Even before the surprise election of the “moderate,” Mohammed Khatami, in Iran’s presidential election this May, a small chorus of foreign-policy writers and experts had begun to urge that Washington adopt a more accommodating attitude toward Iran. In the New Republic last fall, Jacob Heilbrunn opined that “The moment has now arrived for the U.S. to abandon its anachronistic and self-defeating policy of isolating the Islamist state.” And in the spring 1997 issue of the National Interest, S. Frederick Starr attacked the “questionable morality” of present U.S. policy, arguing that it is “not really a policy at all, but a crusade” with “costs aplenty.”

Then came the May-June issue of Foreign Affairs; bearing a red-banner headline, “Changing Course in the Persian Gulf,” it included three separate articles advocating a change in America’s hard line. The first article carried special weight, being written jointly by Zbigniew Brzezinski and Brent Scowcroft, National Security Advisers respectively to Presidents Carter and Bush, and Richard Murphy, Assistant Secretary of State for the Middle East in the Reagan administration. According to these three, “the real impetus” behind the trade sanctions we now impose on Iran “seems to have come out of American domestic politics”; the sanctions, announced by President Clinton “at the World Jewish Congress,” have backfired, and “increasingly isolate America rather than their target.”

While administration policy has thus been criticized from without, there are signs as well of ambivalence from within. Late last year, Robert Pelletreau, then Assistant Secretary of State for the Middle East, declared his hope that “when we enter the [second Clinton term] . . . we will be able to make a match in trying out [a] dialogue.” And in her first visit to Europe as Secretary of State, Madeleine Albright told her European counterparts that although their, much softer, policy—known as “critical dialogue”—had not succeeded, “Our critical silence doesn’t seem to have accomplished that much either.”

In truth, the differences between American and European policy are not over talking with Teheran but over action. We maintain a trade boycott, and have threatened to penalize foreign firms that invest in Iran’s energy industry. Europe not only trades with Iran but has given it loans and credits on favorable terms. The essence of the European approach, as explained by its principal architect, German Foreign Minister Klaus Kinkel, has been to try “to move this important country to responsible . . . cooperation. Progress can only be made with Iran, not against Iran.” By contrast, the American approach has been to squeeze Iran. Washington has been prepared to ease the pressure in response to signs that Teheran is mending its ways, but absent such change, the aim has been to weaken the regime and, if not to contribute to its downfall, then at least to constrain its capacity to do harm in the world.

To put all this another way, our approach has been based on a frank recognition of enmity; the Europeans’ on an expectation of amity. What the domestic critics of current U.S. policy have sought is a shift from the former approach to the latter. Indeed, Brzezinski, Scowcroft, and Murphy virtually say as much, proposing that “the United States . . . sit down with the Europeans, the Japanese, and its Gulf allies” to reach “multilateral policies toward Iran.” Since we have tried and failed to win the Europeans to our approach, this means adopting theirs. In the wake of Khatami’s election, such urgings have increased in both number and intensity.



Should we heed them? The argument between Washington and its European allies has been muddied by legislation applying trade sanctions to rogue regimes including Cuba and Libya. The fact is, however, that not all rogue regimes are alike. Although the governments of Libya and Cuba are curses upon their own people, to the outside world they are no longer much more than nuisances. The Iranian regime, on the other hand, is one of the most malign in the world today, and a menace to American interests.

To begin with, Iran is the font of Islamic fundamentalism, the only still-vibrant ideology challenging the Western-born philosophy of democracy and the rights of man. Since 1979, when the Ayatollah Khomeini and his followers swept the Shah from power, this doctrine, which might better be called “radical Islam” or “Islamism,” has spread over the entire region. Though so far it has come to power only in Sudan and Afghanistan, it continues to threaten governments in Algeria and Egypt, it has elected the current premier of Turkey, and it has established itself as a force to be reckoned with throughout the Middle East.

Whether or not they share Teheran’s Shiite orientation, the various Islamist movements take inspiration (and in many cases material assistance) from the Islamic Republic of Iran. Common to them is an explicitly anti-Western outlook, nourished on the conviction that the relative weakness and backwardness of the Islamic world are the results of a conspiracy which has Zionists or Jews at its controls and America—the “great Satan”—at its center. In Iran itself, virulent anti-Americanism is the very heart of the Republic’s ideology. The slogan “death to America” festoons Teheran airport, and is chanted by university students before Friday prayers. It is “the basic motto of the Iranian people,” says the country’s Supreme Leader, Ali Akbar Khamenei, and must be “preserved like a flag.” (As for the other target of Iranian hatred, the state of Israel—which Khamenei refers to as a “malignant tumor”—it, in the words of Deputy Foreign Minister Hossein Sheikholeslam, “must be annihilated.”)

Iran’s hatreds are hardly vented through words alone. This year as in previous years, Iran remains, according to the annual report issued by the U.S. State Department, the world’s “principal state sponsor of terrorism.” In addition to waging war on Jews—through, in recent years, a machine-gun attack on worshipers in a Turkish synagogue, the blowing-up of the Jewish cultural center in Buenos Aires, the downing of a Panamanian airliner on a route that was known to be used mostly by Jewish businessmen—Teheran uses terror attacks to destabilize regional regimes not to its liking, to combat American influence, and to liquidate or intimidate exiled Iranians. Working to scuttle the Middle East peace process, Iran has sponsored suicide bombers who have wreaked havoc in Jerusalem and Tel Aviv and has been accused by the Egyptian government and Palestinian authorities of initiating assassination attempts against Hosni Mubarak and Yasir Arafat.

The list of countries in which Iranian agents have been credibly linked to murderous attacks is impressive: France, Germany, Italy, England, Norway, Turkey, Switzerland, Japan, Pakistan, Thailand, Iraq, Argentina, Panama, and the United States. Leading Iranian officials are often directly involved in such operations, and some of those who carry them out have been rewarded with high office upon their return home. The regime runs international training camps for terrorists, both on its own soil and in Lebanon and Sudan. It gives arms and money to an array of violent groups, including Hamas and Islamic Holy War in Palestinian-controlled territories, the Islamic Group in Egypt, the Islamic Salvation Front in Algeria, and the Tunisian Islamic Movement.

Of all these groups, the one most closely controlled by Teheran and most lavishly funded—$100 million a year, intelligence reports tell us—is the Lebanon-based Hizbollah. According to former CIA director James Woolsey, Hizbollah has killed more Americans than any other terrorist group. This does not include the nineteen U.S. soldiers who died in the Khobar Towers bombing in Dhahran, Saudi Arabia, last year, the perpetrators of which probably came from a sister organization, Saudi Hizbollah, also backed by Iran. FBI director Louis Freeh recently testified that both Lebanese Hizbollah and the Iran-backed Palestinian group Hamas “have placed supporters inside the United States who could be used to support an act of terrorism here.”

This penchant for violence, and contempt for the boundaries of interstate conduct, make it especially frightening that Iran is working diligently to acquire weapons of mass destruction. In 1994, Woolsey estimated that Iran was eight to ten years away from creating a nuclear weapon; if so, the term is now five to seven years. Woolsey’s successor, John Deutsch, recently gave credence to estimates that Iran could have such weapons by the end of the decade. But all such figures are guesses: on the eve of the Gulf war, U.S. intelligence estimated that Iraq was years away from producing a nuclear weapon, but once inside the country we discovered that the real time span was only about a year.

As if this were not enough, Iran has one of the most active chemical-warfare programs in the third world, and, according to a 1996 Defense Department report, is “conducting research on toxins and organisms with biological-warfare applications.” To address the problem of delivery, Iran is helping to fund, and thus gain access to, North Korea’s Nodong-1 missile, which will have a range of 800 miles. Once it acquires these assets, Iran will not only pose an “existential threat to Israel” (in the words of former U.S. National Security Adviser Anthony Lake), it will also be able to intimidate the other states of the Persian Gulf and to deter American action in defense of friends and interests in the region.



To know that Iran is a menace is not yet to know what to do about it. As in the case of China and Cuba today, and as in past cases like South Africa or, most momentously, the Soviet Union and Nazi Germany, the terms of debate are familiar: can the behavior of troublesome states be modified by friendly gestures, by “engagement,” or must it be contained by unflinching opposition? The argument cannot be resolved in the abstract; in each case there are particulars to guide us, and Iran is no exception. Indeed, in its case we have a wealth of history to go by.

In 1985, the United States launched an initiative aimed at establishing friendly relations with the Islamic Republic. That initiative came to be known as the “Iran-contra” affair, and what most Americans remember about it is that it entailed trading arms for hostages. But those American hostages, though weighing on the minds of President Ronald Reagan and his advisers, were not the only or even the principal motive behind American actions. Indeed, Reagan later revealed that since 1983, a year before the first hostage was seized, various third-party nations had been making “overtures to stimulate direct contact between the United States and Iran,” and the U.S. had been “willing . . . to proceed.” Although Reagan’s stubborn denials that he had indeed ended up trading arms for hostages beggar belief, there is no reason to doubt that he aimed for a larger purpose. In his own words, “because of Iran’s importance and its influence in the Islamic world . . . we chose to probe for a better relationship between our countries.”

The Reagan administration pursued its “strategic opening” to Iran doggedly for over a year and a half. Iran received at least four shipments of weapons or spare parts. U.S. National Security Adviser Robert MacFarlane led a delegation in a secret visit to Teheran, and a few months later his deputy, Oliver North, met in Europe with a relative of a top Iranian official. Both times, the Americans came bearing gifts. Yet despite these gestures and others, America won the release of only two hostages, and more Americans were seized shortly thereafter. Washington’s hopes of a new beginning came to ashes.



A still more definitive experiment at “engagement” with Iran has already been alluded to: the one conducted by the European Union (EU) over the last five years. Europe was favorably positioned for such an approach. Not only do Iranian pronouncements routinely differentiate between Europe and the “great Satan,” but Germany, the prime mover of European policy, has had something of a special relationship with Iran going back to Bismarck’s time.

In December 1992, at Bonn’s initiative, the European Union formally adopted its policy of “critical dialogue.” Although the term itself suggested the possibility of criticizing Iranian behavior, European leaders rarely did this in public, nor is there any evidence that they did so in private. Instead, “critical dialogue” was simply the banner under which EU members cultivated their various ties with Teheran.

Beginning in 1993, Germany and other major creditors refinanced $11 billion of Iranian debt, at rates well below what Iran’s poor credit standing would normally allow. Most EU countries also extended credit on favorable terms to enable Iran to import their goods, and some, including Germany, insured entrepreneurs doing business in Iran. Together, these measures helped to keep the country’s faltering economy afloat.

Germany and its partners reached out to Teheran diplomatically as well, exchanging parliamentary and governmental delegations up to the ministerial level. Sometimes they even favored Iran over moderate Islamic states friendlier to the West. One such indulgence was shown when American, European, and Middle Eastern leaders met for an “anti-terrorism” summit in Egypt in 1996 in response to a spate of terror bombings in Israel. Although the major Arab participants at this conference were willing to support a condemnation of Iran, which had publicly supported the attacks and may even have orchestrated or abetted them, any mention of Iran was blocked by the adamant opposition of Paris and other European governments.

Perhaps the most surprising favor, however, took the form of intelligence cooperation between Bonn and Teheran. Customarily, states engage in this kind of sensitive relationship only with their friends, and the details are almost always secret. In this case some of the particulars found their way into the German press, in stories revealing that German intelligence had given computers, software, and photographic equipment to its Iranian counterpart. What is more, Iranian agents had received training from German experts, not only in Iran but at German intelligence headquarters outside Munich. The head of Iranian intelligence had visited Germany several times, and in 1993 he was hosted for days by the chief intelligence adviser to Chancellor Helmut Kohl.

The goal of all these blandishments, according to the Europeans themselves, was to secure an “improvement” in Iranian behavior. The bar that Teheran was asked to hurdle was set as low as possible: it was asked to void the death sentence (fatwah) pronounced against the novelist Salman Rushdie. It declined. At best, Iranian officials hinted that they would refrain from sending their own agents to assassinate Rushdie, while insisting they were powerless, on theological grounds, to lift the fatwah itself. A $2 million reward for Rushdie’s murder posted by an Iranian “foundation” also remained in effect; this past February the bounty was raised to $2.5 million (perhaps to keep pace with inflation?).

Faced with Iranian adamancy, the EU lowered the bar still further, offering to settle for a document in which the Europeans would acknowledge that the fatwah was irrevocable and Iran would promise not to carry out the murder directly. The plan was buried forever when the CIA warned the Danish government of a “concrete and specific plan” by Teheran to assassinate Rushdie during a scheduled appearance in Copenhagen.



Although the abject failure to secure any concession on Rushdie bred disappointment with “critical dialogue,” and some defensiveness on the part of its German advocates, neither Germany nor the EU deviated from their courtship of Iran. Their steadfastness can be explained in part by economic motives—Iran possesses the third largest oil and second largest natural-gas reserves in the world—and in part by political ones. As one of Foreign Minister Kinkel’s advisers put it, “Iran is big and strategically important and, incidentally, the last place in the Middle East where U.S. hegemony is not prevalent.” But beneath these considerations lurks another layer of motivation that is rarely discussed: namely, terrorist blackmail.

In the mid-1980’s, Paris was rocked by a wave of bombings, eventually traced to a Shiite group. Its leader promptly took refuge in the Iranian embassy, whence his safe passage to Iran was negotiated. Since then, though there have been no further Iranian-backed terror campaigns in Europe (as opposed to attacks on Iranian exiles in Europe and on Europeans in the Middle East), Iran’s ability to wreak wider violence has continued to hover menacingly in the air.

The actions of European governments suggest how sensitive they are to this possibility. Two years ago, it was reported that France was trying to ship missiles to Teheran via Cyprus as a payoff to avoid terrorist strikes during the upcoming trial, in Paris, of the killers of former Iranian Prime Minister Shahpour Bakhtiar. In addition, Paris freed two Iranians whose extradition for murder had been sought by Switzerland. Recently, a former official of Austria’s foreign ministry revealed that in 1989 his government, after receiving direct threats of violence from the Iranian ambassador, let go a number of Iranians suspected of murdering three Kurds on Austrian soil.

The element of blackmail may, indeed, have been present in the very genesis of “critical dialogue.” According to the German news magazine Der Spiegel, in 1992 the Iranian ambassador in Bonn “let it be discreetly known that a letter from the Chancellor to [President] Rafsanjani would be useful in solving the problem of two Germans being held hostage in Lebanon.” Kohl responded, the story continued, “by sending three letters in which he suggested the possibility of a ‘German-Iranian special relationship.’ ” The hostages were duly released, and Germany duly took the lead in sponsoring the new EU policy.



What, then, led to the unraveling of “critical dialogue”? After his 1993 visit to Germany, the Iranian intelligence chief, Ali Fallahyan, announced pointedly that “we don’t want to work against each other in each other’s country.” But then, to the evident chagrin of his German host, the Chancellor’s intelligence adviser Bernd Schmidbauer, Fallahyan himself was indicted for murder in the 1992 slaying of four Iranian Kurdish exiles in a Berlin restaurant. In diplomatic circles, this provoked well-justified fears of Iranian reprisals against German nationals and German property. When (despite signs of displeasure from Germany’s political leadership) the prosecutorial team investigating the murder refused to be intimidated, Teheran intensified its threats. One Iranian paper reported calls by mullahs for a fatwah against the German prosecutor similar to the one that had been issued against Rushdie; militant Islamic groups demonstrated outside the German embassy in Teheran, suggestively displaying photos of the American diplomats who had been held captive in 1979-80; and a German diplomat was accosted in his home.

Early this year, after a long delay, the German court nevertheless convicted four men—an Iranian ringleader and three Lebanese collaborators—of murder. It also found that they had acted at the behest of Iranian intelligence, and that the murders had fulfilled “an official liquidation order” explicitly approved by President Hashemi Rafsanjani, Supreme Leader Khamenei, and Foreign Minister Ali Akbar Velayati.

In an attempt to “manage” the verdict’s repercussions, the German government imposed no material penalty on Iran. Instead, Bonn recalled its ambassador from Teheran, and the other members of the European Union followed suit. To this, however, the Iranians acted with renewed indignation. Rafsanjani vowed that the court’s effrontery would “not remain unanswered,” and Khamenei warned that Germany would “pay a heavy price.” Thousands of Iranians marched outside the German embassy in Teheran, chanting “death to Zionist Germany,” and militant Islamist groups enrolled recruits on the streets of Teheran for suicide missions against Germany. After a few weeks the EU announced that it was ready to restore its plenipotentiaries, but Iran replied that the German and Danish ambassadors were not welcome back.

Thus, ignominiously, ended “critical dialogue.”



This denouement, which came about just prior to publication of the Foreign Affairs essays, should have been an embarrassment to the advocates of a new American softness toward Teheran. They seem, however, to have drawn a second wind from Mohammed Khatami’s sweep to victory in May’s presidential election. Their elation may turn out to be premature.

Khatami, one of only four candidates (out of a pool of 238) who survived vetting by the Council of Guardians, campaigned on a platform of greater cultural and personal freedom, but he did not challenge the fundamental tenets of the regime. Moreover, under the constitution of the Islamic Republic, the president remains subordinate to the supreme leader, a post that will continue to be held by the reactionary Khamenei. It is thus far from clear that Khatami will have either the desire or the power to effect major changes, least of all in the area of keenest interest to the United States, namely, Iran’s dealings with the outside world.

Khatami’s background suggests that he may emerge as the Iranian equivalent of a Nikita Khrushchev—a leader who sponsors cultural liberalization but without altering the system or its foreign policy. Perhaps, warming to his role as the vehicle of popular discontent, he will go farther, and in the fullness of time turn into not a Khrushchev but a Gorbachev: that is, a leader whose radical reforms end up undoing the whole system. But does either prospect suggest that now is the time to ease up on Teheran?

Brzezinski, Scowcroft, and Murphy claim that U.S. sanctions “isolate America rather than their target.” What can this mean? Economically, the United States ranks first in the world in both exports and imports while Iran ranks 39th in the one and 49th in the other. Politically, the United States enjoys closer ties than Teheran does with most of the Persian Gulf states, not to mention with the rest of the world. These authors (and others) also argue that America’s unilateral economic sanctions have been ineffective. Clearly, however, these sanctions have discouraged investment in Iran. Of eleven major energy-development projects the country put up for bid with much fanfare a few years ago, none, until recently, had found even tentative takers. According to the economist Eliyahu Kanovsky, Iran’s GNP per capita has fallen in each of the last three years. Although U.S. sanctions are probably not the only cause of this poor performance, they are undoubtedly one of them.

A common complaint of the critics is that hardship only strengthens the regime, by turning resentment against America. In fact, Iran has witnessed a growing number of anti-regime riots in recent years, and no concomitant increase in spontaneous anti-American manifestations. If anything, the outpouring of protest represented in the vote for Khatami suggests that his victory is a vindication of America’s hard line, not a reason for abandoning it.

Whether Khatami turns out to be a Khrushchev or a Gorbachev or something else altogether, the history of previous failed initiatives toward Iran suggests that strict standards for measuring conduct should never be compromised in a rush to reconciliation. We need not hold out until the Islamic Republic goes the way of the USSR, but we can insist on an end to Teheran’s support for violence, not to mention the terrorist activities carried out by its own hand; a halt to its pursuit of weapons of mass destruction; acceptance of Israel; and renunciation of hate-mongering toward the United States. In all likelihood the chorus now proposing preemptive concessions will find such demands excessive and unrealistic, just as similar voices criticized Reagan and Bush for demanding too much of Gorbachev. But fulfilling these conditions would amount to little more than Iran’s return to the civilized world. There is no reason to settle for anything less.


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