The Shah

by Abbas Milani

  Another controversial appointment was Nouraldin Alamouti, named by Amini to the key Ministry of Justice. Alamouti had been a member of the famous Group of Fifty-Three, Communist intellectuals led by Taghi Arani who had been arrested during the reign of Reza Shah. It was believed that Alamouti would vigorously go after those accused of graft and would not even spare members of the royal family.

  But the most controversial member of the Amini cabinet was easily Hassan Arsanjani, the minister of agriculture. Like Amini, Arsanjani was an old hand in Iranian politics, but unlike Amini, he had been unrestrained in his criticism of the Shah. He was a charismatic orator, a muckraking journalist, a self-styled Socialist by avocation, and a lawyer by vocation. What made his career particularly fit the appointment was that he advocated the necessity of land reform in Iran. Like Amini, he had once been a protégé of Qavam, and a friend and accomplice of General Gharani, the mastermind of the failed 1958 coup. In the very days when he was negotiating with the Shah’s regime over his plans to establish a social democratic party, Arsanjani was secretly conspiring with Gharani to organize a coup.

  The Arsanjani appointment became even more important when it emerged that implementing a land reform would be the centerpiece of Amini’s plans for the “controlled revolution” he had come to lead. There is something of a consensus amongst scholars and politicians that Arsanjani’s radicalism and charisma, his ambitions and his political acumen, made the Amini plan for land reform far more radical than initially intended. When the American Embassy expressed concern about Arsanjani’s increasing radicalism, Amini reassured them by suggesting that such rhetoric was initially needed for “taking the wind out of the sails of the National Front.”10 At an appropriate time, Amini assured the American Ambassador, “he would accept [Arsanjani’s] offer to resign.”11

  The Shah, too, began to worry about Arsanjani as he watched him give more and more rousing speeches against feudalism and landowners. Larger and larger audiences of peasants were bused into the cities and used as props for demonstrations that had more and more the discomforting aura of despotic populism. In a meeting with Israel’s ambassador to Iran, Meir Ezry, the Shah asked the ambassador what he thought of Arsanjani. The Shah must have known that Arsanjani had developed close ties with Israel, whose advisors were at the time helping Iran develop large industrial agribusinesses. The Shah was himself an avid fan and advocate of these large-scale industrial farms. In response to the Shah’s loaded question, Ezry gave an equally loaded response: Arsanjani was “not a minister of agriculture but minister of peasants.” As Ezry himself observes, this “was a warning to the Shah,”12 who began following Arsanjani’s populism more closely.

  Amini’s reforms also included education, government services, election laws, and fighting corruption amongst government officials. Lest he be seen as a mere observer of the ongoing “controlled revolution,” on November 14, 1961, the Shah issued a firman, decreeing that the Amini government was to continue full force with its reforms, particularly in education, improving the living standards of the poor, eliminating corruption, land reform, and eradicating corruption in the government. Though the royal decree was more a symbolic gesture than a serious policy statement, Amini played along, and the next day convened an emergency meeting of his ministers at which he informed them of the Shah’s decree and asked them to redouble their efforts in implementing His Royal Majesty’s command.

  About this time, Amini also sent a trusted advisor and a member of his inner circle, Khodadad Farmanfarmaian, on a secret mission to Germany. Ostensibly, the purpose of the trip was to negotiate a German loan. In fact, Farmanfarmaian was also there to secretly meet with Robert Kennedy, the U.S. attorney general. Farmanfarmaian asked him, on behalf of Amini himself, that the United States show more public support for the Shah. An insecure Shah, Amini knew, was a ticking bomb.13

  On the afternoon of November 15, 1961, the day Amini convened an emergency meeting of his cabinet to discuss the royal decree, in another corner of the city, the Shah was on hand to open the country’s first bowling alley. Azar Ebtehaj, the assertive, ambitious, and beautiful wife of Abolhassan Ebtehaj, the onetime head of the Plan Organization, was one of the two partners who had introduced bowling to the country. The club, known simply as “The Bowling,” became an overnight sensation in the capital. Its restaurant was the city’s hot spot where the “jet setters” gathered. Since Soraya’s days, the Shah had become an avid bowler and had a private lane constructed at the palace where he played regularly. After the launch of “The Bowling” the Shah sometimes played there. Though the royal presence added a certain cachet to “The Bowling,” it was a financial drain since, on the Shah’s nights for security reasons, the establishment would be ordered to keep all other customers out.14 But there was another connection between the bowling alley and the cabinet meeting discussing the Shah’s order.

  Aside from the land reform, the most controversial new policy of the Amini government was the fight against corruption. A number of high-ranking officials of the regime were arrested and charged with embezzlement and misuse of public funds. Easily the most controversial act of the Amini government’s anti-corruption campaign was the arrest of Abolhassan Ebtehaj. The arrest was particularly startling because Ebtehaj was known for his financial probity and considered Amini a close friend.

  Since his appointment as the director of the Plan Organization in 1955, Ebtehaj had survived in power simply because of the Shah’s support. His stern style of management, his no-nonsense attitude, his willingness to take on entrenched interests, his relentless attempt to streamline the country’s economic planning decisions on his own, his distrust of Iranian contractors, and his belief that in those years only Western companies could be entrusted with big contracts and big projects had all worked to make him many enemies among the elite.

  For years, the increasingly swollen ranks of his foes had constantly conspired against him. Their efforts failed in no small measure because of the Shah’s support of Ebtehaj. Manouchehr Egbal and General Fazlollah Zahedi, two of the prime ministers during Ebtehaj’s tenure at the Plan Organization, were his unabashed enemies, but neither could dislodge him from his perch of power. The fact that Western banks and lending institutions trusted and supported Ebtehaj further contributed to his ability to survive his enemies’ machinations.

  The Shah tended to divide key Iranian politicians between those “connected” to the United States and those with ties to Britain. However, he was confused about Ebtehaj. More than once, he asked the British and American ambassadors whether they thought Ebtehaj was “connected” to either power. In September 1955, for example, he told the British Ambassador that “the Americans thought Ebtehaj was pro-British.” The Ambassador answered that in his embassy, some thought Ebtehaj “was pro-American.”15 The truth seems to be that both embassies thought Ebtehaj an unusually competent and reliable financier and an honest public servant but a bit of an eccentric genius. But by 1959 Ebtehaj’s luck was running out.

  On January 24, 1959, on a cold day when the Shah was bedridden with the flu, after numerous ignored requests, Ebtehaj was finally given an audience. One of the Shah’s well-known ways to punish or show dismay with an official was to refuse to see him. Even if he ran into someone in an official ceremony, he would avoid exchanging even a glance with them. In his Daily Journals, Alam describes many such episodes. Ebtehaj, who had for years been able to get a meeting with the Shah almost at will, was now getting the cold shoulder. After a few rebuffed attempts, he finally threatened to quit going to work unless the Shah agreed to meet with him. January 24 was set for the meeting.

  A few days earlier, Ebtehaj had submitted his resignation to the Shah but had heard nothing back. But now, as Ebtehaj talked, the weak and sniffling Shah simply listened without uttering a word. Ebtehaj talked of his increasing tensions with many of the country’s political leaders. He also tried to make the case that the Iranian economy could not sustain the level of military expenditures the Shah c
onsistently pressed for. The Shah said nothing; silence was another of his known discursive tools for displaying displeasure and dismay.

  Though the Shah was angry with Ebtehaj and accepted his resignation, he still rejected the calls for his arrest. Knowing full well that the danger of arrest hung over his head, Ebtehaj put on the pretense of enjoying his unexpected retirement. He started work on launching a private bank, and before long, he and his wife had established the Iranian Bank—with much of the capital provided by Western banks. Azar was chosen to sit on the board of the bank, becoming the first woman to attain such a high status in the world of Iranian finance.

  At the same time, Ebtehaj spent some of his time playing golf, a favorite pastime. One of his eccentricities was that, even before golf became the game of the rich and powerful in Tehran, he would occasionally appear at meetings dressed in his golf attire. He had played a role in helping a man named Khaybar Khan build Tehran’s first golf course. Khaybar Khan was a flamboyant Iranian-born businessman who had returned to Iran in 1958 and set up a flashy office, hired a bevy of beautiful young women who were as much escorts as secretaries and receptionists, gave lavish parties and expensive gifts, and drove around in a Cadillac. Before long, through his friendship with Ebtehaj, Khaybar Khan had established close ties among the Iranian elite, including some members of the royal family. But by the time of Ebtehaj’s resignation, Khaybar Khan had returned to the United States, and by 1962, he was talking to the American media and testifying before Congress about what he alleged was massive corruption and misuse of American foreign aid by the Shah and a few other members of the royal family. For the next five years, Khaybar Khan became nothing less than a nightmare for the Shah. The saga continued until well into 1965, at which time a federal court did in fact order all of the Shah’s U.S. accounts frozen. The banks where the accounts were held immediately informed Mehdi Samii, a trusted confidante of the Shah, that unless they moved the assets before the banks opened the next day, the accounts of the Shah and, in fact, of all the royal family, would be frozen. Samii contacted the Shah and received the requisite instructions to move the accounts, but before any action was necessary, another court overturned the lower court’s order and the danger passed. Within months of the episode, Khaybar Khan was discovered to have forged the most incriminating documents against the Shah.16

  Some of his allegations were similar to the charges made by Ebtehaj when he participated in a conference held at Stanford University in the fall of 1960. Ebtehaj talked about the failure of U.S. policy in Iran, and how, in spite of having given a billion dollars to the country over a few years, the United States was “neither loved nor respected.” The reason, he suggested, was that “where the recipient government is corrupt, the donor government very understandably appears in the judgment of the public to support corruption.”17

  When the Shah heard about the lecture, he was livid. Friends and family advised Ebtehaj not to return, telling him that the Shah would have him arrested at the airport. A few months before his departure for the United States, the Shah had been angered by Ebtehaj’s heated argument with American generals against the idea of expanding the Iranian army.18 The Shah also took umbrage at Ebtehaj’s opposition to the construction of a chemical fertilizer near the city of Shiraz, a pet project of the Shah. Ebtehaj was opposed to the project not just because he felt it was economically unsound but because he suspected that Iranian officials had made illicit gains from the deal.19

  Each of these transgressions had not been enough individually to turn the Shah against Ebtehaj, but now their collective weight was more than he could tolerate. When he least expected it, during the tenure of his friend Amini, Ebtehaj was arrested and charged with financial malfeasance and with signing sweetheart no-bid contracts with the Development Resources Corporations of David Lilienthal, the architect of the famed Tennessee Valley Authority. Lest Ebtehaj find a way to leave prison, the largest bail in Iranian history to that time was set for him.

  But even in prison, Ebtehaj never shied away from expressing his often unique, sometimes contrarian views. Though he was an autodidact with little formal education, he was a brilliant banker and economist. His views on the land reform that was undertaken by the Amini government and that would eventually become the centerpiece of the White Revolution were an example of both his brilliance and his readiness to challenge received or popular opinion.

  When Ebtehaj learned about the Shah’s upcoming trip to the United States, he decided to write a pithy “personal and confidential” letter from prison to his “friends in America” hoping to convince them to stop the Iranian government’s plans for land reform. Contrary to the landowners and the clergy, who were against the land reform as interested advocates of the status quo ante, Ebtehaj opposed the current plan because he thought it undermined the future long-term capitalist development of Iran.

  In his letter, Ebtehaj offered ten reasons why the land reform as proposed was detrimental to Iran’s national interest and capitalist development. Under a “capitalist system of free enterprise,” he wrote in his letter from prison, “it is not right and just that a person may own any number of factories . . . but [be] denied the right to own more than a certain amount of farm land.” He agreed that absentee landlordism was a curse and a problem for Iranian agriculture and the economy, but he suggested searching for ways to overcome “the drawbacks . . . without resorting to sequestration.” Instead of confiscating property, he offered a “land reform brought about through a system of taxation, where farms would be taxed based on not ‘actual but optimum yields.’ ” He proposed a simple but sophisticated system of taxation that would ultimately bring about the desired changes in the country’s agricultural system without undermining the idea of private property.20

  Ebtehaj’s critique is particularly important in its contrast with the Shah’s willingness, indeed eagerness, to use the discourse of revolution and the practice of forced sequestration to promote his own political ends. Before long, the Shah would begin to talk incessantly of the “White Revolution,” and all manner of “sequestration” became part and parcel of the different principles of his revolution. The Shah had a pseudo-Socialist, statist vision of the economy where the state could and should become an economic leviathan. As Ebtehaj had predicted, not long after the land reform, the Shah proved willing to forcefully expropriate the country’s only private television network, the first private university, and the country’s richest private mine. How much did the Shah’s constant conjuring of revolutionary rhetoric help make the idea and concept of revolution part and parcel of the Iranian political discourse? In other societies, the word “revolution” often brings to mind cataclysmic changes. By 1978, the word had been a constant part of Iran’s political vocabulary for almost two decades, and the idea of expropriating successful businessmen had also become “normal.” In 1962, neither the Shah nor Amini were willing to heed Ebtehaj’s advice.

  Amini tried to use the promise of land reform to convince the leaders of the National Front to temper their criticism of his government and avoid confrontations with the police and security forces. A temporary political cease-fire would afford him the chance to consolidate the shaky foundations of his power. But a new generation of activists had joined the ranks of the Front, and inspired by the revolutionary experiences in Cuba and Algeria, they kept pushing for more confrontational and radical policies. Incremental change of the kind promised by Amini was for them nothing but “repressive tolerance”—change intended to maintain the status quo.

  And when the leaders of the National Front announced plans to hold a mass rally in the Jalaliye racetrack, Amini used his many connections to these leaders to ask them to forgo their planned rally. He asked for a respite of stability, a few months of peace during which he could establish his authority and fend off increasing attacks from members of the military. But the National Front would not relent. While younger leaders of the group increased their agitation at the university, leading to numerous confrontati
ons between the government and the opposition, the elder leaders continued with plans for the Jalaliye mass rally.

  The Jalaliye event was at once a tour de force and a coup de grâce for the National Front. The large field that had previously been used as a racetrack was filled with supporters. There was a prolonged—some say a fifteen-minute—exuberant show of support when the name of Dr. Mossadeq was first mentioned. For the Shah, the spectacle was nothing short of a nightmare, reminding him of his own darkest hours. Even more dangerous for the Shah was the idea that the large number of people at the rally would only convince the Kennedy administration to redouble their effort to bring the National Front into the government. But then the Shah received an unexpected bonanza from the mass rally.

  When it was Shapour Bakhtiyar’s turn to speak, he parted from the prepared text that had been approved by the collective leadership. Instead, he talked at great length and with frenzied fervor about the virtues of Iran’s joining the ranks of nonaligned nations. By then, the nonalignment movement, launched by Indonesia’s Sukarno in 1955, had become a formidable force around the world. The fact that Communist China had joined the movement made it even more suspect to American policy makers. In the Cold War vision, nonaligned nations were simply on a slippery slope, a short step from falling into the hands of the Communists. Even the State Department, till then a reliable supporter of the National Front, was not amused by the group’s sudden advocacy of nonalignment. From then on, to the Shah’s relief, support for the idea of offering the National Front a share of power in Iran began to wane amongst American foreign policy experts.