A Historical Example of Blowback: America, Iran, and How Operation Ajax Changed the World

The Clover Helix
www.thecloverhelix.blogspot.com
Tuesday, November 22, 2011

Official diplomatic relations between the U.S. and Persia (later renamed "Iran" in 1935) have existed since 1856 when the Shah, Naser al-Din Shah Qajar, sent an ambassador to Washington D.C. to initiate what became a period of almost 100 years of peaceful trade and mutual respect. Persia was anxious to modernize itself and liberalize her industrial and agricultural policies in an effort to ween herself peacefully from the scourge of British and Russian colonialism. Persia's leaders chose to follow the free market experiment that had become very successful in the United States. The United States, whose own origins were rooted in the rejection of British colonialism and acceptance of individual freedom, was becoming the largest economy in the world and had won the admiration of much of the Middle East for its successful rise (which, unlike the European powers, had occurred without colonial expansion). Like-minded Persian traders were eager to sell their goods into U.S. markets and imported American goods were used to raise the living conditions of Persia's rising middle class. American companies competed to build railways, educators founded secondary schools in Tehran, and American missionaries criss-crossed the country in an effort to spread Christianity. By 1906, Persia's cries for liberalization had reached a crescendo and a Constitutional Revolution erupted which swept in new reforms such as freedom of the press, equal rights before the law, and guarantees that all individuals (including foreigners) were to be safeguarded with respect to their lives, property, homes, and honor, from every kind of interference. The American influence on this constitution is undeniable. During this period of newly created constitutional monarchy, ties between the U.S. and Iran had grown so close that American lawyer, William Morgan Shuster, was appointed as the treasurer-general of Persia by the Persian parliament. The Russians, who resented Shuster's unapologetic pro-Persian presence and his open support for further constitutional reforms, occupied northern Iran in 1911 after the parliament refused to expel him. If there were two nations destined to be friendly with one another, it was the U.S. and Iran. So how is it that we come to this current situation of open hostility?

Shuster and other American officials are pictured above at Atabak Palace in 1911. Shuster is in the front row, third from the left

"[I]t was obvious that the people of Persia deserve much better than what they are getting, that they wanted us to succeed, but it was the British and the Russians who were determined not to let us succeed" William M. Shuster wrote in his book, The Strangling of Persia. Therefore, it is likely no surprise that America's political differences with Iran today stem from this era of financial and political colonialism. After Russia's Red Revolution of 1917, Britain sought to remove Russian forces from Persia in the name of halting Bolshevik expansionism and protecting its Imperial possessions in India. British efforts reached fruition with the Iranian coup of 1921 which culminated with the removal of the very inept monarch, Ahmad Shah Qajar, and installed the Pahlavi dynasty of Shahs, beginning with Reza Shah in 1925. During this time, the British monopolists controlled Persia's oil industry and dominated Iranian politics through military and financial coercion. Reza Shah became very nervous about British influence in national policy and began courting many of Britain's economic competitors. America, perceived by Iranians to be neutral in their disputes with Britain, forged new political and economic ties with Washington D.C. as Reza Shah pushed for even greater liberalization of the increasingly pro-American Iranian economy. Again, an American, Arthur Chester Millspaugh, was appointed as Administrator-General of Finances of Iran. Dr. Millspaugh was able to balance Iran's budget and get her financial books in order. During this time, Iran also acquired the right to issue its own currency from the British, largely at the urging of American advisors.

Iran also forged close diplomatic ties with Fascist Italy and Nazi Germany during this time in an effort to balance out British and Russian political influences. At the breakout of World War II, Germany was, by far, Iran's largest trading partner. During the war, it had become clear that Reza Shah, unsurprisingly, was sympathetic with the Germans against the Russians and British who had been meddling in Persia's internal affairs for hundreds of years. However, Reza Shah pronounced that Iran would remain neutral, just as the U.S. did, in the rapidly expanding war. The British and Russians, who found themselves as unlikely allies against Germany, sought to establish a supply line across neutral Iran and seize the oil fields. When the Iranian government rejected the Anglo-Russian request to use the Trans-Iranian railway as a supply route, they invaded Iran in August, 1941 and rapidly established the Persian Corridor. The British then forced Reza Shah to abdicate the throne in favor of his son, Mohammad Rezā Shāh Pahlavi, who would rule Iran until 1979. Under Mohammad Reza Shah, Iran declared war against Germany in 1943, the political motives for this being obvious. After the war, Allied troops left Iran and the Constitutional Monarchy was permitted to operate autonomously.

During World War II, the Soviet "allies" who occupied Iran established the communist Tudeh Party. After the war, the party grew rapidly inside Iran paralleling communist movements inside China, Korea, Indochina, and Eastern Europe. By the late 1940's the American CIA began clandestine propaganda efforts to disrupt the Tudeh Party, but by the early 1950's the party was hosting rallies with thousands in attendance. Though they had demanded many socialist reforms, the most relevant issue became the nationalization of Iran's oil fields. In 1933, Iran, then under Reza Shah, had signed a 60-year lease agreement with British-owned Anglo-Persian Oil Company (now called British Petroleum) which distributed approximately 20% of the net oil field profits to the treasury of Iran. The Iranians hated that deal from the start. Exacerbating the issue in 1950, word of a 50-50 agreement between American-owned Arabian American Oil Company and Saudi Arabia reached Iran, eliciting anger at the government and sympathy for the Tudeh Party which sought immediate oil field nationalization. By March, 1951 it had become clear that the British were not going to renegotiate the lease agreement, so the Iranian parliament voted to nationalize the Anglo-Persian (Iranian) Oil Company and all of its holdings. In April, 1951 under the terms of the national constitution, Mohammad Mosaddegh was democratically elected as Prime Minister of Iran to execute the plan for nationalization.

The response from the British was immediate: all Iranian oil was to be embargoed on International markets until the oilfields were restored. By August 1951, British warships were blockading Adaban, the largest oil refinery, and threatened to seize any Iranian oil shipments as stolen property. They also cut off shipments of sugar and steel to Iran and froze Iran's currency assets in Britain. Hawkish British lawmakers began pushing for an invasion of Iran to seize the oilfields.

Iran and Britain's mutual friend and ally, the United States, opposed intervention, especially militarily, but chose to honor Britain's embargo while tacitly supporting Iran in their dispute with the British oil monopoly. President Truman pressured the two nations to settle through the International Court of Justice where Iran eventually prevailed. The turning point came when Winston Churchill decided to "remind" Truman that if he needed British help in the Korean War which was then raging then he expected Anglo-American unity on Iran. He also tried to exploit America's sweeping paranoia brought about by the second Red Scare. As such, the decision by the International Court of Justice was rejected by the British and pressure began to grow on the U.S. to deal with this new communist "threat". The U.S. desperately wanted to keep Iran in the western sphere of influence considering its vast oil reserves, long strategic border with the Soviet Union, and close political ties.

Under the embargo, Iran's oil infrastructure began to deteriorate rapidly and joblessness began to destroy the economy. In spite of this Prime Minister Mosaddegh was viewed as a hero by most Iranians in his fight against the British oil trust. A referendum to dissolve parliament and empower Prime Minister Mosaddegh to be able to make laws was passed 2,043,300 votes to 1,300 votes against. The referendum result was short-lived. Nine days later, Mosaddegh was removed by a coup d'état that would eventually see the Shah, who had been briefly in exile, elevated to authoritarian levels of power.

Former Nazi General Fazlollah Zahedi (left) and Mohammad Rezā Shāh Pahlavi (right), Shah of Iran from 1941 until his fall in 1979. Photo taken in 1955.

Forced to chose between its strategic allies Britain and Iran, America eventually fell on the side of Britain. Operation Ajax was secretly orchestrated by the Eisenhower administration to overthrow Mohammad Mosaddegh, stop the expansion of communists in the Iranian government, and to stop the nationalization of the oil industry. Using the American Embassy as their base of operations, the CIA bribed politicians, diplomats, and street thugs to violently protest against Mosaddegh and then arrest him. The CIA then installed its own prime minister, General Fazlollah Zahedi. General Zahedi, who served as a central part of the operation, was a former Nazi who had been imprisoned for plotting the overthrow of the Constitutional Monarchy during World War II. He and several other former Nazis were later awarded high-ranking government posts in the areas of propaganda and oil services under the Shah. General Fazlollah would end his public career as Iran's Ambassador to the United Nations. In return for American help, the British agreed to break up the Iranian oil monopoly and allow foreign, especially American, oil companies to operate in Iran. They also agreed to supply Iran with a 25% contribution of oil revenues, an amount that was still half of what the Saudis were receiving.

The damage done to the international reputation of the United States amongst Middle Eastern nations was massive. The United States, long viewed as a political counterweight to British and Russian colonialism, was now seen as an enemy of Iranian Democracy and puppet supporter of the British Imperialism. The Shah, now armed with nearly limitless powers and western backing, disregarded the Iranian constitution and engaged in a ruthless campaign to destroy political dissent. Every abuse of power would be accounted to the Americans whom Iran had once looked to for friendship. If even the U.S. was not to be trusted, their clerics reasoned, then it was because it was the nature of western infidels to be untrustworthy. The Persian clerics were willingly ignorant that the American public also knew nothing of the CIA's role in Operation Ajax. Seeking moral answers in this worsening political and economic environment, the people of Iran began a period of religious radicalization that eventually led to the events of 1979.

By January 1979, the people of Iran had become so frustrated with the excesses and hubris of the Shah that he would be forced to flee from Iran, forever. President Jimmy Carter decided not to take the advice of the American Embassy in Tehran who requested that the Shah not be granted entrance to the United States; rather they advised he be returned to Iran to face charges of corruption. At the request of David Rockefeller and Henry Kissinger, President Carter reluctantly decided to admit the Shah on humanitarian grounds (the Shah was seeking treatment for cancer) and he was briefly admitted to a New York hospital. Convinced that America would try and reimpose the Shah on the country as had occurred in 1953, students stormed the American Embassy and took 52 American hostages on November 4, 1979. "You have no right to complain, because you took our whole country hostage in 1953” they said to the captured Americans. An ill-fated rescue attempt by the Carter administration resulted in the deaths of eight American servicemen. This further enflamed the Iranian public against the Carter administration. In 1980, in the midst of the hostage crisis, the Shah died of cancer in Egypt. The students, now equally as angry with Carter as the Shah, released the hostages just minutes after the swearing-in ceremony of President Ronald Reagan. The entire hostage ordeal lasted 444 days. However, the damage on Iran's side had been done.

Blindfolded American hostage in Iran, 1980. Images like this were omnipresent in western media for many years after the event had ended.

Whenever we read about modern strains in American-Iranian relations, the taking of the hostages in Tehran is almost always cited and the event has continued to spark American outrage ever since. But rarely do we ever hear mention of the 1953 overthrow and the 26 years of despotic rule at the hands of the Shah and former Nazis, or of the CIA's involvement therein. Nor do we ever hear about the 10 months that the American Embassy operated in Tehran during the Islamic Revolution until the Shah was admitted into New York.

Today, some of the hostage takers are leaders in Iran's theocratic republic. But are these leaders any worse than the Nazis and despots we saddled them with in 1953 in America's blind support of British colonialism? Are we making the same blunders in our blind support for Israel's foreign policy? Today, the CIA would say no and yes, respectively.

Operation Ajax and the taking of the hostages in Tehran are inexorably linked to one another in history. In the meantime, Iran and America, former friends in liberty and mutual respect, continue to build additional cases for going to war with each other.

If there is a clearer example of blowback in American history, then I haven't found it.