Political legacy of hostage crisis

The 1979 seizure of the US embassy in Tehran had nothing to do with ‘anti-imperialism’, argues Yassamine Mather

As Iran’s negotiations with the 5+1 powers approach their final stage, two claims by the conservative factions of the Islamic regime have added to the controversy surrounding them, both inside and outside Iran. These are, firstly, that the country has yet to see any return from Iranian funds released in the last five months in the United States; and, secondly, that the limited relief in sanctions, promised as part of the interim deal, has not materialised.

The deal, signed in November 2013, stipulated that in exchange for Iran’s compliance with imperialist demands to cut back on its nuclear programme the US would release $4 billion of the country’s $100 billion assets currently frozen in the US, and some sanctions would be lifted.

According to the UN’s nuclear watchdog, the International Atomic Energy Agency, Iran has diluted half of its higher-grade enriched uranium stockpile and limited its enrichment of uranium to no more than the “low levels” (maybe 5%) agreed in November 2013. The interim deal ends on July 20 and, unless the two sides can reach a final, long-term agreement that would allow a gradual lifting of all nuclear-related financial penalties and sanctions, more of the same will be imposed and the Iranian economy will face further difficulties. All this will inevitably entail a political fallout, jeopardising the future of Iranian president Hassan Rowhani and his government.

In Iran, Hossein Naghabi, an influential member of the national security and foreign commission of the majles (Iran’s parliament), claimed that so far Iran “has not managed to get one dollar” from funds unfrozen by the Obama administration. In April the fifth instalment was released - the first payment, representing $550 million in unfrozen oil revenue, was transferred from a Japanese bank to the Banque de Commerce et de Placements in Switzerland on February 3, but apparently this has not been transferred to Iran.

Some banking officials have blamed Iran’s slowness in setting up payment instructions for this, while others claim Iran must clarify how the funds will be used before they are released. The truth is probably more straightforward. Most western banks are reluctant to release any funds to Iran, fearing penalties imposed by the US administration. In addition US banks avoid any direct transactions with Iran, as there are a number of legal rulings whose effect is to block the transfer of funds to Iran’s central bank.

On April 6, the Wall Street Journal concluded: “The reason Iran is having difficulty tapping the unfrozen revenue is that banks remain fearful they could violate tight US financial sanctions, especially while the outcome of talks on a final nuclear deal remains uncertain. If financial institutions flout sanctions, they could be shut out of the US banking system, which clears dollar transactions, or face huge fines.”

One reason why Iran’s unfrozen funds have to travel via European banks are the various litigations against Iran preventing the direct transfer of funds from the US. In 2007, for instance, a US district judge ordered Iran to pay more than $2.6 billion to relatives of 241 soldiers killed in the 1983 bombing of the barracks in Beirut.

Some European banks have already paid the penalty for financial transactions with Iran in 2014: for example, Clearstream, a Deutsche Boerse AG (DB1) unit based in Luxembourg, agreed in January to pay $152 million in settlement of civil claims that it violated sanctions. The US is now seeking “property owned by, or held for the benefit of, the Islamic Republic of Iran or any of its instrumentalities, including but not limited to Bank Markazi, by Clearstream Banking SA or any of its subsidiaries,” according to a March 27 federal grand jury subpoena filed by prosecutors in New York.

This is all related to the lingering saga of US embassy staff taken hostage in Tehran in 1979 and later Hezbollah’s bombing of a US naval base in Lebanon, as well as hostages taken by Hezbollah in early 1980s.

Hostage crisis

In November 1979, a group of Islamist students took over the US embassy compound in Tehran, allegedly protesting because the erstwhile shah was receiving medical treatment in America. Contrary to what sections of the Iranian left and most of the international left have claimed, this takeover and the subsequent hostage crises in Lebanon had little to do with anti-imperialism. As far as Iran’s new rulers were concerned, taking western hostages was part of a plan to divert attention from rising workers’ protests, to consolidate the power of the new religious state and divert attention from its growing repressiveness.

The hostages were released after a secret deal between the Republican presidential candidate, Ronald Reagan, and Iran’s Islamic clerics, helping Reagan defeat the incumbent Democratic president, Jimmy Carter, in 1980. This deal paved the way for another secret Iran-US agreement, known as Irangate, when US hostages taken by the pro-Iran Hezbollah in Lebanon were released as part of an elaborate deal. This was the ‘Iran contra affair’, where hostages were exchanged for Israeli weapons, to help Iran fight its ‘anti-western’ war against Iraq. Iran paid for these weapons by depositing funds into Swiss accounts belonging to the Nicaraguan anti-Sandinista ‘contras’, as well as by shipping oil to Israel.

According to the Jaffe Institute for Strategic Studies at Tel Aviv University, Israel’s arms sales to Iran during this period totalled $500 million,1 and Time magazine reported that throughout 1981 and 1982 “the Israelis reportedly set up Swiss bank accounts to handle the financial end of the deals”.2 In addition to Israeli arms, according to the report of the US Congressional committee investigating the Iran-contra affair of November 1987, “the sale of US arms to Iran through Israel began in the summer of 1985, after receiving the approval of president Reagan”.3

Senior Iranian clerics and state officials were directly involved. Ayatollah Ruhollah Khomeini is believed to have given his personal approval, while ayatollah Hashemi Rafsanjani and his immediate family were part of the intricate negotiations with the Reagan administration’s representatives, Oliver North and Robert Macfarlane.

At the end of the day, Iran’s clerics were completely discredited - they were said to be ‘fighting imperialism’, yet they struck a deal that benefited the US, Israel and the Nicaraguan contras! US support for Israel and the Maronites in Lebanon remained unaffected, but the Iranian people are still paying for the foolish gestures of their leaders - the resulting legal cases are affecting Iran’s financial deals and political relations more than three decades after the event.

And since early March Iran has been at odds with the Obama administration over the appointment of Hamid Aboutalebi as its United Nations envoy. The US press has been full of reports linking him to the student militants who overran that Tehran embassy in 1979, and the administration promptly denied him a visa to enter the US, meaning he cannot gain access to the UN headquarters in New York. According to the 1947 agreement, the US is generally expected to grant visas to all officials sent to New York to represent their state. However, clearly UN-US agreements are open to ‘interpretation’ by the world’s hegemonic power.

Iran’s foreign ministry and Aboutalebi himself have denied he was among the hostage-takers, claiming that he merely acted as a translator for them on two occasions. Ironically, however, many of the ‘radical’ students involved in the 1979 embassy incident are currently associated with the ‘reformist’ factions of the regime and the inner circles of president Rowhani. One or two can be found among bourgeois liberal critiques of the regime who are currently in exile. For his part, Aboutalebi is a political adviser to Rowhani, and has previously held ambassadorial posts in Rome, Brussels and Canberra.

However, in the US the issue of the visa has proved once again the durability of the events of 1979-80 in the US psyche. An editorial in The Washington Times sums it up: “Americans of a certain age will not forget their bitter anger at watching 52 countrymen paraded, bound and blindfolded, through the streets of Tehran, nor the endless anxiety felt while the American diplomats were held prisoner for 444 days” (April 7).

Last month Republican Doug Lambert sponsored a bill in the House of Representatives calling for a ban on visas to UN diplomats who have conducted “terrorist activities”. He declared that Americans’ “conscience” could not allow Aboutalebi to enter the US. And Obama signed into law a measure that would bar entry to any UN ambassador whom the US says has engaged in “terrorist activity”. The US president said: “I share the Congress’s concern that individuals who have engaged in such activity may use the cover of diplomacy to gain access to our nation.”

Of course, Irangate has recently been highlighted again, as a film produced and distributed by a cultural appendage of the Islamic Revolutionary Guards, Shafaq Media, entitled I am Rowhani, claims the current Iranian president played a crucial role in the Irangate scandal, allegedly meeting North and MacFarlane, and has remained an advocate of negotiations with the United States since that time.

These two events - the failure of Iran to have its assets returned following the interim nuclear deal, and its inability to appoint a UN envoy of its choice - are reminders of the legacy of acts wrongly dubbed ‘anti-imperialist’. A description contradicted by shameless secret deals, as in the case of Irangate, or in complete surrender, as in the U-turn regarding its nuclear programme. Many on the international left have acted as cheerleaders for this type of Islamic anti-western adventurism, but the reality is that such acts have nothing to do with fighting imperialism.

Internal challenges

Last year, during the presidential election campaign, Rowhani promised an improvement in Iran’s economic situation as a consequence of the new ‘moderation in foreign policy’ (one of his election slogans). So far, however, Iranians have seen little benefit from the political events of the last few months. According to government statistics, the rate of inflation has fallen from 40% to 35%, but wages have only gone up by a fraction of this and everyone’s purchasing power is considerably reduced. The fall in the rate of inflation has mainly been achieved by raising interest rates and stabilising the foreign exchange rate following the nose-dive taken by the rial in 2012.

Many subsidies, including for petrol, have been removed. In late April the price of petrol rose by 42% and no doubt this will lead to further price rises. The ending of subsidies, a process initiated by the previous president, Mahmoud Ahmadinejad, is causing anger at a time of economic hardship. Rowhani’s ministers have blamed corruption and mismanagement during Ahmadinejad’s presidency for the country’s dismal economic situation. However, almost a year after this government came to office, no-one believes the situation is solely due to the mistakes of the previous administration.

The issue of unpaid wages remains a major problem and on May 1 Iranian workers plan to participate in numerous illegal demonstrations and gatherings up and down the country to protest not only about the systematic non-payment of wages, but about low pay and the state’s support for the capitalists and their suppression of workers’ rights.

An increasingly unpopular government is resorting to the kind of repression Iranians have periodically experienced. Last week political prisoners were attacked in Evin prison and subjected to beatings and humiliating treatment - many suffered severe injuries. Relatives who were able to visit later have reported that some prisoners could hardly speak and others had obvious bruises. In a letter smuggled out of Evin, political prisoner Emad Bahavar wrote: “They made us stand in a row facing the wall in ward 350’s corridors while being handcuffed and blindfolded. They started to beat us up from behind. You could hear a whining noise. Outside the ward’s gate, the guards stood like a tunnel and forced us to go through it before taking us onto a minibus. You could see blood on the way and inside the minibus.”4

Some Rowhani supporters have claimed this incident resulted from a plot by conservative elements in the security services to embarrass the ‘reformist’ government. The reality is that, even if this is true, the government’s response was contradictory and too little, too late. The head of Iran’s prison services, Gholam-Hossein Esmaeili, appeared at a press conference to deny the attacks - he blamed the BBC and Voice of America for exaggerating what had been a routine search of prisoners. Yet by the end of the week he was dismissed from his post. Government claims that his new position as a local prosecutor was a promotion did not wash with either the internal or external media.

Rowhani has never made any promises regarding ‘human rights’. However, he said he needed six months to strike a deal regarding Iran’s nuclear facilities and to turn round the economy. Judging by events of the last few weeks, it is doubtful he will achieve much before the first anniversary of the presidential elections that brought him to power in June 2013.



1. J Marshall, P Dale Scott and J Hunter The Iran contra connection: secret teams and covert operations in the Reagan era Boston 1987, p169.

2. Time December 8 1986.

3. http://en.wikipedia.org/wiki/Iran-Israel_relation

4. The Guardian April 22.