Exclusive: Iran and world powers have gone into double-overtime in negotiations to ensure that Iran doesn’t build a nuclear bomb, but the shadow over the talks is darkened by decades of distrust and double-dealing, a dimly understood history of the U.S.-Israeli-Iranian triangle, reports Robert Parry.

By Robert Parry

As Israeli Prime Minister Benjamin Netanyahu continues to accuse Iran’s Islamic State of seeking Israel’s destruction and U.S. neocons talk openly about bombing Iran the history of Israel’s cooperative dealings with Iran, including after the ouster of the Shah and the rise of Ayatollah Ruhollah Khomeini in 1979, seems to have been forgotten.

Yet, this background is important when evaluating some of Iran’s current political players and their attitudes regarding a possible deal with world powers to limit Iran’s nuclear program to peaceful purposes only. In the United States and Israel for their own politically sensitive reasons much of this history remains “lost” or little known.

The division inside Iran between leading figures who collaborated with the U.S. and Israel behind the scenes and those who resisted those secret dealings took shape in the early 1980s but remains in place, to some degree, to this day.

For instance, Ayatollah Ali Khamenei, the country’s current Supreme Leader, was more the ideological purist in 1980, apparently opposing any unorthodox strategy involving Israeli and Republican emissaries that went behind President Jimmy Carter’s back to gain promises of weapons from Israel and the future Reagan administration.

Khamenei appears to have favored a more straightforward arrangement with the Carter administration for settling the dispute over the 52 American hostages who were seized from the U.S. Embassy in Tehran on Nov. 4, 1979, by Iranian radicals.

However, other key political figures including Ali Akbar Hashemi Rafsanjani and Mehdi Karoubi participated in the secret contacts with the Republicans and Israel to get the military supplies needed to fight the war with Iraq, which began in September 1980. They were later joined by Prime Minister Mir Hossein Mousavi.

In 1980, these internal Iranian differences played out against a dramatic backdrop. Iranian radicals still held the 52 hostages; President Carter had imposed an arms embargo while negotiating for the hostages’ release; and he was struggling to fend off a strong campaign challenge from Republican Ronald Reagan.

Meanwhile, Israel’s Likud Prime Minister Menachem Begin was furious at Carter for pushing him into the Camp David peace deal with Egyptian President Anwar Sadat that required Israel returning the Sinai to Egypt in exchange for normalized relations.

Begin also was upset at Carter’s perceived failure to protect the Shah of Iran, who had been an Israeli strategic ally. Begin was worried, too, about the growing influence of Saddam Hussein’s Iraq as it massed troops along the Iranian border.

At that time, Saudi Arabia was encouraging Sunni-ruled Iraq to attack Shiite-ruled Iran in a revival of the Sunni-Shiite conflict which dated back to the Seventh Century succession struggle after the death of the Prophet Mohammad. The Saudi prince-playboys were worried about the possible spread of the ascetic revolutionary movement pushed by Iran’s new ruler, Ayatollah Khomeini.

Upsetting Carter

Determined to help Iran counter Iraq and hopeful about rebuilding at least covert ties to Tehran Begin’s government cleared the first small shipments of U.S. military supplies to Iran in spring 1980, including 300 tires for Iran’s U.S.-manufactured jet fighters. Soon, Carter learned about the covert shipments and lodged an angry complaint.

“There had been a rather tense discussion between President Carter and Prime Minister Begin in the spring of 1980 in which the President made clear that the Israelis had to stop that, and that we knew that they were doing it, and that we would not allow it to continue, at least not allow it to continue privately and without the knowledge of the American people,” Carter’s press secretary Jody Powell told me in an interview for a PBS documentary.

“And it stopped,” Powell said — at least, it stopped temporarily.

Questioned by congressional investigators a dozen years later, Carter said he felt that by April 1980, “Israel cast their lot with Reagan,” according to notes I found among the unpublished documents in the files of a congressional investigation conducted in 1992. Carter traced the Israeli opposition to his possible reelection in 1980 to a “lingering concern [among] Jewish leaders that I was too friendly with Arabs.”

Carter’s National Security Adviser Zbigniew Brzezinski also recognized the Israeli hostility. Brzezinski said the Carter White House was well aware that the Begin government had “an obvious preference for a Reagan victory.”

Begin’s alarm about a possible Carter second term was described, too, by Israeli intelligence and foreign affairs official David Kimche in his 1991 book, The Last Option. Kimche wrote that Begin’s government believed that Carter was overly sympathetic to the Palestinian cause and was conspiring with Arabs to force Israel to withdraw from the West Bank.

“Begin was being set up for diplomatic slaughter by the master butchers in Washington,” Kimche wrote. “They had, moreover, the apparent blessing of the two presidents, Carter and [Egyptian President Anwar] Sadat, for this bizarre and clumsy attempt at collusion designed to force Israel to abandon her refusal to withdraw from territories occupied in 1967, including Jerusalem, and to agree to the establishment of a Palestinian state.”

Extensive evidence now exists that Begin’s preference for a Reagan victory led Israelis to join in a covert operation with Republicans to contact Iranian leaders behind Carter’s back and delay release of the 52 American hostages until after Reagan defeated Carter in November 1980.

That controversy, known as the “October Surprise” case, and its sequel, the Iran-Contra scandal in the mid-1980s, involved clandestine ties between leading figures in Iran and U.S. and Israeli officials who supplied Iran with missiles and other weaponry for its war with Iraq. The Iran-Iraq conflict began simmering in spring 1980 and broke into full-scale war in September.

More Straightforward

Khamenei, who was then an influential aide to Ayatollah Khomeini, appears to have been part of a contingent exploring ways to resolve the hostage dispute with Carter.

According to Army Col. Charles Wesley Scott, who was one of the 52 hostages, Khamenei visited him on May 1, 1980, at the old U.S. consulate in Tabriz to ask whether milder demands from Iran to the Carter administration might lead to a resolution of the hostage impasse and allow the resumption of U.S. military supplies, former National Security Council aide Gary Sick reported in his book October Surprise.

“You’re asking the wrong man,” Scott replied, noting that he had been out of touch with his government during his five months of captivity before adding that he doubted the Carter administration would be eager to resume military shipments quickly.

“Frankly, my guess is that it will be a long time before you’ll get any cooperation on spare parts from America, after what you’ve done and continue to do to us,” Scott said he told Khamenei.

But Khamenei’s outreach to a captive U.S. military officer outlining terms that then became the basis of a near settlement of the crisis with the Carter administration in September 1980 suggests that Khamenei favored a more traditional approach toward resolving the hostage crisis rather than the parallel channel that soon involved the Israelis and the Republicans.

In that narrow sense, Khamenei was allied with Abolhassan Bani-Sadr, the sitting Iranian president in 1980 who also has said he opposed dealing with Israel and the Republicans behind President Carter’s back. In a little-noticed letter to the U.S. Congress, dated Dec. 17, 1992, Bani-Sadr said he first learned of the Republican hostage initiative in July 1980.

Bani-Sadr said a nephew of Ayatollah Khomeini returned from a meeting with an Iranian banker, Cyrus Hashemi, who had led the Carter administration to believe he was helping broker a hostage release but who had close ties to Reagan’s campaign chief William Casey and to Casey’s business associate, John Shaheen.

Bani-Sadr said the message from the Khomeini emissary was clear: the Reagan campaign was in league with some of the Central Intelligence Agency’s pro-Republican elements in an effort to undermine Carter and wanted Iran’s help. Bani-Sadr said the emissary “told me that if I do not accept this proposal they [the Republicans] would make the same offer to my rivals.”

The emissary added that the Republicans “have enormous influence in the CIA,” Bani-Sadr wrote. “Lastly, he told me my refusal of their offer would result in my elimination.”

Bani-Sadr said he resisted the GOP scheme, but the plan ultimately was accepted by Ayatollah Khomeini, who appears to have made up his mind around the time of Iraq’s invasion in mid-September 1980.

Clearing the Way

Khomeini’s approval meant the end of the initiative that Khamenei had outlined to Col. Scott, which was being pursued with Carter’s representatives in West Germany before Iraq launched its attack. Khomeini’s blessing allowed Rafsanjani, Karoubi and later Mousavi to proceed with secret contacts that involved emissaries from the Reagan camp and the Israeli government.

The Republican-Israeli-Iranian agreement appears to have been sealed through a series of meetings that culminated in discussions in Paris arranged by the right-wing chief of French intelligence Alexandre deMarenches and allegedly involving Casey, vice presidential nominee (and former CIA Director) George H.W. Bush, CIA officer Robert Gates and other U.S. and Israeli representatives on one side and cleric Mehdi Karoubi and a team of Iranian representatives on the other.

Bush, Gates and Karoubi all have denied participating in the meeting (Karoubi did so in an interview with me in Tehran in 1990). But deMarenches admitted arranging the Paris conclave to his biographer, former New York Times correspondent David Andelman.

Andelman said deMarenches ordered that the secret meeting be kept out of his memoir because the story could otherwise damage the reputation of his friends, William Casey and George H.W. Bush. At the time of Andelman’s work on the memoir in 1991, Bush was running for re-election as President of the United States.

Andelman’s sworn testimony in December 1992 to a House task force assigned to examine the October Surprise controversy buttressed longstanding claims from international intelligence operatives about a Paris meeting involving Casey and Bush.

Besides the testimony from intelligence operatives, including Israeli military intelligence officer Ari Ben-Menashe, there was contemporaneous knowledge of the alleged Bush-to-Paris trip by Chicago Tribune reporter John Maclean, son of author Norman Maclean who wrote A River Runs Through It.

Maclean said a well-placed Republican source told him in mid-October 1980 about Bush’s secret trip to Paris to meet with Iranians on the U.S. hostage issue. Maclean passed on that information to State Department official David Henderson, who recalled the date as Oct. 18, 1980.

Since Maclean had never written a story about the leak and Henderson didn’t mentioned it until Congress started its cursory October Surprise investigation in 1991, the Maclean-Henderson conversation had been locked in a kind of time capsule.

One could not accuse Maclean of concocting the Bush-to-Paris allegation for some ulterior motive, since he hadn’t used it in 1980, nor had he volunteered it a decade later. He only confirmed it, grudgingly, when approached by a researcher working with me on a PBS Frontline documentary and in a subsequent videotaped interview with me.

Also, alibis that were later concocted for Casey and Bush supposedly to prove they could not have traveled to the alleged overseas meetings either collapsed under close scrutiny or had serious holes. [For details on the October Surprise case, see Robert Parry’s Secrecy & Privilege and America’s Stolen Narrative.]

Military Shipments

Though the precise details of the October Surprise case remain murky, it is a historic fact that Carter failed to resolve the hostage crisis before losing in a surprising landslide to Reagan and that the hostages were not released until Reagan and Bush were sworn in on Jan. 20, 1981.

It also is clear that U.S. military supplies were soon moving to Iran via Israeli middlemen with the approval of the new Reagan administration.

In a PBS interview, Nicholas Veliotes, Reagan’s assistant secretary of state for the Middle East, said he first discovered the secret arms pipeline to Iran when an Israeli weapons flight was shot down over the Soviet Union on July 18, 1981, after straying off course on its third mission to deliver U.S. military supplies from Israel to Iran via Larnaca, Cyprus.

“It was clear to me after my conversations with people on high that indeed we had agreed that the Israelis could transship to Iran some American-origin military equipment,” Veliotes said.

In checking out the Israeli flight, Veliotes came to believe that the Reagan-Bush camp’s dealings with Iran dated back to before the 1980 election.

“It seems to have started in earnest in the period probably prior to the election of 1980, as the Israelis had identified who would become the new players in the national security area in the Reagan administration,” Veliotes said. “And I understand some contacts were made at that time.”

In the early 1980s, the players in Iran also experienced a shakeup. Bani-Sadr was ousted in 1981 and fled for his life; he was replaced as president by Khamenei; Mousavi was named prime minister; Rafsanjani consolidated his financial and political power as speaker of the Majlis; and Karoubi became a powerful figure in Iran’s military-and-foreign-policy establishment.

Besides tapping into stockpiles of U.S.-made weaponry, the Israelis arranged shipments from third countries, including Poland, according to Israeli intelligence officer Ben-Menashe, who described his work on the arms pipeline in his 1992 book, Profits of War.

Since representatives of Likud had initiated the arms-middleman role for Iran, the profits flowed into coffers that the right-wing party controlled, a situation that allowed Likud to invest in Jewish settlements in the West Bank and created envy inside the rival Labor Party especially after it gained a share of power in the 1984 elections, said Ben-Menashe, who worked with Likud.

The Iran-Contra Case

According to this analysis, Labor’s desire to open its own arms channel to Iran laid the groundwork for the Iran-Contra scandal, as the government of Prime Minister Shimon Peres tapped into the emerging neoconservative network inside the Reagan administration on one hand and began making his own contacts to Iran’s leadership on the other.

Reagan’s National Security Adviser Robert McFarlane, who had close ties to the Israeli leadership, collaborated with Peres’s aide Amiram Nir and with neocon intellectual (and National Security Council consultant) Michael Ledeen in spring 1985 to make contact with the Iranians.

Ledeen’s chief intermediary to Iran was a businessman named Manucher Ghorbanifar, who was held in disdain by the CIA as a fabricator but claimed he represented high-ranking Iranians who favored improved relations with the United States and were eager for American weapons.

Ghorbanifar’s chief contact, as identified in official Iran-Contra records, was Mohsen Kangarlu, who worked as an aide to Prime Minister Mousavi, according to Israeli journalist Ronen Bergman in his 2008 book, The Secret War with Iran.

However, Ghorbanifar’s real backer inside Iran appears to have been Mousavi himself. According to a Time magazine article from January 1987, Ghorbanifar “became a trusted friend and kitchen adviser to Mir Hussein Mousavi, Prime Minister in the Khomeini government.”

In November 1985, at a key moment in the Iran-Contra scandal as one of the early missile shipments via Israel went awry, Ghorbanifar conveyed Mousavi’s anger to the White House.

“On or about November 25, 1985, Ledeen received a frantic phone call from Ghorbanifar, asking him to relay a message from the prime minister of Iran to President Reagan regarding the shipment of the wrong type of HAWKs,” according to Iran-Contra special prosecutor Lawrence Walsh’s Final Report.

“Ledeen said the message essentially was ‘we’ve been holding up our part of the bargain, and here you people are now cheating us and tricking us and deceiving us and you had better correct this situation right away.’”

Earlier in the process, Ghorbanifar had dangled the possibility of McFarlane meeting with high-level Iranian officials, including Mousavi and Rafsanjani. Another one of Ghorbanifar’s Iranian contacts was Hassan Karoubi, the brother of Mehdi Karoubi. Hassan Karoubi met with Ghorbanifar and Ledeen in Geneva in late October 1985 regarding missile shipments in exchange for Iranian help in getting a group of U.S. hostages freed in Lebanon, according to Walsh’s report.

A Split Leadership

As Ben-Menashe describes the maneuvering in Tehran, the basic split in the Iranian leadership put then-President Khamenei on the ideologically purist side of rejecting U.S.-Israeli military help and Rafsanjani, Mousavi and Mehdi Karoubi in favor of exploiting those openings in a pragmatic way to better fight the war with Iraq.

The key decider during this period as in the October Surprise phase was Ayatollah Khomeini, who agreed with the pragmatists on the need to get as much materiel from the Americans and the Israelis as possible, Ben-Menashe told me in a 2009 interview from his home in Canada.

Ben-Menashe said Rafsanjani and most other senior Iranian officials were satisfied dealing with the original (Likud) Israeli channel and were offended by the Reagan administration’s double game of tilting toward Iraq with military and intelligence support while also offering weapons deals to Iran via the second (Labor) channel.

The ex-Israeli intelligence officer said the Iranians were especially thankful in 1985-86 when the Likud channel secured SCUD missiles from Poland so Iran could respond to SCUD attacks that Iraq had launched against Iranian cities.

“After that (transaction), I got access to the highest authorities” in Iran, Ben-Menashe said, including a personal meeting with Mousavi at which Ben-Menashe said he learned that Mousavi knew the history of the Israeli-arranged shipments in the October Surprise deal of 1980.

Ben-Menashe quoted Mousavi as saying, “we did everything you guys wanted. We got rid of the Democrats. We did everything we could, but the Americans aren’t delivering [and] they are dealing with the Iraqis.”

In that account, the Iranian leadership in 1980 viewed its agreement to delay the release of the U.S. Embassy hostages not primarily as a favor to the Republicans, but to the Israelis who were considered the key for Iran to get the necessary military supplies for its war with Iraq.

Israeli attitudes toward Iran soured when the lucrative arms pipelines of the Iran-Iraq War dried up after the conflict finally ended in 1988. Iran’s treasury was depleted as was the treasury of Iraq, where Saddam Hussein lashed out at one of his oil-rich creditors, the Kuwaiti royal family, in 1990, invading the country and setting the stage for a U.S.-led Persian Gulf War that drove the Iraqis out of Kuwait.

With Iraq burdened by post-war sanctions and its military might restricted by weapons inspectors, Israel began to view Iran as its principal regional threat, a view shared by the wealthy Saudis. That common viewpoint gradually created the basis for a de facto Israeli-Saudi alliance which has begun to come out of the shadows in recent years. [See Consortiumnews.com’s “Deciphering the Mideast Chaos.”]

Meanwhile, in Iran, this half-hidden history of double-dealing and back-stabbing remains part of the narrative of distrust that continues to afflict U.S.-Iranian relations. Even 35 years later, some of the same Iranian players are still around.

Though Mousavi and Karoubi fell out of favor when they were associated with the Western-backed Green Movement in 2009, Rafsanjani has remained an influential political figure and Khameini replaced the late Ayatollah Khomeini as Iran’s Supreme Leader. That makes him the most important figure in Iran regarding whether to accept a U.S.-brokered deal limiting Iran’s nuclear program — or not.

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com). You also can order Robert Parry’s trilogy on the Bush Family and its connections to various right-wing operatives for only $34. The trilogy includes America’s Stolen Narrative. For details on this offer, click here.