Fateful Consequences: U.S.-Iran Relations During
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FATEFUL CONSEQUENCES: U.S.-IRAN RELATIONS DURING THE NIXON AND FORD ADMINISTRATIONS, 1969-77 BY ANDREW SCOTT COOPER A thesis submitted to the Victoria University of Wellington in fulfilment of the requirements for the degree of Doctor of Philosophy (2012) 1 TABLE OF CONTENTS Abstract………………………………………………………………………………………..2 Acknowledgements…………………………………………………………………………... 3 Timeline of Events……………………………………………………………………….……5 Personalities………………………………………………………………………………….10 Introduction: WHEN THE SHAH FELL, OUR POLICY FELL WITH HIM ……………………13 Chapter One: I LIKE HIM, I LIKE HIM AND I LIKE HIS COUNTRY: U.S.-Iran Relations in Nixon’s First Term, 1969-72………………………………………………………………....45 Chapter Two: POPEYE IS RUNNING OUT OF CHEAP SPINACH : U.S.-Iran Relations and the 1973 Energy Crisis, October War and Arab Oil Boycott………………………………….....75 Chapter Three: WE ARE HEADED FOR DISASTER IN THE INDUSTRIAL WORLD : U.S.-Iran Relations and the 1973-74 Oil Shock………………………………………………….........101 Chapter Four: THE INFLUENCE OF THE WHALE OVER ITS CAPTORS : The Nixon and Ford Administrations Respond to the Oil Shock, 1974-75…………………………………….....118 Chapter Five: I NOT ONLY MAKE THE DECISIONS, I DO THE THINKING : Pahlavi Iran and the 1974-75 Oil Boom……………………………………………………………………....146 Chapter Six: WE HAVE GIVEN IN WHEN THE SHAH REALLY WANTED IT : Realities Collide Over Oil Policy, Arms Sales and Nuclear Cooperation, 1974-75………………….169 Chapter Seven: IRAN IS ON THE VERGE OF MOVING AWAY FROM US : Impasse and Confrontation, 1976………………………………………………………………...………194 Conclusion: FATEFUL CONSEQUENCES ..............................................................................222 Bibliography...........................................................................................................................228 2 ABSTRACT This thesis analyzes the trajectory of U.S.-Iran relations from 1969, when Richard Nixon came to office, through the early and mid-1970s when the Nixon Doctrine embraced Iran as the cornerstone of its national security architecture in the Persian Gulf and West Asia, to 1977 when Ford left office with U.S.-Iran relations in a state of disrepair. It discusses the factors—geopolitics, economics, Iranian nationalism, domestic politics, the rise of transnational entities like Organization of Petroleum Exporting Countries (OPEC), rivalries between the Departments of Defense, State, and Treasury and personal ambitions—which damaged the relationship and contributed to the collapse of the Pahlavi dynasty in Iran. It lays particular stress on the difficulties in resolving national security and conflicting economic interests in regards to Iran’s oil resources at time when U.S. dependency on oil from the Middle East increased. It places these conflicts in the context of a series of crises in the form of the 1973 energy crisis, the October War, Watergate, the OPEC oil embargo and oil shock. It explains that the inability or unwillingness of either side to resolve their policy differences resulted from the economic forces unleashed by the oil shock, the difficulties of reconciling strategic, geopolitical and economic goals, and the domestic political vulnerabilities of chief architects of the relationship—Presidents Nixon and Ford, Henry Kissinger, and the Shah Reza Pahlavi—at a time when Vietnam, Watergate and recession weakened the U.S. and the Shah faced the dangers of incipient rebellion, revolution and coup which he tried to suppress through the use of SAVAK, the secret police, and one-party rule. The thesis thus examines how the intrusion of economic concerns into cold war geopolitical calculations had fateful consequences, not only for U.S.-Iran relations, but for U.S. national security strategy, the survival of the Pahlavi regime, and stability in the Persian Gulf which resulted in a new U.S. reliance upon Saudi Arabia to ensure access to oil. 3 ACKNOWLEDGEMENTS This thesis grew out of a research project begun in New York City in the spring of 2006. Professor Gary Sick of Columbia University gave generously of his time and encouraged my efforts to research President-Shah relations during the Nixon and Ford administrations. Columbia is also the home of the Center for Iranian Studies, and Ahmad Ashraf, managing editor of the Encyclopaedia Iranica , introduced me to the diaries of Court Minister Asadollah Alam, provided me with an invaluable Iranian perspective of events, and helped with introductions. Half-way through my research I returned to New Zealand to enroll in the PhD history program at Victoria University in the city of Wellington. My supervisors, Associate Professor Dolores Janiewski and Professor Roberto Rabel, offered wise counsel and patiently worked with me as I developed my thesis. I would like to thank them for their advice, patience and support. Scholars who study US-Iran relations during the cold war invariably turn to the collection of documents housed at the National Security Archive at George Washington University. The National Security Archive provides an unparalleled service to historians through its collection of documents, Iran: The Making of US Policy, 1977-80 , as well as the Kissinger telephone transcripts. The papers of former Secretary of the Treasury William E. Simon are open to scholars at Lafayette College’s Skillman Library. Although I was unable to personally visit the Library, Diane Wyndham Shaw located documents and mailed them to me. I am grateful to Professor Gholam Reza Afkhami and the Foundation for Iranian Studies in Maryland for making available the Foundation’s invaluable collection of oral history interviews conducted with former high ranking U.S. officials and diplomats. The holdings of FIS offer a unique historical record and I am appreciative to Professor Afkhami and his staff for their efforts and assistance during the course of my own research. 4 General Brent Scowcroft’s collection of papers deposited at the Gerald R. Ford Presidential Library in Ann Arbor, Michigan, is one of the single most important troves of documentation available to American foreign policy scholars. Thank you to Geir Gunderson and his colleagues at the library for fulfilling so many research requests, I owe a debt of gratitude to former government officials and retired diplomats whose interviews for my book The Oil Kings were folded into this thesis. They agreed to meet to interpret documents, share insights and offer reminiscences. In the United States, former Ford administration officials General Brent Scowcroft, James Schlesinger and Frank Zarb offered invaluable insights into oil policy during the crisis days of the mid-1970s. Diplomats Henry Precht, Bill Lehfeldt and Charlie Naas, now retired, helped provide a diplomatic perspective of events, shared stories, and helped decipher declassified documents. Defense strategist Edward Luttwak talked to me about U.S. power projection in the mid-1970s, a time when the U.S. was perceived as weak at home and abroad. Former Iranian Foreign Minister and Ambassador Ardeshir Zahedi opened his home in Montreux, Switzerland, and spent two days answering my questions, offering his own perspective, and talking about the personalities and events of that earlier era. Former Secretary of Defense Donald Rumsfeld and former Chairman of the Federal Reserve Alan Greenspan declined my requests for interviews. I did not receive responses from the office of former Secretary of State Henry Kissinger or from Iranian economist Jahingir Amuzegar. Lastly, I would like to thank my family for their love and support during the time it took to produce the thesis. 5 TIMELINE OF EVENTS 1921 • Reza Khan, commander of Persia’s Cossack regiment, seizes power. 1925 • Reza Shah sworn in as Iran’s new monarch, adopts family name “Pahlavi.” 1941 • Troops from Great Britain and the Soviet Union invade, occupy Iran. • Reza Shah Pahlavi abdicates, vacates Peacock Throne. • Crown Prince Mohammad Reza, 21, succeeds as second Pahlavi king. 1946 • Iranian troops crush pro-Soviet separatists in Azerbaijan. 1951 • Iranian parliament confirms Dr. Mohammad Mossadegh as prime minister. • Mossadegh nationalizes Iranian oil assets. 1953 • Mossadegh overthrown by royalists in CIA-sponsored revolt. • Vice President Richard Nixon visits Tehran, meets Shah. 1959 • Shah marries Farah Diba. 1963 • Shah launches White Revolution reforms. • Royalist troops crush demonstrations inspired by Ayatollah Khomeini. 1964 • King Faisal’s reign begins in Saudi Arabia. 6 1967 • Nixon consults Shah in Tehran. • Shah holds belated coronation. 1969 • Shah travels to Eisenhower funeral observances. • Nixon enunciates ‘Nixon Doctrine’. • Shah pays state visit to Washington. 1970 • U.S. officials debate lifting restrictions on arms sales to Iran. • Nixon signals the Shah he can “push” for higher oil prices. • U.S. adopts ‘Twin Pillars’ policy in Persian Gulf. • U.S. oil production peaks at 11 million barrels. 1971 • Oil producers and oil companies sign Tehran Agreement. • Ambassador MacArthur assures Nixon Iran is ready to defend Persian Gulf. • Persepolis celebrations in Iran. • Iran seizes three disputed islands at entrance to the Persian Gulf. • Secret U.S.-Iran airlift of military supplies to Pakistan. 1972 • Nixon visits Tehran. • Nixon administration secretly ends restrictions on arms sales to Iran. • Kissinger intervenes in sale of F-14 fighter jets to Iran. • Secret U.S.-Iran airlift of military supplies to South Vietnam. • Nixon appoints Helms U.S. ambassador in Tehran. 7 1973 • Fuel shortages threaten domestic U.S. economy. • Shah nationalizes Iran’s