Shah’s Fall Colossal Mistakes that Sealed Shah’s Fate

December 24, 2016 by  

M. Reza Vaghefi

In No.82 of Mirassian some assertions were made by Dr. Rezaian that were not fact-based The article below is fact-based and I hope you would consider it for publication in Mirassian.
We are all fortunate to have Mirassian under your leadership to publish views of all of us who are affected by what happens in our motherland.
M. Reza Vaghefi

Over the last thirty-eight years a number books and articles have been written about Shah of Iran downfall in l979. The most comprehensive and well-investigated one is the ‘Coup’ written by a well know historian Professor Ervand Abrahamian, an Armenian-Iranian scholar on the faculty of Columbia University. In his book, he elaborates the determining role of CIA which together with MI6 the British Intelligence agency and their surrogates, most of them Iranians traitors, who used the mobs and prostitutes to launch a small moving crowd which was then enhanced by units of armed forces, as planned, to attack Premier Mossadegh’s house and take over vital communications and logistics to announce the downfall of the legitimately elected government. The events happened in a background that step by step had eroded Shah’s internal support which provided a fertile moment for the British and American governments to jointly undermine and ultimately end a regime that had enjoyed the support of people from all walks of life in Iran for 28 months. No period in last two hundred years had seen so much freedom, so much participation by the people in all aspects of political environment.
Quite often the fall of Pahlavi dynasty is attributed to the movement that was led by late Ayatollah Khomeini. The late Ayatollah took advantage of the extreme dissatisfaction by the disillusioned and economically underprivileged people in addition to the supporters of the National Front who were waiting for the time to arrive to express their deep resentment of the Shah’s behavior toward the nationalist movement leader Dr. Mossadegh who led the nationalization of Iranian oil which had been exploited by the British for over 50 years..

First: 15th of Khordad
Hassan Ali Mansoor, the son of Ali Mansoor who was late Reza Shah’s Prime Minister when the allied forces attacked Iran in 1941, was appointed Prime Minister in 1964. Under his administration the government signed a document allowing “extraterritorial rights” privileges to the American personnel, including military, to be tried in American courts in the event that they committed a crime. According to this document such a criminal would bypass Iranian courts, undermining Iranian jurisprudence. While many people were kept in dark about this most significant act, the politicians close to the regime knew it and there was some silent resentment even though nothing was said publicly about this act. The complaint was that such act nullified the courageous act by Shah’s father Reza Shah the Great who had cancelled the so called “Capitulation” that provided same privileges to some foreign powers. It was a proud moment for Reza Shah indicating his strength and courage to stand up against foreign powers namely Russia and Britain at the time.
No politician rose against this Act but religious community was unease and even among the clergy the only one that vocally stood up against it was Ayatollah Khomeini. At that time Ayatollah had created a devoted following which on 15th of Khordad (June 1963) violently attacked government buildings and created a movement that shook the Shah’s regime. At that time I was a senior economic analyst at the National Iranian Oil Company. I saw the smoke rising from destruction and explosion of some building from the 8th Floor of the NIOC headquarters. It was during Assadollah Alam’spremiership (1962-64) that this event took place. Alam with Shah’s approval suppressed the revolt in a bloody way after a good number of people lost their life and Khomeini, who had just been authenticated as Ayatollah by a number of senior clergy in Qom (to save him from certain death) was arrested and sent into exile in Turkey. Some pecuniary compensation was made to survivors of the revolt but the movement did not die and survivors of those killed did not forget what had been done to their love ones. The depth and strength of the movement endured for 15 years though under the radar so it was not quite evident to Shah’s regime which thought to strengthen the religion as a counter weight to communist that were also operating under the radar. We should not forget that the National Front, with the star of the movement, Dr. Mohammad Mossadegh, under house arrest, was also waiting in the wings for the right moment to arrive and when the time came they eagerly joined the fight again, the time in full cooperation with the clergy led by Ayatollah Khomeini who was in Iraq and under the pressure from the Government in Iran he left for France.

۲٫ OPEC is Created
When the Organization of Petroleum Producing Countries (OPEC) announced its presence, in international oil market, Iran under the Shah took an active role although he was not in favor it at the beginning later Shah concluded that there was strength in a united front against the Seven Sisters that dominated the global market. In 1960’s Iran was expanding and needed more dollars and Consortium was reluctant to even sell more Iranian oil. Iranian negotiators probed the Consortium using the number of population to be qualified to sell more of oil but the Consortium that was operating the Iranian oil was not phased therefore there was an impetus to do something and OPEC was created. It was a shock to the industrialized nations that tried to ignore it for a while but increasingly realized that it was a de facto institution and began to negotiate with it. The long term implications of OPEC creations had yet to emerge. In an extensive review of the events after the Fall of Shah by the respected London Economist magazine examines the causes and consequences of his Fall. In its Gulf Survey June 1981, the Economist provides a clear picture of opinions of the Persian Gulf rulers and experts. “More disturbing to the Gulf rulers, in retrospect, was the failure of the Americans to support the Shah….Many Gulf officials credit darker motives: they think Americans gave the Shah the final push to punish him for creating OPEC.” The Economist, The Gulf Survey June 1981 p.5”. This also reminds us about a conversation between Dr. Jahanguir Amoozegar,the dominant figure in OPEC and Minister of Economy and Finance, in Prime Minister Hoveida’s cabinet, and late Assadollah Alam who was the Imperial Court Minister when this conversation took place. Alam invited Amoozegar to have breakfast at Alam’s residence. He presciently told Dr. Amoozegar not pursue higher prices during the OPEC meeting. A suggestion which was contrary to what he, Amoozegar, had been instructed to do by the Shah. In addition to the above, General Alexander Hague, the Supreme Allied Commander of NATO in mid 70’s, showed a letter written by King of Saudi Arabia, to a former NIOC executive. The letter indicated that the higher price for oil was Shah’s goal, putting the blame squarely on Shah and of course excusing himself from this process. We should remember that Saudi Arabia plowed in more than $60 billions (in early 1980s in short period of time but managed to blame Shah for the rise of oil price and Americans believe him.

۳٫ Matters of the Persian Gulf
It was the Shah who understood the value of the Middle Eastern countries that harbored vast volumes of oil, and this was extremely vital to the industrialized nation of the West and Japan. At one point Shah suggested that any price increase in industrial products, which jumped exponentially after OPEC ‘s should be indexed to increases in oil prices which meant, ultimately, less profit by the industrial products producers if OPEC were to cooperate with the West. But the feeling of having the West so much dependent on Middle East oil emboldened Shah who officially announced that “Matters concerning the Persian Gulf region will be dealt with by the countries of the region……..without outside intervention”. The Economist June 1981, p.5. This extraordinary and courageous position was announced in a communique at a joint meeting with Soviet leaders in October 1972 in Moscow after a state visit by the Shah. Shah may have meant to reassure the Russians of less influence by the West, mainly United States, in the Persian Gulf but it was vastly interpreted differently by the United States especially after Bahrain had allowed a small base to the latter in Persian Gulf.

۴٫ Iran-Iraq Border Skirmishes
Soon after Saddam Hossein took control of Iraqi government and the armed forces in early 70’s it established close ties with the Soviet Union (of the time), which inherently produced a conflict with Iran since Iran was extremely close to the United States. In Iraq, the Kurdish minority was a major challenge to Saddam’s authoritarian rule which led to Saddam’s army hammering the Kurds. Under legendary Mustafa Barzani the Kurds began a brutal guerrilla war against the Baathist government. It was a successful story as long as CIA continued to supply weapons to Kurds and the Iranian military advising them ( Kurds reciprocated this help when Saddam attacked Iran). But the situation led by Shah instigated a call from President Boumedian of Algeria who invited the Shah to meet with him to discuss the problem.
How this happened is itself an interesting story. Dr. Habeeb Agahi, then Deputy Minister of Economy was attending a conference in Algiers when he was summoned by the President of Algeria.
 President Boumedian, who as military commander had led the Algerian war against French colonialism, had established great credibility in Islamic countries. In meeting with Dr. Agahi, Boumedian asked him to take a message from him to the Shah. The message was: “why two Moslem nations need to fight against each other” which meant that he (Boumedian) may not have been aware of CIA’s role in this affair (NYT Magazine August 14,2016 p.18). Upon returning to Iran the Deputy Minster reported the message to the Shah who subsequently flew to Algeria and met with Saddam Hossein. Both sides signed a peace treaty to stop the conflict, on March 15, 1975. Shah’s decision to sign a peace treaty with someone who opposed the United States was the straw that broke the camel’s back. As soon as the treaty was signed, Dr. Henry Kissinger, the National Security Advisor to President Ford, ordered CIA to immediately stop the flow of weapons. Shah’s increasingly adopting policies that were contrary to US policy was evidently unbearable by the US defense establishment and may have been one of determining factors in his demise.

۵٫ Shah’s Announcement about the Oil Consortium
The Oil Consortium was created by the Seven Sisters after the CIA and M16 with their Iranian surrogates led a Coup against legitimate government of Dr. Mossadegh. The oil agreement was for 25 years upon which the whole affair would have to be reviewed. In l975 Shah announced that the oil agreement will not be renewed with the Consortium when the Accord expires in 1979. Many people familiar with the politics of situation considered this a bad strategy. You never tell your adversary what you will do five years from now. For a whole set of reasons that announcement was a strategic mistake and it followed previous mistakes mentioned above. Was it due to bad advice or was it due to an emboldened Shah who had forgotten what had taken place in August of 1953 when he fled the country as a result of bad decision to remove Dr. Mossadegh and replace him with General Zahedi whose support from CIA-M16 and some in the clergy (see Coup by Abrahamian’s last chapter) led to demonstration by thugs and prostitutes which was joined by units of the Army.
In sum Shah’s mistakes were plenty but it began with removal of Dr. Mossadegh and consequently losing credibility in eyes of millions who took to the streets of Tehran and other major cities to put an end to a regime that over 50 years had done some good things for Iran. Had he accepted the Economic Plan drafted by some top economist in 1972, most probably things would have been different today But over time the lack of coordinated actions by the government and absence of financial discipline after billions of dollars began to flow in and a decentralized decision making under a premier who was unaware of the depth of dissatisfaction led to Shah’s fall. More important is that Shah had been surrounded by spies and sycophants
 who constantly praised his leadership. Most among these people was Assadollah Alam who for the most critical part of Shah’s rule was closest to him and showered him with sycophancy just like Rosputin. There were many cultural mistakes but galvanizing phenomena were the depth of corruption and poverty that emerged as result of bad economic policies and lack of foresight and accountability by the executives in the government.
This is of course true for all leaders and rulers: Peoples’ trust is the most enduring factor in the whole affair and that must never be forgotten.


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