The following is from the "Background" section of the November 16, 2007 CQ Researcher report on "U.S. Policy on Iran" by Peter Katel
Modern U.S.-Iranian relations began with the CIA-engineered overthrow of Prime Minister Mohammed Mossadegh in 1953. Mossadegh, an ardent nationalist, had been at the center of a crisis that had been building since the late 1940s over the future of Britain's longstanding oil concession, which effectively controlled Iran's major natural resource. (Footnote 34)
Mossadegh had accepted the post of prime minister from the shah on condition that parliament end the concession, which it did on April 28, 1951. "The anniversary of the passing of the oil nationalization bill," writes historian Ali M. Ansari of the University of St. Andrews in Scotland, "is perhaps the closest thing to an Iranian independence day." (Footnote 35)
But for the CIA — which worked closely with the British — Mossadegh's nationalization of Britain's Anglo-Iranian Oil. Co. showed him to be a threat to Western interests, and politically unreliable, in a region where the Soviet Union was a looming presence. President Dwight D. Eisenhower approved a coup plan. One attempt failed, leading the shah to take a sudden vacation in Rome. Then, on Aug. 19, 1953, a CIA officer directed a move against Mossadegh, who eventually surrendered. "The shah became the centerpiece of American foreign policy in the Islamic world," writes New York Times correspondent Tim Weiner in a recent history of the CIA. But, "A generation of Iranians grew up known that the CIA had installed the shah." (Footnote 36)
Although the United States poured money into Iran after the coup, it didn't buy all Iranians' friendship. Abolhasan Ebtehaj, a government official who lost his post after disputes with American officials, faulted the free-spending U.S. approach. "Not so many years ago in Iran, the United States was loved and respected as no other country, and without having given a penny of aid," he said in a 1961 speech in San Francisco. "Now, after more than $1 billion of loans and grants, America is neither loved nor respected; she is distrusted by most people and hated by many." (Footnote 37)
The John F. Kennedy administration, which came to power in 1961, pushed the shah even harder to shake up his country's social structure. Arguing that Iran's land-tenure system amounted to "feudalism," creating conditions that made Iran ripe for a communist revolution, the Americans demanded private land ownership for peasants.
But when the shah's so-called "white revolution" occurred, it brought repercussions that the Americans hadn't foreseen. Rural, land-owning aristocrats and members of the clergy, who had been instrumental in pushing out Mossadegh, opposed the change, in some cases more because it was American-imposed than because of its objectives. The shah, with U.S. encouragement, also proposed the political emancipation of women, which angered conservatives, especially religious leaders.
When a national referendum showed 99 percent approval for the "revolution," riots broke out because the election clearly had been rigged. Ruhollah Khomeini, a previously obscure clergyman, became one of the strongest voices against the shah.
For Iranians, what the shah and his American advisers called reform was something quite different. "The shah's modernization program — which created less an authentic development than a consumer society for privileged elites — quickly enriched the members of the royal family and the court, the entrepreneurs (almost all subcontractors for large Western firms), the powerful merchants, the importers of spare parts and consumer goods, the speculators," wrote French journalist Eric Rouleau in 1980. (Footnote 38)
Then the United States prompted the shah to introduce legislation granting immunity from the Iranian legal system for any American citizen accused of a crime. On the same day the bill was approved — after the shah fixed the parliamentary vote — Iranian lawmakers also approved a $200 million loan from the United States.
"The dignity of Iran has been destroyed," Khomeini declared. "They wanted a loan, and America demanded this in return." In 1964 Khomeini was sent into exile. (Footnote 39)
The United States and the shah deepened their relationship in the 1970s. Israel, too, enjoyed close ties to the shah, whose quiet acceptance of the Jewish state enraged Arab governments — and many Iranians. By 1977, there were some 30,000 American government personnel and businesspeople in Iran, President Jimmy Carter noted during a toast to the shah on New Year's Eve in Tehran. (Footnote 40)
"Iran, because of the great leadership of the shah, is an island of stability in one of the more troubled areas of the world," said Carter, in words that would later embarrass him. "This is a great tribute to you, your majesty, and to your leadership and to the respect and the admiration and love which your people give to you." (Footnote 41)
Only weeks later, however, the monarchy's collapse began. In January, after the shah-approved publication of a defamatory newspaper article about Khomeini, well-organized street protests broke out in several cities, creating a crisis atmosphere.
To the surprise of observers, the shah and his notorious secret police, SAVAK, proved incapable of coping. In the past SAVAK had arrested, tortured or killed hundreds of thousands of genuine or alleged oppositionists. Israel had a close working relationship with SAVAK, growing out of antagonism between the shah and the Arab states. That relationship fueled popular antagonism toward the Jewish state.
A year later, on Jan. 16, 1979, the shah fled Iran. Two weeks later, Khomeini returned home from exile in Paris, turning the revolutionary process definitively toward his brand of socially conservative, politically aggressive and theocratic Shiite politics. Some secular democrats who were involved in an early provisional government were pushed aside. "At every step of the way, [Khomeini] and his supporters proved more ardent in their faith, more manipulative in their conduct and more merciless in their retaliations," writes Ray Takeyh, a historian and senior fellow at the centrist Council on Foreign Relations. (Footnote 42)
Khomeini's strategy bore fruit on Dec. 3, 1979, when Iranian voters approved a constitution that created today's Islamic Republic of Iran, directed by a religious leader who would not be accountable to the public or to elected officials. A Guardian Council, mainly clerics, would have the final word on all legislation.
The referendum passed amidst a frenzy of enthusiasm generated by a crisis that still reverberates. A month earlier, on Nov. 4, a band of student militants overran the U.S. Embassy in Tehran, taking 52 hostages, to punish the Carter administration for allowing the shah into the United States for cancer treatment.
Khomeini applauded the takeover, and the United States cut relations with Iran — which haven't been restored to this day. Khomeini's forces, meanwhile, used CIA and other U.S. documents the students found to discredit domestic enemies shown to have connections to the United States. The hostage crisis ended 444 days after it began, with the inauguration of Ronald Reagan on Jan. 20, 1981.
Besides broken diplomatic relations, U.S. sanctions against Iran imposed during the hostage crisis also have survived. The United States first imposed financial penalties on Iran during the crisis, when the Carter administration banned Iranian oil imports and froze Iranian assets in the United States. In 1987, Reagan banned imports of all Iranian goods and services, citing Iranian support for international terrorism. In 1995, Clinton banned U.S. participation in petroleum development in Iran, also citing Iranian support for terrorism as well as efforts to acquire weapons of mass destruction. In 1997 Clinton extended the previous order by explicitly barring Americans from virtually all trade and investments involving Iran — a ban that was eased in 2000 to allow imports of Iranian dried fruits, nuts and caviar. (Footnote 43)
During the hostage crisis, in September 1980, Saddam Hussein launched a war against Iran over its alleged violation of a bilateral treaty. But, pretext aside, Saddam wanted to crush the new republic. As a Sunni ruling a majority-Shiite populace, Saddam viewed Iran's Shiite government as a powerful threat to his predominantly Sunni regime.
Saddam also posed a serious threat to Israel, given his nuclear ambitions. Iran seemed a lesser danger, despite its anti-Israel rhetoric. But for the United States, still reeling from the hostage crisis, Iran was the main enemy. The Iran-Iraq war would see the United States helping Iraq, while Israel secretly shipped arms to Iran. These alignments later shifted — with the United States toppling Saddam and Israel coming to fear Iran. But even during the 1980s, U.S. officials at one point joined in a scheme with Israel to sell arms to Iran.
During the eight-year war, Israeli leaders occasionally acknowledged their tilt toward Iran. "For 28 of 37 years, Iran was a friend of Israel. If it could work for 28 years . . . why couldn't it [again], once this crazy idea of Shiite fundamentalism is gone?" asked Yitzhak Rabin, Israel's defense minister, in 1987. (Footnote 44)
But in addition to talking, the Jewish state was supplying arms to Iran. Both countries had reasons to keep the supply line secret, but in July 1981 an Argentine airplane carrying Israeli weapons to Iran crashed, leading to reports of a $200 million arms deal between the two countries. (Footnote 45)
A few years later, Israeli — and American — arms sales to Iran became front-page news during the so-called "Iran-Contra" scandal. In November 1986, a Beirut newspaper revealed a secret visit to Iran by President Reagan's national security adviser, Robert McFarlane. Weeks later, Reagan admitted his administration had sold weapons to Iran — violating a U.S. arms embargo — and funneled the profits to the "contra" guerrillas fighting Nicaragua's left-wing Sandinista government.
Further complicating an already tangled tale, the Reagan administration also acknowledged it had fed secret intelligence to Iraq from U.S. satellite photos, allowing it to assess damage from bombing strikes on Iranian targets. "Because we could see the fact that Iran at various times clearly had the upper hand, and had the manpower to continue much further than Iraq could," the American assistance was necessary, an unnamed White House official said. (Footnote 46)
By that time, the United States had another reason to help Iran's enemy. Following the 1982 Israeli invasion of Lebanon, Iran — eager for a base in the Arab countries — helped create the terrorist organization and political movement Hezbollah (Party of God). Its base was Lebanon's marginalized Shiite population, which had turned against Israel.
The following year, Hezbollah was implicated in a deadly bombing that destroyed the U.S. Embassy in Lebanon's capital, Beirut, killing 63 people. Six months later, a Hezbollah truck bomb hit the U.S. Marine barracks in Beirut, killing 241 Marines serving as peacekeepers.
Opinions are divided about whether Iran played a role in a terrorist attack that killed 19 airmen in 1996 at Khobar Towers, an apartment building serving as Air Force quarters near Dhahran, Saudi Arabia. In December 2006, U.S. District Judge Royce C. Lamberth of Washington ruled Iran responsible in connection with a lawsuit by victims' families against the Islamic Republic. (Footnote 47)
Lamberth's decision echoed Attorney General John Ashcroft's conclusion in June 2001 that "elements of the Iranian government inspired, supported and supervised" the attack. Some experts challenge that conclusion. "There was a paucity of credible evidence," writes historian Ansari. (Footnote 48)
Rise of Repression
After Khomeini's death in 1989, Iran's clerical overseers chose conservative Ayatollah Ali Khameini as the next supreme leader. "He believes that the mission of the Islamic Republic is to uphold religious norms and resist popular attempts to alter the regime along democratic lines," writes a critic, historian Takeyh. (Footnote 49)
By the late 1990s, however, the popular call for more democracy was picking up strength. In 1997, by a landslide of nearly 70 percent, voters elected Mohammed Khatami as president. Khatami, a mid-ranking cleric who had emerged as a foe of repression, had studied Western philosophy, from which he quoted freely. And he knew Western social and political norms up close, having lived in Germany. That broader outlook and experience showed. "State authority cannot be attained through coercion and dictatorship," he had written. (Footnote 50)
In 1998, Khatami indicated a willingness not only to loosen controls on Iranians but also to enter into negotiations aimed at renewing relations with the United States. Using a 1998 interview with CNN to broadcast his views to the West, Khatami condemned terrorism "in all its forms." And speaking of the hostage crisis — still looming over U.S.-Iranian affairs — Khatami said it grew out of Iranian grievances such as the 1953 coup but also reflected the chaos of a revolutionary period — a condition that no longer applied. "Today, our new society has been institutionalized," he said, "and there is no need for unconventional methods of expression." (Footnote 51)
In his first year in office, more than 200 new newspapers and magazines and 95 political parties and organizations were permitted. The new freedom sparked public debates on topics that had been out of bounds, including Israel and the Palestinians.
In 2001 Khatami swept into office a second time, with a 77 percent victory. But even supporters admitted that political liberalization had advanced, despite continued repression, while the economy had fallen off a cliff. One-quarter of the workforce was unemployed, and 40 percent of the population lived below the poverty line. (Footnote 52)
Not surprisingly, the high hopes Khatami had inspired turned into disillusion. Economic disaster aside, Iranians who had hoped for reopening relations with the United States had experienced only disappointment. Iranian-U.S. cooperation early in the invasion of Afghanistan hadn't led to closer ties. "Before and during the war in Afghanistan, the Iranians were quite helpful to the United States," writes Kenneth Pollack, director of Persian Gulf Affairs at the National Security Council in the Clinton administration "They shared our hatred of al Qaeda and the Taliban, and they provided us with extensive assistance on intelligence, logistics, diplomacy and Afghan internal politics." (Footnote 53)
And yet, the year after the Afghanistan campaign began, Bush in his first State of the Union address called Iran a member of the "axis of evil," along with North Korea and Iraq. "Iran aggressively pursues these weapons [of mass destruction] and exports terror," Bush said, "while an unelected few repress the Iranian people's hope for freedom." (Footnote 54)
In 2005, Ahmadinejad, then Tehran's mayor, won a presidential-election runoff with 62 percent of the vote. A veteran of the bloody Iran-Iraq War and an engineer of working-class origins, he combined Khomeini-era rhetoric against the United States with denunciations of economic injustice.
Where reformists in Iran had hoped for eventual restoration of relations with the West, the new president and his circle looked to China, India and Russia for capital and trade links. "Our nation is continuing the path of progress and on this path has no significant need for the United States," Ahmadinejad said shortly before his election. (Footnote 55)
34. Except where otherwise indicated, this subsection is drawn from Ali M. Ansari, Hidden Iran (2006); and (for details of the CIA's role) Tim Weiner, Legacy of Ashes: The History of the CIA (2007), pp. 81-92.
35. See Ansari, op. cit., pp 36-37.
36. See Weiner, op. cit., p. 92.
37. Quoted in ibid., p. 46. See also, Frances Bostock and Geoffrey Jones, Planning and Power in Iran: Ebtehaj and Economic Development Under the Shah (1989), pp. 160-161.
38. See Eric Rouleau, "Khomeini's Iran," Foreign Affairs, fall 1980.
39. Quoted in Ansari, op. cit., p. 53.
40. Unless otherwise indicated, material in this subsection and the one that follows is drawn from Ansari, op. cit.; Takeyh, op. cit.; Trita Parsi, Treacherous Alliances: The Secret Dealings of Israel, Iran, and the U.S. (2007), p. 62; and Rouleau, op. cit.
41. See "Tehran, Iran, Toasts of the President and the Shah at a State Dinner," Dec. 31, 1977, The American Presidency Project, www.presidency.ucsb.edu/ws/index.php?pid=7080&st=&st1=.
42. See Takeyh, op. cit., p. 23. Also see Shaul Bakhash, The Reign of the Ayatollahs: Iran and the Islamic Revolution (1990).
43. See Bernard Gwertzman, "Iraq Gets Reports From U.S. for Use in War With Iran," The New York Times, Dec. 16, 1986, p. A1. U.S. Department of the Treasury, op. cit.
44. Quoted in Glenn Frankel, "Israeli Critical of U.S. Policy in Gulf War," The Washington Post, Oct. 29, 1987, p. A33.
45. See Benjamin Weiser, "Behind Israel-Iran Sales, 'Amber' Light from U.S.," The Washington Post, Aug. 16, 1987, p. A1.
46. Quoted in Gwertzman, op. cit.; See also Bob Woodward, "CIA Aiding Iraq in Gulf War," The Washington Post, Dec. 15, 1986, p. A1.
47. See Carol D. Leonnig, "Iran Held Liable in Khobar Attack," The Washington Post, Dec. 23, 2006, p. A2.
48. See Ansari, op. cit., p. 180; Ashcroft quoted in Barbara Slavin, "14 indicted in barracks bombing," USA Today, June 22, 2001, p. A6.
49. See Takeyh, op. cit. pp. 33-34. For background, see Katel, op. cit.
50. Quoted in Takeyh, op. cit., p. 44.
51. See "Iranian President Favors People to People Dialogue," CNN "Worldview," Jan. 7, 1998.
52. See John Ward Anderson, "With Stalemate Ended, Khatami Takes Oath in Iran," The Washington Post, Aug. 9, 2001, p. A12.
53. See Kenneth M. Pollack, "Don't Count on Iran to Pick Up the Pieces," The New York Times, Dec. 8, 2006, p. A35.
54. See "The President's State of the Union Address," The White House, Jan. 29, 2002, www.whitehouse.gov/news/releases/2002/01/20020129-11.html.
55. Quoted in Takeyh, op. cit., p. 133.
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The following is from the "Background" section of the November 16, 2007 CQ Researcher report on "U.S. Policy on Iran" by Peter Katel