The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

U.S. Policy toward Iran Takes a New Turn

Jul 21, 2006

On May 31, Secretary of State Condoleezza Rice announced that the U.S. was willing to engage in direct negotiations with the Iranian government. She repeated twice that the U.S. recognized the Iranian government’s right to nuclear technology. Secret documents that were later leaked to the press indicated that the U.S. was offering to lift—and not just suspend—long standing sanctions against Iran. The U.S. was ready to sell commercial jets, agricultural equipment, telecommunications technology. The U.S. was also ending its opposition to Iran’s membership in the WTO, as well as to loans from the World Bank and other big institutions.

Finally, the U.S. said it was ready to transfer nuclear technology to Iran, including the building of a light water reactor.

Formerly, the Bush administration had labeled the Iranian regime an original member of the “axis of evil.” Bush officials claimed that Iran was one of the most dangerous threats to the U.S. and “world peace.” The U.S. consistently maintained that Iran could not be trusted with nuclear technology, because it was bent on developing nuclear weapons, weapons of mass destruction (WMD). It accused Iran of supporting “terrorist” organizations like Hezbollah and Hamas, and terrorist bombings, such as the destruction of the Khobar Towers in Saudi Arabia.

The Bush administration’s offer of nuclear technology to Iran showed what these charges against Iran were: pure propaganda.

Of course, the Bush administration disguised its offer in all the usual bluster and bombast, which was duly hyped by the U.S. news media. It made a big deal about the U.S. setting a pre-condition to negotiations that Iran suspend all of its uranium enrichment. In fact, as a Los Angeles Times editorial noted a couple days later, this demand is little more than a face saving measure for Bush, to make it seem as if the U.S. were reining in the supposedly big nuclear threat. In reality, the U.S. had already assured the Iranians that this freeze would be temporary. Besides that, the Iranian government had already agreed to similar conditions during previous negotiations.

The U.S. government, along with its European partners and China, also made a big deal about threatening to punish Iran for “missing” a deadline for a formal response to the initial offer six weeks after the offer was made. Yet, a day after condemning Iran for missing the deadline, Bush publicly stated that the negotiations were going ahead. And reports in the Financial Times of London revealed that the Bush administration had assured the Iranians that they had more time. The deadline was always a fake, as was the threat.

Not even the Middle East crisis and the beginning of the war that Israel launched against Hamas and Hezbollah, that is, against the populations of Gaza and Lebanon, derailed the U.S. negotiations with Iran. While the U.S. condemned Iran for its support of Hamas and Hezbollah, it did not abruptly cut off negotiations, nor did it propose to punish Iran further with harsher sanctions.

No, behind the constant barrage of bombast and bluster, the preparations for a shift in relations between the U.S. and Iran were moving ahead.

The Policy Shift

Commentators might have described the Bush proposals to Iran as “sudden” or even “seismic,” but they had not at all come out of the blue.

The Bush administration had initiated this diplomatic process more than 18 months ago. In February 2005 Bush announced that his administration was dropping its official opposition to negotiations between the “EU-3” (France, Germany, and the United Kingdom) and Iran over Iran’s nuclear enrichment program. Previously, the U.S. had claimed that it didn’t want to have anything to do with these negotiations because it didn’t want to “reward Iran’s bad behavior.” But in February 2005, Bush returned from a trip to Europe saying that not only did the U.S. support the negotiations, but it wanted to broaden them to include such issues as supplying Iran with airplane spare parts and support for Iran’s membership in the WTO. For those who watch such things, this shift in the U.S. stance toward Iran could be seen in Bush’s 2006 “State of the Union” address. Certainly, Bush still played the tough guy, declaring that the U.S. would “continue to rally the world” to confront the supposed Iranian threat. But this was already a far cry from earlier threats that the U.S. made toward Iran, a charter member of “the axis of evil.”

During February and March, there were all the scare stories about how Iran was defying the United Nations by continuing to insist on its right to enrich uranium, along with the Bush administration’s threats that it was getting ready to bomb suspected Iranian nuclear sites—perhaps even with nuclear “bunker busters”! But when push came to shove, the U.S. did not force the issue. On the contrary, when the matter of Iran’s supposed defiance was taken to the U.N. Security Council in March 2006, the U.S. stood back and allowed Russia and China to block the sanctions, settling for only a non-binding “presidential statement,” a slap on the wrist. At the same time, the Bush administration also announced that it had offered to open up a dialogue with Iran about Iraq.

Right after its May 31 announcement of its shift in policy, the Bush administration’s old neo-conservative allies—like Richard Perle, Bill Kristol and various other luminaries of the American Enterprise Institute—made some noise about the Bush administration caving in to international pressure. In fact, there is little indication of real disagreement in U.S. official circles over this initiative. In the months preceding it, practically every single important official who had served in the most responsible foreign policy capacity in earlier administrations, Democratic and Republican alike, had publicly called for this shift, including Kissinger, Brzyznski, Scowcroft, Albright, Perry, Armitage to name just a few.

The most telling indication of this support came on June 14 when the Republican-controlled U.S. Senate overwhelmingly endorsed Bush’s initiative to negotiate with Iran and turned back a move that could have repudiated Bush’s initiative. When Rick Santorum, a Pennsylvania Republican, who is linked to the far-right religious fundamentalists and is in the middle of a difficult re-election campaign, introduced a harsh new sanctions bill barring any U.S. investment and trade with Iran, the Senate defeated it by a vote of 54 to 45. Once Santorum and other Republicans got a chance to make their point, the whole Senate passed a resolution in support of the Bush administration’s initiative with Iran 99 to 0. Unanimous! This time around, even the most conservative right-wingers, including Rick Santorum, went on record in support of the Bush administration’s initiative—despite their empty talk about new sanctions against Iran, which was only meant to placate their right-wing, reactionary base.

The U.S. Punishes Iran

For 27 years, since the overthrow of the U.S.-sponsored dictator of Iran, Shah Reza Pahlevi, the U.S. government had not had any official face-to-face meetings with officials from the Iranian government.

The break took place in 1979 after an enormous mass uprising overthrew the U.S.-sponsored strong man, the Shah in Iran, a revolution that threatened to spread to other countries in the region against other U.S.-sponsored dictators. The U.S. was further humiliated when Iranian students took over the U.S. embassy in Tehran and took 52 employees hostage. The mullahs, led by the Ayatollah Khomeini, hijacked the revolution. They imposed their rule with brutal repression against the masses who had actually chased out the Shah. In so doing, the mullahs did imperialism’s dirty work. On January 21, 1981, as Ronald Reagan was inaugurated as the new U.S. president, Khomeini freed the hostages, and Reagan loosened trade sanctions.

But for U.S. imperialism, the Iranian revolution represented an enormous set-back. The Shah’s regime was one of the main pillars, along with Israel, for U.S. control over the vital Middle East region. The Shah’s enormous army, equipped with some of the best U.S. technology, was supposed to keep order in the Persian Gulf. With the revolution, that pillar of support for U.S. imperialism had crumbled. What followed next in that region’s history, the barbaric wars and mass slaughter, is really a history of U.S. imperialism trying to overcome that loss and solidify its hold over the region.

For U.S. imperialism, the number one order of the day was to isolate and punish Iran—above all, to make an example of how hard the U.S. comes down on any country and people that dare do anything similar. President Carter started the ball rolling by breaking diplomatic relations with Iran and imposing trade sanctions. The U.S. government under Carter encouraged Saddam Hussein to attack Iran. Obviously, Hussein had his own reasons for doing it: he wanted to become the new regional strongman. But in effect, the Iran-Iraq War of 1980-88 completed the work of drowning the revolution in a bloodbath.

During the war, the U.S. funneled most of its aid to Saddam Hussein, while reimposing trade sanctions against Iran and pressuring allies not to sell arms or spare parts to Tehran. But in fact, the Reagan administration was playing a double game. It was also secretly supplying Iran with weapons, including thousands of anti-tank and anti-aircraft missiles, as well as spare parts for Iran’s fleet of American-made F-4, F-5 and F-14 warplanes, left over from the time of the Shah. This dirty deal was exposed by the Iran-Contra scandal that broke out in November 1986.

In reality, U.S. imperialism was trying to weaken both sides, ruined by one million dead with their countries in ashes. In 1990-91, barely two years after the Iran-Iraq war ended, U.S. imperialism attacked Iraq, the first Gulf War.

In this war, the U.S. and Iran found themselves on the same side. While the Iranian regime denounced the U.S. war, the Iranian rulers were also perfectly happy to see their old nemesis, Saddam Hussein, defeated and weakened. Iran provided refuge for fleeing Iraqi airplanes, but then never turned them back to the Hussein regime during or after the Gulf War. After the war, Iran went along with the U.S. and U.N. sanctions on Iraq. In return, for a few years, the U.S. government relaxed its trade embargo against Iran, and trade between the two countries increased substantially. In fact, in the early 1990s, the U.S. became Iran’s largest trading partner.

However, the continuing U.S. campaign against Iraq after the war, the punishing trade embargo and air strikes, posed a problem for U.S. relations with Iran. For with Iraq increasingly on the defensive, U.S. policymakers did not want to see Iran try to fill the void and emerge as a regional power. To counter that, the Clinton administration slapped new trade and investment barriers on Iran. As the U.S. pounded Iraq, it also began to squeeze Iran. Clinton called it a dual containment policy.

The U.S. government was continuing to punish Iran for the revolution that had overthrown the Shah in 1979—just as it had done in the past to the governments of China, Cuba and so many others. To justify this policy, the U.S. government continued to brand Iran as a state supporting terrorism.

U.S. Government Versus Its own Bourgeoisie

This continued effort to isolate and squeeze Iran began to pit the U.S. government against the oil companies—which obviously saw Iran as ripe for gushers of profits. And the Iranian government needed them more than ever to get oil production going, given the huge destruction that the Iran-Iraq War had caused to its infrastructure.

But when the U.S. oil companies tried to go in, the U.S. government stopped them. The first big confrontation came in March 1995, when the Clinton administration stopped Conoco from signing a one-billion-dollar contract with the Iranian government to develop and exploit large Iranian oil fields.

Then in 1996, the new Republican majority in Congress tried to fix the situation for the U.S. oil companies. Citing Israeli reports that Iran had secretly embarked on a program to develop nuclear weapons (the tried and true excuse), they pushed through the Iran-Libya Sanctions Act (ILSA), that not only barred all U.S. trade and investment in those two countries, but also imposed penalties on any corporation from other countries doing business with Iran. In other words, the U.S. government was going to make sure that if U.S. oil companies couldn’t go into Iran and Libya—neither could other oil companies.

This didn’t wash. The big oil companies based in other countries were not about to accept it. Not even the mighty U.S. government could pass legislation telling them where they could and couldn’t do business and make profits. So they got their governments to make a big stink against ILSA. In the end, the U.S. State Department did not try to enforce ILSA. As a result, Iran granted major contracts to Total (France), Gazprom (Russia), Petronas (Malaysia), ENI (Italy) and Shell (Dutch-UK), without U.S. government retaliation.

The fact that these companies could profit from Iranian oil, while U.S. companies were left out in the cold, did not sit well with the U.S. oil companies. Even Dick Cheney, who at the time was head of Halliburton, the oil services and construction company, denounced the sanctions as “being counterproductive.” Big U.S. oil companies, as well as agricultural exporters, arms merchants, and financial companies organized a new lobbying group, USA*Engage, with the goal of getting U.S. unilateral sanctions lifted all over the world. An early press release by USA*Engage spelled out their position: “Virtually every major U.S. oil company, gas company and oil-service firm belongs to USA*Engage, a broad based coalition formed... to fight unilateral economic sanctions... Such a proactive approach is new for the oil industry, which has traditionally been afraid of angering shareholders by appearing to fight sanctions against so-called rogue states.

When Does the U.S. Government Stop Calling Iran a Rogue State?

This raised the question: how long should the U.S. government continue to try to isolate Iran? How long should the U.S. try to make Iran an example for other people who might try to overthrow their own U.S.-sponsored dictator? When does the oil companies’ thirst for profits outweigh the political benefits that come from continuing the sanctions?

In reality, the U.S. government had to weigh its long-term concern for maintaining its domination based on fear, against the short-term economic goals of the businesses that it serves.

But Big Oil’s concerns soon had an impact on the Clinton administration, which first raised the possibility of normalizing relations with Iran. In June 1998, U.S. Secretary of State Madeleine Albright called for a road map to better relations with Iran. President Clinton also let it be known that he wanted to see a way to take some steps “toward ending the strains between our nations [Iran and the U.S.].”

The question of a U.S. turn in policy began to be raised by Republicans, who served in the Reagan and first Bush administrations, as reflected by a think tank report published in 2000 by former president George Bush’s national security adviser and confidante, Brent Scowcroft. Scowcroft even blamed some in his own party for the fact that U.S. government policies had remained so belligerent: “Many of the U.S. policies that are found troublesome by Iran can be traced to the Congress that took office in January 1995.”

For U.S. imperialism, Iran has great strategic importance. It has the second highest proven oil reserves in the world after Saudi Arabia, as well as the second highest gas reserves in the world after Russia. That means that it is a source of great profits—but also of great power over the rest of the world economy.

But beyond that, it is a very large country. With a population of almost 70 million people, it is the second most populated country in the Middle East after Egypt. And it is located in the middle of the Persian Gulf region that the U.S. has long sought to dominate. Iran borders on both the Persian Gulf and the Caspian Sea, as well as on 15 countries—many of which are energy rich and unstable. So, it is centrally placed both economically and militarily.

Given Iran’s size, and its economic and political importance in the vital but explosive Middle East region, the U.S. government could not afford to isolate it forever, as it has done to Cuba or North Korea, for example. Sooner or later, it would have to find a way to normalize relations with the Iranian government.

With the election of two oil men, Bush and Cheney, in 2000, the U.S. oil companies had every reason to feel confident that the U.S. government would soon allow them to do business in Iran, especially since Cheney himself had come out so strongly against unilateral sanctions. This was reaffirmed by Bush’s nominee for secretary of state, Colin Powell, during his confirmation hearings in the U.S. Senate: “differences with Iran need not preclude greater interaction, whether in more normal commerce or increased dialogue. Our national security team will be reviewing such possibilities,” he said in the obtuse language of diplomacy.

Secret Partnership

Notwithstanding the mullahs’ “Great Satan” rants against the U.S. meant for domestic consumption, they had consistently demonstrated their good will toward U.S. imperialism and toward the oil companies, whenever they had a chance.

In the period that followed the 9/11 terrorist attacks, U.S. and Iranian interests converged, and the mullahs demonstrated to the U.S. government how responsible a partner they could be.

First, Iran supported the U.S. war in Afghanistan against the Taliban and Al Qaeda. The Iranian Shiite regime had been sparring with the Sunni Taliban and Al Qaeda in Afghanistan for years. It was Iran that had originally backed the Northern Alliance, the main armed opposition in Afghanistan. Once the U.S. announced its intentions of attacking Afghanistan, the U.S. relied on the Northern Alliance to fight the Taliban and Al Qaeda, with Iranian support. Iran also closed its borders to Al Qaeda and Taliban fighters. When the U.S. began to bomb Afghanistan, the Iranian regime offered to help the U.S. in any search and rescue operations if U.S. pilots on their missions over Afghanistan had to land on Iranian territory. Once the U.S. began military operations, State Department and NSC officials met secretly with Iranian diplomats in Paris and Geneva. According to former State Department official Flynt Leverett, these discussions focused on “how to effectively unseat the Taliban and once the Taliban was gone, how to stand up an Afghan government.” The Iranian government worked with the U.S. government to broker the support by the Northern Alliance for a coalition government under the leadership of Hamid Karzai, a U.S. puppet. Finally, Iran played a key role in the U.S.-organized donor conference in Bonn Germany in November 2001, and pledged 560 million dollars for the reconstruction of Afghanistan.

According to the Washington Post (October 22, 2004), the U.S. policy-making bureaucracy inside the State Department presented a paper in late November 2001 suggesting that the United States establish more formal arrangements for cooperation with Iran in the continuing war in Afghanistan. The paper suggested exchanging intelligence information with Tehran as well as coordinating some military operations. The CIA agreed with the proposal, as did the head of the White House Office for Combating Terrorism, retired General Wayne A. Downing.

But in the run-up to the U.S. invasion of Iraq, the Bush administration was not ready to take this step. In its preparation to invade Iraq, the U.S. had to appear strong and dominant. To take steps to normalize relations with Iran at that time could be interpreted as a sign of weakness. Cheney and Rumsfeld were not going to send that kind of signal—especially at a point when U.S. power appeared to be on the ascendency.

So, the White House, NSC and the Pentagon blocked the recommendations from the State Department, CIA and White House counter-terrorism office. Instead, the White House included Iran as a charter member of the “axis of evil” in Bush’s January 2002 State of the Union message. The Iranian regime was being warned not to make trouble for the U.S. as it prepared to attack Iraq.

Once again, the Iranian regime responded with its own denunciations of the U.S. But behind the scenes, Iran cooperated with the U.S. After all, Saddam Hussein and the Baath Party were finally going to be pushed out of power. As in Afghanistan, Iran offered to rescue U.S. pilots if they were forced to land in Iran during the air campaign. It allowed Ahmad Chalabi, Washington’s favored Iraqi opposition leader, to set up an office in Tehran, paid by the U.S. government. And when U.S. bombs meant for Iraq “accidentally” hit Iran, Iran did not protest “too hard... They [the Iranians] have behaved rather well,” said a senior U.S. official.

After the U.S. occupation of Iraq showed signs of unraveling into a disaster, the Iranian regime approached the Bush administration once again. In a secret memo from April-May 2003 recently leaked to the press, the Iranian regime offered to accept peace with Israel, to cut off material assistance to Palestinian armed groups and pressure them to halt terrorist attacks within Israel’s 1967 borders. In other words, the Iranian regime was offering to work with the U.S. to reduce tensions in the rest of the Middle East, while the U.S. military was increasingly tied down in Iraq.

In return, the secret Iranian proposal sought U.S. agreement for diplomatic recognition, the halt of U.S. hostility and the abolition of sanctions.

But the Bush administration turned Iran down again. The Bush administration would not turn toward Iran until the continued deterioration of the situation in Iraq left it with almost no other choice. As Philip H. Gordon of the Brookings Institution put it in the current issue of Foreign Affairs, “Bush has gotten the United States bogged down in an unsuccessful war, overstretched the military, and broken the domestic bank. Washington now lacks the reservoir of international legitimacy, resources, and domestic support necessary to pursue other key national interests.”

To extricate itself from the war, the U.S. government needs stability in the region. Therefore it must reinforce the existing regimes—starting with Iran, which shares a long border with Iraq. Both the U.S. and Iranian governments have a similar interest: they do not want the raging internal war and power struggle provoked by the U.S. invasion of Iraq to spill over the border, to become a regional war, or to upset the status quo throughout the region.

The war in Iraq is pushing the U.S. to begin to normalize relations with Iran.

What Would a “Grand Bargain” with Iran Bring?

Obviously, the negotiations with Iran are far from a done deal. They could still be derailed by new explosions or crises in the Middle East region, a region made more unstable by the U.S. invasions of Afghanistan and Iraq.

However, if the new “grand bargain” between the U.S. and Iran does go through, it will not be to further “peace,” as will be trumpeted. It will only mean that Iran will be brought in as an open partner of the U.S. and the lesser imperial powers to help further their grip on the Middle East, its peoples and resources. Obviously the Iranian government is aiming to emerge from these negotiations in a better position to be a kind of regional power. But even if it does, it would only mean returning to its previous role under the much-hated Shah. But this time, the client state would be run by the mullahs.

Certainly, the Iranian economy has suffered tremendously from the successive blows of the eight years of the Iran-Iraq War, the U.S. economic sanctions, and the low price of oil and gas, practically Iran’s only exports, throughout most of the 1980s and 90s. One result is that Iran, an important energy exporter, is suffering from its own energy crunch. It has to import 40% of the gasoline it uses from the rest of the Middle East and even from Venezuela! (This energy crunch is what has pushed the Iranian government to develop nuclearenergy to produce electricity, to partially relieve demand on their oil and gas resources.)

The ending of the sanctions would mean a flood of international capital, a gold rush, or black gold rush, for the big international oil companies. Undoubtedly, they would begin to develop Iran’s vast, but underdeveloped oil and gas reserves, along with the infrastructure to exploit those resources, such as ports, refineries, pipelines—all of which require enormous investments. This development is likely to follow the pattern seen in other oil exporting countries in the Middle East. The added income will first of all be gobbled up by the oil companies. Much of the rest of the wealth will be recycled back to the U.S. and the other big industrial countries to buy military equipment. Or the wealth will go into the big financial institutions. After they are all done, whatever crumbs are left will enrich a tiny privileged minority of the Iranian population—just as under the Shah.

The economy will be left to rot and decay. The standard of living of the working class and poor, already extremely low, will continue its long-term decline.