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Overthrow of the Iranian Government

One of the best known covert actions of the Central Intelligence Agency (CIA) was its role in the 1953 overthrow of the Iranian government headed by Mohammed Mossadegh and the subsequent installation of the Shah in to power. While it is true that the coup was successful in large part due to CIA money, materials and strategy, it is also true that the CIA did not act alone. To the contrary, the British plotted the coup and did not propose making the overthrow a joint venture with the CIA until a year after the government began discussions on this prospect.

But before the CIA involvement in the overthrow of Mossadegh is discussed, it would be beneficial to examine the events that led the British to decide that Iran needed a new government.

In the late nineteenth and early twentieth century, Great Britain began a new wave of imperialism, focusing on areas in the Middle East strategic to enhance their trade. Persia (which wasn’t known as Iran until 1935) was one of the countries in which Britain gained enormous power and influence. This power was derived from its control of Persia’s main export product, oil, through the Anglo Iranian Oil Company (AIOC). Iranian oil had become crucial to Great Britain during World War II, and Britain’s control over the oil in the postwar years was an essential source of revenue for the British. Not only did the company (and Britain by extension) make money from the sale of oil, but also from the taxes it levied on Iran. In 1950, AIOC made 170 million pounds from oil sale and an amount equal to 30% of the profits in taxes.

Of course this wealth was acquired at the expense of the Iranians, whom had no control over their largest export, were only receiving around 10% of the profits made from their resources and worked the oil fields for very little pay. It therefore should have come as little surprise when Mossadegh announced his plan to nationalize Iranian oil production when he became Prime Minister in 1951. This plan was made law in May of 1951, only a month later.

Even though he had said he would offset the losses of the AIOC, this new law led to the British decision to remove Mossadegh from power. The only offers that would appease the oil company were either a new oil settlement or payments to make up for profit losses that the company would face. But Mossadegh’s spirit of nationalism was strong and he remained firm on his stance.

The British policymakers felt that they had three ways in which they could handle the threat of nationalization of Iranian oil production: they could stop oil production and hope that the negative economic consequences would bring the Iranians back to the discussion table, they could plot a coup to install a government friendly to British interests or they could take direct military action.

The British did halt the oil production. No oil was produced from this time until the 1953 coup, and the impact on the Iranian economy was disastrous. This, however, was not enough to break the will of Mossadegh. Britain did begin preparations for war with Iran, but abandoned this idea when they realized that they could not get sufficient military personnel to the area quickly and it was a possibility that Iran could defend itself against the small amount of troops that were already there.

So the British decided to supplement their economic pressure with the installation of a new Iranian government. Government discussions concerning the logistics of the coup began in September of 1951, and in November of 1952 MI6 and the Foreign Office Team approached the CIA to discuss cooperation in the coup. Until the Eisenhower administration the US government was in favor of Mossadegh, as they viewed his government as a balance to Soviet influence in the area. But Eisenhower’s administration was weary of nationalism in the third world, sympathetic to “oil interests” and concerned with what it perceived as the spread of communism. Due to this policy shift, the CIA agreed to help MI6.

The CIA and MI6 came up with the strategy to stage a mass demonstration in the streets of Tehran. The protesters, who were paid to protest using MI6 and CIA funds, were depicted as Tudeh (Iran’s communist party) supporters in the media. This way the military, supplied with guns, trucks and cars from the US military, would have a “suitable pretext” for coming into the city - to save Iran, a very religious society, from the threat of takeover by the godless communists.

The successful coup occurred in August of 1953, and the Shah assumed power as had been planned. The Shah’s dictatorship, marked by repression and torture of the Iranians, lasted nearly 26 years. He was ousted from power in 1979 by Muslim fundamentalists led by Ayatollah Khomeini.

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