by Jay Solomon
Copyright © 2016 by Jay Solomon
All rights reserved.
Published in the United States by Random House, an imprint and division of Penguin Random House LLC, New York.
RANDOM HOUSE and the HOUSE colophon are registered trademarks of Penguin Random House LLC.
LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA
NAMES: Solomon, Jay (Reporter)
TITLE: The Iran wars : spy games, bank battles, and the secret deals that reshaped the Middle East / Jay Solomon.
DESCRIPTION: New York : Random House, 2016. | Includes index.
IDENTIFIERS: LCCN 2016016783| ISBN 9780812993646 | ISBN 9780812993653 (ebook) Subjects: LCSH: United States—Foreign relations—Iran. | Iran—Foreign relations—United States. | Economic sanctions, American—Iran. | Nuclear weapons—Iran. | Nuclear arms control—Iran.
CLASSIFICATION: LCC DS63.2.I68 S65 2016 | DDC 327.1273055—dc23
LC record available at https://lccn.loc.gov/2016016783
Ebook ISBN 9780812993653
randomhousebooks.com
Frontispiece photograph by AP Photo/Mehr News Agency, Raouf Mohseni
Book design by Barbara M. Bachman, adapted for ebook
Cover photographs: © Rick Wilking/AFP/Getty Images (Javad Zarif and John Kerry); iStock Images (currencies); iStock Images (Capitol); © Chris Mellor/Getty Images (flag)
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Contents
Cover
Title Page
Copyright
CAST OF CHARACTERS
PROLOGUE: A DIPLOMATIC RUSE
CHAPTER 1: THE PERSIAN DOMINO
CHAPTER 2: THE MISSED CHANCE
CHAPTER 3: THE SHIITE CRESCENT
CHAPTER 4: THE AXIS OF RESISTANCE
CHAPTER 5: THE PHYSICS RESEARCH CENTER
CHAPTER 6: THE RIAL WAR
CHAPTER 7: THE CLENCHED FIST
CHAPTER 8: BLACK GOLD
CHAPTER 9: THE ARAB SPRING
CHAPTER 10: THE ROAD TO VIENNA
CHAPTER 11: KHAMENEI’S SHADOW
CONCLUSION: WAR AND PEACE
Dedication
ACKNOWLEDGMENTS
NOTES
About the Author
Cast of Characters
THE DIPLOMATS
John Kerry, secretary of state, 2013–
Hillary Clinton, secretary of state, 2009–2013
Jake Sullivan, special envoy to Iran, 2012–2014
William Burns, deputy secretary of state, 2011–2014
Wendy Sherman, undersecretary of state, 2011–2015
Ernest Moniz, secretary of energy, 2013–
Javad Zarif, foreign minister of Islamic Republic of Iran, 2013–
Abbas Araghchi, deputy foreign minister of Islamic Republic of Iran, 2013–
Qaboos bin Said al Said, sultan of Oman
Salem ben Nasser al-Ismaily, sultan of Oman’s special envoy to Iran
THE FINANCIAL WARRIORS
Stuart Levey, undersecretary of treasury for terrorism and financial intelligence, 2004–2011
Adam Szubin, director of Treasury Department’s Office of Foreign Assets Control, 2006–2015
Robert Morgenthau, New York County district attorney, 1975–2009
Steve Perles, founder of Perles Law Firm
Akbar Komijani, deputy governor of Bank Markazi
Mark Dubowitz, executive director of Foundation for Defense of Democracies
THE NUCLEAR PLAYERS
Mohsen Fakhrizadeh, former head of Iran’s Physics Research Center
Fereydoun Abbasi-Davani, director of Atomic Energy Organization of Iran, 2011–2013
Ali Akbar Salehi, foreign minister of Iran, 2010–2013; head of Atomic Energy Organization of Iran, 2013–
Mohamed ElBaradei, director general of International Atomic Energy Organization, 1997–2009
Yukiya Amano, director general of International Atomic Energy Organization, 2009—
Olli Heinonen, deputy director general of International Atomic Energy Agency, 2005–2010
Benjamin Netanyahu, prime minister of Israel, 2009–
Mahmoud Ahmadinejad, president of Iran, 2005–2013
Alireza Jafarzadeh, Washington spokesman for the Mujahedin-e Khalq
David Albright, president of the Institute for Science and International Security
THE AXIS OF RESISTANCE
Ayatollah Ali Khamenei, supreme leader of the Islamic Republic of Iran
Bashar al-Assad, president of Syrian Arab Republic
Hassan Nasrallah, secretary general of Hezbollah
Khaled Meshaal, chairman of Hamas Political Bureau
Imad Mugniyah, late Hezbollah military commander
Mustafa Badreddine, late Hezbollah military commander
SPY MASTERS
Major General Qasem Soleimani, commander of Revolutionary Guard’s Qods Force
General Abdul Reza Shahlai, a deputy commander of Qods Force
Henry Crumpton, deputy chief of CIA’s Counterterrorism Center, 1999–2001
Gary Berntsen, leader of CIA’s Jawbreaker operation in Afghanistan, 2001–2002
David Petraeus, commander of Multi-National Force in Iraq, 2007–2008; CIA director, 2011–2012
Zalmay Khalilzad, senior director at National Security Council, 2001–2003; ambassador to Afghanistan, 2003–2005, and to Iraq, 2005–2007
James Dobbins, State Department special envoy on Afghanistan, 2001–2002, 2013–2014
Prologue
A Diplomatic Ruse
Since the 1980s, the Islamic Republic of Iran steadily, though erratically, developed the technologies needed to build nuclear weapons. Though the West constructed expansive defenses to stop these advances, it achieved only limited success. This would all change during the second term of President Barack Obama.
On September 26, 2013, Secretary of State John Kerry, just six months on the job, attended his first international meeting on the Iran nuclear crisis in a dilapidated conference room at the United Nations headquarters in New York. The top diplomats of the five permanent members of the UN Security Council—the United States, Russia, China, France, and the United Kingdom—plus representatives from Germany and the European Union gathered around the table to reach a major advance toward making a nuclear deal with Iran, or so they thought. On Kerry’s left sat the Iranian delegation, headed by its U.S.-educated foreign minister, Javad Zarif, known for his impeccable English and disarming smile. The wooden conference table was bathed in an eclectic mix of purple, red, and gray reflecting off the room’s decades-old wallpaper. Journalists from across the globe jammed into stakeout positions outside the hall anticipating the results of the highest-level meeting ever between diplomats from Washington and the Islamic Republic. Circumstances seemed ripe for a thaw in their relations.
The meeting between Iran and the so-called P5+1 diplomatic bloc was also the first opportunity for the two sides to discuss their positions on the nuclear talks since Kerry’s appointment and the election of the moderate Iranian president Hassan Rouhani three months earlier in Tehran. Years of failed talks had stoked real fears in the Obama White House and Europe that Israel might attack Iran’s nuclear facilities. This meeting, the diplomats hoped, could ward that off. The Iranian politician and cleric had won the vote on a pledge to improve his country’s ties with the West and end Iran’s economic isolation. U.S.-led sanctions, aimed at curbing Tehran’s nuclear program by targeting oil profits held in banks around the world, were crippling Iran’s economy. The penalties cut Iran’s oil revenues in half and diminished the value of its currency, the rial, by two-thirds. Aides to Rouhani privately warned the president that their country could run short of hard currency and face a crisis if Tehran wasn’t able
to quickly get its hands on tens of billions of dollars of oil revenue frozen in Asian, European, and Middle Eastern bank accounts. Iran’s Islamic revolution, which Rouhani had championed since his twenties, was in jeopardy.
Zarif didn’t let on to the dire state of Iran’s finances and made a self-assured presentation to the room, according to diplomats who took part in the meeting. He described the standoff over Iran’s nuclear program, which had dragged on for nearly a decade, as a “manufactured crisis.” He said his government had no intention of developing nuclear weapons and that it was willing to allow international inspectors from the UN significantly more access to Iran’s nuclear sites. Tehran was also willing to diminish its stockpiles of nuclear fuel, which included enough medium-enriched uranium for at least two nuclear weapons. He said a deal should be easy to put in place.
“We hope to be able to make progress toward resolving this issue in a timely fashion based on respecting the rights of the Iranian people to nuclear technology for peaceful purposes,” Zarif told reporters after the meeting. “At the same time, [we need to make] sure that there is no concern at the international level that Iran’s nuclear program is anything but peaceful.”
Kerry and Zarif, however, weren’t exactly being straight with the foreign ministers assembled at the meeting or with the media outside, many of whom thought this meeting marked only a first step. The two statesmen, whose countries had been enemies for nearly four decades, were collaborating in an elaborate diplomatic ruse for the benefit of their presidents and, they believed, peace.
The meeting at the UN was a coming-out party. For more than two years already, Kerry had been secretly reaching out to Iranian leaders to attempt a compromise on a nuclear agreement. The former Democratic presidential candidate had started this secret diplomatic work in late 2011, while still serving as chairman of the Senate Foreign Relations Committee. He’d used the position for a range of other diplomatic missions, such as attempting to broker a peace deal between Syria and Israel and mending U.S. ties with the mercurial Afghan leader Hamid Karzai. But his efforts on Iran were particularly high stakes and included secret trips to the Persian Gulf country of Oman, where he discussed building bridges to Iran with Oman’s sultan, Qaboos bin Said al Said. Oman’s monarch was one of the only Arab rulers who had strong ties to Tehran’s paramount political figure, Supreme Leader Ayatollah Ali Khamenei. Kerry sent messages to the ayatollah through the sultan’s offices, indicating that the United States was willing to make significant concessions on the nuclear dispute, which had remained deadlocked since Tehran’s vast infrastructure was revealed in 2002.
The standoff focused more than anything else on Iran’s demands that it had the right to produce nuclear fuel on its soil through the enrichment of uranium. The technology was threatening international stability because it could be used both for powering a nuclear reactor and for producing the core of an atomic weapon. Kerry indicated to Khamenei for the first time that the United States could accept Iran enriching uranium, provided significant monitoring be put in place. Through the Omanis, the politician also discussed confidence-building measures with Iran, such as prisoner swaps and joint efforts to fight terrorism.
Kerry wasn’t acting alone, nor was he the only American going through Oman. His efforts bolstered President Barack Obama’s own secret initiative to have direct talks with the Iranian regime, which began at the start of his presidency in 2009—like Kerry’s meetings, initially behind the backs of the Security Council and the United States’ closest Middle East allies, including Israel and Saudi Arabia. In 2012, more than a year before Kerry, Zarif, and the rest of the P5+1 met in the conference room in New York, White House and State Department officials sat down with an Iranian delegation in the Omani capital, Muscat, in the first direct meeting between the United States and Iran on the nuclear issue since the revolution in 1979. Kerry was not present. That encounter was kept secret because of the White House’s fears that Israel and the Arab states, and their allies in Washington, might try to upend the diplomacy if they got word. The United States knew that any moves toward rapprochement between Washington and Tehran would be viewed as a threat to these countries, which feared a stronger Iran.
This first meeting made little progress. But the escalating U.S. sanctions on Iran and Rouhani’s election in June 2013 accelerated the diplomacy to the point where many of the terms of a framework for an accord were already agreed to by the time of the meeting at the United Nations in New York. Zarif hinted at some of the broad outlines of a deal to the P5+1. But neither he nor Kerry let their diplomatic partners know just how far the bilateral track had advanced, or how close they were to an initial nuclear agreement. “I think all of us were pleased that Foreign Minister Zarif came and made a presentation to us,” Kerry told reporters, giving no sign of a larger deal already in the works.
Exiting the meeting, Kerry and Zarif met privately in an adjacent room at the United Nations not much larger than a phone booth. A scheduled fifteen-minute meet-and-greet turned into a substantive forty-five-minute discussion. The two men exchanged personal email addresses and cellphone numbers to lay the groundwork for what they anticipated would be stepped-up negotiations in the ensuing months. Their staffs were instructed to do the same. Both men privately said they remained deeply skeptical of the other, due to their governments’ historical hostility. But at the same time, they expressed hope their efforts could forge a diplomatic thaw between the United States and Iran, ending more than forty years of estrangement.
—
THE SEPTEMBER 2013 MEETINGS in New York marked an important advance in a frantic period of direct diplomacy between Washington and Tehran that ultimately resulted in Iran and the P5+1 signing a landmark nuclear accord in July 2015. The deal was President Barack Obama’s signature foreign policy achievement. Some of his supporters equated it with Richard Nixon’s secret outreach to China in the 1970s that led to a normalization of relations between Washington and Beijing. It cooled a growing feud between Washington and Tehran that the White House believed risked escalating into a military confrontation. “The president and I both had a sense that we were on an automatic pilot towards a potential conflict, because no one wanted to talk to anybody or find out what was possible,” Kerry told me in an interview in early 2016. “I have no doubt we avoided a war. None.”
Iran, under the deal, agreed to cap or reduce large parts of its nuclear infrastructure, including the number of centrifuges enriching uranium as well as its stockpile of fissile material, for at least a decade. It also agreed to enhance the ability of the UN’s nuclear watchdog, the International Atomic Energy Agency (IAEA), to access and monitor Iran’s nuclear sites to guard against Tehran secretly developing atomic weapons. In return, the United States and Western countries rolled back the crippling economic sanctions they had imposed on Iran over the past decade.
President Obama, from his first days in office, pursued an opening to Iran and Supreme Leader Ali Khamenei with an obsessive commitment. The White House thought a link to Khamenei would be a critical step toward stabilizing the Middle East and avoiding another regional conflict. Tehran and its military proxies had tentacles spread into most Middle East countries, and they posed direct threats to U.S. allies in Israel, Saudi Arabia, and the United Arab Emirates. Obama sent at least four letters to Khamenei, called for better relations in speeches and national addresses to the Iranian people, and communicated to Tehran via third-party countries that the United States wasn’t seeking regime change in Iran. This marked a sharp reversal of the George W. Bush administration’s policy, which largely shunned Tehran and sought to keep it outside the diplomatic tent. Iran, for its part, undermined Bush’s major Middle East projects, including the wars in Iraq and Afghanistan and the peace process between Israel and the Palestinians, by backing anti-U.S. militias. Obama viewed détente with Shiite-dominant Iran as crucial to stopping the spread of nuclear weapons, calming the region, and underpinning efforts to counter radical Sunni groups such as t
he Islamic State and al Qaeda. He saw Iran as part of a solution. Rapprochement with Iran, the White House calculated, would aid the U.S. effort to pivot away from a foreign policy consumed by the Mideast to one focused more on the booming economies of Asia.
Obama’s hope for an opening was a first step on the way to the historic Iran nuclear deal, which ranks among the riskiest diplomatic bets made by an American president in modern U.S. history. Indeed, while the United States hopes the nuclear deal will curb the spread of nuclear weapons in the Mideast, there’s the threat it could fuel an arms race. Many of the terms of the agreement lapse after a decade, and Iran will then be allowed under international law to rapidly expand its nuclear program and produce weapons-grade fuel. Iran is also developing an expansive ballistic missile program. In preparation for these threats, Saudi Arabia and other Arab countries have vowed to match Iran’s nuclear and military capabilities over the next decade.
The agreement, what it took to get there, and the tens of billions of dollars now flowing to the Iranian regime could also undermine hopes for a democratic transition in Tehran. Millions of pro-democracy supporters took to the streets in 2009 to protest the allegedly fraudulent reelection of President Mahmoud Ahmadinejad. The political revolt was widely seen as the greatest opening for political reform since the country’s 1979 revolution. But President Obama and his advisors offered almost no support for the demonstrators out of fear that backing the protestors would diminish Khamenei’s willingness to hold direct negotiations on the nuclear dispute. Communications between the two leaders had already begun by then, and the moment for political change in Tehran passed. There are no guarantees, U.S. officials concede, that the nuclear agreement will breed more moderate Iranian behavior, and it could entrench the hard-line regime.
The story of the nuclear agreement, and the decade of U.S.-Iranian conflict that preceded it, marked a new era in the annals of U.S. national security and diplomacy. The Obama and George W. Bush administrations deployed weapons never used before against an enemy state. These included sanctions on Iran’s entire banking, transportation, and energy sectors and the deployment of cyber weapons, including the Stuxnet virus, which briefly crippled the Iranian centrifuges used to produce nuclear fuel. All of this was aimed at forcing Iran into negotiations on the nuclear issue. In many ways, the United States’ conflict with Iran created and fine-tuned new forms of American warfare that encompassed virtually every corner of the world.
