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October Surprise, Part 8: Iran deal Collapses
by Kenneth R. Timmerman

Reprinted from
Western Journalism Center/ WorldNetDaily

Oct. 16, 2000
Iran deal collapses
Support for Mideast terror jeopardizes Clinton legacy
Posted: October 16, 2000
1:00 am Eastern

© 2000

A Special Investigative Report from the Western Journalism Center with the assistance of the Iran Brief

Editor's note: The Clinton administration has been hoping to conclude a "package deal" with the government of Iran in time for the November elections that would resolve 20 years of hostility between the United States and Iran, lead to renewed diplomatic relations, and give President Clinton a much-sought-after "legacy" in foreign affairs, according to intermediaries directly involved in the negotiations and former U.S. officials.

As reported in WorldNetDaily the deal, if successful, would restore complete commercial ties between the two countries, allowing U.S. oil companies to invest in Iran and to buy Iranian crude oil while allowing President Clinton and Vice President Gore to claim credit for "resolving" the current oil crisis, all in time for the elections.

Earlier segments of this special report from the Western Journalism Center have appeared in starting Monday, Sept. 25.


By Kenneth R. Timmerman
© 2000, Western Journalism Center

The United States Senate has thrown a monkey-wrench into the Clinton administration's plans to renew commercial and diplomatic ties with Iran when it unanimously approved legislation allowing Iran's assets in the United States to be seized to compensate victims of Iranian-backed terrorist attacks.

But Iran also deserves its share of blame for sabotaging a deal which Clinton administration negotiators believed would be approved by both sides within a matter of weeks, according to administration sources and Iranian intermediaries involved in the exchanges.

Last Wednesday, as the cycle of Middle East violence was escalating, Iranian Foreign Minister Kamal Kharrazi met with the leaders of radical Palestinian groups at the Iranian embassy in Damascus, urging them to step up military operations against Israel. "The talks covered ways of ensuring the continuation of the uprising against the Zionist enemy,'' said Ahmed Jibril, the head of the Popular Front for the Liberation of Palestine-General Command, a group cited in German intelligence reports for its involvement in the bombing of Pan Am Flight 103 twelve years ago.

Reuters quoted Iranian officials as saying that top leaders from Hamas and Palestinian Islamic Jihad also attended the coordination session. Both groups are funded by the Iranian government and have murdered Americans in terrorist attacks in Israel.

The Justice for Victims of Terrorism Act, which cleared the Senate in a 95-0 vote on Wednesday, compels the president to assist the families of Americans murdered by terrorists to identify and seize assets belonging to the governments sponsoring the terrorist groups that carried out the attacks. The Clinton White House and the State Department lobbied hard to keep the bill from becoming law, but the president has now indicated he will sign it.

The administration had claimed Iran was on the verge of a historic compromise with the United States. But Iran's recent behavior -- including its refusal to release 10 Jewish shopkeepers and students accused of spying for Israel, and its outrageous public support for terrorist groups openly sabotaging Arab-Israeli peace talks -- has made it politically hazardous for the administration to pursue the secret talks at this time.

On Thursday, Sens. Jon Kyl, R-Ariz., and Diane Feinstein, D-Calif., proposed new legislation that would require the administration to end the negotiations with Iran and take a tougher stand on Syria as well.

"We expect this bill to pass by the end of the session," an aide to Kyl said.

The bill steps up U.S. counter-terrorism efforts, and calls on the U.S. to "make no concessions to Iran" until Iran "demonstrates that it has stopped supporting terrorism" and "cooperates fully with the United States in the investigation of the 1996 bombing of the Khobar Towers complex in Saudi Arabia."

With yet another set of legislative handcuffs on administration negotiators, the likelihood of any secret deal with Iran becomes increasingly unlikely.

Caving in to terrorists
In parallel with the secret back-channel talks with Tehran, the Clinton administration has made a series of "good faith" public gestures toward Iran over the past 18 months, without any demand that Iran respond in kind.


In April 1999, the administration lifted a ban on the sale of food and medicines to Iran, in an effort to quietly resume trade.

President Clinton preceded the relaxation of sanctions with bizarre remarks recognizing Iran's "historic grievances" against the U.S., uttered at a White House "Millennium Dinner" on April 12.

Last summer, the president sent a letter to Iranian President Mohammad Khatami, offering closer ties and reassuring him that the United States had no "hostility" toward the Islamic Republic of Iran. This came despite an FBI investigation that concluded Iran was deeply involved in the June 1996 attack against a U.S. Air Force barracks in Dhahran, Saudi Arabia in June 1996 that killed 19 U.S. servicemen.

In November 1999, Deputy Secretary of State Strobe Talbott, a key player in the back-door negotiations with Iran, authorized the sale of upgrade kits for Iran's Boeing 747 cargo jets, which are used for both commercial and military flights. This came despite concerns from the Pentagon that this would enhance Iran's military airlift capability.

On March 17 Secretary of State Madeleine Albright tipped the administration's hand by announcing that the U.S. was seeking a "global settlement" with Iran. As an added sweetener, she made an unbidden apology for the U.S. role in the 1953 coup d'etat that restored the shah after a Soviet-backed effort to topple him from power.
"The coup was clearly a setback for Iran's political development," she said. "And it is easy to see now why many Iranians continue to resent this intervention by America in their internal affairs."


Starting in July, the administration loosened travel restrictions on Iranian officials. First to come to the U.S. was an Iranian negotiator from the Iran-U.S. Claims Tribunal, who lobbied members of Congress to reject the Justice for Victims of Terrorism Act.

Next, the administration approved a trip to New York by Parliament Speaker Mehdi Karrubi, known to U.S. officials as a key intermediary during the Iran-contra affair. A hard-line left-wing cleric, now described as a "moderate," Karrubi addressed an Intra-parliamentary conference at the end of August and met with State Department official Donald Bloom and with a Congressional delegation headed by U.S. Sen. Arlen Specter, R-Pa.

President Khatami himself followed a few days later, addressing the United Nations for the annual opening session of the General Assembly. The State Department then allowed Foreign Minister Kamal Kharrazi to travel to Los Angeles on Sept. 22 to address Iranian-American groups, the first such trip since the 1979 revolution. During his trip, Kamal Kharrazi held closed-door sessions with Iranian-America businessmen and political groups, and addressed a public forum at UCLA, as first reported by

Iran has failed to reciprocate for any of these U.S. gestures, as noted bitterly by Assistant Secretary of State Martin Indyk last year.

"We wait patiently for an Iranian reaction that is more positive than what we are getting at the moment," he told a U.S. Information Agency news briefing on May 14, 1999.

In a subsequent speech to the Asia Society in October, Indyk complained of Iran's "hide-bound and unimaginative" response to U.S. gestures of friendship and dialogue. Perhaps as a reward for his recalcitrance, Indyk was stripped temporarily of his security clearance last month.

"In any negotiation, you need reciprocity," says George Washington University terrorism expert Professor Yonah Alexander. "Iran perceives these one-sided U.S. gestures as weakness."

Alexander likened the U.S. gestures toward Iran to those of Britain's government in 1938 toward Adolf Hitler. "Appeasement didn't help Chamberlain in Munich, and it's not helping now. With these people, you need to take a tough position."

Seeing that the Clinton administration is prepared to make ever-greater concessions without anything in exchange, the Tehran regime has taken an increasingly hard line toward the U.S. and toward Israel in recent weeks.

On October 1, President Khatami told the leaders of Middle Eastern terrorist groups -- Hamas, Palestinian Islamic Jihad, and Hezbollah -- that the only way for real peace in the Middle East was through an end to the state of Israel, Reuters reported from Tehran. "They are basically an occupying entity,'' Khatami said. "Naturally, any government that is based on oppression and injustice may stay in power for a while, but ultimately it is doomed to failure."

According to Alexander, Iran recently called on notorious Lebanese terrorist Imad Mughniyeh to coordinate terrorist attacks against "quality targets" inside Israel. Mughniyeh was responsible for kidnapping U.S. hostages in Lebanon in the 1980s as well as the murder of U.S. Marine Lt. Col. William R. Higgins.

Instead of appeasing Iran, Alexander believes, the United States should demand the arrest and extradition of Mughniyeh and other terrorists, including those responsible for the June 1996 attack against the U.S. Air Force barracks in Dhahran, Saudi Arabia.

The lobbyists
Iran has felt increasingly self-confident in its efforts to get U.S. sanctions lifted as it has torn a page from the book of communist China, enlisting a stunning array of U.S. businesses, academics and lobbying organizations to plead its cause in the United States.

A powerful "anti-sanctions" lobby has emerged in the U.S. over the past few years. Its activities include open lobbying of Congress, full-page advertisements in major U.S. newspapers and grass-roots organizations. Most of America's largest oil companies have joined the effort, including Mobil, BP-Amoco, CONOCO, UNOCAL and Exxon, as part of an anti-sanctions lobbying group known as USA*Engage. Also part of the anti-sanctions coalition is Houston-based Halliburton, whose CEO, former Secretary of Defense Dick Cheney, is now the Republican Vice Presidential candidate.

(Cheney told the New York Times shortly after he was nominated that he would renounce his anti-sanctions efforts, since he was a "team player" and Gov. Bush did not support his efforts as an oil industry executive to open Iran to U.S. exporters).

USA*Engage called on the administration on Sept. 18 to change its oil policy and lift sanctions on Iran, "to ensure an increased supply of energy resources."

The Clinton administration has given unusual credibility to one anti-sanctions group, the American-Iranian Council (AIC), by twice sending Secretary of State Madeleine Albright to events sponsored by the group to announce major changes in U.S. policy toward Iran.

The Council is run by a Rutgers University assistant professor of urbanism, Hoosang Amirahmadi, an Iranian-American who fought against the Shah in the late 1970s as part of Iran's Soviet-dominated Communist Party.

Amirahmadi today boasts of his efforts to promote U.S. business ties with Iran by organizing policy conferences against the sanctions, and through his own consulting business. AIC is chaired by former Assistant Secretary of State Robert Pelletreau, a recently-retired Near East hand who now works as a lawyer-lobbyist with the Washington, D.C., firm Afridi and Angell.

The American-Iranian Council receives the bulk of its funding from CONOCO and UNOCAL, according to the group's most recent tax return and interviews with Amirahmadi. A CONOCO spokesman, Gary Marfin, confirmed that the company provided AIC with approximately $25,000 per year to fund its public policy activities.

Marfin vigorously denied any suggestion that CONOCO's funding of the American-Iranian Council could be considered lobbying on behalf of the Iranian government.

"We also support USA*Engage," Marfin said. "We support any group that opposes unilateral sanctions, or that is arguing in favor of U.S. engagement with Iran." Among the anti-sanctions group CONOCO supports financially are the Petroleum Institute and the National Association of Manufacturers, Marfin said.

Amirahmadi claimed that AIC was "not in the business of lobbying against sanctions," despite the fact that it organized public conferences against the sanctions.

He also denied allegations brought by fellow Iranian-Americans that he had received money from the Iranian Foreign Ministry in support of his lobbying activities.

"I have not received any money from the government of Iran, and neither has AIC," he said.

Infiltrating the community
The Iranian government has also been busy infiltrating the Iranian community in the United States, which until recently was solidly conservative and strongly supportive of the son of the former shah. Over the past few years, Iran has succeeded in setting up several new Iranian-American lobbying groups to support their goal of getting U.S. trade sanctions on Iran lifted.

Here, too, the Clinton administration has helped Iran's cause, granting it special licenses to purchase U.S. radio and television stations, and allowing it to beam Iranian government propaganda into the U.S. by direct satellite broadcasts. The administration also allows the Iranian government to run Islamic schools and mosques in the United States that are dedicated to anti-American and anti-Jewish propaganda.

Among the new lobbying groups are the Iranian Trade Association in San Diego, Calif.

In addition to promoting U.S. trade with Iran and providing commercial information to its members, ITA openly professes to engage in "grass-roots advocacy mobilization to lift the U.S. unilateral trade sanctions on Iran."

The group's website has a section devoted to legislation pending before Congress, and provides sample lobbying letters. An interactive feature allows visitors to look up their members of Congress and senators by zip code, and provides them with mailing and e-mail addresses.

Although it claims to be a non-profit organization, the Iranian Trade Association proclaims its lobbying mission in crystal clear terms.

"Many Iranians want to speak out against the U.S. sanctions on Iran, but until now, they have not had the opportunity to effectively participate in the political process. ITA ensures that their message, along with that of its membership, is clearly heard on Capitol Hill and around the world," says the website.

The Internal Revenue Services imposes strict limits on lobbying by non-profit organizations that, if violated, can lead to fines and the loss of tax-exempt status. ITA operates a parallel consulting group, called the U.S.-Iran Business Council, which aspires to be a clearing house for U.S. companies seeking to do business with Iran. The group includes direct links to Iran's Oil Ministry and other major government departments.

Another new pro-regime advocacy group, Iranians for International Cooperation, is run by a former U.S. Senate intern named Trita Parsi. Now living in Stockholm, Parsi and his group have been lobbying the expatriate community on behalf of Iranian President Khatami and lobbying the U.S. government to lift the sanctions.

The group urges its members to lobby Congress against the Justice for Victims for Terrorism Act that awards Iran's U.S. assets to the families of Americans murdered by Iranian-backed terrorists. Like ITA, it makes available sample lobbying letters, and provides an interactive database to locate members of Congress by zip code.

It has also attempted to gin up opposition from Iranian-Americans to Rep. Brad Sherman, D-Calif., because of his support for Iranian Jews jailed in Shiraz, and launched a lobbying effort urging the U.S. government to stop fingerprinting Iranian nationals when they arrive at U.S. airports, a practice the U.S. claims is necessary to prevent terrorism, but which the group claims is merely racist.

Working with Parsi is a University of Maryland undergraduate, Babak Talebi, who represented the group at a meeting in New York in September with the Iranian president. As with ITA, the group's lobbying activities would appear to contradict its charter as a non-profit organization.

In addition to these public organizations, dozens of smaller groups, university professors and private businessmen operate an increasingly broad-based support network for the Islamic Republic in the United States.

Money in the water
Word of an impending deal with Iran reached the Washington, D.C., beltway over the summer, where lobbyists, lawyers, opportunists and hangers-on could smell money in the water.

Top among them, according to an Iranian intermediary involved in the talks, was Lanny Davis, a former White House aide and personal attorney for President Clinton. Davis now works for the gold-plated Washington, D.C., law firm of Patton Boggs. Queried through his office while on foreign travel, he denied any personal involvement in efforts to lift trade sanctions on Iran.

Also involved were former administration political appointees now working at the law firm of Steptoe & Johnson in Washington, D.C., the intermediaries said.

"They can smell the money in the water," said one of the intermediaries involved in taking their offers to Tehran.

One of those seeking cash is a Bethesda, Md., businessman who boasts of his ties to Lanny Davis, Vernon Jordan and to other Clinton confidants and former administration officials.

In a telephone exchange from Tehran, a source close to Iran's National Security Council said an intermediary had arrived from the United States toward the end of September, bearing a letter from Maryland businessman Paul H. Geffert.

In the letter, Geffert reportedly offered to lobby the president of the United States on behalf of the government of Iran in exchange for a hefty consulting fee.

"A concerted behind-the-scenes effort between now and President Clinton's departure from office can lead to the removal of U.S. trade sanctions with Iran," the official read from Geffert's letter. Geffert wrote that he had spoken with two Washington, D.C., law firms -- Patton Boggs, and Steptoe & Johnson -- who could provide "experts with direct access to the president and his top appointees for international trade."

Those experts, the letter went on, had "extensive experience with negotiating bilateral agreements."

Geffert told the Iranians that their common goal should be "to remove barriers so citizens of Iran and America can find additional common ground through trade."

Among the U.S. officials he said were backing the initiative was Sue Esserman, a deputy U.S. trade representative and former Steptoe & Johnson attorney, who entered the administration in March 1994 as assistant secretary of commerce for import administration.

Esserman declined to answer questions. A deputy, Jake Bright, insisted that "Iran is not in her portfolio" and referred inquiries to the USTR press office. That office contradicted Bright, saying, "Sue Esserman is the person handling trade issues with Iran" but could provide no explanation why Bright had supplied apparently false information.

Amy Stilwell, a spokesperson for USTR, phoned back with an official statement after this exchange.

"Ambassador Esserman is not involved in any sort of interagency team dealing with the issue you raised," she said. "Nobody from this agency will be speaking about the Iran trade embargo," she added. "It's a political decision."

An Iranian official reacted with skepticism to Geffert's letter, which was accompanied by demands for six-figure consulting fees and contributions to the Clinton Library in Little Rock. "These guys are liars," the official said. "They are like our bazaaris," a reference to Iranian carpet merchants.

Contacted on several occasions by this reporter, Geffert refused to discuss the details of the letter, except to say that he had been "interested in Iran since the 1970s." He volunteered that he had worked on "economic development projects" in Russia, and had recently returned from a business trip to China.

"A good day for me is not getting mentioned in the papers," he said.

According to Maryland State records, Geffert is the president of Ventus, Inc., a consulting firm run out of his home in Bethesda. The state records show that Ventus ceased to exist as a legal entity on Oct. 5, 1992, because Geffert had failed to file a personal property tax return.

But according to the intermediary, Geffert had presented himself on numerous occasions over the past five years as a conduit to top Clinton administration officials, including Deputy Secretary of State Strobe Talbot and Ambassador Richard Schifter.

Shifter, the intermediary added, had been the "point man" for conducting the secret back-channel negotiations with Tehran for Secretary of State Albright.

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