Big Deal in Iran

1.

In 2003, it became clear that Iran had for years concealed an extensive nuclear program that had brought the country closer than many governments had suspected to the ability to build a bomb. But there was still dispute over exactly how advanced Iran’s program was. Last summer, a senior Israeli intelligence official predicted that Iran would have its first nuclear bomb within four years.¹ Others, particularly in Europe, regarded the end of the decade as a more realistic date. There was also uncertainty about Iran’s nuclear aims. It seems likely that rather than attempting to build a bomb, the Iranians were assembling technology that would enable them to do so at short notice. By creating this capacity, they may have hoped to reduce their vulnerability to George Bush’s hostility toward the Islamic Republic. About one thing, international observers were unanimous: when diplomatic pressure, particularly from the US, Britain, France, and Germany, succeeded in persuading the Iranian government to call a halt to the most controversial parts of its nuclear program last October, the country was alarmingly close to producing the nuclear fuel that could be used to make a bomb.

During the Shah’s regime, Iran signed the Nuclear Non-Proliferation Treaty, which permits the controlled civilian, but not military, application of nuclear technology. But evidence obtained by inspectors for the International Atomic Energy Agency (IAEA), the UN’s nuclear watchdog, as well as Western intelligence findings, showed that Iran intended to invest at least one billion dollars, and probably much more, to become self-sufficient in the production of enriched uranium. States hostile to Iran maintained that a country that is rich in oil and gas would not have an interest in developing nuclear technology unless it wanted to make weapons.

Moreover, Iran had been building gas centrifuges—sophisticated machines that can be used for enriching uranium to the level needed to power nuclear reactors, and that can also be used to make fuel for nuclear weapons—which bore a close resemblance to a Pakistani design developed in the 1980s. Some Western intelligence officials also alleged that Iran had engaged the help of North Korean scientists to pursue advanced missile technology.

In September 2003, the IAEA delivered an ultimatum to Iran, demanding that it give up uranium enrichment, respond to requests for information, and allow agency inspectors a much freer hand to search for nuclear activities. The Iranian government then took the dramatic step of agreeing to disclose in full its nuclear activities. On October 21, it announced it would turn over previously classified documents about its nuclear program. It also agreed to sign an “additional protocol” to its existing agreement with the IAEA that would allow scientists from the agency to make intrusive spot inspections of any suspected nuclear sites. (According to the existing “safeguards agreement” which Iran accepted a few years after it signed the nonproliferation treaty in 1969, inspectors were only allowed to visit declared nuclear sites, and on advance notice. Iran’s leaders also acceded to demands that they suspend uranium enrichment.)

The international pressures that led to Iran’s agreement to the new protocol can be dated, at least in part, to August 2002, when an exiled opposition group, the National Council of Resistance of Iran (NCRI), began releasing, from the US and elsewhere, damaging information exposing Iran’s progress toward achieving a fuel cycle—the capacity to make nuclear fuel either from natural uranium or from the plutonium that is a byproduct of a nuclear reactor.² The NCRI revealed that the Iranians were constructing a big plant near Natanz, in central Iran, where uranium hexafluoride (UF6), the gaseous form of natural uranium, would be enriched by being spun in centrifuges at supersonic speeds. The cost of this plant, a Tehran-based proliferation specialist has estimated, is around one billion dollars. The same group revealed that Iran had completed a heavy water production plant at Arak, also in the center of the country; reactors using heavy water designed for peaceful uses of nuclear energy can be manipulated to produce plutonium in weapons-grade concentrations.³

By building these facilities, Iran was not violating its “safeguards agreement” with the IAEA—the agreement obliged Iran only to inform the agency six months before introducing nuclear material into any of its production plants. But Iran was acting suspiciously. Why had it not announced its plans for nuclear facilities at Natanz and Arak? Iranian officials claimed that they had informed the IAEA both about Natanz and about their intention to build a heavy water reactor at Arak. It turned out that they had told the agency only that they were building an enrichment facility, without disclosing the location; and they had said nothing about Arak.

Iran could have eased the mounting international concern caused by these revelations by the NCRI. A quick decision to sign and ratify the additional protocol providing for inspections on short notice of any suspected nuclear site would have satisfied most of the thirty-five members of the IAEA’s board of governors. Faced with the hectoring of America and Israel—the latter generally conceded to be a nuclear state that has never signed the nonproliferation treaty—many countries, especially those not aligned with the US, defended Iran’s right to develop a fuel cycle. But Iran’s diplomacy was amateurish. Asked to sign the additional protocol, it stalled, reinforcing the impression that it had something to hide.

Under pressure from the US, the UK, and other nations, the IAEA and its director general, Mohamed ElBaradei, helped to work out a consensus among IAEA member states that Iran had engaged in illegal nuclear activity and posed a threat to international efforts to contain proliferation. Throughout 2003, ElBaradei, who used to be a member of Egypt’s diplomatic service and has also taught at New York University Law School, tried to expose Iranian secrets with scrupulous fairness, going out of his way not to act like an instrument of the Bush administration, which, in early 2002, had declared Iran part of its “axis of evil.” His reports did not lay out Iran’s misdemeanors in neatly quotable accusations but presented them as part of a larger analysis. His exactitude infuriated American officials, but it ended by working in their favor. The IAEA’s more incriminating findings had an integrity that even the nonaligned countries found persuasive. For instance, in a report dated August 26, the director general obliquely accused Iran of lying when it claimed that it had developed its uranium enrichment technology without first testing undeclared nuclear material. Such a test would be a violation of the safeguards agreement, which obliges its signees to inform the agency of any change in their nuclear inventory.

ElBaradei started building a consensus on the need to expose Iran’s programs during his visit to Iran in February 2003, when he pronounced himself “impressed” by the sophistication of the Natanz facility. This backhanded compliment was the first of a series of the IAEA’s increasingly explicit criticisms of the Iranian program. As the IAEA investigation went on, agency inspectors increasingly encountered deception on the part of the Iranians. According to a Western diplomat in Teh- ran, Iranian officials were engaging in a combination of outright “lies” and

admissions that were calibrated to get the international community off their backs…. What the Iranians claim is transparency is in fact enforced admissions.

Early in 2003, for example, the Iranians confessed to having secretly imported undeclared natural uranium in 1991, some of it in the gaseous form of UF6. But some of this UF6 could no longer be accounted for and the Iranians’ explanation—that it had leaked from its containers—only increased suspicions. Later in the year, they admitted to having used this “leaked” UF6 to conduct several tests in 1999 and 2002.

By mid-September, the IAEA governors were sufficiently angry, and united, to issue their resolution demanding that Iran sign an additional protocol, reveal the full history of its nuclear program, and suspend its uranium enrichment activities. On October 21, when the British, French, and German foreign ministers visited Tehran, the Iranians, in what amounted to a reversal of their former position, said that they acceded to these demands. In the weeks following, documentary evidence that Iran turned over to the IAEA gave Western officials a startling picture of a nuclear program that had been developing for years virtually undetected. According to a recent article in The Washington Post, these documents provided “the outlines of a vast, secret procurement network that successfully acquired thousands of sensitive parts and tools from numerous countries over a seventeen-year period.”

Diplomats interviewed by the Post said the information provided by Iran confirmed the longstanding suspicion of many nuclear experts that Pakistan was one of the principal sources of Iran’s nuclear technology. Other Western publications, including The New York Times, have also reported that there was a secret agreement, made in 1987, between Pakistan and Iran to exchange nuclear technology.⁴ By exposing the sources of both its supplies and its expertise, Iran has made it hard for itself to clandestinely reinvigorate its nuclear program.

2.

For an Islamic regime that prides itself on making strategic decisions without first asking for the approval of foreign countries, least of all Christian ones, Iran’s acceptance of the IAEA ultimatum on October 21 was a momentous retreat. Faced with the immediate prospect of isolation, and the more distant threat of Security Council sanctions, Iran chose cooperation over confrontation.

Iranians both in and out of government have felt they were targets of the US since Bush’s “axis of evil” speech in early 2002. Pressure on Iran increased with America’s invasion of Iraq and the Bush administration’s refusal to publicly repudiate demands, from Israel and from some American neoconservatives, for “regime change” in Iran. These fears seemed further confirmed last summer when US officials told members of a Japanese consortium that they would be liable to secondary sanctions if they signed a long-pending $2.8 billion agreement to develop Azadegan, a big oil field in southern Iran. The Japanese have their own nuclear worries over North Korea and depend on America’s protective shield. They did not sign the agreement, and, even now, remain reluctant to do so until the parliament in Tehran ratifies Iran’s adherence to the additional protocol, something that will not happen until after February’s elections. Both Japan and Iran hope that the mooted participation in the project of companies from other countries, like China and India, will have the effect of blunting US objections.

Until last autumn the Iranians’ economic vulnerability was exacerbated by the growing sense among European officials that the EU’s diplomatic approach to Iran had failed. The EU had been hoping to persuade the Iranian government to do four things: reveal its nuclear secrets, improve human rights in Iran, stop supporting groups that violently oppose peace initiatives in the Middle East, and cease opposing Israel’s existence. In 2002, the EU opened negotiations on a trade agreement with Iran. By the summer of 2003, Iran’s negotiations on the EU’s four points were going nowhere. Negotiations on the trade pact stopped. Some European leaders talked of adopting a harder, more “American” line. Then came the IAEA ultimatum.

The Iranians might have taken a stronger stand against the ultimatum if they had received more diplomatic support from Russia. By the end of the 1990s, Russia had become Iran’s acknowledged nuclear partner. Unlike Pakistan, whose apparent assistance remained covert, Russia was willing to risk American anger and openly supply Iran with nuclear technology. By 2002, despite American and Israeli opposition, Russian companies had come close to completing a nuclear reactor, worth more than $800 million, near the town of Bushehr on the Persian Gulf. Then, as allegations about Iran’s secret activities grew, and Russia’s defense of Iranian intentions became less tenable, Russia’s position changed.

In public, Russian officials politely urged the Iranians to dispel the doubts about their nuclear program. In private, they stalled on their contract to build the reactor at Bushehr; they did so as a gesture to American officials, who argued that the Bushehr plant was essentially a military installation.⁵ The Russians allowed technical hitches and quibbles over the price of equipment to delay the completion of the reactor, which, according to the original contract with Russia, was supposed to be completed in 2000. Now no one expects the Bushehr plant to come online before 2005. The Russians have insisted that Iran agree to return, after using it, the nuclear fuel that it had contracted to buy from Russia, thereby ensuring that the used fuel could not be reprocessed to make weapons. A few days after the IAEA board of governors issued its ultimatum, Russia’s atomic energy minister said that talks with Iran on buying and returning the spent fuel could take “a long time.” In private, the Russians told the Iranians that they would not receive Russian fuel unless they signed the additional protocol.

Less than a month before the October 31 deadline set by the IAEA, Western officials continued to have doubts whether its ultimatum would have an effect. On October 9, ElBaradei told the Financial Times that, although the Iranians had increased the flow and accuracy of their disclosures to the IAEA, information remained inadequate. A big problem seemed to be the inability of Iran’s two major political factions to cooperate with each other. In theory, the supreme leader, Ayatollah Ali Khamenei, had assigned the Supreme National Security Council (SCNC), a bipartisan body of senior officials, to formulate Iran’s nuclear policy. In practice, as with much other Iranian decision-making, there was an impasse between the allies of the Ayatollah Khamenei, the supreme leader, and the reformist president Muhammad Khatami.

Since his triumphant election to the presidency in 1997, Muhammad Khatami has taken a conciliatory line in relations with the West. He and his supporters in the government and parliament were keen to reach an amicable agreement with the IAEA, but he was stymied by his conservative rivals—the senior clerics who are protected by the Ayatollah Khamenei and have been appointed to positions of great power. As Khatami’s government explored ways of increasing Iran’s cooperation with the IAEA, senior clerics with links to Khamenei advocated withdrawing from the nonproliferation treaty altogether. The conservative-led Revolutionary Guard resisted advice from reformists that military bases be opened to IAEA inspectors. Iranian diplomats, most of whom are from the reformist faction, were kept in ignorance of the discussions. “You had lobbyists from the foreign ministry,” recalls the same Western envoy, “who knew less about the latest Iranian position than their foreign interlocutors.”

By the middle of October, Khamenei had decided to end the impasse by favoring his fellow conservatives. Rather than assign the reformist president to negotiate on Iran’s behalf, Khamenei gave Hassan Rohani, his representative on the Supreme National Security Council, authority to do so. When ElBaradei visited Tehran on October 16, Rohani told him that “a decision had been taken to provide the agency, in the course of the following week, with a full disclosure of Iran’s past and present nuclear activities.” ElBaradei understood that Rohani’s promise carried the authority of the supreme leader; it was therefore worth more than any number of assurances from the reformists. On Rohani’s authority, the IAEA inspectors were given access to the military bases they asked to see, and the way to the October 21 deal was open. That deal showed that Khatami’s influence over strategic decisions was declining. The three European foreign ministers saw the President only after they had successfully concluded negotiations with Rohani. The meeting with Khatami amounted to no more than a courtesy call.

A little over a month later, the IAEA governors responded officially to the changes in Iran’s position and to the information that the Iranians had given them. They passed a resolution deploring the fact that Iran had on several occasions before October seriously breached its agreement to allow inspections. The resolution also obliquely threatened Iran with censure or punitive action from the United Nations Security Council if it continued to break its agreements.⁶ But the board also praised Iran’s new readiness to cooperate with the IAEA and resisted America’s urging that Iran’s behavior be immediately referred to the Security Council. The Iranians were thus able to present the IAEA’s otherwise damning document as a national triumph. In effect, the board agreed that the Iranians should not be punished for past misdeeds as long as they came completely and verifiably clean about them, and took convincing measures to ensure that they were not repeated. According to Rohani, the resolution marked the end of a state of “emergency” that had characterized relations between the Iranians and the IAEA.

In January, diplomats in Vienna, where the IAEA has its headquarters, said that Iran had continued to acquire equipment that could be used to enrich uranium. Iranians were said to be quibbling over what the suspension of uranium enrichment activities means; just acquiring equipment, they argued, does not amount to uranium enrichment. Iran’s alleged transgression, and Rohani’s repeated insistence that Iran’s suspension of uranium enrichment was “temporary,” may be designed to win further diplomatic advantages in the future. In other respects, IAEA board governors seem confident that Iran is abiding by its new commitments, and that it has given up all enrichment and fuel-reprocessing experiments. The information that the Iranians have given the IAEA will be an invaluable guide to the methods and suppliers that have been used to secretly develop nuclear weapons. On December 18, Iran signed the additional protocol allowing spot inspections. In exchange, Iran hopes to receive help in pursuing its civilian nuclear program. This nuanced solution was first formulated in the communiqué that the three European countries issued with Iran on October 21. The document affirmed Iran’s right to develop nuclear energy for peaceful purposes. Once concerns about its programs “are fully resolved,” it said, “Iran could expect easier access to modern technology and supplies.” That vague promise was designed to reassure Iran, which has made clear its anger at having been subjected to what it claims is an unjust embargo on nuclear technology needed for peaceful uses.

Britain, France, and Germany proposed allowing Iran to have a supply of nuclear fuel—probably from Russia—that could be used in light water reactors and then returned to Russia. In Tehran, some foreign diplomats speculate that Iran may favor a different solution, one which would allow it to restart uranium enrichment as long as it was placed under permanent international monitoring. This sounds like ElBaradei’s own position, stated in an article he wrote for The Economist in October, that sensitive nuclear processes should be permitted only in “facilities under multinational control.”

Some hard-liners in the Bush administration, supported by Israel, have remained skeptical about Iran’s new position. They argue that Iran should abandon all nuclear activity, not merely the uranium enrichment that Iran has undertaken to suspend. The plant at Bushehr, they maintain, should be closed down. The Iranians are reserving their right to resume enrichment activities. If they are ready to bargain away that right, they will be looking to the US to offer inducements, not the Europeans, for it is the US they fear.

3.

By engaging Iran in talks, the EU hoped to help Khatami make his country more democratic at home and more acceptable abroad. Most Iranians, who twice elected Khatami president, share these goals, but they have been thwarted by the conservatives who continue to exert control over public life and have behind them the military and police forces. Conservative judges have suppressed freedom of speech. The appointed upper house has vetoed virtually every enlightened legislative act that the reformist parliament has passed since it was elected in 2000. In 2002, according to some sources, the conservatives, wanting to embarrass Khatami, steered a shipment of Iranian arms, ostensibly bound for Palestine, into the path of Israel’s security forces.

The conservatives have demonstrated to the world that when voters challenge their grip on power they achieve nothing. At first, foreigners enjoyed dealing with the reformists; Khatami himself is a cultivated and charming mullah. But frustration then set in. The reformists promised much, including more friendly international relations. The conservatives prevented them from delivering domestic reforms and took over international negotiations.
The first months of Iran’s nuclear crisis followed this pattern. According to a senior government official that I spoke to, Khatami urged, earlier this year, that Iran sign the additional protocol. He was overruled by “certain people”—that is, Khamenei. Months later, however, the supreme leader endorsed not only the signing of the protocol but also other concessions that Khatami had not considered. Cynical Iranians have long suspected that the conservative faction, despite its opposition to Khatami’s ideas about détente, might be willing to deemphasize or discard its radical anti-Americanism and anti-Zionism if it were to feel threatened. In the October 21 deal, the conservatives relinquished the secret nuclear programs that they previously thought would shield them from American hostility.

Among the conservatives are pragmatists who seek a more congenial place for Iran in the world. Above all, they seek an exit from the “axis of evil.” On the whole, they do not subscribe to the liberal ideals that have made the reformists attractive to the West. Instead of democratizing the Islamic Republic, they are interested in preserving it and their place in it. They take heart from the example of Pakistan, where a military dictator has shown that he does not have to share values with the US, he has only to cooperate with it.

After seven years of Khatami’s presidency, the anti-reformist campaign to undermine him is succeeding. In February’s parliamentary elections, the conservatives will benefit from the apathy of the voters, especially among young people and women, who make up Kha- tami’s core constituency yet perceive the dwindling of his power. On January 10, the Guardian Council, a hardline twelve-member body that has the power to vet candidates, disqualified some four thousand parliamentary candidates, including eighty-two sitting deputies, from standing in next month’s elections. Under pressure from the President and some eighty protesting deputies, the supreme leader then recommended both that most of the disqualified deputies be declared eligible and that the cases of excluded candidates outside the parliament be reviewed.

It is likely that some of the most influential reformist deputies, including the President’s brother, will be declared, once again, unfit to stand, but that many will have their eligibility confirmed. The absence from the election of leading reformists, however, will work in the conservatives’ favor; and the next parliament may well be less reformist than the current one. In 2005, when Khatami’s term ends, a rigged selection process will ensure that candidates to replace him will be conservatives and nonentities. Hassan Rohani’s recent nuclear negotiations and his visits abroad make him seem like a president in waiting. Since October 21, for example, he has met senior EU officials in Brussels, and was received by Vladimir Putin in Moscow and Jacques Chirac in Paris.⁷

As for nuclear policy, the new system of UN inspections may discover more Iranian transgressions. But it would be uncharacteristically foolish for the conservatives to commit themselves to actions that they do not intend to carry out. Fulfilling their promises, moreover, is the only way that they are likely to achieve their immediate goal of softening, if not isolating, America’s hard-line position within the IAEA. An image of reliability is vital, also, to the broader message that they want to convey—namely, that they, not Khatami, can make concessions on the military issues that interest the West. By doing so, they hope that concerns about human rights and democracy will not determine Western attitudes toward Iran.

The intended recipients of this message in Washington—or at least some of them—seemed, until recently, to be impervious to it. At least twice last year, the Bush administration was indirectly approached by well-connected Iranian conservatives who suggested that steps be taken to normalize relations between the two countries. US officials are said to have rejected the overtures, partly because of their distaste for Iran’s theocracy, partly because they judged it inadvisable to deal with just one part of a split polity.

But American attitudes toward Iran may now be changing. In December, in response to Iran’s catastrophic earthquake, which killed more than 41,000 people, the US offered to send emergency relief and medical workers. The Iranians accepted immediately. But they turned down the Bush administration’s offer to send a high-level humanitarian delegation to the afflicted region, perhaps because they worried that Iranians, who are generally pro-American, would give their guests an embarrassingly warm welcome. That rebuff has not stopped the US from temporarily waiving restrictions on the transfer of money to private organizations in Iran, thereby allowing Americans to donate directly to relief efforts.
In an interview that was published on December 29 in The Washington Post, Colin Powell praised the “new attitude” that Iran was showing on some issues. He was referring primarily to the Iranians’ capitulation to the IAEA’s demands, but also to other Iranian positions as well. Having vociferously opposed the American invasion of neighboring Iraq, Iran has been cooperating with the interim government there. Iranian leaders have a good relationship with Abdul Aziz al-Hakim, who holds the rotating presidency of the US-appointed governing council, as well as three other influential members of the council. It sends gasoline across the border and its cement makers are keen to take part in reconstruction. The Revolutionary Guard has good working relations with coalition forces that control the areas bordering on Iran. Iran’s ability to disrupt Iraq, even if it wanted to, is complicated by its relatively feeble influence over Ayatollah al-Sistani, the country’s preeminent Shia cleric.

The Iranians believe that they are doing the US a favor by detaining more than three hundred suspected al-Qaeda operatives. It will take US concessions before they acquiesce to longstanding American demands that the detainees be handed over to their countries of origin. In public, Powell indicates that the US may favor restoring the low-level dialogue that it used to have with Iran. This was cut off last spring, after the US linked three bombings in Saudi Arabia to some of the al-Qaeda militants that are now thought to be in Iranian custody. In private, Powell speaks of more substantive discussions.

Although he welcomed the aid that the US sent to the victims of the earthquake, Khatami was careful to distinguish between humanitarian cooperation and a political thaw. Having tried sincerely to bring about détente with Bill Clinton, who seemed amenable to improving relations, Khatami is said to feel personally affronted by Bush’s hostility. In particular, he blames Bush’s “axis of evil” speech for plunging Iran into an extended crisis that has played into the hands of his conservative opponents and has frozen hopes of domestic reform. As long as Bush is in the White House, it is unlikely that Khatami will expect the kind of dialogue that briefly seemed possible during Clinton’s second term.

For their part, the conservatives officially say they are skeptical of America’s willingness to improve relations. On January 10, Ayatollah Ali Khamenei said that there was “no sign of US animosity toward Iran decreasing.” Other Iranian officials said Iran has no plans to start talks with the US—which does not mean that such talks are ruled out. What seems clear is that Khatami’s rivals are waiting for their next opportunity to further consolidate their power. For them, it is enough that America appreciate that it was conservatives who made the decisive intervention that led to the October 21 deal. It is now up to the US administration to decide whether, and to what extent, it may relax its hostility to the Islamic regime, and its efforts to weaken it, and press instead for the sort of dialogue that could lead to a lasting accommodation. That would bring the Americans into contact with the conservatives they despise. But these conservatives have privately let it be known that they are in favor of talks. Their surprising U-turn on the nuclear issue has demonstrated more clearly than ever that they, not the elected government, hold the real power in Iran.

—January 28, 2004