What really happened to the Shah [Peanut Jimmys Coup]

"In November 1978, President Carter named the Bilderberg group's George Ball, another member of the Trilateral Commission, to head a special White House Iran task force under the National Security Council's Brzezinski. Ball recommended that Washington drop support for the Shah of Iran and support the fundamentalistic Islamic opposition of Ayatollah Khomeini. Robert Bowie from the CIA was one of the lead 'case officers' in the new CIA-led coup against the man their covert actions had placed into power 25 years earlier.

Their scheme was based on a detailed study of the phenomenon of Islamic fundamentalism, as presented by British Islamic expert, Dr. Bernard Lewis, then on assignment at Princeton University in the United States. Lewis's scheme, which was unveiled at the May 1979 Bilderberg meeting in Austria, endorsed the radical Muslim Brotherhood movement behind Khomeini, in order to promote balkanization of the entire Muslim Near East along tribal and religious lines. Lewis argued that the West should encourage autonomous groups such as the Kurds, Armenians, Lebanese Maronites, Ethiopian Copts, Azerbaijani Turks, and so forth. The chaos would spread in what he termed an 'Arc of Crisis,' which would spill over into Muslim regions of the Soviet Union.

The coup against the Shah, like that against Mossadegh in 1953, was run by British and American intelligence, with the bombastic American, Brzezinski, taking public 'credit' for getting rid of the 'corrupt' Shah, while the British characteristically remained safely in the background.

During 1978, negotiations were under way between the Shah's government and British Petroleum for renewal of the 25-year old extraction agreement. By October 1978, the talks had collapsed over a British 'offer' which demanded exclusive rights to Iran's future oil output, while refusing to guarantee purchase of the oil. With their dependence on British-controlled export apparently at an end, Iran appeared on the verge of independence in its oil sales policy for the first time since 1953, with eager prospective buyers in Germany, France, Japan and elsewhere. In its lead editorial that September, Iran's Kayhan International stated:

In retrospect, the 25-year partnership with the [British Petroleum] consortium and the 50-year relationship with British Petroleum which preceded it, have not been satisfactory ones for Iran … Looking to the future, NIOC [National Iranian Oil Company] should plan to handle all operations by itself.

London was blackmailing and putting enormous economic pressure on the Shah's regime by refusing to buy Iranian oil production, taking only 3 million or so barrels daily of an agreed minimum of 5 million barrels per day. This imposed dramatic revenue pressures on Iran, which provided the context in which religious discontent against the Shah could be fanned by trained agitators deployed by British and U.S. intelligence. In addition, strikes among oil workers at this critical juncture crippled Iranian oil production.

As Iran's domestic economic troubles grew, American 'security' advisers to the Shah's Savak secret police implemented a policy of ever more brutal repression, in a manner calculated to maximize popular antipathy to the Shah. At the same time, the Carter administration cynically began protesting abuses of 'human rights' under the Shah.

British Petroleum reportedly began to organize capital flight out of Iran, through its strong influence in Iran's financial and banking community. The British Broadcasting Corporation's Persian-language broadcasts, with dozens of Persian-speaking BBC 'correspondents' sent into even the smallest village, drummed up hysteria against the Shah. The BBC gave Ayatollah Khomeini a full propaganda platform inside Iran during this time. The British government-owned broadcasting organization refused to give the Shah's government an equal chance to reply. Repeated personal appeals from the Shah to the BBC yielded no result. Anglo-American intelligence was committed to toppling the Shah. The Shah fled in January, and by February 1979, Khomeini had been flown into Tehran to proclaim the establishment of his repressive theocratic state to replace the Shah's government.

Reflecting on his downfall months later, shortly before his death, the Shah noted from exile,

I did not know it then – perhaps I did not want to know – but it is clear to me now that the Americans wanted me out. Clearly this is what the human rights advocates in the State Department wanted … What was I to make of the Administration's sudden decision to call former Under Secretary of State George Ball to the White House as an adviser on Iran? … Ball was among those Americans who wanted to abandon me and ultimately my country.[1][1]

With the fall of the Shah and the coming to power of the fanatical Khomeini adherents in Iran, chaos was unleashed. By May 1979, the new Khomeini regime had singled out the country's nuclear power development plans and announced cancellation of the entire program for French and German nuclear reactor construction.

Iran's oil exports to the world were suddenly cut off, some 3 million barrels per day. Curiously, Saudi Arabian production in the critical days of January 1979 was also cut by some 2 million barrels per day. To add to the pressures on world oil supply, British Petroleum declared force majeure and cancelled major contracts for oil supply. Prices on the Rotterdam spot market, heavily influenced by BP and Royal Cutch Shell as the largest oil traders, soared in early 1979 as a result. The second oil shock of the 1970s was fully under way.

Indications are that the actual planners of the Iranian Khomeini coup in London and within the senior ranks of the U.S. liberal establishment decided to keep President Carter largely ignorant of the policy and its ultimate objectives. The ensuing energy crisis in the United States was a major factor in bringing about Carter's defeat a year later.

There was never a real shortage in the world supply of petroleum. Existing Saudi and Kuwaiti production capacities could at any time have met the 5-6 million barrels per day temporary shortfall, as a U.S. congressional investigation by the General Accounting Office months later confirmed.

Unusually low reserve stocks of oil held by the Seven Sisters oil multinationals contributed to creating a devastating world oil price shock, with prices for crude oil soaring from a level of some $14 per barrel in 1978 towards the astronomical heights of $40 per barrel for some grades of crude on the spot market. Long gasoline lines across America contributed to a general sense of panic, and Carter energy secretary and former CIA director, James R. Schlesinger, did not help calm matters when he told Congress and the media in February 1979 that the Iranian oil shortfall was 'prospectively more serious' than the 1973 Arab oil embargo.[2][2]

The Carter administration's Trilateral Commission foreign policy further ensured that any European effort from Germany and France to develop more cooperative trade, economic and diplomatic relations with their Soviet neighbor, under the umbrella of détente and various Soviet-west European energy agreements, was also thrown into disarray.

Carter's security adviser, Zbigniew Brzezinski, and secretary of state, Cyrus Vance, implemented their 'Arc of Crisis' policy, spreading the instability of the Iranian revolution throughout the perimeter around the Soviet Union. Throughout the Islamic perimeter from Pakistan to Iran, U.S. initiatives created instability or worse."

Thanks for posting this article. This is interesting, though from what I've read my recollection is that Vance was more the culprit in this than Brzezinski, so I'll need to do some more research to digest this article and reconcile it with what I've seen elsewhere. According to Kai Bird's biography of Rockefeller lawyer John McCloy, The Chairman, the Rockefellers were actually supporting the Shah because his fall would've threatened their oil interests, so they had McCloy and Henry Kissinger recruit Brzezinski into an (unsuccessful) effort called Project Alpha to counter the influence of Vance and certain anti-Shah elements in the State Department (two who Bird names are Ambassador William H. Sullivan and Henry Precht) on Carter's Iran policy. I posted a bit on this a while back, which I'll quote for reference:

(From Iran) An Open Letter To Senator John Kerry

From Kai Bird, The Chairman: John McCloy: The Making of the American Establishment, New York: Simon & Schuster, 1992, 643:

"As late as May 1978, Carter's ambassador in Tehran had reported that the regime was firmly in place, but by the autumn William Sullivan had changed his mind. On November 9, 1978, he wrote a cable entitled 'Thinking the Unthinkable', and recommended that private talks be opened with the Ayatollah Khomenei's entourage in an attempt to broker a peaceful transition to a new coalition government composed of moderate elements in the opposition. Sullivan was not alone in this view. Henry Precht, one of the Foreign Service's most knowledgeable Iran experts, believed the shah was completely isolated."

http://www.workmall.com/wfb2001/iran/iran_history_the_bakhtiar_government.html

Following Khomeini's arrival in Tehran, clandestine contacts took place between Khomeini's representatives and a number of military commanders. These contacts were encouraged by United States ambassador William Sullivan, who had no confidence in the Bakhtiar government, thought the triumph of the Khomeini forces inevitable, and believed future stability in Iran could be assured only if an accommodation could be reached between the armed forces and the Khomeini camp. Contacts between the military chiefs and the Khomeini camp were also being encouraged by United States general Robert E. Huyser, who had arrived in Tehran on January 4, 1979, as President Carter's special emissary. Huyser's assignment was to keep the Iranian army intact, to encourage the military to maintain support for the Bakhtiar government, and to prepare the army for a takeover, should that become necessary. Huyser began a round of almost daily meetings with the service chiefs of the army, navy, and air force, plus heads of the National Police and the Gendarmerie who were sometimes joined by the chief of SAVAK. He dissuaded those so inclined from attempting a coup immediately upon Khomeini's return to Iran, but he failed to get the commanders to take any other concerted action. He left Iran on February 3, before the final confrontation between the army and the revolutionary forces.

http://www.mindef.gov.sg/safti/pointer/back/journals/2000/Vol26_4/8.htm

The key players were Carter, Cyrus Vance and Zbigniew Brzezinski. Harold Brown did not play a key role because he did not have as much access to Carter compared to Vance and Brzezinski.55 Brzezinski was thought to be more aggressive and innovative than Vance but Vance was believed to be more skilful than Brzezinski in assessing the feasibility of policy options.56 Carter had different expectations from both men due to their different strengths. "Carter believed he would benefit from hearing both the cautious, bureaucratic considerations of Vance and the more action-oriented and abstract considerations of Brzezinski."57

Brzezinski was the more hawkish of the two. He was convinced of the need to maintain a pro-American regime in Iran. He established close contact with the Iranian ambassador to America, Zahedi, who sought to get American support for the Shah through Brzezinski.58 Brzezinski was painting a more optimistic picture of the Shah to Carter and was determined to keep the Shah in power.59 He was a strong advocate for a military clampdown on the opposition.60 Later, he even advocated a military coup but Carter was not in favour of a military crackdown or coup.61

Brzezinski manipulated the advisory process. When Henry Precht (Department of State Desk Officer for Iran) proposed that the US remove the Shah and seek contact with Khomeini's forces for a coalition government, Brzezinski excluded Precht from SCC meetings.62 On 24 October, the State Department had produced a memo on how to deal with the situation in Iran. As he disagreed entirely with the memo, he shelved it permanently.63 Later, he attempted to change Carter's policy subtly by calling the Shah on the telephone on 3 November and stated American support for "any actions that the Shah considered necessary",64 thus implying a military crackdown. He also tried to encourage the Shah to crackdown on the opposition through Zahedi.65 On the other hand, William Sullivan, the US ambassador to Iran, told the Shah that the US would not be responsible for such actions.66 Hence, the Shah was confused by these conflicting messages.

On the other hand, Vance argued that the US could not assume responsibility for a bloodbath in Iran67 and recommended large-scale political reforms.68 He sought a broad-based coalition government that included forces from Khomeini's camp.69 There was a possible move by Vance to move Carter towards his views. The Carter administration had commissioned George Ball, the former Deputy Secretary of State, as an independent consultant. Ball recommended a civilian coalition government.70 A SCC meeting was convened on 13 December to discuss Ball's proposal. On the same day, Sullivan sent a cable recommending the same policy.71

It was plausible that the Ball episode was "a clever and sophisticated move to bring Carter around to Vance's view".72 Initially, everyone, including Brzezinski, liked the idea of appointing an independent consultant. Later on, Brzezinski regretted this move when he realised that Ball was a good friend of Vance's. This move eventually failed because Carter insisted upon a coalition government without Khomeini.73 While Vance was telling the Shah through Sullivan to swiftly establish a civilian government,74 Brzezinski was encouraging a military government.

Finally, to shed more light on the compromise message drafted for Carter while he was away at Camp David, we should examine how each player attempted to manipulate the information presented to Carter. At the meeting on 28 December, Brzezinski took the lead in drafting the message for Carter. He tried to ensure that the message was subtle enough to include the military option.75 The message first stated that the US preferred a coalition government. "If there was uncertainty about the underlying orientation of such a government or its capability to govern, or if the army was in danger of being fragmented" , 76 "then a firm military government under the Shah may be unavoidable".77 Vance was in charge of bringing the message to Carter. At Vance's urging, Carter changed the language to ensure that the military option would not be considered.78 Instead of "a firm military government", the message now advised "a government which would end disorder, violence and bloodshed".79 The Shah failed to see any guidance in this message.

Since posting this I've read Robert Lacey's history of Saudi-US relations, The Kingdom, which I'd also recommend for additional information on Carter's Iran policy.

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