The Devil's Chessboard

by David Talbot

  Accustomed to royal opulence and the slavish attentions of his court, the young shah seemed lost in exile. “We do not have much money,” the shah warned his wife, who as the daughter of a prominent Iranian diplomat was also used to a luxurious lifestyle. He told Soraya they would have to be “very careful” with their spending. Before they fled, he had even asked her whether they could sell some of their wedding gifts, which included a mink coat and a desk set with black diamonds from Joseph Stalin and a Steuben glass bowl designed by Sidney Waugh that had been sent by President Truman.

  During their first night at the Hotel Excelsior, the distraught shah paced the living room of their small suite, unable to sleep. He kept his personal pilot awake late into the night, fretting about the future that awaited him. The shah begged the pilot, one of only two retainers who accompanied the royal couple to Rome, to stay with him in exile. “Who is going to play tennis with me if you leave me?” asked the forlorn ruler.

  But the shah was far from abandoned as he and Queen Soraya took up residence at the Excelsior. The CIA, which had prevailed upon the Persian industrialist who owned the fourth-floor suite to make it available to the royal couple, was keeping the shah under its watchful care. The Iranian monarchs found their accommodations to their liking. The luxury hotel’s Belle Époque–era grandeur had been drawing royal guests since the turn of the twentieth century. In the 1950s, the hotel enjoyed a la dolce vita revival, attracting a new wave of kings and queens from Hollywood, including Humphrey Bogart and Lauren Bacall, and Audrey Hepburn and Gregory Peck. (John Wayne claimed that he scored his most memorable one-night stand at the Excelsior, with Marlene Dietrich. “I took her on the staircase,” he boasted.)

  The Excelsior had also become a favorite rendezvous spot for espionage agents from around the world, as well as Italian men of mystery. Licio Gelli—leader of Propaganda Due, the conspiratorial Masonic order whose intrigues undermined Italian democracy for many years—kept three adjoining rooms at the hotel. The discreet gentlemen who paid visits to Gelli—whose secret anti-Communist operations drew funding from the CIA—would enter Room 127, conduct business in Room 128, and then exit through Room 129.

  More important from the shah’s point of view, the Excelsior was also favored by Allen Dulles on his visits to Rome. That August, he and Clover were vacationing in Switzerland when the spymaster suddenly informed his wife they were leaving for Italy, and on the afternoon of August 18 the Dulleses checked into the Excelsior at the same time as the shah and Queen Soraya. Frank Wisner insisted the simultaneous arrival of the two couples was a complete coincidence. “They both showed up at the reception desk at the Excelsior at the very same moment,” Wisner told a CIA associate, with tongue undoubtedly firmly in cheek. “And Dulles had to say, ‘After you, Your Majesty.’”

  Dulles’s arrival in Rome was conveniently timed. By the following morning, the mobs running riot through the streets of Tehran were led and financed by the CIA—the final act in a covert drama aimed at overthrowing the democratically elected government of Prime Minister Mohammad Mossadegh and restoring the shah’s autocratic rule. Mossadegh, a dedicated patriot and wily survivor of Iran’s treacherous politics, had antagonized the British government by nationalizing the powerful Anglo-Iranian Oil Company (later renamed British Petroleum) soon after taking office in 1951. The British behemoth—the third-largest producer of crude oil in the world—ruled Iran with imperial arrogance for much of the twentieth century, crushing labor strikes in the hellish oil fields and propping up and replacing local regimes at will. Mossadegh’s defiant seizure of Iran’s oil treasure set off a global thunderclap. “By the end of the 1980s, most countries in the Middle East and North Africa, as well as Asia and Latin America, had nationalized their oil, and thus gained influence over world prices,” observed historian Ervand Abrahamian. “In the early 1950s, however, such a loss was seen as heralding the ‘end of civilization’—not only for Britain but also for consumers throughout the industrial world.”

  After Mossadegh’s bold move, the British spy agency MI6 began working strenuously to undermine his government. When the prime minister responded to the British plotting by shutting down the British embassy in Tehran and ejecting the ambassador, London turned to Washington for assistance.

  The Dulleses were more than willing to help. Through their law firm, the brothers had long ties to major U.S. oil companies like Standard Oil, which strongly supported the tough British stand against Mossadegh, with hopes of securing their own stake in the Iranian oil fields. Allen had another former client with a big interest in the Iranian oil dispute: the London-based J. Henry Schroder Banking Corporation, on whose board he served, was the financial agent for Anglo-Iranian Oil.

  The Dulles brothers had demonstrated their dedication to their former Sullivan and Cromwell petroleum clients soon after President Eisenhower took office by sabotaging a Justice Department antitrust case against the Seven Sisters oil giants. The price-fixing case against the oil cartel, a holdover from the Truman years, was reduced from a criminal to a civil charge and conveniently transferred to Foster Dulles’s jurisdiction, the first time in U.S. history that an antitrust case was handed over to the State Department for prosecution. Foster argued that the case had national security implications, and it quietly disappeared, leaving Big Oil unscathed.

  Furthermore, Allen Dulles had a business history with the shah. In 1949, while still employed as a Sullivan and Cromwell rainmaker, Dulles had flown to Tehran, where he met the shah and negotiated a stunningly lucrative deal on behalf of a new company called Overseas Consultants Inc., a consortium of eleven large U.S. engineering firms. Iran agreed to pay OCI a Croesus-like fortune of $650 million for which the consortium pledged to modernize the backward nation, building hydroelectric plants, importing industries, and transforming entire cities. “This would be the largest overseas development project in modern history,” noted Dulles biographer Stephen Kinzer. “It was the greatest triumph of Allen’s legal career. For Sullivan and Cromwell it opened a world of possibilities.”

  The shah realized that Allen Dulles could be an important ally. And indeed Dulles repaid the young ruler’s generosity by opening doors for him in New York and Washington. In November 1949, Dulles hosted an exclusive dinner party for the visiting potentate in the dining room of the Council on Foreign Relations. The shah’s remarks were music to the ears of the dinner guests. “My government and people are eager to welcome American capital, to give it all possible safeguards,” he assured them. “Nationalization of industry is not planned.”

  But the rise of Mossadegh and his National Front political alliance disrupted the dream of prosperity that the shah had spun for his privileged audience. Mossadegh’s coalition led the opposition to the OCI deal, which National Front leaders denounced as a massive giveaway that would “break the back of future generations.” This patriotic rhetoric stirred the passions of the Iranian people, whose fate had long been determined by foreign powers. In December 1950, Iran’s parliament voted not to fund the monumental development project, thereby killing the chances of Dulles and OCI for a huge payday and forever poisoning the spymaster’s perceptions of Mossadegh.

  Western observers found Mossadegh a perplexing character—strongly phobic to British colonial attitudes but touchingly hopeful about an alliance with the growing U.S. empire. The aging, balding leader was a mercurial personality, given to emotional outbursts and fainting spells. His long, mournful face gave him a funereal look, but he was capable of boyishly enthusiastic behavior. On a visit to Washington in October 1951, the new prime minister charmed Truman administration officials. Secretary of State Dean Acheson was tickled by his “delightfully childlike way of sitting in a chair with his legs tucked under him.”

  In the beginning, Eisenhower also seemed sympathetic to Mossadegh, who sent the president-elect a heartfelt note on the eve of his inauguration, bemoaning the economic blockade that Britain had imposed on Iran and asking for U.S. assistance. There was a beguilingly
innocent tone to the Iranian leader’s plea: “It is not my desire that the relations between the United States and the United Kingdom should be strained because of differences with regard to Iran. I doubt however whether in this day and age a great nation which has such an exalted moral standing in the world [as the U.S.] can afford to support the internationally immoral policy of a friend and ally. . . . The Iranian people merely desire to lead their own lives in their own way. They wish to maintain friendly relations with all other peoples. [But Anglo-Iranian Oil Company], which for years was engaged in exploiting [our] oil resources, unfortunately has persisted in interfering in the internal life of [our] country.”

  Eisenhower’s innate midwestern sense of decency initially made him recoil from backing Britain’s colonial siege of Iran. He rebuffed the Dulles brothers’ advice, suggesting that it might be a better idea to stabilize Mossadegh’s government with a $100 million loan than to topple it. If Eisenhower had followed through on his original instincts, the bedeviled history of U.S.-Iran relations would undoubtedly have taken a far different course.

  An air of tragic heroism clung to Mossadegh. When American envoys made a last-ditch effort to persuade him to appease the British oil giant, he proudly refused. The history of Iran’s leadership was plagued by cowardice and corruption, said Mossadegh, and he would not continue this sorry legacy. Anglo-Iranian Oil had already been offered fair compensation for its losses; Mossadegh would not compromise the resource rights of his country any further. If he cut a deal with the British, the prime minister told U.S. mediators, his reputation would be forever stained with the Iranian people, who would immediately assume that their nation had been sold out once more. Mossadegh’s adamant defense of Iranian sovereignty made him a beloved figure in his homeland, with a popular referendum at the height of the Iran crisis giving him nearly unanimous support.

  Realizing that Eisenhower was not inclined to defend British imperial interests, the Dulles brothers reframed their argument for intervention in Cold War terms. On March 4, 1953, Allen appeared at a National Security Council meeting in the White House armed with seven pages of alarming talking points. Iran was confronted with “a maturing revolutionary set-up,” he warned, and if the country fell into Communist hands, 60 percent of the free world’s oil would be controlled by Moscow. Oil and gasoline would have to be rationed at home, and U.S. military operations would have to be curtailed.

  In truth, the global crisis over Iran was not a Cold War conflict but a struggle “between imperialism and nationalism, between First and Third Worlds, between North and South, between developed industrial economies and underdeveloped countries dependent on exporting raw materials,” in the words of Ervand Abrahamian. Dulles made Mossadegh out to be a “stooge” of the Communists—but he was far from it. The scion of an aristocratic Persian family, the prime minister was educated in France and Switzerland, and tilted more toward the West than in the direction of Iran’s feared Soviet neighbor to the north. Mossadegh was a fervent nationalist, not a secret Communist—another Gandhi, in the assessment of one British foreign official, not a Mao. The Tudeh, Iran’s Communist Party, regarded Mossadegh with a decided wariness, viewing him as a “liberal bourgeois” with dangerous illusions about America. Mossadegh, in turn, relied on the Tudeh’s support when it suited him but kept his distance, seeing the party as too subservient to Moscow. Meanwhile, Soviet leadership remained reluctant to get too deeply involved in Iranian politics for fear of threatening the West’s interests there.

  But after weeks of intensive lobbying by the Dulles brothers and the British government, Eisenhower became convinced that Iran was a Cold War battleground and that Mossadegh had to go. In June 1953, Allen presented the CIA plan to overthrow Mossadegh’s government to his brother at a special meeting of national security policy makers held in Foster’s office.

  The coup plan had been drawn up by Kermit “Kim” Roosevelt Jr., Allen’s handpicked man to run the operation on the ground in Iran. The well-bred grandson of Theodore Roosevelt did not seem like the sort of cutthroat character to carry out such a disreputable task. Roosevelt was well regarded even by ideological enemies like Kim Philby. “Oddly enough, I dubbed [Roosevelt] ‘the quiet American’ five years before Graham Greene wrote his book,” Philby once noted. “He was a courteous, soft-spoken Easterner with impeccable social connections, well-educated rather than intellectual, pleasant and unassuming as host and guest. An equally nice wife. In fact, the last person you would expect to be up to the neck in dirty tricks.”

  Indeed, Roosevelt was taken aback by the blithe way that the fate of Iran’s democracy was discussed in Foster’s office that day. “This was a grave decision to have made,” he later observed. “In fact, I was morally certain that almost half of those present, if they had felt free or had the courage to speak, would have opposed the undertaking.”

  But the Dulles brothers had already made up their minds about Iran and they allowed no room for debate. And once the brothers fixed the administration on its fateful course, they were confident that they had the right man for the job. The Dulleses could see the ruthless streak beneath Kim Roosevelt’s smooth Groton and Harvard polish. Three years earlier, they had recruited Roosevelt to work in Iran as a lobbyist for their ill-fated Overseas Consultants Inc. deal. And for the past two years, he had been spearheading a secret CIA operation to organize an underground resistance network inside Iran, burying crates of guns and cash in the desert to distribute to tribal warriors in case of a Soviet invasion. Roosevelt now turned this clandestine effort against Iran’s elected government, hiring bands of mercenaries and paying military leaders to betray their country. When push came to shove, Kim Roosevelt revealed that he shared his grandfather’s enthusiasm for imperial misadventures.

  The U.S. and British intelligence operatives running the anti-Mossadegh operation were prepared to go to any lengths to accomplish their task. Key officials in the military and government who remained loyal to Mossadegh were kidnapped and murdered, such as General Mahmoud Afshartous, the officer in charge of purging the armed forces of traitorous elements. The general’s mangled corpse was found dumped on a roadside outside Tehran as a message to all officials who chose to stand by the prime minister. Other prominent loyalists had their throats slit and their bodies buried far away in the Alborz Mountains.

  In the end, as Tudeh Party leaders feared, Mossadegh was undone by his faith in the American government. The prime minister still controlled the streets of Tehran on August 18, with National Front and Tudeh militants roaming throughout the capital and toppling royal statues and other symbols of the shah’s rule. But after conferring with Roosevelt, U.S. ambassador Loy Henderson—the Dulles brothers’ other canny emissary in Iran—arranged a fateful meeting with Mossadegh. During the hourlong meeting, Henderson vehemently protested the anti-Western “mob attacks”—which he claimed had even threatened the U.S. embassy and assaulted his chauffeur. Henderson warned that if the prime minister did not restore order, the United States would have to evacuate all Americans and withdraw recognition of Mossadegh’s government. The gambit worked. Mossadegh “lost his nerve,” according to Henderson, and immediately ordered his police chief to clear the streets. It was, the U.S. diplomat later observed, “the old man’s fatal mistake.”

  With Mossadegh’s supporters off the streets, the CIA’s hired thugs were free to take their place, backed by rebellious elements of the military. On the morning of August 19, as Mossadegh huddled in his home at 109 Kakh Street with his advisers, tanks driven by pro-shah military officers and street gangs whose pockets were literally stuffed with CIA cash converged on the prime minister’s residence.

  For two hours, a firefight raged outside Mossadegh’s home, which was protected by three tanks commanded by officers loyal to the prime minister. But the rebel forces had two dozen tanks at their disposal, including two powerful U.S.-built Shermans, and the outcome was predictable. As shells tore into his residence, Mossadegh ordered his tank commander to cease fire.
The seventy-one-year-old prime minister and his top aides then scaled the wall to a neighboring house, barely escaping the wrath of the hired mob, which proceeded to smash down the green grill gate and ransack the official residence. One of the brave officers in charge of defending the prime minister was torn limb from limb by the rampaging mob. Soon after, Mossadegh and the other officials were arrested and imprisoned in a military barracks, thereby ending Iran’s brief interlude of democracy.

  Mohammad Mossadegh had been violently evicted from office, but the CIA coup could not be successfully completed until the shah returned home to reclaim his throne. As the coup got under way, Kim Roosevelt had worked frantically to prevent the shah from fleeing the country, telling him that it was his duty to stand with the rebel forces and assuring him of U.S. protection. But courage failed “the king of kings.” He was “a wimp,” in the candid estimation of Roosevelt, who had stuck it out in Iran even after the shah had taken flight and the CIA had told their intrepid agent that he should do the same.