ORAL HISTORY OF JOHN W. NIELDS, JR.
May 22, 2018
This interview is being conducted on behalf of the Oral History Project of the
Historical Society of the D.C. Circuit. The interviewer is Elizabeth Cavanagh and the
interviewee is John W. Nields, Jr. The interview took place at Covington & Burling on Tuesday,
May 22, 2018. This is the fourth interview.
MS. CAVANAGH John, the first thing I guess we were going to talk about today was your
involvement with the Iran-Contra hearings. You were the Chief Counsel
for the House Select Committee to investigate covert arms transactions
with Iran in 1987. Many books have been written about these events. A
lot of the testimony footage is actually available online. Let’s hit the
highlights and you can decide what we should focus on today. For
posterity though, perhaps you can provide some background about what
the Iran-Contra hearings were about.
MR. NIELDS Good, I think the easiest way is to begin when the rest of the world started
to become aware of the underlying events, and that started in early
November of 1986 when a Lebanese newspaper, I think it’s called Al
Shiraa, put out an article that reported that the United States government
had sold arms to Iran and that they had done that to get hostages released
that had been taken by terrorist organizations in Lebanon and which were
in league with Iran. And that we rewarded Iran with arms in order to get
the release of hostages. This was almost unthinkable when the article first
came out. Iran was a sworn enemy of the United States of America. They
had taken our entire embassy hostage in 1980 and bought down one
administration. They were clearly a terrorist country and they were in
league with the people that were taking hostages of innocent U.S. citizens
in Lebanon. We had a very firmly or, I should say the Reagan
Administration, the United States government had a very firmly
announced policy that we would not ransom hostages, that we would not
pay ransom for the release of hostages because all that would do would be
to encourage terrorists to take more hostages and then we’d have to
ransom them too. So this was, as I say, unthinkable and the United States
government officially denied it. Said that it was completely false. But the
reports got more persistent and it started becoming clear that there was
something to them. On the nineteenth of November, President Reagan
had a press conference in which he announced that indeed we had sold
arms to Iran in return for release of hostages. He said that that had started
in the beginning of 1986 and he was asked — because there were rumors
that the Israelis had shipped some arms to Iran for the same purpose in
concert with us in late 1985 — and he was asked about that at the press
conference. He said, oh no, we had nothing to do with that. That we
didn’t know anything about it and didn’t have anything to do with it. That
was the Israelis. That statement was false.
MS. CAVANAGH It was false that the U.S. government didn’t know about it?
MR. NIELDS Yes, we were absolutely a part of it and not only did the U.S. government
know about it, Ronald Reagan personally knew about it. Now, whether he
remembered it, that’s a different question, but he absolutely knew about it
when it happened. The investigation made that 100% clear that there were
two sets of — or two arms shipments, one in September of 1985, one in
November 1985 that the Israelis did, and he approved both and there was
significant United States government involvement in the second.
MS. CAVANAGH They were Israeli arms or U.S. arms?
MR. NIELDS These were arms that the Israeli government had purchased from the U.S.
and the deal was they shipped those arms subject to a promise by the U.S.
government that we would replenish them. The reason that there was this
commotion about, or the false statements about, the Israeli sales is that
people high up in the government believed that these sales were probably
illegal. That they violated the Arms Export Control Act, which is a very
detailed and byzantine thing to try to study, but he had done that and he
thought this likely was illegal. Somehow, once these arm sales to Iran
started to surface in November 1986, Bud McForlane, together with Oliver
North and some people from the CIA, started to put together chronologies
of the events. The chronologies were started off, and I think they started
working on them sometime around the 10th of November, 1986, people
started working on them, and they started off honest and a genuine effort
to try to recount what had happened and who made what decisions and so
forth. McFarlane had told everybody (in substance), “folks, remember
that in the past, people often get into more trouble with the cover-up than
they do with the events and let’s get this accurate,” and then ended up
changing true versions of the Israeli sales and made them false. It is likely
that President Reagan was prepared [for his November 19 press
conference] by people who were working with the same chronologies.
I’m not sure whether we know that that exactly happened. So, the
business of the—so the next thing that happens is that on November 21st –
November 19th, the press conference is a Wednesday, November 21st was
a Friday. John Poindexter, who had taken over for Bud McFarland as
National Security Advisor in early 1986, and Bill Casey, the head of the
CIA, both appeared before House and Senate Intelligence Committees on
Friday the 21st. And they were asked about the arms sales in general and
in particular about the Israeli sales because people were not clear or
satisfied that they were getting the straight scoop on that.
MS. CAVANAGH Did the Israelis deny it too?
MR. NIELDS I don’t remember if the Israelis said anything yet. I don’t think they said
anything, at least not at this time period. Eventually, when our
investigation got going, the Israelis sent a detailed chronology. That was
the main source of their information. It was a written chronology. But
Poindexter and Casey were both asked by Congress about the Israeli sales
on Friday, November 21, 1986 and they said we [did not know about these
arms shipments until after the fact]. That was a problematic thing to say
because the CIA — the Israeli plane that was supposed to carry the arms
to Iran in November 1985, these were Hawk anti-aircraft missiles and
there were 18 of them that were sent in November 1985. The Israeli plane
that was supposed to take them [to Iran] had either broken down or wasn’t
available. I think it wasn’t available because of some delays that had
happened. So the CIA jumped into the picture and got a proprietary
airline of the CIA to go actually pick up the missiles and take them to Iran.
So you can see this was a problem. So Poindexter and Casey told the
Intelligence Committees that we had provided the airplane, but that we
thought we were picking up “oil drilling equipment.” The Committees
said to Poindexter, “We’d like it if you could go check your files for more
documentation and make that available to us.” And he said, “Yes, of
course I’ll do that.” And he went back into his office (right after the
meeting with the Intelligence Committees), where he had the only copy in
existence of a signed document by the President of the United States,
Ronald Reagan, at the time of the, or shortly after the November 1985
Israeli shipments, which was called a “Finding.” A very, very significant
document in covert actions — there has to be one signed personally by the
President for every covert action that is done and this was a covert action
and the President signed the Finding. Poindexter had taken it [the signed
finding] and put it in his office, not showing the signed finding to anybody
else, and when he went and got back to his office on the afternoon of
November 21st, he ripped it up and threw it away [because it showed that
the President knew full well that our airplane was picking up missiles, not
oil drilling equipment.] Then the next thing that happened is Ed Meese,
the Attorney General, returned from some trip and had gotten wind of the
fact that there was some confusion and inconsistency. There was
something not quite right about the accounting for these Israeli shipments,
and he said he was going to start a Justice Department investigation,
which would be conducted over that weekend. That’s the 22ndP Pand the
23rd of November. He gave Oliver North a little bit of lead time warning
and Oliver North went back to his offices, told other people what was
coming down the pike, and they started shredding documents. They
shredded, and shredded, and shredded, and then they also went into the
official documents that couldn’t be shredded, because they were
documents that were in official NSC files and they had numbers on them.
They were sequentially numbered and they were in a special place, but a
number of them showed that the NSC had been involved in supporting the
Contras with money and military activities at a time when it was illegal to
do that. They doctored those documents. They made — they crossed out
certain parts and then typed something in its place, xeroxed it and put that
back in the NSC files. But they only got about halfway through that
process when the people from the Justice Department showed up. North
later disappeared with Fawn Hall his secretary with documents in her
MS. CAVANAGH Really.
MR. NIELDS Yes really, and so the Attorney General’s people obviously didn’t see a lot
of the documents they would have seen if they have gotten there sooner.
But there was one copy remaining of what later turned out to be several
iterations of the same document, and what the document showed was that
the proceeds from the arm sales to Iran, instead of going to the United
States Treasury, had gone into secret Swiss bank accounts under the
control of a former Air Force Major General named Richard Secord and
his private citizen compadre Albert Hakim; and that after going into the
Swiss bank accounts that were under their control, not the United States
government’s control, but they were working with North, the money
(much of it) was then sent to the Contras. So the document proposed that
the Iran arms sales proceeds be “diverted” to the Contra, and so this
document was like a hot document. And it had a place on it for the
President to, I can’t remember whether it was initial or check or sign, and
ostensibly it was something that would be taken to the President and that
he would approve — that became known as the “diversion.” The copy
that was not shredded was not checked or signed, so there was a big
question about whether the President knew about and approved the
diversion. There didn’t seem to be much of a question then as to whether
the “diversion” happened — it happened. And the next day, after the
weekend, which must have been the 24th, might have been the 25th, but
Meese has a press conference and announces that they found this
document and that there has been this diversion of arms sales proceeds to
the Contras and that President Reagan didn’t know about it. I’m satisfied
that Meese did not know whether the President knew about it, but that is
what he said, and that then brought on, this was like head-spinning ….
There had been lots of rumors during the years when the Boland
Amendment forbade the government from supporting the Contras, that the
Government was doing it anyway, but North, McFarlane, Poindexter, and
Elliott Abrams from the State Department, all appeared at Congressional
hearings or meetings and gave false testimony about it.
MS. CAVANAGH Previously.
MR. NIELDS Previously, previously. Let’s see if I’ve got it. This is his testimony at the
MS. CAVANAGH Whose testimony?
MR. NIELDS North. This is vintage [reading from testimony]: “I will tell you right
now counsel and all the members here gathered that I misled Congress. I
misled.” Question: “at that meeting?” Answer: “at that meeting.”
Question: “face-to-face?” Answer: “face-to-face.” “You made false
statements to them about your activities and support of the Contras?” “I
MS. CAVANAGH You were clear.
MR. NIELDS But it was also defiant, it was like it was bragging. So anyway that
basically tells you why we had Iran-Contra hearings and it tells you a lot
about what actually happened.
MS. CAVANAGH It’s a really helpful summary.
MR. NIELDS Good, good, good. So then comes the investigation, which obviously is
what I had a part in.
MS. CAVANAGH Now there were also multiple investigations, which is slightly confusing—
maybe you can speak to that a little bit too.
MR. NIELDS Sure. So let me tell you my part of it just to put it in time and then I will
relate the others to that. So, I think I got a call, anyway there was a House
Select Committee and “Select” means it’s not a standing committee with
normal jurisdiction; it is created for a particular purpose and it disappears
when that purpose has been served, and it was a select committee in the
House to investigate the Iran-Contra affair. And it was made up of mainly
Chairs, or at least the Democratic side of it was made up of Chairs of all of
the other major Committees that might have had jurisdiction: Foreign
Affairs, Armed Services, Government Operations, I’m forgetting some
obvious ones, but ….
MS. CAVANAGH Democrats controlled the House at this point.
MR. NIELDS Democrats controlled the House at that point. Then the Senate set up a
similar committee. The Chair of the House Committee was Lee Hamilton,
one of the finest members of Congress, I think, who ever served—he was
just an extraordinarily smart, and fair, and decent, and measured person,
and he asked me, or somebody on his behalf asked me, if I would be
willing to be the Chief Counsel, and I think that’s because he was on the
Koreagate committee that I had worked on several years before that. And
there were like nine Democrats and six Republicans, and Dick Cheney
was the ranking minority member of our committee, and I thought he was
a perfectly decent force in the hearings and in the investigation before.
The Senate Committee Chair was Daniel Inouye, a Democrat, and the
ranking Republican member was Warren Rudman—and I should say I
think Warren Rudman might have been as important a figure in these
Congressional investigations as anybody. I bumped into him in a number
of other contexts and he is a force of nature. A lot of people serve in
important positions in Congress and the fact that they were there probably
didn’t change anything. Warren Rudman always made a difference and
played a … just by force of his personality and the fact that he was
completely centered in what we should be doing. There was not an inch
of difference between what Lee Hamilton thought we should be doing or
Warren Rudman or Daniel Inouye. There was a difference in the House
side. You could tell that Republicans were Republicans and Democrats
were Democrats by the point of view that they came at a lot of things.
You couldn’t tell that at all on the Senate side. It was completely
integrated. Anyway, so the first actual body that investigated the IranContra affair, I think I’m right about this, is the Tower Commission,
which was a commission appointed by President Reagan to find out what
had happened. They did a lot of spade work and I think the fact that they
had been in existence was very helpful in our ability to do our job in a
timely fashion, and I’ll get to that later because that was a non-trivial issue
in my mind and in everybody’s mind. They did a very nice job. They got
their arms around a lot of stuff. They could not figure out whether the
President really knew about the Israeli sales before or after and he said one
thing one time and then another thing another time, and in the end he
ended up saying I don’t know, I don’t really know the answer to what I
knew. I believe the same … they also couldn’t figure out whether the
President had signed the finding that I described in November of 1985 that
had to do with the Israeli shipments of Hawks in the CIA proprietary
airline. But a copy of that, or the real original, of that document had been
drafted by Stanley Sporkin, who was General Counsel of the CIA and later
a judge. It was still on his computer hard drive or whatever the right term
was then, and he found it and had it spat out at some point, I think during
the Tower Commission period. So that everybody knew that finding had
been drafted but nobody knew what happened to it after that. I think they
knew it was sent to Poindexter. But nobody knew anything after that and
nobody could find a signed copy of it.
MS. CAVANAGH Meaning no one knew if it ever got to President Reagan.
MR. NIELDS Yes, that’s what I meant. The other investigation, of course that was an
independent counsel—statutory independent counsel, not informally in the
Justice Department like [Robert] Mueller, for example.
MS. CAVANAGH The independent counsel statute still existed.
MR. NIELDS Right. And Lawrence Walsh was the independent counsel and he was
doing a criminal investigation and he was doing it as quickly as he could.
I knew him (only barely) because he had been a partner at Davis Polk, my
first two years out of law school and I was an associate there. And I knew
at least one of the people he chose from Davis Polk to help him with it. So
they were in the mix. They were demanding documents and he got started
before we did. I’m almost sure about that. I don’t know how much
before, but maybe a month. My memory is that I started working
sometime towards the end of January.
MS. CAVANAGH Of 1987?
MR. NIELDS Of 1987, but I’m hazy on exactly when. And it was at least a month and
maybe longer after I started working before I and my staff had security
clearances. So there was not a whole lot we could do. We knew there was
a stack of documents waiting for us. We could draft subpoenas and I think
I did that. I copied Judge Walsh’s subpoena and then added on to it. He
reportedly was absolutely indignant that somebody would do that to him.
I said you’re not copyrighted. You think I’m a dummy. You’d been
thinking about this and had gathered all the documents to comply with it.
I want the same documents you got and then I want more.
MS. CAVANAGH Looks like a smart move.
MR. NIELDS I thought it was a perfect intelligent thing to do. What do I want to tell
you next. Have I covered the other investigations that you hoped I would
MS. CAVANAGH You mentioned that there was a House investigation and a Senate
investigation. You haven’t talked about it and I don’t know if you want to
talk about it yet, like who led the Senate investigation, your counterpart.
MR. NIELDS Yes. My counterpart was Arthur Liman, a very smart lawyer from New
York. He had a superb reputation. We had a good working relationship.
When we each were hired, the committees were absolutely clear that they
were going to run two separate investigations and have two separate sets
of hearings. That was dumb enough that eventually it didn’t happen. Our
staffs were not exactly integrated but we talked all the time and when it
came time to have the hearings, we totally divided up witnesses in a fair
way. There were four really important witnesses. They were North and
Secord and McFarlane and Poindexter. I was more interested in the
people who were doing things so we got North and Secord, and they were
more interested in the Cabinet level, and they [McFarlane and Poindexter]
weren’t Cabinet level exactly but they were national security advisors. So
they took the lead on Poindexter and McFarlane. Everybody interrogated
everybody at the hearings. Our staffs would each name somebody to do
interrogation at the beginning of the witnesses’ testimony, and then after
one from each staff questioning, then the members would pitch in. That’s
the way the hearings went. Is that about what you wanted?
MS. CAVANAGH I guess my next question would be, do you want to talk a little bit about
what the investigation was like in terms of …. When did the hearing
MR. NIELDS Let me get to that. Let me get to one other thing before I leave the other
outfits because there was one really important place where we intersected
with the independent counsel. I was virtually sure that we were going to
end up having to immunize more than one major witness. Our job was to
get what happened out there so that the public knew what had happened
and what didn’t happen. And if we weren’t able to answer the question
then we weren’t able to answer the question after having done a real
thorough job of trying. The country was in turmoil and it needed to be put
out of turmoil. It may be some bad things would happen and then we
needed to know that and needed to figure out how to do better in the
future, and if people speculated that something really awful happened and
it hadn’t, it was important that the public know that too. I thought our job
was more important than the independent counsel’s, which was to put
people in jail. I might have felt different in another context but I thought
the major things that went wrong were more important to our political
system than to our criminal justice system. It was our political system that
had broken down really badly. The public had been told we have this
policy and we had the exact opposite policy, and Congress had been told
that the executive had been following the law that the Congress had passed
and they weren’t. That is unacceptable in our country. I thought whether
Oliver North or somebody else went to jail for six months was not as
important as getting to the bottom of this and doing it with reasonable
Now, that was (not only) my idea. The external pressures for expedition
were absolutely intense. If I’m right that we got our security clearances
around the beginning of March, the hearings began May 4th as I recall.
They were originally, when I first came on board, it was like people were
saying we’ll have our hearings start in three weeks or something like that.
That was crazy but May 4th wasn’t very much less crazy. I’m sorry I
interrupted myself on the subject of immunities.
One of the first things I recall doing (after discussing it obviously with Lee
Hamilton), was a letter going from us to Walsh telling him, the time is
going to come way sooner than anybody would like when we are likely to
be putting the major people you’re investigating on the witness stand
under immunity, and if you have not gathered your evidence and
documented that you’ve gathered your evidence and documented what it is
before that time, then you’re not going to be able to demonstrate what you
need to demonstrate to try your case, which is that your case is all
untainted by your exposure to immunized testimony.
MS. CAVANAGH Because any of the testimony after the grant of immunity they wouldn’t be
able to use.
MR. NIELDS Not only would they not be able to use that testimony, if they learned a
fact as a result of it, they wouldn’t be able to go find some other way of
proving that fact and they wouldn’t be able to prove what they have to
prove when they’ve been exposed to immunized testimony, which is
affirmatively demonstrate that nothing that they did of any moment
resulted from information they learned from the immunized testimony.
It’s a hard job. They were livid with rage at us.
MS. CAVANAGH They were under a lot of time pressure too.
MR. NIELDS They were under time pressure too. But anyway that was a source of … I
think they are still bitter about the fact that we did go ahead and immunize
Poindexter and North, although that’s another topic for another time and
another day. I thought they made plain use of the big critical piece of
information that nobody ever would have found out about if we hadn’t
immunized Poindexter, which is: “what happened to the November 1985
Finding and who did that.” I don’t know why they used that against him
but they did. They did it because North, who told us he did not know what
happened to the Finding, purported to remember that Poindexter ripped it
up it later on after Poindexter told the world under immunity that he had
MS. CAVANAGH Later?
MR. NIELDS Later. [I believe North testified to this at his own criminal trial — well
after the Congressional hearings, but prior to Poindexter’s trial.] And then
they called North as a witness in the Poindexter case. But I don’t think
North would have ever “remembered” that if Poindexter hadn’t testified
about it under immunity.
MS. CAVANAGH Tell me about the decision to grant North and Poindexter immunity.
MR. NIELDS Well the Committee did. The Committees.
MS. CAVANAGH For the purpose of finding out really how high this went?
MR. NIELDS Yes. Even though I’m not sure they told us the truth about what Reagan
knew, I didn’t think you could do this in the way, well, let’s convict North
and Poindexter and then after all their appeals have run then threaten them
with a big jail term if they don’t roll over and testify about Reagan.
MS. CAVANAGH Did this feel familiar to you after doing the bag job case and Mark Felt.
And you’ve got certain people on a lower level, on how far this could go.
MR. NIELDS Particularly, I think this is kind of normal for prosecutors of all stripes.
The thing that is similar between those two is it’s government. But every
prosecutor wants to know how high it went. If it’s a company you want to
know is it the CEO that was responsible for this or was it someone lower
down or is somebody being a rogue. So that’s not exactly special to my
own experience, but sure, the question I wanted to know was who is the
highest person responsible. And impeachment was in the air. I didn’t
think that Reagan would be impeached even if he knew and I wasn’t at all
convinced that he should be. I thought that was a really extreme thing to
MS. CAVANAGH There’s another interesting question which is, you felt like your role was
trying to get the information out there, as opposed to convicting somebody
or finding somebody guilty of something. What was that like? Because a
lot of your career is litigation and trying to win, right, and here there
wasn’t necessarily a win possible.
MR. NIELDS That’s true but it is also true that in a slightly … what you say is right. My
attitude was a little different than it was as a prosecutor. But it’s also a lot
the same because the way you instinctively go at a potential scandal is
push as hard as you can to find out how bad the scandal was and who did
it. That’s your job, to find out if it happened and then find out who’s
responsible for it.
MS. CAVANAGH You are looking for wrongdoing.
MR. NIELDS You are looking for wrongdoing. It’s not that you’re hoping to find
wrongdoing. You may be, it’s a little hard to untangle your motivations
sometimes, but you are looking for wrongdoing. And that’s why as a
defense lawyer, I remember my friend Neil Eggleston who was deputy to
me on this and later became White House counsel, said when he
represented somebody, as a defendant and a defense lawyer, you are
always allowed to hate your prosecutor. The prosecutor includes
somebody who is investigating you. Because they are trying as hard as
they can to find out if you’re guilty. And that means generally trying to
push as hard as they can to get evidence of guilt. Now when they fail,
they say fine, I tried hard, and now I’m satisfied this person shouldn’t be
charged. But you can’t be satisfied they shouldn’t be charged if you
haven’t tried to find evidence to convict them.
MS. CAVANAGH That’s interesting.
MR. NIELDS So it is perfectly okay for any person, including any President and I won’t
mention any names, to have a very antagonistic feeling toward whoever is
investigating them. There is nothing abnormal about that. It is a human
reaction and it’s perfectly realistic.
MS. CAVANAGH In terms of the investigation maybe you want to speak a bit about the
process and what that was like.
MR. NIELDS I am really embarrassed to tell you this but the time pressures and volume
of material or something … I can almost remember no specific thing that
happened. There are exceptions to that and I will tell you some of them.
But I can’t remember sitting in a room and reading documents. I know I
did. I know that the White House sent us over lots of very incriminating
documents, a lot of them having to do with the support of the Contras and
the false statements about the support of the Contras. They built an
airfield, they had airplanes, they had munitions, they dropped them where
they thought the Contra armies were. They raised money from foreign
governments. They raised money from private citizens. Adolph Coors.
We used to call them Contra-butions. And at a time when it was illegal
for them. It wasn’t criminal, there was no criminal statute. The only
statute was an appropriations bill that said no money from any
appropriation may be spent on [supporting the Contras].
MS. CAVANAGH That’s the Boland Amendment?
MR. NIELDS Boland Amendment. This may be a good answer to your question or if
not, a good place to go next, I think. What I remember is we were getting
very close to a May 4th deadline and we didn’t have a hearing. We didn’t
have any witnesses. We had documents. I suppose you could have
somebody stand up, and most importantly, the reason we had no witnesses
is everybody was going to take the Fifth, who was high up and had done
any wrongdoing. The other thing we were missing was the Swiss bank
records. There was a mutual assistance treaty with Switzerland that
enabled the Justice Department to get access to these documents. But I
don’t think they got them very quickly and they were not feeling very
friendly towards us so they were not likely to make what they get
available to us. We had no obvious path to getting those documents and if
we don’t get those documents, we are not going to be able to do our job. I
mean that’s just like follow the money, and people like Clark Clifford
were out there saying, I’ll bet you find that some of that money went into
political campaigns. Oh, did you hear what Clark Clifford said? Which
turned out not to be true. So I just remember an unbelievable amount of
document reading and then interviewing of witnesses, but I didn’t
interview any witness that I would have wanted to put on at our first set of
hearings, except I knew Dick Secord’s lawyer and he started having
conversations with me and his client came in. They’re feeling their way to
whether they can agree for him to testify without immunity. He wanted to
testify. He wanted to tell his story. Partly I think he liked the attention
and partly he thought he had done nothing wrong and why should he hide
in the underbrush. Then the Senate had the same kind of experience with
McFarlane. Then I talked to Secord and Hakim’s lawyers and came up
with an arrangement whereby they got some hope of immunity for the
document production so that it couldn’t be used against them. Maybe only
Hakim got that, I can’t remember. He was the custodian of the
documents. We would take his deposition—nobody knew where he
was—he wasn’t in the US of A. And he didn’t want anybody to know
where he was. He didn’t know if anyone was going to arrest him or put
him in irons and so on. So he didn’t want to come into the U.S. The
Justice Department wasn’t going to go along. They weren’t particularly—
we didn’t tell them about it—but they wouldn’t probably have been very
happy to find out we were going to get the documents before they were
and then expose them on national TV and taint their case against Hakim
maybe. I don’t know. So we ended up arranging a deposition of Albert
Hakim in Paris by having—we needed a Democratic member of our
Committee and a Republican member to actually compel testimony and to
confer immunity. So we got—oh no. It was not a Republican/Democratic
it was a—we needed somebody from the Senate and somebody from the
House. So on an Easter afternoon, we left my house at 4pm, flew to Paris,
went to Paul Weiss’ Paris office where Arthur Liman was a partner, and
got this slightly unusual immunity order. Everybody knew that it might
not turn out to be effective but this guy wasn’t coming into the US of A,
so nobody was going to touch him anyway until he felt like it. They
marched into the room with a sort of Gore-Tex carrying case about, maybe
a little longer than that [six or seven feet], with binders and it was in the
shape, you know, the size of a three ring spiral binder, and those were the
bank records. I think we had to have Lee Hamilton on the phone. We
asked the questions, got the documents, and the carrying case had a handle
it, and we took off for the airport. And I arrived home at 2 in the
afternoon the next day. We had our Swiss bank records. When we got
onto the — it was a TWA DC10 and we got on this plane after the short
deposition session and I had a guy carrying — you know, an FBI agent
working for us — carrying the documents. It was a bright red casing.
And we walked onto the plane and the stewardess said that’s the same
casing that a guy had coming up from Zurich this morning. So I said well
at least we know they’re Swiss.
MS. CAVANAGH That’s what they looked like.
MR. NIELDS What’s that?
MS. CAVANAGH That’s what they look like. The Swiss banking records. So you needed
those. You got those.
MR. NIELDS So we got those and we had a hearing. And I really can’t — I couldn’t tell
you any other detail about the ….
MS. CAVANAGH It must have been very intense in terms of the work.
MR. NIELDS It was very …
MS. CAVANAGH You know one of the news reports says that you were at your desk at 7am
everyday and rarely home before 10:30 at night.
MR. NIELDS Yes. I think it was even later than that. I mean it was — and we were — I
mean I was sleep deprived and I was light deprived. We were in the dome
of the Capitol.
MS. CAVANAGH You called it a crypt in one of the articles. Yes. The Washington Post,
they asked you about your daughters’ ages and you stumbled a little bit.
And you said they changed ages while I’ve been in this crypt. That’s what
you said in a Washington Post article.
MR. NIELDS Is that right?
MS. CAVANAGH It must have been a blur.
MR. NIELDS It was a blur.
MS. CAVANAGH Where was it? How was it a crypt?
MR. NIELDS Well it was a crypt only in the sense that there was no window anywhere.
MS. CAVANAGH Wow. That’s tough.
MR. NIELDS And it was in the dome of the Capitol. I mean I feel like there was a
dome-shaped ceiling but I don’t remember it being four stories above us
and I don’t quite believe that we were up that high in the Capitol. But it
was in, I mean partly for security purposes, it was no place where a
window was around and it was creepy.
MS. CAVANAGH I have that the office was on the House side of the Capitol. “Cloistered
and guarded.” And you described it as “organized chaos.”
MR. NIELDS Did I?
MS. CAVANAGH Yes you did.
MR. NIELDS Well that sounds right. Lots of people were running around doing lots of
stuff and I wasn’t sure what all of them were doing ….
MS. CAVANAGH Who was on your team? Like, did you pick people for your team? Was it
staffers for the members of the Committee? Who were you working with
during this period?
MR. NIELDS Well Neil.
MS. CAVANAGH Right, Neil Eggleston.
MR. NIELDS A guy named Pat Carome who was at Wilmer. Wonderful guy.
MS. CAVANAGH I met him a long time ago. I worked at Wilmer over a summer.
MR. NIELDS Terrific lawyer. Julius Genachowski who was not a lawyer then but he
was so able that I ended up using him as a lawyer. He was more useful
than anybody other than the other two people that I …
MS. CAVANAGH And he was the head of the FCC ultimately, right?
MR. NIELDS Yes he was. Ken Ballen. I think I hired these people. But I got flooded
with resumes. And I’m pretty sure I hired them. I don’t remember Lee
Hamilton interviewing people but he might have, but I’m guessing I hired
this great staff, with one exception. There was a head investigator who
was hired at the same time as me and I’m pretty sure that he didn’t stay
because he figured out that this was going to be lawyers’ work more than
and — but there was a whole bunch of investigators. Gus Hall — no Gus
Hall is a Communist leader. What was his name? Last name was Hall.
And many others. I would recognize their faces but I’m not sure I can
conjure up. So Secord and McFarlane were the major witnesses but I feel
like we called 10, 12 others? But I really don’t know.
MS. CAVANAGH Do you want to talk a little bit about the testimony? Some of them or what
that was like? I mean obviously there was a lot of press coverage of the
Oliver North testimony on a daily basis. Live TV for the first time, right?
So we saw this around-the-clock coverage of the news.
MR. NIELDS Koreagate was on TV for two days and this was on TV for 8-9 weeks,
MS. CAVANAGH It was the middle of the summer.
MR. NIELDS Well there was a break as I recall and the North thing began after the
MS. CAVANAGH I have that he was July 7-10.
MR. NIELDS Yes that sounds just about right. So we might have had a couple of weeks
off in June. I can almost remember—there were parts of it where I was
sitting there and somebody from the Senate side was introducing evidence
about Oliver North’s wife buying lingerie and I remember saying what? I
mean we were working together but there wasn’t time for us to actually sit
in the same room and collaborate about how we were going—and
whoever that witness was, and I don’t remember who it was, there must
have been somebody on my staff asking questions. I just — I remember
Chuck Cooper — have I got his name right?
MS. CAVANAGH I’m not sure. [Assistant Attorney General Charles J. Cooper]
MR. NIELDS He was one of the two people who did, Brad Reynolds [Assistant Attorney
General William Bradford Reynolds] — I thought Charles Cooper was the
other lawyer that Meese appointed to do the weekend — he was a
Republican and I think a staunch Republican but his testimony was
riveting. I think Neil might have put him on. It was really good
testimony. I remember that. I mean it was straight up and no holds barred
and you just got — I mean it really painted a picture. Everybody was
saying that’s just shocking what I just learned.
MS. CAVANAGH Well when Oliver North testified were you, did you expect him to
essentially say, yes I lied, I did these bad things, but I did them for good
reasons. I mean he kind of presented himself as a real patriot and proud of
what he had done, as you suggested earlier. Did you know he was going
to testify in that way? And how do you handle a witness like that?
MR. NIELDS Yes. I didn’t know what he was going to do. I knew that he was going to
emote and be reasonably good at it. I’m not sure I had a very good plan to
deal with that. I was mainly focused on getting everything out there. And
I was perfectly satisfied with how I did that. I remember feeling that I had
been too intense — too tense and too confrontational. That I would have
done better if I had let him be him and contrast that to the seriousness of
what was going on. Instead, I was wanting to be on the attack. I think it
was probably a mistake.
MS. CAVANAGH Do you think it made him seem more sympathetic, or, I don’t know ….
MR. NIELDS It played into his, and I think I didn’t understand also that I was living in a
cultural divide. It’s not quite as bad as it is now but it was a Vietnam postVietnam War cultural divide and so there were people who just wanted
Oliver North to take the stage and have his hand on his heart and testify
about patriotism and helping out these hostages and all the other things.
MS. CAVANAGH And the suggestion that somehow you were holding him back from being
able to do that, and government holds him back from being able to do
that—a suggestion of the movie A Few Good Men, Jack Nicholson’s
character. He was sort of like that.
MR. NIELDS Yes he was quite like that. And Arthur did, at least by technique, he did
well by sort of getting in a chair next to Oliver North and commiserating
with him about how he ended up being the fall guy when he was only
following orders, you know? That worked better with North’s personality.
But I still, I didn’t want to do that. I didn’t want give off any whiff that
there was anything okay about lying to everybody about what you did.
And North ran for the Senate against Chuck Robb and somebody that I
knew well who was supporting Robb or at least opposing North, I mean
not as a candidate or anything, called me up and said, Oliver North just
was on TV on Channel 7 with a group of school children and one of them
had raised her hand on camera and said, “Is it okay to lie to Congress?”
And North said, “The Democrats said I lied to Congress. The press said I
lied to Congress. I never lied to Congress.” So he asked me if I could put
him onto something that would help. I said mmm-hmmm.
MS. CAVANAGH You did and then he lied to Congress. Right?
MR. NIELDS I think I sent him a tape of it. I think they played it the next day on the
MS. CAVANAGH Interesting you mention that because I just read recently, I didn’t know
this at the time, but that a lot of people thought the reason he lost that
election is because Nancy Reagan made statements against him,
essentially because she felt that he had wronged President Reagan by lying
to him, not telling him what was going on, that was the implication.
MR. NIELDS Or just, yes, gone off on his own and done something rogue that Reagan
got blamed for.
MS. CAVANAGH Right. And I believe what he said when he testified with you was that he
didn’t know if President Reagan knew anything about all this.
MR. NIELDS Well he certainly knew that President Reagan knew a lot about a lot but
the diversion, I think his testimony was, that he believed at the time that
President Reagan knew. That he saw these documents going up and
assumed that they’d come back approved. But he denied actual
knowledge of that. And I don’t know whether that’s true testimony or
MS. CAVANAGH He testified that William Casey did know about the diversion of funds,
MR. NIELDS I think that’s right and then Casey you couldn’t ask because ….
MS. CAVANAGH He had died recently, right?
MR. NIELDS I mean really shortly after he was before that Senate Intelligence
Committee, he went into the hospital and had part of his brain taken out
and then eventually died.
MS. CAVANAGH I didn’t realize it was that close to that time.
MR. NIELDS It was really close. He was unavailable for the hearings.
MS. CAVANAGH Did you want to speak a little bit about Dick Secord’s testimony or the
experience of ….
MR. NIELDS I remember Secord’s testimony. All I remember is I thought it went very
well. I cannot tell you a single question or a single answer that I recall,
but he was mostly a witness that was accurately informing everybody of
what he was doing. Both in the Contra part of it, which he was deeply
involved in, and in the Iran part, which he was less deeply involved in but
still involved. And what became known as “the Enterprise,” which is this
private thing that he and Hakim had with bank accounts and airplanes and
the boat and a ship, I think they called it. And he had not done too badly
financially as a result of what he was doing for North. I remember Dick
Secord telling me in one of those meetings before he — maybe I’ll have to
take this out — but he volunteered in an off-hand way when McFarlane’s
name came up, well he said he didn’t have the “air speed.” I think air
speed means enough speed so that you stay airborne.
MS. CAVANAGH That’s funny. Did you question Ed Meese as well?
MR. NIELDS I did. And not particularly effectively. It was painfully obvious that he
was doing something that an Attorney General shouldn’t be doing, which
is to, the thing that he did that was reprehensible, I thought, was, when he
did his brief investigation and once he had come upon the diversion
memo, he then had meetings with I think all of the key players — Casey,
Poindexter, and maybe the President — and took no notes. He stopped
taking notes. He also said he was now serving as the President’s counsel,
not as Attorney General. This was all sort of a way of making whatever
he was doing at that point not government property that he had to turn
over but he said he never took any notes anyway. I mean it was pretty
obvious whose well-being he was looking after at that point and it wasn’t
the country’s, it was Reagan’s.
MS. CAVANAGH We’ve just touched briefly on the press coverage. There was a lot of press
coverage and there was coverage of you as well, right? And your long
hair. There were comments about that and I think someone interviewed
Gail. There were some comments that Gail made about, you’re not an
image kind of person, you’re not paying attention to that, and your
children must have been aware of this. I think I read that they went to the
first day of hearings or at least maybe a couple of them did.
MR. NIELDS I had forgotten that.
MS. CAVANAGH All three daughters went to the first day of hearings on the opening day of
North’s testimony, is what one of the reports said. I’m curious what that
was like for you and for your family. It was a different time obviously
than today. I think in one of the articles you also mentioned that you had a
listed phone number. It was not unlisted but you didn’t get many calls
about it and I could only imagine how different that would be today.
MR. NIELDS You mean there would be a lot of calls.
MS. CAVANAGH Or not even just calls, but you can imagine what the internet would look
like. It would be a very different kind of response. Were you aware of
that day-to-day when you were working so hard and so focused on it? In
terms of the impact on your family.
MR. NIELDS My family was all just happy as clams. If there was something negative
said about me, they either didn’t notice it or they didn’t hear it. I mean
they were just all thinking this is more fun than a barrel of monkeys. And
I think the same is true of my wife. I did one day get a — I don’t know
what they were — I don’t think they were Secret Service. I think they
were Capitol police, but there had been several death threats and so they
volunteered to take me, escort me home, and stand sentry, and I said no
MS. CAVANAGH You didn’t have people camped out in front of your house? You didn’t
have press at your driveway or anything like that?
MR. NIELDS No, we were hard to find.
MS. CAVANAGH Oh really.
MR. NIELDS Yes, reasonably hard to find.
MS. CAVANAGH You mean because of where you lived.
MS. NIELDS Yes. I lived at the end of a long dirt road. So it wouldn’t have been easy
to — if anybody had wanted to do that, I think they — I got a lot of mail.
I got a huge amount of mail.
MS. CAVANAGH Did you read your mail?
MR. NIELDS I read — I had somebody put it into a positive and a negative and I read
MS. CAVANAGH That was smart. Do you still have your mail?
MR. NIELDS I think I still have the positive and they were about equal sized. I had a
couple of marriage proposals. I had to turn those down.
MS. CAVANAGH Too late! Okay. Do you want to speak a little bit about the outcome. The
Committee, I guess, had a report. There it is. [Aside to recording device.]
He’s got the report on the table here.
MR. NIELDS My feeling about it was that we did a pretty darn good job of what we set
out to do which was — I mean I thought we did a — I guess the work
including the hearings probably ended in August?
MS. CAVANAGH I think that’s right.
MR. NIELDS And before mid-August, I would have guessed, and we really started our
work around March 1, and in that period of time we did what I regarded as
a two-year investigation. What would have normally taken me as a
prosecutor two years to do, and I thought we got the facts out there pretty
MS. CAVANAGH And the report is dated November 1987 so that was pretty quick.
MR. NIELDS Yes the writing of the report took a couple of months. But I thought, with
one exception: I don’t think we answered the question of what Reagan
knew about the diversion. And there may have been some other high-up
people like Don Regan, or I always assumed that George H.W. Bush was
mostly out of the loop and that he was not an insider in that
administration. In terms of the Contras, we got a very big window into the
support of them at a time when it was not lawful for there to be support
and who was involved, and what they were doing, and who they lied to,
and when and how. In terms of the Iran part of it, I think we didn’t figure
out whether Reagan knew about the diversion, but he knew about
everything else. Poindexter basically testified: “I didn’t tell him [the
President, about the diversion], I wanted to give him plausible
deniability.” So it was very clear that his testimony wasn’t worth anything.
It didn’t help you answer the question one way or the other. And I think
North is the same and that was certainly a big question that we didn’t
answer. But by the time we got started, it is not clear there was a way to
MS. CAVANAGH Right. And you didn’t have any involvement subsequently to this report
in terms of any of the indictments or convictions or ….
MR. NIELDS Well that is another topic that I probably should say something about.
MS. CAVANAGH Sure.
MR. NIELDS I don’t have any remorse about it but it’s an unhappy fact for me that a
consequence of us immunizing North and Poindexter is that their
convictions got overturned and—I mean in some ways punishment wasn’t
really the point and the fact that two juries hearing all the evidence
convicted them is a nice thing to have out there. That was a real trial with
real facts and they committed real crimes and the jury said so. And they
won their appeals for reasons that had nothing to do with their guilt or
innocence. But it’s not a good feeling to have screwed up perfectly
legitimate prosecutions. On the other hand, I can’t fathom how they went
about dealing with that issue. They were supposed to have, they even
talked to Judge Gesell, right? It was [U.S. District Court Judge Gerhard]
Gesell. I am quite sure that there were going to be taint hearings before
the trial began and then they never had them. And then they were going to
have taint hearings after the trial and before the appeals and they didn’t
have those either.
MS. CAVANAGH Just to clarify, you mean hearings where they would talk about what
evidence would be allowed and what would be tainted by the prior
immunity deal. And they didn’t do that.
MR. NIELDS They didn’t do that and they didn’t do it after either. Then when they get
an opinion by [D.C. Circuit] Judge [David] Sentelle and I think [D.C.
Circuit] Judge [Laurence] Silberman, and who was the other …
MS. CAVANAGH I don’t know. I don’t have that. I can look it up for you. [Chief Judge
Abner Mikva for Poindexter, Chief Judge Patricia Wald for North.] [See,
e.g., United States v. Poindexter, 951 F.2d 369 (D.C. Cir. 1992); United
States v. North, 920 F.2d 940 (D.C. Cir. 1990).]
MR. NIELDS And then they acted so stunned when they got the convictions reversed.
And as I told you before, the Poindexter prosecution was just like, they’re
crazy. Why do they introduce evidence about the ripping up of the — at
Poindexter’s trial — that he ripped up the finding when the only way they
knew that is because, the only way anybody knew that, is because he
disclosed it under immunity? Then they started, when the Court of
Appeals decided what any Court of Appeals — any sensible one — any
Court of Appeals applying the law would have reversed those convictions.
And then they tried to have a post-reversal hearing on North, sort of
retroactively. And they were mad at the part of the opinion that says that
you’re going to have to go through the evidence, in some cases, line by
line. Well that’s exactly what the law was. They just got mad at that and
blamed us and then they started having the hearing and gave up. Now for
North, and I was not sure why they needed to give up on North. I think
they had plenty of — I mean maybe there was some problem they weren’t
going to be able to solve that I didn’t know about, but it was unclear from
an outsider’s point of view — they had indicted him for lying to Congress.
What’s tainted about that? Right? I mean, they couldn’t use his
admissions under immunity but they didn’t need them.
MS. CAVANAGH But the frustration was directed at you, I guess, or …
MR. NIELDS “You” is not me personally. There may have been some of that but it was
the Congress, the committees screwed us.
MS. CAVANAGH Then there were some officials indicted and convicted on lesser charges
and then George H.W. Bush pardoned [Caspar] Weinberger, I think.
MR. NIELDS Weinberger was indicted for lying to me. I mean that’s not the only thing
he was indicted for but I asked him in a deposition — now see I do know
something — I asked him at a deposition — that’s true. So I went to the
Defense Department and got in a room next to his office where he had his
desk and took his deposition, and I asked him if he had any documents
that would inform us about what he had been told in real time about the
November 1985 Israeli shipments of Hawk missiles. He said he didn’t
have any. Well as it turned out they were right in the next room in his
desk. So they indicted him for that years later. I mean I thought that
would have been in what, the end of 1992?
MS. CAVANAGH I don’t have the year for that.
MR. NIELDS Or was it — Bush pardoned him at the end of his term.
MS. CAVANAGH Yes. So I think there was a final report, 1993 maybe.
MR. NIELDS ’92 or something.
MS. CAVANAGH I think there was a final report in 1993 and I think George Bush, the
pardons were towards the end of his term.
MR. NIELDS That’s what I thought so it was like five years later. I thought that was just
ridiculous that they were charging these people five years later.
MS. CAVANAGH I was wondering why it was so much later.
MR. NIELDS I think they had a different independent counsel. I think Walsh was
replaced by Jim Brosnahan.
MS. CAVANAGH I’ll look it up. [James J. Brosnahan; led trial team against Weinberger.]
MR. NIELDS I think he wanted something to show for his … he had a chance at the
spotlight so he indicted some more people, including Caspar Weinberger.
I thought they stuck around way too long.
MS. CAVANAGH Interesting. I’m wondering in a bigger picture sense, and you mentioned
how any president might correctly feel hostile toward an investigation, I’m
wondering what sort of impact you think the Iran-Contra hearings had
going forward. Obviously we’ve had many investigations since then. At
least one of which you were involved with was Webb Hubbell, which
we’ll talk about later. And now of course there are more with the current
president. I’m wondering just if you have any reactions to that in terms of
if you think those hearings that you were involved with had kind of a
longer term impact, kind of shifted the political ground in terms of
partisanship, or any other thoughts you have.
MR. NIELDS Well the partisanship in the Iran-Contra affair was there but it was minor
compared to what it is now. I mean just minor. As I told you, the Senate
Committee, I think they had three Republicans and six Democrats or five
— maybe they only had three Republicans. But they were totally
lockstep. As I say, Rudman was the most important player, I think.
Arthur Liman talked to Rudman. I think that’s most of what happened on
the Senate side. And now — I mean the Senate Intelligence Committee
looks close to nonpartisan so maybe I should eat my words. It may be a
difference between the House and the Senate. But no, it has just clearly
gotten worse. The partisanship clearly got worse. It was almost nonexistent in Koreagate. It was not too bad in Iran-Contra and it was
virulent in Whitewater and it is more virulent now.
MS. CAVANAGH Any thoughts about the role of the independent counsel and now special
MR. NIELDS Well you really got me because I was completely in favor of an
independent counsel when it was first put into the system right after
Watergate and thought it was ridiculous that everybody was praising
Justice Scalia’s dissent in Morrison against Olson, which was an
independent counsel case and the constitutionality of the independent
counsel law was challenged, and Scalia wrote what I later thought was one
of the great opinions anyone has ever written. [See Morrison v. Olson,
487 U.S. 654, 697 (1988) (Scalia, J., dissenting).] He foresaw what
happens and the Independent Counsel’s five-year investigation of numbers
of people in the Iran-Contra affair. A normal prosecutor would not have
done that. They wouldn’t be doing that case for five years. Almost for
sure and it’s the press that was driving these political independent counsel
cases and the press does not understand what the difference between a
crime and a non-crime is, a political wrong and a criminal wrong, and it is
great for the press to have a political scandal. It’s fabulous for them. And
so by the time I was getting to the end of the Webb Hubbell experience I
was adamantly against the independent counsel law. I have always felt
very strongly that we should be applying our laws blind to political station
and power, but not in a way that causes us to investigate and prosecute
politicians or government officials when we wouldn’t investigate private
citizens for doing the same thing. Maybe your threshold of investigating
is a little lower, but really what you are trying to get to is that the law is
neutral and you don’t pick people and then see if you can find a crime they
did. You pick crimes and find out who the people are that are responsible
for them. I know that that’s a dichotomy that doesn’t work perfectly, but
it comes from a speech that Justice Robert Jackson made in 1940 when he
was Attorney General. A wonderful speech. He had all the U.S.
Attorneys from all around the country and he gave a speech that is quoted
extensively in Scalia’s dissent in Morrison against Olson. Its thesis is, you
know, where all of us are criminals to one degree or another, and what an
awful world it would be if we ran our justice system where we decided
that we pick people and see if we can find a crime that they committed,
and it’s really important that we resist doing that under all circumstances.
I didn’t say it as articulately as he did but — I thought that the Whitewater
investigation had just taken that to an extreme degree.
MS. CAVANAGH We are going to talk about that but probably not today. I don’t know if
you have more about Iran-Contra or not. I mean, I have in my notes that
during a break in the hearings you flew to Atlanta to deliver oral
arguments in two cases for Howrey. My reaction was how in the world
did you manage that? I don’t know if you remember what they were. I
don’t know, it was just mentioned.
MR. NIELDS Well I’d like to tell you what they were.
MS. CAVANAGH Sure. Excellent. That’s what I was hoping, that that was what you wanted
to talk about.
MR. NIELDS Yes because they were both very important to me and also I haven’t really
talked about criminal defense except Mary Treadwell, which was a little
bit aberrational. The first case was defending a lawyer charged with tax
evasion and he had a methodology for reporting his fees as income and the
methodology was he waited until the case had closed and then he reported
the fees that he got. That was his methodology. I was not involved in the
first trial. Following his conviction, a friend of mine from the U.S.
Attorney’s office who did tax defense work recommended me to him to
handle his appeal. The first appeal resulted from the fact that during the
jury deliberations the judge got a note—this guy was Jewish, the
defendant. Dan Heller was his name. [See United States v. Heller, 785
F.2d 1524 (11th Cir. 1986).] During the jury deliberations a note came in
from a juror who wanted to talk to the judge so the judge brought him in,
and I think the judge had counsel present, and the judge said what’s up.
The juror said, well there is some, I can’t remember if he used the word
race, but there’s anti-Semitic prejudice in the jury deliberations and I find
it shocking. I think this juror was Jewish and so the judge, he took down a
statement from him as to what was being said in the jury room, and then
he called jurors one at a time and much to his chagrin, what he got would
just make your hair stand on end. But the judge let the deliberations
continue. The defendant got convicted after that and then I did the appeal
and really if I had lost this appeal, I would really think I was a terrible
MS. CAVANAGH You mean because when the jury came in they said really anti-Semitic
things or …
MR. NIELDS So I stand up in front of Judge [Elbert] Tuttle and Judge [R. Lanier]
Anderson and I can’t remember who the third one was [Judge James
Clinkscales Hill], and I just started reading from the transcript and then
I’m quoting, “Well, he’s a Jew. We’ll just hang him.” And it went
downhill from there. Judge Tuttle was like this [covering his eyes]. But
this matters to the next chapter of the story. Obviously he got a new trial.
A wonderful lawyer named Carr Ferguson who had been head of the tax
division at DOJ and was also a Davis Polk partner, although he hadn’t
been at Davis Polk when I was there. He was just kind of a tax consultant
for the appeal. At the moot court the day before he said, “What do you
say if you get asked the question, is Mr. Heller’s way of reporting his
taxes proper? Is it legal?” I don’t remember if I came up with an answer
but Carr had one already in his head and he said, how about this … I
should have told you something else before, but it was very clear that it
was not proper because Judge Anderson, who was the tax specialist on the
11th Circuit or was, had written an opinion in a case called City Gas
where something very analogous had been done. I can’t now remember
what it was but it had to do with deposits on gas or something. Just take
my word for it, it was a perfect analogy to our case, and he had rejected
the tax treatment that my client had done. But Carr said how about you
say this: That no, your Honor, not in light of Judge Anderson’s opinion in
City Gas, but before that, at the time when the defendant had filed his tax
returns, the law was unclear, and in a tax evasion case you can’t prosecute
somebody criminally for doing something where the law’s unclear. And I
think that’s a pretty damn good answer. And I got the question and I
delivered the answer. So the answer credits Anderson for clarifying the
law. So it didn’t matter much in that first appeal, because it was so
obvious we were going to win on the antisemitism in the jury room. [See
United States v. Heller, 830 F.2d 150 (11th Cir. 1987).] But I then
defended Heller in a second trial and lost.
MS. CAVANAGH Because he was convicted again after the retrial.
MR. NIELDS After the retrial in a case that I tried. So two things are true — and the law
really was unclear, by the way. There was a tax court case and we had
cited that and it had been relied on at both trials but it did look as though it
blessed what he had done. The other thing that had happened was that he
had an accountant that absolutely knew how he was reporting his taxes
and had in effect blessed his methodology, and reliance on advice of
counsel or of an accountant is a defense in a tax evasion case. However,
an IRS agent who hated Heller because of something that the Miami
Herald had done when Heller was representing the Miami Herald — an
expose in some group of the IRS, and this guy hated Heller for that.
Before the indictment, he went to the accountant and he said to him, you
have two options here. If you say that you knew what Heller was doing
you will be a co-defendant. If you say you didn’t know what he was doing
you are a witness. So he figured out by the next morning that he wanted
to be a witness, and testified at trial that he did not know what
methodology Heller was using to report his income. So I argued on appeal
both that the law was unclear and I had tried to get the judge to deliver an
instruction that if he followed his method the jury could not convict him
because the law was unclear, and he didn’t give me that instruction. I
made a good record arguing it; and I also made a very good record that the
accountant was lying when he testified that he didn’t know, and that the
IRS agent knew exactly what he was doing and his threats to the
accountant deprived Heller of his most important witness. I argued that
case in the Court of Appeals. Judge Anderson was once again on the
panel. I think particularly because of the answer I gave at the first appeal,
which I completely credit Carr Ferguson for, he wrote the opinion and
agreed that the tax law had been unclear and then went on to accept my
other argument as well, that Heller had been improperly deprived of his
reliance on advice of his accountant defense, which meant that the case
couldn’t be retried. My argument wasn’t that he — that the accountant
had given incrimintating testimony that was perjurious. That argument
would have lost and I knew that from the beginning, and I remember
asking a summer associate who eventually became a very good lawyer at
Howrey, find me a case that isn’t based on perjury, because if I argue that
he perjured himself the other side will argue, well, that was a jury issue.
You argue that to the jury, the jury finds he didn’t [perjure himself] and
that’s the end of it. So he comes up with Webb against Texas [see Webb
v. Texas, 409 U.S. 95 (1972)] and a bunch of other cases that say the same
thing. They say if you take — if the government takes a defense witness
and either causes him to take the Fifth or causes him not to testify
favorably but to alter his testimony, then you have interfered with a
defense witness in a way that’s unconstitutional. And the beauty of that
argument — that’s exactly what happened — he was my client’s best
witness, and when the IRS agent deprived Heller of his favorable
testimony, you can’t fix that problem; once he’s become a perjured
witness, what the hell use is he to Heller. So anyway the court reversed on
both grounds and the case could not be retried.
MS. CAVANAGH Interesting. And then you had another case.
MR. NIELDS The other case was for a guy named Jose Luis Castro. Cuban American.
Charming man. He was a lawyer and when he came to me he had been
sentenced to 10 years in jail for bank fraud. He was a young man and he
had a gorgeous and lovely wife. Just a wonderful warm human being and
two very young children, and I remember thinking if I don’t win this case
I don’t think — he may lose his family. So it was the least appealing issue
you could possibly imagine. It was a multiple conspiracy issue. There
had been one guy at the center who had engaged in two different
conspiracies. One was a fraud — all I remember is it had to do with
coffee. He was in the coffee business and he defrauded somebody by
hiding stuff in the wrong place, and then there was a bank fraud that he
committed with my client’s help. They should not have been joined in the
same indictment and trial and there was very bad evidence on the coffee
conspiracy. Most of the trial was about the coffee conspiracy and my guy
is sitting there, and Roy Black who defended him at the trial made a very
good record, and I had unlocked the secret to multiple conspiracy law one
day in the library when I was in the U.S. Attorney’s office. I sorted out —
I mean nobody can figure out multiple conspiracy law. I’m not sure I
really did figure it out but I had a really good argument and I wrote a good
brief, and I remember I had charts and they worked. Usually multiple
conspiracy arguments don’t work but this one did. I told my client the
odds are one in ten that we will win. We should win, but courts can
usually find a way to get around these multiple conspiracy arguments but
we should win. The government kept asking for adjournments for time to
answer our brief and Judge Edmondson’s clerk would call us up on the
phone and say what is your position — and we would file something
saying, well that’s fine but you’ve got to let my client out from jail.
Right? Get out on bail and we’re fine. And they granted these extensions
three times without granting bail, but Judge Edmondson seemed skeptical
at the government’s repeated delays. Anyway, we win. I think we got
like a letter within — something happened within about three days after
oral argument and they let him out on bail pending the written decision.
And we’re thinking I think that’s a good sign about how this case is going
to come out.
MS. CAVANAGH This was on appeal. He was convicted and you were not the lawyer.
MR. NIELDS I was not the lawyer in the first trial. So I’m sorry — one day I argued
this case, the next day I argued the Heller case and it was all in that
window of time after the first set of hearings and before North.
MS. CAVANAGH Both in the Eleventh Circuit.
MR. NIELDS Both in the Eleventh Circuit and I was down there like four days.
Appearing in one and then the other. What did I say, Atlanta?
MS. CAVANAGH Yes. A lot of balls in the air that summer.
MR. NIELDS I had a lot of balls in the air and so then they reverse and it gets sent back.
[See United States v. Castro et al., 829 F.2d 1038 (11th Cir. 1987).] Then
the government indicts him for perjury at the first trial. They called me
and told me they were going to do it, and I said, are you planning to join it
as a crime with this case? Do you want me to get another reversal? They
said—oh they were scared of me by that time. They said no. So they
indicted him in front of another judge. I mean I got so lucky but I will say
I really—I was preparing to defend him on the bank fraud case. That was
going to be the first one. The one that he had been sentenced to 10 years
the first time. He’d done fourteen months waiting for the appeal. The
government came to me and said, if he pleads guilty we’ll give you five
years if you will take a five year max and we’re okay. I thought about that
and talked to my client and he said I want to plead. He really didn’t have
a defense. But I knew that it was before the guidelines — you know what
I mean about the guidelines and so what mattered then, there was — I
don’t even know what branch of government, whether it was probation —
it was in the probation world. They had a grid and depending on the crime
you got convicted of, you would be basically viewed as eligible for
probation a third of the way through serving your sentence, two-thirds of
the way through, or almost not to the end. Bank fraud was way up there,
the high end; perjury was way down. We weren’t even talking perjury.
The government wasn’t going to try that. They were just throwing that in.
So I read what I thought would be their minds and went down and saw
them, and I said, okay, I’m going to make you an offer you can’t refuse.
What? I’m going to have him plead to both crimes. I said, but the total
exposure for both crimes has got to be five years, which is what you want:
and I get to allocate the exposure between these two cases. I mean the
statistics for prosecutors of getting two felonies instead of one — was very
appealing. So they said fine, and I said I get to choose which order I get to
plead it, and we get time served and I get to allocate that to whichever case
I want. They said okay to all of that. We go to Judge [James C.] Paine,
who had tried the bank fraud case, and two things happen. First of all, I
had allocated two years to the bank fraud and the fourteen months of time
served. So I had ten months left on the bank fraud. I didn’t want to be
greedy so I gave them a little bit of something in the bank fraud case. We
get there. The judge — I had submitted a presentence report and a letter
from his wife that was … and it was true. She was saying my husband —
and he had — when he decided to plead he was holding nothing back, I’m
guilty. And his wife writes a letter as good as any I have ever read that
tells the judge basically that my husband is as remorseful as he possibly
be, he has completely turned a new leaf. But I get there and the judge
hasn’t gotten the letter or my submission. So he says, well it’s probably
back there somewhere and he apologizes. He comes back 20 minutes later
and he looks at her, I got your letter, this man is completely rehabilitated.
I am going to give him probation — time served plus probation.
MS. CAVANAGH Wow.
MR. NIELDS Then I go to the perjury judge and I’m thinking I’m going to get three
years from this guy but at least I’ll get, in a third of that time he will be
eligible for probation. Well he reads, of course, my submission, which has
the other judge’s remarks and everything. He said, well he says you’ve
been rehabilitated and that’s good enough for me. I’m going to give you
three months in a halfway house.
MS. CAVANAGH Wow, that was an outcome nobody hoped for. That was a good day of
being a lawyer. That’s a great story. And then you went back to IranContra. Well we probably should stop. I’m thinking next time we’ll start
maybe with Atchison v. Barry.
MR. NIELDS Sure.
MS. CAVANAGH Okay. Great. I’ll turn off our devices.
END OF TAPE
ORAL HISTORY OF JOHN W. NIELDS, JR.