Moving Miller from the Fed to the Treasury to succeed Blumenthal, after unsuccessfully trying to find his replacement among the upper echelons of American business, left open the key post of central bank chairman. But Paul Volcker was an inspired, even historic, choice. Most important was the change in Jimmy Carter. The president was steeled to set his principal priorities and achieve them. He now knew he had to play an inside political game in Washington, while also emphasizing his continued identification with the common good as the outsider, a difficult balancing task that Ronald Reagan actually managed to achieve.
While introducing fiscal discipline, deregulation, major environmental breakthroughs, and passing our last, major energy bill, Carter had to hold on to the political base of the party’s liberals, who did not see any need to change their profligate ways; fend off a challenge from Senator Kennedy to his left; and maintain the support of his conservative Southern base. It was an acrobatic act beyond his or any other mortal at the time, until Bill Clinton applied his magic a decade and a half later. In the meantime, as Caddell artfully put it to me: “You were in the middle of it; you were getting your ass kicked off on both ends, Stu.”61
Yet, when this extraordinary three-month period was over, a Washington Post poll published on September 14 gave Carter the lowest approval rating of any president in three decades.62 And to insert a visual exclamation point, he collapsed in a ten-kilometer race near Camp David on September 15. This led the press to depict the event as representative of the failing strength of his presidency, even though in characteristic fashion the president recovered quickly and awarded the winner his trophy with a huge smile.
I do not believe that this exceptional period had villains. Caddell’s recommendations may have had excesses, but he had put his finger on a major problem with the Carter presidency; Rafshoon may have made a disastrous recommendation for a mass resignation; and Ham’s remarkable political antennae may have malfunctioned. But they were looking for ways to follow up his successful speech with dramatic action to show he was reasserting control. Mondale and I misjudged the power of Carter’s speech.
But during the storm all the key actors were searching for answers to try to help salvage a presidency at its low point. Everyone acted with the best of intentions, however misguided these actions may appear in the cold light of history. It was an exceptionally tense and difficult time—with an Iranian revolution, gasoline lines, soaring oil prices, energy legislation stuck as special interests battled on all sides, and sinking polls for the president. This kind of environment can produce rash decisions.
Soon an upheaval thousands of miles away in Tehran cruelly prevented the president from building even his modest momentum and from becoming the president who, with a new sense of discipline despite a sour economy, might have reconnected with the American people to gain a second term in office.
PART VIII
IRAN
26
THE RISE OF THE AYATOLLAH
The Iranian revolution of 1979, midway in the Carter presidency, was the most profound geopolitical event of the twentieth century’s postwar period, except for the fall of the Soviet Union. The popular uprising brought down the Shah of Iran, one of America’s most important allies in the Middle East, cost Carter a distinguished secretary of state, and was a decisive factor in the political demise of his presidency, by creating one of the most humiliating diplomatic traumas in American history. More than fifty American diplomats were held hostage in their own embassy in Tehran for 444 days, serving as a principal lever for Islamic radicals to consolidate their revolution. This ushered radical Islamic theology into a government in the Middle East for the first time in history, turning Iran almost overnight from a key American ally to a sworn enemy.
The challenges born out of the Iranian revolution are as contemporary as today’s headlines. Iran remains a hostile theocratic state, in which the ultimate decision makers are not the nominal government figures with whom the Carter administration and its successors have dealt, but a parallel set of organizations: the Council of Elders, the Revolutionary Guard, revolutionary courts controlled by radical Islamic clerics and their adherents, and above it all a grand ayatollah as supreme leader, who does not engage with other sovereign states in the way of the modern world.
Jimmy Carter was the first president to confront this dramatically new and untested reality. Although it was not clear to us at the time—and it rarely is at revolutionary moments—Iran was undergoing a historic upheaval in which the forces that filled the void left by the departure of autocratic rulers initially left their people far worse off, like the early days of the French Revolution, Russia’s Bolshevik Revolution, and the misnamed “Arab Spring” of our century.
The decisions facing Carter on Iran were among the toughest any president could face in peacetime: How to support an increasingly unpopular autocratic leader but a strategically vital ally; whether to block his radical successor and then navigate a new relationship with the unique reality of an Islamic republic; whether to allow the Shah to enter the United States for medical treatment, knowing the risks of inflaming the Iranian public; and finally the worst dilemma of dealing with the unprecedented capture of the American diplomats serving in what was then the largest U.S. embassy in the world. Should the safety of our hostages prevail over American honor and standing as the guarantor of world order?
To appreciate the unique challenges the Carter administration faced, it is important to understand something of Iran’s history, in contrast to what Gary Sick, Brzezinski’s senior aide on Iran on the National Security Council, called the “unrelieved ignorance” among American foreign-policy makers about such a critical country.1 Unlike most of the states in the region, which were created by agreements among the colonial powers after World War I, Iran has a long, proud, but troubled history as an independent nation. Iranians have never forgotten their rich ancestry as the Persian empire; in ancient times it was the largest in the known world, extending from what now is Turkey eastward into India. The history of Europe would have been very different if the nascent Athenian democracy had not beaten back King Xerxes’ Persian invaders on the plains of Marathon in 490 B.C.E. Like all great empires, the Persian one declined, but its poetry, art, architecture, and even the Persian game of chess remain enduring monuments of civilization and culture.
For Westerners it is worth remembering that Persian history, culture, and language are totally different from the Arabic. When Persians abandoned the Zoroastrian worship of fire for Islam, they adopted the Shia sect, which is founded and still pursued with a sense of grievance over the rightful successor to the prophet Muhammad. Victorian Britain and czarist Russia engaged in the “Great Game” for influence in Central Asia. The British gained a huge oil concession in 1901, which led to a popular revolution forcing the Shah of the ruling Qajar Dynasty in 1906 to accept a constitution with an elected parliament, leaving him as a constitutional monarch. The British posted a wise diplomat to Tehran, Sir Arthur Hardinge, whose prophetic insight should have been known to U.S. intelligence during the entire postwar period of American engagement into the Carter years, and remains pertinent to this day. The religious zeal of the Shiite sect, he wrote, lies in “its resistance to political authority, and its fierce antagonism toward all from the outside world, be they Christians or Sunni Moslems.”2
Turmoil reflecting this outlook marked the early years of the twentieth century in Iran, as the British sought stability to protect their oil concessions and make the country a buffer between Russia and their colony of India. They installed a commander of the Persian Cossack Brigade as prime minister, and in 1925 he mounted the Peacock Throne as the new Shah, Reza Pahlavi, founding the Pahlavi Dynasty under the 1906 constitution. This authoritarian ruler rapidly modernized what had been a weak and divided country. He curbed the power of the feudal landlords, reformed education, granted significant freedoms to women, and suppressed the powerful religious establishment in a rehearsal for what Carter would confront
half a century later with his son.
During World War II Reza Pahlavi was forced into exile for Nazi sympathies, and in 1941 his 21-year-old son Mohammed Reza Pahlavi took the throne. For the next ten years Iran was nominally a constitutional democracy with its own parliament. Since the young Shah had been put on the throne by foreign governments, his legitimacy was questioned. To bolster his position he attempted to negotiate better terms with the Anglo-Iranian Oil Company, with the support of the Americans, who feared that unrest would increase Moscow’s leverage in Iran. When Anglo-Iranian finally offered to split profits 50–50, it was rejected as inadequate, and the Shah’s handpicked prime minister was assassinated within days after refusing to nationalize the oil company.
The oil minister, Mohammed Mossadegh, no Communist but a nationalist and wealthy aristocrat who had championed nationalization, became prime minister. As far back as the 1920s, he had opposed the Shah’s father as an authoritarian ruler. Mossadegh at age 70 transformed himself into an angry populist and mobilized masses of people to demonstrate against the oil company. Foreign intervention followed, serving as a template for Iranian behavior throughout the hostage crisis a quarter-century later. London seriously considered armed intervention to depose Mossadegh, but the United States opposed it lest the USSR be encouraged to move into Iran. The British then embargoed Iranian oil, and Mossadegh roused his countrymen to demonstrate against the British. This left the Shah helpless to combat his popular prime minister, but also deprived Mossadegh of support from the moderate reformers, who saw him as autocratic and dangerous because of his reliance on the mob, and the Shiite clerics, who condemned him as an enemy of Islam for working with the local Communist Party. Mossadegh made a beeline to America to engage the new Eisenhower administration and seek medical help. Aging and ill, he spent forty days in Washington and New York, some of them in the hospital.
When Winston Churchill returned to power in 1951, he turned to his wartime partner, now President Eisenhower, and together they hatched a scheme to get rid of Mossadegh. To implement the plan, the Shah tried to dismiss Mossadegh as prime minister, but the plot failed, and the Shah escaped to Europe. This led to a coup in August 1953 called Operation Ajax, organized by Britain’s MI6 (the Secret Intelligence Service) and the CIA under Kermit Roosevelt, Jr., a grandson of Theodore Roosevelt and a career intelligence officer then serving as the agency’s Mideast bureau chief. By the end of August, Mossadegh was under house arrest and the Shah was restored to his throne. America’s role in ousting an elected prime minister was embedded in the collective memory of the Iranian people, with the United States providing a convenient whipping boy for the ruling clerics, an abiding resonance of the 1953 coup.
Reinstalled in power, the Shah shed his role as a constitutional monarch, grew increasingly autocratic, and appointed only prime ministers who followed his orders. Press censorship grew more severe, no public criticism of his policies was permitted, and the parliament became a rubber stamp.3 Yet, the Shah was not simply a self-aggrandizing dictator. Flush with money from the huge run-up in oil prices after the 1973 OPEC embargo, and with the best of intentions, he became a reformer and nationalist intent on a great leap forward to lead his country out of poverty and backwardness,4 with a White revolution to preempt a Red one by the Communist Tudeh Party. But the process of reform, and especially giving women the vote and breaking up the great feudal estates, was imposed at great speed and created powerful enemies. The Shah abolished political parties and enforced order through the dreaded internal security service, SAVAK—an anagram of the Persian words for Organization of Intelligence and National Security—which ruthlessly pursued and notoriously tortured political opponents.
This led to calls for more freedom. Having alienated the liberal intelligentsia, the clerics, and the landowners in the early 1970s, the Shah also undermined his support among the powerful merchant class by having inspectors impose heavy fines on small businesses. For different reasons, these disparate groups shared the goal of getting rid of the Shah or at least curbing his repressive power with some measure of democratic transparency.
One voice stood above all the rest with a clear message, though it was at sharp variance with the goals of other sectors of Iranian society: The cleric Ruhollah Khomeini, who had great influence as a grand ayatollah, called for the establishment of an Islamic republic along religious lines. In the end these disparate groups coalesced around Khomeini as a way of getting rid of the Shah. Following public speeches by Khomeini in 1963, mass protests against the Shah broke out in Tehran and other major cities. SAVAK and the army quickly put down the demonstrations and killed numbers of people in the streets. The Shah had Khomeini arrested and sent into exile in 1964 just across the Iraqi border in Najaf, a city holy to Shiites. From his Iraqi exile, Khomeini preached against the Shah’s corruption, his ties to Israel, and the influence of the United States. He began to develop the idea of an Islamic state based upon Islamic law as interpreted by Islamic clerics in a series of lectures, which were published as a book, Islamic Government in Persia.
In putting the reaction of the Carter administration into context, it is important to understand that the concept of a clerically run Islamic state was revolutionary, even in traditional Islamic terms.5 By the early 1970s, middle-rank clerics throughout Iran became adherents of Khomeini’s vision of an Islamic state. Many of these clerics, some leftists, and Mehdi Bazargan, an engineer who would play a central role in President Carter’s drama with Iran, were also arrested. They founded the world’s first Islamic party as an avowed liberation movement. Khomeini remained above politics, but the Islamic party supported him and developed a set of disciples.6
UNKNOWN UNKNOWNS
When Jimmy Carter was inaugurated on January 20, 1977, there was nothing apparent to the administration or our intelligence services—although there should have been—that there was any threat to the Shah’s continued rule, now well into its third decade. As the Cold War intensified, he had become the darling of presidents. An enormous pipeline of sophisticated military equipment, managed by Iran with help from Pentagon technicians, and paid for by Iranian oil, supported Iranian power as a Cold War barrier against the USSR and to stabilize the Middle East—$10 billion in arms in just the five years before Carter took office. Nixon and Kissinger, with good reason, staked the protection of U.S. interests in the Persian Gulf on the Shah, and that reliance was deeply embedded in the policy inherited by Carter. The Shah was handsome, with wavy graying hair; he was urbane, suave, well-spoken in fluent English and French, and had a beautiful young empress in his opulent palace and a summer retreat in the mountains above sweltering Tehran.
Because of the bipartisan consensus that put all of America’s eggs in the Shah’s basket, we did not issue one formal statement or draft one speech for Carter on Iran during the 1976 presidential campaign.
There was certainly no hint of wariness in the elaborate welcome for the Shah when he made a state visit in November 1977. We literally rolled out the red carpet at the White House. Uniformed military buglers welcomed him from the Truman Balcony, along with the Marine Band, and a podium for the Shah and the president to speak was erected on the South Lawn. But trouble was brewing. A well-organized Iran Student Movement, drawn from some 60,000 Iranian students in the United States, donned masks against identification by SAVAK and began demonstrations in Lafayette Park across from the White House for a week before the Shah’s arrival. The Iranian Embassy helped organize counterdemonstrations, with frequent clashes and competing bullhorns.
To be closer to the ceremonies, the warring student factions clashed at the Ellipse, just south of the White House, which is normally a quiet place, almost hermetically sealed against the noise of political storms. But it was impossible to ignore the week of angry riots or to avoid the tear gas loosed by the National Park Service during the Shah’s arrival. The prevailing wind blew it into the faces of the president and the Shah. The Shah was coughing during his remarks, and the president used a
handkerchief to wipe away tears. Carter made light of it during his toast at the formal state dinner that evening: “One thing I can say about the Shah; he knows how to draw a crowd.”7 Everyone laughed, but the events of the day presaged trouble.
Because Carter recognized the Shah’s crucial role as an American ally and supplier of half of Israel’s oil, he raised concerns about the Shah’s iron rule only in a private session after dinner in the small study next to the Oval Office. The Shah pressed for more advanced weapons. Carter tried to deflate his grandiose expectations by pointing out that Iran accounted for almost half of the $11.5 billion in American arms sales abroad.8 He also told the Shah that he believed SAVAK had attacked the demonstrators, that the Shah was making a serious mistake by clamping down so harshly, and urged him to reach out to dissident groups. Carter remembered that the Shah “completely contradicted” him: “I’m doing what needs to be done against these Communist demonstrators, and the rest of you leaders in the Western world are making a foolish mistake to condemn them.” This was the first time Carter had touched on human rights with the Shah, who resented his interference. He believed the Shah was “singularly isolated; he was on a pedestal and he didn’t understand what was going on in his country,” believing the dissidents represented only a tiny minority.9
But it was almost another year before Brzezinski began to suspect that he was not getting the full story from American intelligence. In the autumn of 1978, Brzezinski complained to the president about poor intelligence from the CIA and recommended Carter send a note to CIA Director Turner, whose remit included improving the agency’s analytical capabilities. To avoid making it appear that he was pointing a finger solely at Turner, Brzezinski recommended the personal note also go to him and Vance.10 Carter did so, saying he was “dissatisfied with the quality of political intelligence” on Iran. Remarkably, the note was leaked to the press and caused a firestorm.11 The concerns were justified.
President Carter Page 87
