The Spies of Winter

by Sinclair McKay

  Chapter Nineteen

  ‘Berserk with Fanatical Nationalism’

  The term ‘black gold’ had particular resonance and urgency for Britain at the start of the 1950s: the struggles in Malaya meant that the government was ever more dependent on the money gained from other natural resources. The abundant oil that had gushed from the ground of Iran had already enriched the British Treasury to a quite startling degree, and on terms that were extraordinarily unfavourable to the Iranians. This was no colony, nor even a dependency; Britain had no sovereign rights over the country that had been one of the cradles of civilisation. But for some decades, the British had the oil contracts and it had the extraction technology, and the majority of the people in Iran were left little the wiser about how they had failed to benefit.

  The close of the war also brought the end of a sense that the British had been behaving fairly. And the clandestine manoeuvrings of both Britain and the United States – the US saw just how great this Iranian prize would be for the booming American economy – were slippery.

  There are few people around today who would make the claim that Britain and America’s manipulation of Iranian sovereignty was solely about making sure that it did not fall into the hands of a rapacious Soviet Union. However, there were new American powers at play, particularly the freshly formed Central Intelligence Agency. By contrast with those flint-faced operatives, the men and women of GCHQ were not in the business of toppling governments or causing regime change. But in the early 1950s, they were having to work hard to accurately read the fast-shifting geopolitics of both Iran and Egypt.

  The Eastcote codebreakers had managed to hold on to a few small covert stations in the north of Iran, in order to collect up as much Soviet traffic as possible. This was bountiful territory for them: from these vantage points, they could monitor activity around the Caspian in Soviet territories such as Uzbekistan and Kazakhstan – the sites not only of nuclear testing but also of vast labour camps to which dissidents and political prisoners had been deported.

  On top of this, these were unstable times throughout the entire region. In the early 1950s, the old listening station in Egypt at Heliopolis just outside Cairo, was – despite the increasing noise of Egyptian nationalism – still at the centre of the Middle Eastern surveillance effort. But not for long: in the course of the conflict to follow, all these bases become very insecure.

  As Christopher de Bellaigue has written, British businessmen had been making inroads into Iran from the late 19th century; they were allowed in because the then Shah was facing huge economic difficulties. First, the British did a deal for the growth and export of tobacco; then came vast infrastructure projects. Roads, dams and railways were built, and all with what might be termed British inward investment, which naturally always meant that British business exerted a monopoly and a stranglehold on Iranian finances.

  One might incidentally wonder, in an age when Britain is itself relying on Chinese investment in future domestic nuclear energy, whether such business should be automatically seen as exploitative; in the case of Iran, however, the habit of monopoly soon came to mirror a certain frame of mind, colonialist in flavour if not in practice. As it was, the cosy 19th-century arrangements had been broken up after furious protests from Russians in the north of the country; this was another round of the Great Game between Russia and Britain, played a little further west than Afghanistan, but the principles were the same. As much as Iran had to listen to British money, it also had to be mindful of the desires of its mighty Russian neighbour. This was why, in 1946, after Second World War alliance had crumbled away, codebreakers like Alan Stripp were up in the north of Iran, helping other agents to make sure that the country did not fall into the grip of the Soviets.

  Back at the start of the 20th century, there had been plenty of intellectuals within Iran who saw perfectly well in what direction the country was being steered, and who shrewdly made protests to ayatollahs to try and rein in the power of the Shah and of the British. But the First World War rendered them all powerless; in the struggle against the Ottoman Empire, Britain and Russia carved up Iran between them.

  Then, in the aftermath of the First World War, as the Ottomans dissolved, the British foreign secretary Lord Curzon swiftly drew up the Anglo-Persian Agreement which would in effect have handed Iranian sovereignty to Britain. Again, the rationale given was that if the United Kingdom had not stepped in, Lenin’s Red Army would have stormed the country. At the time, Curzon said of the Iranians: ‘These people have got to be taught at whatever cost to them that they cannot get on without us. I don’t at all mind their noses being rubbed in the dust.’

  He didn’t mind; but they very much did. The urban nationalists and the Iranian parliament were in tumult and the agreement was forgotten. But in the fog of recrimination, very few spotted what was going on behind the scenes at the Anglo-Persian Oil Company. The younger Winston Churchill had bought huge numbers of government shares in the concern; and worked the contracts so that 84 per cent of the company’s profits went straight to Britain without so much as seeing the interior of an Iranian bank. By 1947, the concern had been renamed the Anglo-Iranian Oil Company. And the Treasury in Whitehall was earning somewhere in the region of £15 million annually on the company’s profits; Iran got half of that.

  Brought up in this febrile atmosphere of intellectual revolt and British contempt was a bright young man called Mohammed Mossadegh, who would turn out to be an absolutely pivotal figure. Indeed, relations between Britain and Iran today are still feeling the aftershock of the events in the early 1950s that he was instrumental in sparking.

  Mossadegh was a thoroughgoing anti-colonial nationalist. Why, he asked, should nations like Britain have the power to suck, vampire-like, on Iran’s terrific natural wealth? After the war, his following grew to the extent that he came to wield serious political weight; and in 1951, the Shah was forced, by public insistence, to stand aside and appoint Mossadegh as prime minister. Mossadegh was unusual in commanding a following among secular and deeply religious figures alike. He united the hard-line socialists and the profound conservatives. He was felt by some to be another Gandhi. He addressed the United Nations in New York, and told the Assembly: ‘Hundreds of millions of Asian people, after centuries of colonial exploitation, have now gained their independence and freedom.’

  And one of Mossadegh’s first acts in 1951 was to nationalise the Anglo-Iranian Oil Company. Britain had been warned at the United Nations that in the future, the profits of oil were to be shared, not sequestered. Britain was not quite ready to see it that way. One factor that may have hardened its stance a little was the recent fall of the Labour Attlee government, and the return of Winston Churchill and the Conservatives to 10 Downing Street. Whereas Clement Attlee had been, in his heart, a devout internationalist anti-colonialist, there were many elements in the Tory party who quite genuinely felt – as Curzon had put it all those years ago – that Iran needed Britain more than Britain needed her.

  So there was a stout refusal to share oil profits: the British were the ones taking the oil out of the ground, so therefore their efforts should replenish the Treasury. ‘Oil can be the pillar of Persian revenue only while it can be brought, against many difficulties, to the world’s markets,’ declared The Times in 1951. ‘The Persian state cannot supply the technical skill, initiative and commercial knowledge upon which the place of Persian oil in the international ramifications of the industry depends.’ No Iranians had been allowed in senior positions at the Anglo-Iranian Oil Company; it was run by de facto colonial figures. Oddly enough, even some of the left-leaning UK newspapers like The Observer agreed that Britain had a perfect right to continue profiting from the oil wells. Mossadegh was portrayed as a ‘Frankenstein’ figure and even – in more excitable corners of the British and American press – compared to Adolf Hitler. This was some five years before Egypt’s Nasser attracted a similarly hysterical response, Mossadegh was being demonised as a dangerous enemy. His followers, an
d all those who favoured nationalism, were seen as fanatics.

  Mossadegh’s tragedy was that he chose this heroic moment of defiance at a point in history when there was another, deadlier, game afoot. Several years after George Kennan’s advocacy of the idea of containment of the Soviet Union, the Cold War had plunged below freezing, with both superpowers now settling into the narrative positions that they had effectively created for themselves. Washington DC was in the grip of a morbid mass anxiety about the contagion of Communism. If it had reached so far into American institutions, what would happen in countries apparently less developed and sophisticated? And more: what could be done to thwart the Soviets in their maniacal appetite for world conquest? One very straightforward strategy was to deprive them of the vast quantities of fuel needed to expand their armies further.

  And this was how the abundant oil fields of Iran came to be seen through the eyes of American hawks: a potentially vast and lethal prize for Stalin to grab and exploit.

  According to Christopher de Bellaigue, there were those in Whitehall and MI6 only too eager to fall in with this paranoid scenario, to ensure that the steady flow of funds to Britain’s revenues were not interrupted. In America, the new Eisenhower administration, together with a ruthlessly enthusiastic CIA, plotted to have Mohammed Mossadegh overthrown and replaced by Shah Reza Pahlavi. De Bellaigue contends that MI6 – which itself had suffered a gruelling period following the debacle of the Cambridge Spies – was all too eager to help. This might be too cynical a reading, and the British agents may have been every bit as concerned about the spread of Communism as their American counterparts.

  The coup went ahead: Mossadegh was overthrown, the Shah was installed – and immediately, the American press began singing extravagant hymns of praise to this fresh new ruler who was opening up a golden new era of trade and understanding between Iran and the West. Quietly, the CIA channelled millions of dollars into the country, to shore up the chief political and military figures around the young shah. The New York Times understood it all as a morality tale about the dangers of nationalism, and the need to check those little Hitlers who developed these dreams. ‘Under-developed countries with rich resources now have an object lesson in the heavy cost that must be paid by one of their number which goes berserk with fanatical nationalism,’ proclaimed an editorial. It might be grimly added at this point that the British government must have taken this sentiment very firmly on board; how else – when they were to characterise Nasser in Egypt in similar terms in 1956 – did they imagine that they would win the support of the Americans in their own adventure?

  The repercussions of those events in 1953 are still felt today. The Shah, with his torturing secret police, was himself overthrown in 1979 and replaced with an extremist theocracy that only now shows, at the time of writing, any signs of starting to thaw. But in the 1950s, Mossadegh’s overthrow secured not only the oil, but other advantages, too. It would still be possible from there to monitor Soviet activity quite some distance into the Urals. In the years to come, the listening stations in Iran would grow in value as surveillance technology sharpened. But there was always a sense, or undercurrent, of insecurity about such outposts. The threat of Islamic insurgency was never far beneath the surface. In the meantime, the oil continued to flow; and after the interventions of America and Britain, more of the funds began to seep into Iran, helping the Shah shore up his reign. It has been pointed out that if only Mossadegh had agreed to some form of compromise over the oil, he too might have seen the British government relent.

  But from the point of view of GCHQ, the region had to be covered with terrific care: there was no question that the Soviets – sharing borders with Iran as they did – nursed fierce territorial ambitions in this area. For if they could have secured Iran, it would not only have meant access to unlimited oil, but also access to a naval base on the Persian Gulf, which in turn would give the Soviets a route to Turkey and India. Such an idea was acutely worrying to codebreakers and security chiefs alike; it could so easily have been one of the trigger points for an unstoppable war. Incidentally, the interventions from the West may still cause anger within Iran, but it is perfectly possible and respectable to argue that the alternative was that the country fell into Soviet hands, which would have had a ripple effect of destabilising the Middle East as well as the Indian subcontinent.

  Elsewhere, by the early 1950s, the codebreakers and secret listeners were in regretful retreat. In Egypt, where the codebreaking station at Heliopolis still employed a significant number of civilians, the pressure was not from religious grievance so much as raw nationalism; even several years before the 1956 Suez debacle, it was becoming impossible to maintain an intelligence base there, still less any other kind of military establishment. The loss of Heliopolis was felt on two levels: first, as a strategic base, capturing a wide range of signals and encryptions, it had been doing brilliant work ever since the war. The second, for many operators, would have been the withdrawal from what, for many, had been a rather elegant existence, certainly when compared to the smog-bound nature of life back in London.

  Cairo in that pre-Nasser period was still the domain of King Farouk, and for the expatriates, still very much a milieu of elegant restaurants and sophisticated nightclubs, in an entirely different dimension to the life being led by ordinary Egyptians. The writer and academic Edward Said – though born a Palestinian – was sent to school in Cairo in that period; although Egypt had won its independence from British influence in 1935, the school and its teachers appeared to have only an abstract idea of what this might actually mean. Victoria College was, he wrote, ‘a school in effect created to educate those ruling-class Arabs and Levantines who were going to take over after the British left. My contemporaries and classmates included King Hussein of Jordan, several Jordanian, Egyptian, Syrian and Saudi boys who were to become ministers, prime ministers and leading businessmen…

  ‘…Although taught to believe and think like an English schoolboy,’ added Said, ‘I was also trained to understand that I was an alien, a Non-European Other, educated by my betters to know my station and not to aspire to being British.’1

  That age was ending. Senior figures in the Egyptian military – who were still brooding after being defeated in the Arab–Israeli war of 1948 – looked with disgust at the bloated, self-indulgent and wholly ineffectual King Farouk; at the luxury of his court and at the corruption to be found close to him throughout Cairo. They looked at the British, treating the land and the people as if they were somehow their own, and at the British forces, which by that time were largely confined to the Canal Zone. And they plotted.

  The coup came on 23 July 1952 at midnight; King Farouk and his friends were apparently enjoying a late-night picnic of caviar and champagne in the city of Alexandria. A team of 200 officers and around 3,000 troops took control of Cairo’s broadcasting station; they also took command of the city’s tanks. There were soldiers in Alexandria too, but Farouk did not think of commanding them to defend him. He said that he wanted no bloodshed. Given recent history in that region, the story of Farouk’s fate is quite remarkable for its absence of violence; the new leader General Naguib (soon himself to be turfed aside in favour of Colonel Nasser) allowed the king and his family to take to the royal yacht, together with some belongings and crates of champagne. Farouk and his family made first for the island of Capri, and thence to the millionaires’ retreat of Monaco. Farouk was eventually killed not by a bullet, but by the culmination of a lifetime of excess: he collapsed in a smart restaurant while entertaining a blonde in the small hours.

  But his removal – and the installation of an entirely new, fiercely nationalist regime in Egypt – meant that for the British, withdrawal was inevitably going to lack the grace that they had somehow managed in India. What was certain was that the intensely secure operation at Heliopolis would have to be moved. And so it was that codebreakers were transferred instead to Cyprus.

  It was not the most comfortable fit: the military insta
llation there had already taken in the listening outpost from Sarafand in Palestine; the gradual removal of Britain’s footholds in this region of the Mediterranean was a source of some disquiet both there and in Whitehall. For the Americans, however, there is some suggestion that the military and nationalist supporters in Egypt had been given some covert support by the CIA; for once again, the prime objective was ensuring that no Communists could get any kind of foothold. For Britain to lose the old Combined Bureau base was most unfortunate; but no Americans would have looked on at her struggle to keep a colonial grip on Egypt with any kind of sympathy. Once again, the old country was tasting humiliation, the maddening nature of which would culminate in the crisis of 1956 – prime minister Eden comparing Nasser’s nationalisation of the Suez Canal to Nazism, followed by a harrowing and abortive military attempt to grab it back, and then the cold refusal of America to give Eden and Downing Street any kind of backing.

  That was all to come. One immediate difficulty for the codebreakers was that their new and ever expanding improvised base at Cyprus was far from being serene. The island had been under the control of the British since the 19th century; it formally became a British colony in 1925. In the late 1940s, as the Communists had sought to get a foothold in the Aegean, the military bases there had become utterly indispensable, not least because of the centrality of intelligence gathering. By the 1950s, the closeness of British and American intelligence once again came to the fore as the Americans set up their own surveillance and transmission site on the island. Even before they had done so, there appeared to be an assumption that the work done on the island was a venture that both would have an equal share in. Neither power could afford to lose their position there; but as with the rest of the British Empire, change was rushing in as unstoppably as a storm. It had to be managed with consummate care. The chief difficulty was that, as well as a largely Greek population, there was a significant minority of Turkish Cypriots. By the late 1940s, nationalist feeling among the majority population was beginning to smoulder; the people wanted to be formally conjoined with Greece. The presence of the British was ever more fiercely resented. And the tall aerials installed by GCHQ were both a symbol of British control and also a temptingly juicy target for local insurgent hotheads.