started to roll in the United States. The CIA gathered an increasing amount of evidence of Iranian arms supplies via Croatia to Bosnia, in the form of photos taken by spy satellites that revealed aircraft on Turkish airfields. Two days later, the CIA saw the same aircraft in Zagreb or other airports in Croatia. The aircraft flew via Turkey, where a stopover was sometimes made, before resuming the flight over the Black Sea via Bulgarian and Romanian air space to Zagreb, where the arms were unloaded. Part of the consignment was forwarded to Bosnia; Croatia was said to have received thirty per cent of the supplies. The CIA recorded approximately eight flights a month and also received reports from the Croatian intelligence services.

When the CIA got wind of the supplies, it produced a difference of opinion between the American ambassador Galbraith and the CIA station chief there. The station chief asked Galbraith to explain, and he answered that he was aware of the secret consignments from Iran; the station chief would just have to contact Miroslav Tudjman. The station chief would not be palmed off so easily. As a matter of fact, the State Department can covertly encourage anything the President tells them to. What would have been illegal was the involvement of the CIA without a 'written finding'. Covert diplomacy is not illegal. Covert action by the CIA is, however, illegal unless there is a finding. The station chief therefore asked Galbraith where the finding was, because without a finding he was not allowed to cooperate in the operations, which would then be illegal. If that was the case, it could have major policy consequences.

The chief of station raised the alarm with his headquarters in Langley, which subsequently wondered who knew about this at the State Department and in the National Security Council (NSC). A parallel was drawn with the Iran-Contra affair, which was also led from the NSC. The CIA wondered, although the ambassador can do what he wants, whether Ambassador Galbraith might have encouraged Tudjman to make requests for arms supplies. This fear would later be dismissed as unfounded by the Senate, but it did lead rapidly to speculations that the CIA had begun spying on State Department staff.[17] However, this fear proved to be correct. But the station chief in question had indeed decided to watch Galbraith's movements.[18] The station chief also became concerned because Iranian officials, who were apparently involved in the Croatian pipeline, visited the library of the United States Information Service, which was located immediately beneath Galbraith's office, daily. Out of fear of terrorist attacks, from then on only visitors with a membership card were allowed to enter the library, after which the Iranians disappeared.[19]

According to Langley, a covert operation had indeed been started in which the CIA was not involved. In response, the CIA in Washington took action at the highest level. The director of the CIA, Woolsey, approached in succession Lake, Christopher, and Talbott. On 5 May 1994, Talbott told Woolsey 'the essence of what had been decided':[20] Galbraith had received no instructions. Incidentally, Woolsey later stated that he was not given the impression in this discussion that the policy on Iranian involvement changed with this instruction; although in practice this was definitely the case. According to a senior US intelligence official, Woolsey did not ultimately approach President Clinton. Once it was clear that the ambassador was acting on the authority of the White House and the Secretary of State and not off his own, the CIA interest stopped except to report the arms flows as intelligence.[21]

Talbott told Woolsey that another reason for permitting the operations had been that the ABiH was at the end of its tether. The American intelligence community arrived at a different conclusion, however: it thought that the ABiH could retain the major part of Bosnia without needing military assistance. There were apparently divergent assessments of the power of the VRS versus the ABiH. According to Corwin, something else played a role in Sarajevo:

'In fact, one of the great miscalculations of Serb military strength in the former Yugoslavia was made by Russian military intelligence (GRU). Out of a wish to strike a blow at NATO hegemony and out of revenge for having lost the Cold War, the GRU constantly overestimated the Serb's ability after summer 1994, to withstand Croatian and/or Bosnian offensives'.

According to Corwin, the US administration also had a tendency 'to overestimate the military strength of the Bosnian Serbs, at least publicly, albeit for different reasons'.[22]

In spite of the fact that the CIA had been bypassed in these operations, Woolsey offered to have the CIA set up the secret operation for smuggling arms to Bosnia, only if a finding was signed by President Clinton. But this was rejected: Lake still feared that it would leak out.[23] Otherwise Lake appeared to have a pathological fear of leaks; he shared little information with others and was difficult to approach. He was nicknamed 'the submarine'. [24] Woolsey confirmed that he was not aware of a presidential finding, and that in May 1994 he went to the NSC, and later to the Secretary of State to obtain information on the supplies, but to no avail. Talbott told him that his station chief in Zagreb must do nothing and make no comment. According to the Assistant Secretary of State, it concerned a 'policy decision of the US Government'; the president could after all ask an ambassador to do something.

Woolsey was surprised at this state of affairs; after all, the CIA had built up the necessary experience with covert operations. If policymakers were to have requested him to organize the secret arms supplies, then his service would have taken care of the execution, even if he was opposed to it: ultimately this was one of his duties. Woolsey:

'We would rather have had control and could have done it better and without Iranian involvement (...) The CIA did not move weapons to Bosnia. We were perfectly willing to do that. We had enough experience in this field but the policy level did not want the CIA to do that'.[25]

The Senate concluded later in 1996 that Talbott should have explained the policy - not to block the transit of Iranian arms for Bosnia via Zagreb - more clearly to Woolsey. Meanwhile the Iranian arms supplies had indeed leaked out: on 24 June 1994, the Washington Times printed the story of the 'wink' towards Tudjman. The precise details remained rather vague for now.[26]

There were also suspicions regarding the Croatian pipeline within UNPROFOR. On 18 July 1994, Akashi reported that the Bosnian Muslims were receiving large quantities of new arms via Croatia, which was demanding financial compensation or a share of the goods. Akashi was unable to take any action against this because UNPROFOR was not even allowed to inspect the Iranian aircraft at Pleso Airport in Zagreb.[27]

Iran may well have been permitted to supply arms to Bosnia, but not to receive any arms itself. The fact that the CIA was not involved in the Croatian pipeline did not yet mean that Iran had a free hand: for instance, in August 1994 a shipment of advanced technology from Slovenia, destined for Iran, was intercepted in Vienna following a tip off from the CIA.[28]

In the summer and autumn of 1994, brainstorming continued at an informal level within the American government on the possibility of executing secret operations. Plans were elaborated for training the ABiH.[29] An US 'mercenary outfit' was to arrange this training. This was carried out by Military Professional Resources Incorporated (MPRI), a company based in Virginia that employed various retired American generals and intelligence officials, such as the former director of the DIA, Lieutenant General Harry Soyster. With the consent of the State Department, MPRI trained the Hrvatska Vojska (HV, the Croatian Army) and later also the ABiH.[30] MPRI's role arose from the signing of the agreement between the United States and Croatia on military collaboration. By engaging MPRI, Washington also reduced the danger of 'direct' involvement.[31] Interestingly, DPKO was never officially informed about these activities of MPRI.[32]

Holbrooke, meanwhile appointed[33] as Assistant Secretary of State for European Affairs with the primary task of bringing an end to the war in Bosnia,[34] was becoming increasingly actively involved with the option of secret arms supplies to Bosnia. In reality, he was against this, because of the danger for European ground forces in Bosnia. On 6 September, he met Akashi and stated 'on a strictly confidential basis' that he wanted to avoid the embargo being lifted, because of the far-reaching consequences for UNPROFOR on the ground. 'He appeared to be genuinely looking for alternative policies', according to Akashi.[35]

What these alternatives were would soon be apparent. When in October Holbrooke visited Zagreb, Galbraith told him about the 'no instructions' instruction and the Croatian pipeline. Holbrooke apparently knew nothing of the matter;[36] which is remarkable because various articles had already been published on the subject. The political adviser to the British prime minister, Pauline Neville-Jones, was also convinced that Holbrooke was aware of the 'no instructions' instruction.[37]

On 2 November, the Dutch Permanent Representative to NATO also reported to the Ministry of Foreign Affairs about cargo aircraft from Teheran, which were delivering arms to Croatia via the Ukraine. His Canadian counterpart had tipped him off, referring to the Globe and Mail, which stated that UNPROFOR was aware of the matter, but was turning a blind eye.[38]

Holbrooke also spoke on this trip (on which he was accompanied, among others, by Brigadier General M. Hayden[39], the head of intelligence of US European Command)[40] with the Bosnian prime minister, Haris Silajdzic, who urged him to do more for Bosnia. Holbrooke came up with a plan in which Sarajevo would accept that the arms embargo would not be lifted for the coming six months in exchange for American encouragements to third party countries to violate the UN embargo and to step up the supplies of military goods. Holbrooke had already instructed State Department lawyers to investigate the legal snags attached to such a separation of words and actions. Holbrooke said that their recommendation was 'encouraging':

'... suggesting to a foreign country that it might consider a covert action appeared perfectly legal; going one step further and encouraging a foreign country appeared legal but potentially risky from a political standpoint. Actually supporting the foreign action through direct participation, the reports said, crosses the line into covert action'.

Lake and Christopher rejected Holbrooke's plan, however; Christopher still feared leaks and angry reactions from London, Ottawa and Paris, which could lead to the departure of UNPROFOR. Lake thought that this was a sort of covert operation anyway, in which case the president and Congress must be let into the secret.[41]

Reactions in the Netherlands and in UNPROFOR to the lifting of the arms embargo

Meanwhile, a debate was raging in the US Congress about lifting the arms embargo against Bosnia. This debate also did not go unnoticed in various capitals and in UNPROFOR. For instance, Netherlands Prime Minister Wim Kok told President Clinton by phone of his great concern about the possible lifting of the arms embargo. Clinton expressed understanding, but pointed to the domestic political pressure from Congress for lifting the arms embargo, which he himself called 'hypocritical', because in the event of a unilateral decision it would not be American but other troops who would run large security risks.[42]

In a gloomy and comprehensive scenario, Akashi outlined from Zagreb the possible consequences for the UN peacekeeping operations. The UNPROFOR commanders considered that lifting the arms embargo could be deemed by the Bosnian Serbs to be a de facto declaration of war by the international community. This had consequences for the humanitarian efforts and would lead to the VRS stepping up military actions against UNPROFOR. Furthermore, the VRS could feel forced to start large-scale military operations before the arms reached the ABiH, and UNPROFOR would lose any semblance of impartiality. The VRS would consider lifting the arms embargo to be new evidence of Western support to the Bosnian Muslims. Furthermore, the VRS would immediately withdraw its heavy weapons from the Weapon Collection Points in Sarajevo and other areas.[43]

In the autumn of 1994 there were in fact two tendencies that could be observed. The American government had to operate more cautiously, to prevent the 'truth' about the Iranian connection being revealed. At the end of 1994 a wide variety of rumours were circulating that Holbrooke had discussed a plan with foreign officials for Washington to make secret funds and/or arms available to the ABiH. A high American government official was said to have urged the Croatian government to continue certain military supplies to Bosnia.[44]

Investigation by the Intelligence Oversight Board

Holbrooke's activities gave Woolsey renewed concerns; in October 1994 he approached Lake again, but again this had little effect. In the autumn of 1994, Woolsey then approached the Intelligence Oversight Board, a small unit in the White House that is responsible for internal investigation into possible false steps within the intelligence community. The reason for Woolsey's move was that Congress was starting to have concerns about the Iran connection, and Woolsey wanted to prevent his service becoming the object of this concern.[45]

Some sections of the Clinton administration resented this move, because it ultimately led to an extremely thorough internal investigation by the Intelligence Oversight Board (IOB) that lasted six months, and that concentrated on three questions: whether Galbraith and Redman had offered assistance to Tudjman; whether either one of the ambassadors had actively intervened with Croatian officials for the transit of arms; and whether Galbraith or Holbrooke had offered arms and funds to Bosnia or Croatia. At the same time, the Intelligence Oversight Board examined whether French accusations from March 1994, that the Americans had executed airdrops over Bosnia, were correct.

And the IOB also scrutinized the deployment of US Special Forces, who originally went to Bosnia to assist in humanitarian relief. However, some Canadian and Swedish UNMOs had seen these units unloading and handling cargo. The Canadian report came from Visoko; the Swedish report came from Tuzla, where a Civil Affairs official of Sector North East made no secret of his Special Forces background.[46] Otherwise, American Special Forces were present throughout Bosnia: a British officer had personally witnessed an US Special Forces colonel scouting out the territory during a visit to the British headquarters in Gornji Vakuf in 1993. When asked what he was doing there, the American answered that he was looking for suitable helicopter landing places. In a night-time operation one day later, American C-130s dropped equipment, ammunition and arms, which were apparently transported in helicopters for the ABiH, and a few days later ABiH soldiers were walking around in brand new American uniforms carrying M-16 rifles. This was remarkable, because those were nowhere to be found in the Balkans.[47]

In May 1995, the IOB arrived at a better than expected conclusion for the supporters of the arms supplies resumption via the Croatian pipeline, namely that no definitive conclusions could be drawn on what had happened, but that no 'covert action was conducted in arms shipments and no U.S. laws were broken'; there had been no 'improper encouragement to President Tudjman', and the activities of Redman and Galbraith fell under 'traditional diplomatic activity', which required no permission from Congress. According to Redman, the Bosnian Muslims actually never discussed arms supplies with the Americans, because it was known in Sarajevo how legalistic American government thinking was.[48] A subsequent conclusion of the IOB was that Holbrooke had made no offer. The Pentagon and the CIA had already investigated these French accusations and arrived at the conclusion that no such activities took place, and that furthermore no US Special Forces had been involved.[49]

The further American policy on the Croatian pipeline

In early 1995 James Woolsey resigned as Director Central Intelligence. A senior White House adviser stated that Woolsey's relationship with the White House and Congress was poor, and that this caused his departure. He described him as someone with 'an inherent tendency of always swimming against the stream'.[50] Woolsey agreed with this observation but for other reasons. 'If you are a Director of Central Intelligence and you let the politicians tell you what...