he Iran Conundrum
After the Shah Fled Iran in January 1979 he eventually journeyed to Mexico and spent 122 days there. According to CNN while in Mexico doctors discovered the Shah was stricken with an aggressive cancer and recommended he be admitted to a hospital in the United States.
https://www.cnn.com/2014/10/27/world/ac-six-things-you-didnt-know-about-the-iran-hostage-crisis/
It turns out that the CNN version of events is flawed. In the autumn of 1973 court physician Dr. Hossein Ayadi was alarmed when he discovered swollen lymph nodes and on a routine slide smear found smudge cells which are commonly associated with Chronic Lymphocytic Leukemia (CLL). In late April 1974 the CLL diagnosis was confirmed.
Afterwards Paris Cochin Hospital’s Georges Flandrin, a world-class hematologist, flew 39 times to Tehran via private jet to treat the Shah.
https://oncodaily.com/stories/celebrities/the-shah-of-irans-hidden-cancer
By the time the Shah departed Iran in mid-January 1979 he was already under the care of one of the best doctors in the world and had received dozens of treatments. The notion that only United States doctors had the expertise to provide proper medical care is not supported by the facts.
Nonetheless President Carter allowed the Shah to enter the United States contingent upon on a medical emergency.
On March 7, 1980 national columnist Mary McGrory wrote in the Washington Star:
“The public will want to know why the President [Carter], having first resisted the nagging of Henry Kissinger and David Rockefeller, ultimately gave in and admitted the Shah for medical treatment that was obviously available elsewhere.”
The entry of the Shah into the United States triggered a fierce backlash in Iran. On November 4,1979, Americans were taken hostage at the Embassy of the United States in Tehran and held until January 20, 1981 – a total of 444 days. The incident occurred after an angry mob of Muslim militants stormed and occupied the building.
During Thanksgiving November 1979 Congressman George Hansen (R-ID) flew to to Tehran on his own expense. Hansen was not acting in an official capacity, in fact he explained to the Minister of Foreign Affairs, Banir Sadir, that he had no authorization to negotiate on behalf of the U.S. government yet, eventually, Hansen was allowed access to the Iranian militants occupying the Embassy and their American captives.
The Iranian militant captors provided Hansen with secret CIA cables and other sensitive documents that they snaffled after taking over the embassy. They also agreed to release the hostages if the U.S. Congress would hold public hearings to expose atrocious human abuse crimes perpetrated by the Shah and his dreaded secret police, SAVAK.
The deal was that the congressman would be allowed to take half the hostages home if he could secure an agreement with appropriate members of Congress to hold hearings. Once the hearings commenced the remainder would be released. Accordingly Hansen contacted Henry Reuss chairman of the Banking Committee who agreed to hold hearings. Unexpectedly when President Carter found out he immediately announced that the Shah would not be the subject of any federal investigation. Result? Carter doomed any chance of early release of the hostages.
Among the top secret documents purloined by the militants was a secret eyes-only U.S. State Department document dated August 2, 1979 signed by the Office of Iranian Affairs Director Henry Precht addressed to L. Bruce Laingen U.S. Charge d’ Affairs in Tehran titled: “PLANNING FOR THE SHAH TO COME TO THE UNITED STATES.” It states in part:
“We should make no move towards admitting the Shah until we have obtained and tested a new and substantially more effective guard force for the embassy.”
An article in the Huffington Post provided these details:
“About that reaction, a State Department report specifically warned of ‘the danger of hostages being taken’ and advised ‘When the decision is made to admit the Shah, we should quietly assign additional American security guards to the embassy, to provide protection to key personnel until the danger period is considered over.’”
https://www.huffpost.com/entry/benghazitehranwarnings-un_b_1935749
The super-secret document, which was issued three months before the Shah came to America, indicates that the Shah’s entry into the United States was part of long range plans rather than an urgent medical emergency.
Twenty-four hours before the Shah arrived in New York Iranian Foreign Minister Ibrahaim Yazdi warned the U.S. State Department, “You are playing with fire. There will be a very drastic reaction.”
https://www.huffpost.com/entry/benghazitehranwarnings-un_b_1935749
Part of the animosity towards the Shah resulted from an August 19, 1953 coup d’état that overthrew the Prime Minister of Iran, Mohammad Mosaddegh, and reinstated the rule of Mohammad Reza Pahlavi, as the Shah of Iran. The coup was instigated by the United Kingdom (MI6),and by the United States (CIA). A key motive was to protect British oil-interests in Iran after Mosaddegh had nationalized the country’s oil industry in 1951.
In order to enhance acceptance of the Shah’s rule the CIA subsidized Iran’s mullahs and ayatollahs with hefty monthly payments. The payout program ran from 1951 until 1977 when the payments were abruptly halted by President Carter despite CIA warnings that terminating them would undermine the Shah. https://www.cia.gov/readingroom/docs/CIA-RDP90-00552R000302910010-7.pdf
Incredulously embassy security was not increased, even in the face of stern warnings that hostages could be taken, which indeed happened three months later on November 7, 1979.
Henry Precht, himself admitted, “those guards were never provided.” Former Secretary of State Cyrus Vance later told Mike Wallace on a 60 Minutes broadcast, “We said that we could [increase security]. But we didn’t.” https://www.huffpost.com/entry/benghazitehranwarnings-un_b_1935749
The refusal to increase embassy guards is even more baffling when one considers the volatility of the region. Earlier in February 1979 the American Embassy was attacked and temporarily occupied by extremists but that was before Khomeini who had just returned after 14 years in exile and had not yet solidified his power base. The extremists were readily expelled.
Also in February 1979 Adolph Dubs the United States Ambassador to Afghanistan was killed during a rescue attempt after his kidnapping.
The embassy take over in Tehran provided Carter the pretext to freeze $12 Billion of Iranian assets secured in the United States. In fact the new Khomeini regime had the legal right to withdraw its assets from the U.S. and deposit the gold and notes in other foreign banks.
Patrick Tyler, explained in his book, World of Trouble: The White House and the Middle East from the cold war to the war on terror, the machinations Chase used to declare Iran in default of its loan payments.
Carter froze Iranian assets in the United States, including the hundreds of millions of dollars in Chase accounts. The freeze enabled Chase to declare Iran in default on its loans since the Iranian central bank was no longer able to move money between accounts to make interest payments.
The legality of the loans was worrisome. According to a March 28, 1980 Wall Street Journal article, “In the final years of the Shah’s reign, many major international banks, led by Chase Manhattan, quietly disregarded the Iranian constitution and lent hundreds of millions of dollars to Iran without specific approval of the loans by that nation’s parliament.”
Caveat Lender: Chase Bank And Others Face Court Challenges On Huge Loans To Iran. Bill Paul Wall Street Journal March 28, 1980
When the Shah was in power no one dared challenged the legality of the loans. But after the Shah was overthrown and Khomeini was in charge the legality of the loans was no longer guaranteed.
The record shows that Iran never did withdraw its assets and its central bank continued to make payments on the loans from the Chase-led consortium.
An article in the February 1, 1981 edition of the Washington Star succinctly explained:
Until the embassy seizure, the central bank of Iran had been making scheduled payments on the loans. But the banks were worried that once the new government focused on the loans – and the huge interest rates involved – the payments would end.
Nonetheless after the embassy was seized and Carter froze Iranian assets rendering Iran’s central bank unable to make payments on its outstanding loans. Since, as a result of the freeze, the Iranian central bank was unable to move money from its accounts to the Chase bank accounts. This sleight of hand gave the Chase-led banking consortium the leverage it needed to declare Iran in default of its loan obligations.
As the Shah fled Iran Khomeini returned from exile in Paris. At the time of Khomeini’s arrival, the Shah had been giving the Chase Bank of Manhattan deposits from daily oil sales which gave the Chase bank a float of about $80 million dollars per day! Khomeini swiftly terminated the daily oil deposits to Chase denying them their lucrative $80 million per day float.
For his part Congressman Hansen submitted abundant material to the Congressional Record that delved into the strange facts that encompassed the 444 days long Iranian hostage crisis.
One entry bore the headline:
THE HOSTAGES – TRAPPED BY BIG BANK POLITICS.
The hostage crisis began over a banking crisis and it ended when the banking crisis was resolved by the bankers, not the State Department. … The State Department sat back and watched the bankers get their satisfaction and then the crisis was over. – Congressman George Hansen
How many people realize that the State Department did not participate in the 1981 negotiations to free the hostages rather it was the bankers that controlled the narrative. A February 2, 1981 Time Magazine article explained it like this:
Government officials participated very little in the discussions. There was no exchange between the government and us, said one moneyman. They took what we gave them.
https://time.com/archive/6854831/iran-hostages-how-the-bankers-did-it/
Only after the bankers were satisfied were the hostages released ending a 444 day long nightmare.
Let’s think about this. It is a fact of history that the American embassy was warned in no uncertain terms three months in advance that allowing the ex-Shah into the United States would jeopardize the safety of embassy personnel leaving them vulnerable to attack and kidnapping. In early February 1979 the Embassy was violently attacked and in Afghanistan the American ambassador was outright kidnapped and then killed during a rescue attempt. One of the key questions that has never been addressed is why did we not increase embassy security??
Within days of taking American hostages President Carter froze Iranian assets which consisted of some 12 billion dollars maintained in the United States. The Chase-led banking consortium manipulated the freeze to declare Iran in default of its loans even though the Iranians, up until the time of the freeze, were making their monthly payments on schedule. But as explained above after the freeze was in effect the Chase-led consortium banks manipulated an underhanded maneuver to declare Iran in default.
According to the Wall Street Journal a series of loans issued by the Chase-led consortium to Iran between January 1977 and June 1978 totaled more than one billion three hundred million dollars ($1.3 billion).
Caveat Lender: Chase Bank And Others Face Court Challenges On Huge Loans To Iran. Bill Paul Wall Street Journal March 28, 1980
Viewing the matter through banker’s perspective one can understand their acute anxiety. When the Shah was running the tables Chase Manhattan handled about $80 million a day in Iranian oil money, or more than $20 billion a year—a massive deposit base for Chase to use for its loan and other business operations. The radical Khomeini swiftly cut off that source of easy money. Further since the Iranian parliament never approved the loans Khomeini could have challenged whether Iran had to continue making payments.
An entry into The Congressional Record by Congressman Hansen informs that Leonard Santos, Deputy Advisor to the Assistant General Counsel for International Affairs and others began to worry that Iran might withdraw its assets from U.S. banks in America and overseas in the spring of 1979 after the radical Khomeini and his crowd took over the levers of government and the masses started screaming DEATH TO AMERICA!
Santos claimed that the State Department was involved in the discussions about freezing Iranian assets months before the hostages were seized and that top State officials like Secretary Vance and Deputy Secretary Warren Christopher participated.
Herein is the central question: Was it just coincidence that for three months the embassy never increased its security in anticipation of the ex-Shah’s arrival into the United States which resulted in the taking of hostages which gave Carter the pretext to freeze Iranian assets that the banks quickly manipulated to declare Iran in default and seize the money owed them?
Congressman Hansen phrased the question like this:
How can it be that the State Department would spend six months trying to protect the big money interests while their own employees are left to the wolves?
Congressional Record February 18, 1981 Page 2330
Mark Adams National Security Commentator