During the quarter-century reign of Mohammad Reza Pahlavi as Iran's Shah, the source he had of staying in power was because of all the trouble that London and Washington had gone to in order to put him in power in the first place. When the Shah and his family suddenly fled Tehran in 1979, it was confident that it would be back, or at least find a comfortable environment in exile, only to learn that neither Britain nor America really wanted anything to do with him, a stance which became even more troubling, given his growing cancer, and the fact that no other country except Egypt really wanted it. Its earthly moves became even more precarious after Iran's mullahs overthrew the monarchy, and its militants seized all the personnel of the American Embassy in November, setting off its terrible ordeal while the 'October Surprise' by the Reagan administration was panning out, a process which was only softened by the Shah's death. The Pahlavis were still confident that its heir, Reza, would someday return to Tehran as Shah.
Mohammad Reza's fall was because he trusted his American overlords too much, believing that the growing communist threat to Iran would always prevent it from happening. As a result, the Shah made himself and his family ever more remote from his people while doing whatever the West demanded, especially allowing Iran's oil to be plundered in an unprecedented manner, and only pursuing nuclear power in ways that it could live with. Thanks to the ouster of Prime Minister Mohammad Mossadeq, every major American oil company joined British ones in gaining a significant part of Iran's oil production without paying any Iranian taxes, and it only increased when Iraq's Saddam Hussein nationalized its oil reserves while Iran only became more beholden to disaster capitalism as it purchased more military weapons than it could afford to meet the alleged Soviet threats, and its own internal opposition, leading some to suspect that he had more expansive ambitions of his own.
The Shah then in 1967 nationalized Iran's own oil resources, taking how much oil Iran produced away from OPEC, the Organization of Petroleum Exporting Countries, driving it for everything it was worth in order to pay for his increasing desire to make Iran a real world power within a generation. Washington, though protesting, was forced to go along openly with anything he demanded about Iran's oil production, and was willing to sell him almost anything but atomic weapons. "No one can dictate to us," the Shah explained. "No one can wave a finger at us, because we will wave a finger back." (1) In the process, Iranian businessmen like Manucher Ghorbanifar and Albert Hakim, suspected SAVAK informants, made fabulous fortunes, "...constrituted a new court, and one riven with just as many jealousies as that which revolved around the Shah and his family."(2) It was because of this growing American influence in Iranian economic and military affairs that the Ayatollah Khomeine broke with the Shah in 1964, and called for his overthrow from Paris in 1978.(3)
The plundering of oil in Iran - while in the short term was a bonanza, especially because it was accompanied by an incredible increase in the world price of the commodity - in the long term it became an increasing albatross because it could only be sustained by extra output, what it was soon unable to provide.(4) The contraction of its economy was also exacerbated by its customers, especially Britain and the United States, using covert means to force Tehran to cut its prices and/or yet again increase production. The primary means was to fund minorities of either a national, like the Kurds, or political nature, especially the communists, to oppose the regime - what, of course, just made matters worse. The first director of Iran's National Intelligence and Security Organization aka SAVAK, General Teimur Bakhtiar, was sacked for saying so, and for seeking Washington's assistance in overthrowing the Shah - what the CIA informed him of, and Bakhtiar was replaced in 1961 when he organized demonstrations against reforms that the Shah had authorized. After a decade on the run, organizing efforts to overthrow the Shah, he was finally killed in a hunting accident - what was suspected of having been arranged by Mossad elements still with SAVAK.(5)
Relations between Tehran and Washington just became more unstable as time went on despite appearances, especially after OPEC imposed an oil embargo on the United States in reponse to the 1973 Yom Kippur War. Just after Nixon's stunning victory in the 1972 presidential election, he had fired Director of Central Intelligence Richard Helms because he had proven difficult in allowing the Agency help cover up the Watergate break-in, and on the spur of the moment, the President had offered Helms the ambassadorial post in Tehran, not because of any covert foreign plan but because of a covert domestic plan - to get him as far away as possible from the blowback from Watergate. While the Shah's enemies thought that the appointment showed that he was simply the CIA's puppet (6), the Shah apparetnly thought otherwise, particularly when Helms became a ravid supporter of his digging his own grave by his rapid transformation of Iran. Helms rejected all advice that the Shah pursue contacts with his opponents, especially Muslim ones, and that the United States distance itself from his increasingly isolated rule.
This seemed like part of an American plan to covertly overthrow him when Helms's real thoughts about conditions in Iran just started leaking out in Washington when the Shah and his family hastily left Tehran. "According to cables from Ambassador Helms to Washington, published by Jack Anderson in 1979, the Shah became irritated by critical publicity about the activities of SAVAK operations in the U. S. in 1976." (6) In a later cable, the Shah warned Helms that Iran would respond in kind if America took any action against his agents in the States. The Shah added a month and a half later that he wanted to maintain its special relationship with Washington, and denied that any SAVAK actions were against either the American government or its citizens. Then on January 3, 1977, the Shah told the departing Helms that if any action were taken against his agents in the States, he " 'would not be able to overlook the presence of seventy of your people who are carrying out activities contrary to Iranian law' or of 'others whom we do not know about officially.' " (7) In short, the Shah had just about had it with the employees of the American Embassy in Tehran.
It would seem that American investigators would be interested in this build-up of SAVAK in the States, and elsewhere, especially in France and Britain, but SAVAK was only of interest when it was going after troublesome dissidents at home, starting with the descimation of a Marxist gang in 1971 which had occupied the gandarmarie of the Caspian village of Siahkal. During the period 1971-1977, SAVAK, led by Parviz Sabeti, killed 368 guerrillas, and executed around 100 political prisoners. "Once in SAVAK hands," Shawcross wrote, "people would simply disappear." (8) In fact, the claims about SAVAK brutality became so widespread that the Shah restrained it somewhat, sending off its agents to more sophisticaed agencies, particularly the CIA, so its method would be less cruel. But the damage had been done, and there was no turning back of the clock when oppostion to the regime mounted. Sabeti wanted to kill 5,000 of the protesters to regain regime stability, but the Shah would not hear of it, confident that he could weather the storm.
Though it didn't seem obvious at the time, the survival of the Shah's regime seemed to depend upon his surviving the onslaught upon it, or at least make arrangements for the transfer of power to his son, Reza, once he gained his majority. In the meantime, the only likely successor was twin sister Princess Ashraf Pahlavi's son, Shahriar Mustapha Shafiq, taking over if the Shah died or became a hopeless medical problem because of his spreading cancer. Princess Ashraf was completely different from her slightly older, twin brother - bold, outspoken, and most immoral in her economic and family life, just adding to the Shah's problems. While she epitomized everything that was corrupt about the country, as did her elder son Shahram, her younger son Shafiq, who graduated first in his class at Britain's Dartmouth Naval College in the late 1970s, seemed much more interested in expanding Iran's influence in the region, like the Shah himself, than just commanding the elite Hovercraft fleet at the Bandar Abbas naval base. "The Imperial Navy was supposed to protect the Persian Gulf and to safeguard the oil lanes, " Shawcross explained, "but he thought it was not being equipped to do either." (9)
With such a looming conflict about whether Iran would become the leading secular or Muslim power in the region, it was hardly surprising that when Ayatollah Khomeini returned from exile in Paris, he put the highest priority on determining the condition and outlook of the Pahlavi family, and taking measures which best suited the kind of Iran he sought. While the head of his revolutionary courts, Sadeq Khalkhli, was sentencing the Shah and many members of his court to death, the Ayatollah was busy, figuring out who and how to dispose of first. In doing so, he appointed Hossein Fardoust, head of SAVAK's Special Intelligence Unit, the head of the mullahs' successor, the Ministry of Intelligence and National Security aka SAVAMA. Fardoust had attended Le Rosey school in Switzerland with the Shah, and had been his constant confident ever since. Fardoust obviously knew the worst secrets about the regime, especially his own, and planned to make the most of them for his new employers.(10)
Fardoust had attended to some of the needs of the Shah's sons.He took them back and forth to the Swiss school, Crown Prince Reza now being 19, and his brother Ali Reza just in his teens, getting to know them quite well. More important, Fardoust conveniently saw to the scapegoating of high officials for alleged corruption - what the Shah thought might save himself and his family. Fardoust's former SAVAK boss, yes-man General Nematollah Nassiri - who was more interested in amassing wealth during his tenure in office while similar dandy Parviz Sabeti was actually running in service - was recalled from Islamabad where he was ambassador in November 1978 to face charges. He was noted for his attempts to soften the blows by SAVAK, even having saved Khomneini from execution because of the distress it would cause the common people. The most famous betrayal by the Shah was the arrest of his former Prime Minister Amin Hoveyda on corruption charges, and who was left to face trial and execution soon after the Pahlavis made their hasty escape from Tehran.
The most important help that Fardoust supplied the Ayatollah during the moderate government of Mehdi Bazargan was all the information that SAVAK had about CIA's spying - what the Shah had told Helms about - and once Khomeini had settled scores with some of his most notorious underlings, he immediately endorsed the students who overran the American Embasssy in Tehran on November 4, 1979. While the Shah had finally been able to go for New York for treatment, the students discovered that the Embassy had nearly 70 employees, far more than a "bare bones" staff it claimed. "The militants also found thousands of files," (11) many of which had been returned to Tehran after Ambassador William Sullivan had ordered their removal, and though many had been shreaded, the militants painstakingly reconstructed them to America's great detriment. "Over the next five years Iran published more than fifty volumes of documents seized in the embassy in November 1979." (12) While most observers saw it as the bitter humiliation of the "Great Satin", it also gave the Shah's foreign supporters, especially former SAVAK agents, the green light to do whatever they wanted.
SAVAK personnel now working for the mullahs, like Faroust, wanted to reduce the dying Shah's family from ever returning to Tehran as his successor - what the captured documents best focused on - showing that Shahriar Shafiq, Ashraf's son, was the most threatening descendant. On December 7, 1979, he was gunned down in Paris - where former SAVAK informant Ghorbanifar had conveniently relocated, allegedly fleeing in terror - as he walked to his sister's apartment in the rue de la Villa Dupont, carrying her some groceries. "A young man wearing a wraparound crash helmet fell in step behind him, pullted out a pistol and shot him in the back of the head." (13) For good measure, the assassin shot him again in the head, and then disappeared into a crowd on rue de Pergolese, never to be seen again. Shafiq had escaped from Iran after the revolution started, eluding Republican Guards giving chase as he made his way to Kuwait. He signed his own fate by calling his mother, and telling her that "...he was determined to go back to Iran." (14)
In January 1979, just before the Shah left Tehran, Khomeini supporters overran its embassy in Washington, putting its employees to flight. The Ambassador Ardeshir Zahedi rejoined the Shah's entourage while its press attache Ali Tabatabai was staying in the States, and organizing the Iran Freedom Foundation, becoming its president. By the next year, it had put together a counter-revolutionary group - headed by former Prime Minister Shahpour Bakhtiar, and including former Iranian Generals Gholarm Ali Oveissi and Ahmed Pelizben - to overthrow the Ayatollah with the help of Iraqi dictator Saddam Hussein. "We know there are military units inside Iran which support any serious move to restore order," Tabatabai explained. "The goal of such a movement would be to establish a military government for two or three years, followed by a popular referendum on the country's future." (15)
Hardly had the press spokesman returned home to Bethesda, Maryland, than he was gunned down by an American Muslim, Dawud Salahuddin, when he went to settle a dispute at the front door between one of his bodyguards and the assassin over the delivery of a package. SAVAMA paid him $5,000 to do the killing, and he fled to Tehran afterwards where he remained unnoticed, though being wanted by the FBI. It was only a year later that Tehran admitted the existence of SAVAMA, denying that it was like other countrys' intelligence services because it observed Islamic principles. Still, the planned overthrow of the mullahs went ahead, with Saddam's forces attacking in September, but only making modest advances because of the warnings given. The war permitted Israel to kill off Carter's fadding hopes of settling the Palestinian question - what Prime Minister Begin kicked off with the July 1981 bombings of South Lebanon and Beirut, and PLO Chairman Yasser Arafat finished by responding (16)
The only way that the Ronald Reagan's presidential campaign in the States could take advance of the situation was for it to promise Tehran that he would undo measures that the Carter administration had taken against it, and more if it only delayed any release of the American hostages there until after the election. Reagan told campaign supporters that he had a "secret plan" to solve the crisis - what Washington was still trying to settle with special offers of its own. "My ideas require quiet diplomacy," he disclosed, "where you don't have to say what it is you're thinking." (17) Vice presidential Republican nominee George H. W. Bush, and DCI designate William Casey, acting upon the briefing books former CIA Security Director Robert W. Gambino had stolen from White House about what it was attempting with Khomeini (18), had arranged the surprise by meeting Iranian agents in Paris and Madrid. "If the October Surprise was accurate," Vankin and Whelan wrote, "then it seems the secret arms-for-hostages deals exposed during the Iran-Contra scandal could be back dated to 1980:" (19)
The reason why the October Surprise was not more quickly identified as the beginning of Reagan's arms-for-hostages ploys was because all investigations of the process were so slow in coming, and so belated in releasing any accurate findings. This was especially true after Iran-Contra itself started being exposed. While Iran had been able to regain the initiative in its war with Iraq, thanks to the release of its funds, and the continuing supply of weapons despite the sanctions the Carter administration had imposed, conditions were becoming most difficult for Tehran by 1985. In 1983, Reagan's personal envoy to Baghdad Donald Rumsfeld declared that "the defeat of Iraq in the three-year-old was with Iran would be contrary to U. S. interests." (20) The following year, Washington resumed diplomatic relations with Iraq, and was supplying it with all kinds of weapons, including helicopters for gas attacks which were inflicted upon their domestic opponents.
In this desperate situation, former SAVAK informants and current Iranian businessmen Ghorbanifar, Hakim, and retired US Air Force Major General Richard Secord became busily involved in getting any weapons they could, and they were fairly successful in doing so despite Washington*s Operation Staunch where allies were urged not to supply weapons to Iran. During 1984, Hezbollah, a Shiite group which Iran favored, had captured seven new American hostages in Lebanon, including the CIA's chief of station in Beirut, William Buckley. National Security Advisor Robert "Bud" McFarlane was not happy with the policy, and worked around it to make sure that Tehran did not fall under Moscow's influence after the expected death of the Ayatollah. Despite the opposition of the State and Defense Secretaries to dealing with hostage takers, "...the president approved the transaction. Israel, through Ghorbanifar and his private intermediaries shipped ninety-six wired-guided antitank (TOW) missiles to Iran on August 30 and another 408 on September 14. One hostage was released." (21)
Despite this puny result, MacFarlane, Oliver North and Israeli Prime Minister Shimon Peres' counterterrorism adviser Amiram Nir and former Mossad director David Kimche developed a plan whereby Ghorbanifar, Al Schwimmer and Yaacov Nimrodi would provide 150 HAWK, 200 Sidewinder, and about 50 Phoenix missiles to Tehran on planes supplied by Schwimmer and Nimrodi. (22) Grand Ayatollah Hossein Montazeri had just become Iran's Supreme Leader. The CIA could not be officially used because it would have nothing to do with Ghorbanifar - suspecting that he was now a SAVAMA agent because he had flunked two lie detector tests, and " 'should be regarded as an intelligence fabricator and a nuisance.' This known liar was the reed on which McFarlane and Kimche proposed to build the new U.S relationship with Iran." (23) The plan's attractiveness was based upon shipping the military hardware through Sweden - what would make it look like it was the intended user of the weapons which would faciltate Pentagon resupply to Israel for what it had provided, and make its distrusted Prime Minister - Olof Palme, who was trying to arrange a settlement of the Iran-Iraq War - a complete fraud if the shipments were ever exposed.
The trouble started with the plotters not getting presidential approval for what was planned, and informing Congress. Ollie North was given the responsibility of informing the government of the third unnamed country, apparently Sweden, of what was planned and getting approval for it, but he didn't get round to having Secord do it before the plane departed. Then Palme was tipped off about the shipment on November 17th, forcing the El Al plane with 80 HAWK missiles aboard to return to Israel in mid-flight, and additional planes, awaiting word in Öudvika that four hostages had been released before taking them to Tehran, were left with nowhere to go. Then the plotters hastily put together another shipment on November 24th, 18 outdated HAWK missiles with the Star of David painted on them which the Iranians refused to accept. The project was then left in limbo as the President's men decided upon its suspension for the time being - what Ghorbanifar refused to pass along to the Iranian for fear that it would result in the deaths of the hostages. (24)
The most likely source of Palme's intervention was former SAVAK director in Washington Mansur Rafizadah, who became a CIA agent after the fall of the Shah, though Saddam's Ambassador to Sweden Mohammed Saeed al.Sahaf, aka "Baghdad Bob" during his 2003 ouster, could have been the source. They both wanted weapons shipped to Tehran stopped, but for different reasons. Rafizadah was opposed to any assistance that Ghorbanifar arranged because he claimed that he was now working for SAVAMA. In fact, Rafizadah even divulged to Time magazine way before American investigators discovered that Iran-Contra was a two-pronged illegal project, approved by the President, to improve relations with Iran by providing arms-for-hostages while using the proceeds to fund the Contras.(25) Ghorbanifar was able to get Reagan to revive the effort with his promises, though he still refused to work with the CIA. Ultimately, according to Rafizadah, the suspected SAVAMA agent was cut out of the process, and the White House went it alone in "Operation Recovery", after the President signed two more findings to justify the effort, supplying Iran with two shipments of 500 TOW missiles each on February 18th and 27th.(26).
The next day at 11:30 a.m., according to Jan Bondeson in Blood on the Snow, "Baghdad Bob" informed Palme that Swedish arms maker Bofors had been again illegally sending weapons to Iran (27) - what infuriated him since as recently as February 4th, he had told an Iranian military delegation that it would not be getting any weapons from Sweden as long as he was in charge. (28) Whether the Iraqi ambassador really thought that Bofors was the culprit or was just taken in by the ploy North's people used to transfer the shipments into planes where Bofors is located in Ludvika to make it look like Palme's government was violating the law, the violations of Swedish sovereignty set off alarms bells for the statsminister. Before the 1985 election, the statsminister had appointed a special prosecutor to stop such action, and he had been alerted to what was going on by Palme blocking the November shipments. Then Sweden had an agency known as SSI, the Section for Special Collection, to pick up human intelligence, and telephone and radio transmissions about such illegal activities, and the still more secret Intelligence Bureau which liaised with foreign intelligence agencies, especially the CIA and Shin Bet, to make sure that nothing like this happened.
Palme immediately concluded that Swedish authorites - not Bofors as Bondeson has claimed (29) - were aiding and abetting American-Israeli officials who were interested in his undoing, and he challenged them to protect him and members of his family when they went without informing his bodyguards to the Grand Cinema on Sveavägen to see the film, The Brothers Mozart. Palme relied upon the KMS, Ltd. bodyguard reassessors, - who had been casing his apartment in the Old Town for the last few days - to protect them from anything untoward, not knowing that these British military veterans had been brought into the plot just in case Palme's assassintion proved necessary. Members of the team, especially assassin Captain Simon Hayward, it seems, had been practicing for this possible eventuality with the stakeout of an IRA arms cache in Magherafelt, Northern Ireland, if and when young Francis Bradley was obliged to come and move it. When North went ahead with the shipment on February 18th, it triggered Bradley's assassination later the same day.(30) When the second occurred on February 27th, it was Palme's turn, though he did not know that his gamekeepers had turned poachers..
1. Quoted from William Shawcross, The Shah's Last Ride: The Fate of an Ally, p. 172.
2. Ibid., p. 177.
3. Antonia Juhasz, The Tyranny of Oil: The World's Most Powerful Industry - and What We Must Do To Stop it, p. 331.
4. For a more general discussion of the problems, see Paul Collier, The Plundered Planet, p. 37ff.
5. Op. cit., pp. 160-1.
6. Ibid, p. 273, footnote.
7. Quoted from ibid.
8. Ibid., p. 199.
9. Ibid., p. 295.
10. Ibid., p. 296.
11. Ibid., p. 276.
12. Ibid., p. 277.
13. Ibid., p. 294.
14. Ibid., p. 295.
15. Christian Science Monitor, June 19, 1980.
16. Alan Hart, Arafat, p. 442ff.
17. Quoted from "October Surprise", in Jonathan Vankin & John Whalen's The 60 Greatest Conspiracies of All Time, p. 166.
18. Angus Mackenzie, Secrets: The CIA's War at Home, p. 97.
19. Op. cit., p. 168.
20. Quoted from Chalmers Johnson, The Sorrows of War, p. 225.
21. Lawrence E. Walsh, Firewall: The Iran-Contra Conspiracy and Cover-Up, p. 5.
22. Lou Cannon, President Reagan: The Role of a LIfetime, p. 549.
23. Ibid., p. 543.
24. Walsh, op. cit., p. 6.
25. For more, see: http://time.com/time/magazine/article/0,9171,963440,00.html
26. Walsh, op. cit., p. 45.
27. Ibid., p. 197.
28. Richard Reeves, "The Palme Obsession," The New York Times Magazine, March 1, 1987, p. 56.
29, Bondeson, p. 204.
30. For more, see Raymond Murray, The SAS in Ireland, p. 348ff., and Mark Urban, Big Boys' Rules: The Secret Struggle against the IRA, pp. 214-6.