 |  |
Click for Contents
Iran's Use of Terror To Blackmail The West
Herb Krosney and David Horovitz
In exchange for immunity from Iranian terror operations on their soil, several European nations have rescheduled Iran's debts, boosted trade with Teheran and even released Iranian murder suspects. The Jerusalem Report reveals the astounding story of Iran's international extortion racket.
Iran is blackmailing the West. It is using the threat of terrorism to pressure Western nations to reschedule debts, boost trade and even release jailed Iranian terror suspects. The Jerusalem Report has uncovered the details of how France and Germany have capitulated to Iran's extortion; several other Western nations may be implicated as well.
Within under a year, the government of Ali-Akbar Hashemi Rafsanjani has managed to get a massive $6.2 billion of foreign debt repayments postponed
- enabling the desperately cash-strapped regime to keep its head above water, and maintain its hundreds of millions of dollars of spending on conventional arms, missile technology, chemical weapons and its nuclear program.
Here, The Jerusalem Report shows for the first time how Iran has used the threat of terrorism, combined with the promise of expanded trade, to cajole countries into accepting the debt rescheduling.
The French government, we can reveal, has not only agreed to postpone Iranian debt repayments, but has even released two Iranian murder suspects from jail - overruling its own judiciary - in return for a promise that pro-Iranian terrorists will no longer operate on French territory.
And the German government, apart from rescheduling a whopping $2.4 billion in Iranian debts, has promised to try to hush up details of the Iranian government's role in Islamic extremist terrorism - again in return for guaranteed immunity from terrorism.
Using its most potent international asset - the threat of terrorism -
Rafsanjani's unstable regime has extorted financial breathing space, averting the threat of riots at home, which it would have faced had it been forced to cut food subisidies.
The West's capitulation to Iran comes despite intense pressure from the United States, which a year ago expressly urged its allies to resist Iranian efforts to reschedule debts. The Americans, characterizing Iran as an "outlaw" state, believed that the only way to force Teheran to toe the line of normative behavior, and to rein in its military spending, was to tighten the financial noose by demanding that Iran come up with the money it owes on schedule. Now, American officials fear, a crucial opportunity has been lost, though they feel some satisfaction that they have at least managed to block some new international credit being extended to Iran.
Only Britain has backed the American line, staunchly resisting Iranian pressure to cut a deal on rescheduling $140 million in debts. And that may explain why Iranian-sponsored terrorists, seeking to undermine Mideast peace moves, chose London as the venue for their late-July bombings of the Israeli Embassy and a central Jewish community building.
The question now is whether the Islamic terrorists, in their current series of attacks on Israeli and Jewish targets, will continue to honor the immunity deals cut by Iran in Europe.
THE MASTERMIND The shadowy figure at the center of Iran's "understandings" with Western Europe, The Jerusalem Report can reveal, is Ali Fallahiyan, Teheran's minister of information, personally appointed by President Ali-Akbar Hashemi Rafsanjani, with overall responsibility for intelligence.
Fallahiyan is a man of many roles. Appearing unpublicized in European capitals, he is granted direct access to the most senior echelons of both the intelligence and the political communities, where he is regarded as a sophisticated international operator. Back in Iran, he is feared as the man with overall responsibility for internal security. And to the world's anti-terrorist forces, he is notorious as the figure behind Iran's terror network - whose operatives in Europe alone have killed at least 20 Iranian dissidents in the past five years.
In contacts with Europe since October 1993, during which he reached his understandings" with France and Germany guaranteeing them immunity from terror, Fallahiyan's working method was quite simple. "Basically," one senior European intelligence source confided, "his custom is to smoothly set out his cards, listing for his hosts the matters of mutual concern: their fears of terrorism, the common desire for greater trade, Iran's anxiety for its citizens being held in the host country's jails, Iran's problems making its debt repayments and so on.
"Then," the source continued, "Fallahiyan suggests a single package deal to solve all those problems at a stroke. The polite term might be `tacit understanding,' but less polite terminology springs to mind: extortion, protection, blackmail."
The method clearly works. In the late 1980s, France and Germany both cut deals with Iran for the release of their hostages from pro-Iranian captors in Lebanon. In much the same way, in the last few months, the same two countries made deals with Fallahiyan ensuring that future waves of terrorism would pass them by. Britain resisted making deals for the hostages in the 1980s, and its captives - men like John McCarthy and Terry Waite - were among the last to be set free. In July, with the bombing of the Israeli Embassy and the Balfour House Jewish community offices in London, it paid the price for resisting Fallahiyan.
THE FRENCH UNDERSTANDING France's deal with Fallahiyan, European sources have told The Jerusalem Report, was reached last October. The price was steep, but then Iran knew it could drive a hard bargain. The French government still remembered well a 1986 Shi'ite extremist bombing campaign in Paris. And more recently, in August 1991, Shapour Bakhtiar, Iranian prime minister under the shah, was gunned down in the capital by Islamic extremists. The French would clearly be prepared to do almost anything to guarantee immunity from terror from now on.
The French negotiator was Jean-Charles Marchiani, senior adviser to France's Interior Minister Charles Pasqua - considered by U.S. officials to be the prime villain in this regard. Apart from keeping Pasqua informed, Marchiani also provided full details of the negotiations to senior personnel in the office of Prime Minister Edouard Balladur.
An experienced undercover operator in the Middle East, it was Marchiani who in 1987 dealt directly with the Iran-backed Hizballah organization in Lebanon to strike the agreements that led to the release of many of the 15-plus Frenchmen taken hostage between 1985 and 1987. These deals included the release of an Iranian Embassy official, Wahid Gordji, arrested for his part in the 1986 Paris bombings, the reported cancelation of weapons sales to Iraq and the settlement of a longstanding $1-billion financial dispute in Iran's favor.
The elements of the "understanding" reached last fall between Fallahiyan and Marchiani were as follows: In exchange for guaranteed immunity from Iranian-sponsored terrorism, France would reschedule $200 million in Iranian debt. It would provide government insurance guarantees to encourage French sales and investment in Iran. And, most shocking of all, it would see to it that two Iranian nationals, arrested in France a year earlier as suspects in the November 1990 murder in Geneva of Kazein Rajavi, were set free and returned to Iran. Rajavi, whose Paris-based brother Massoud is the leader of the Iranian opposition in exile, was a former Khomeini loyalist who once served as Iran's ambassador to the U.N. in Geneva but then became a fierce opponent of the regime.
The last element of the package deal was clearly the most problematic. Switzerland had officially requested the extradition of the Iranian duo -
Ahmad Taheri and Mohsen Sharif Esfahani - in November 1992, to stand trial for murder, and three months later French judges had approved the request. And Jean Brouguiere, the French investigating magistrate, had compiled a 170-page report on the case, concluding that the Iranian government had been involved in the Rajavi murder.
Brouguiere, incidentally, had also investigated the 1991 Bakhtiar killing -
finding that the Iranian government oversaw it, naming Fallahiyan among those responsible, and implicating President Rafsanjani's brother Muhammad as well.
Around the time of the secret Fallahiyan-Marchiani meetings - in Teheran, Cyprus and an unidentified European country - a small Iranian hit team in Norway attacked and badly wounded William Nygaard, the local publisher of Salman Rushdie's "The Satanic Verses." The timing of the attack might have been purely coincidental... but it might also have been Fallahiyan's signal to the French that he really meant business and had complete control over the terrorists.
The Iran-France understanding has worked like clockwork. In early summer, Iran and France successfully concluded the rescheduling of Iran's debt. The French government export insurance company, Coface, is now guaranteeing French companies' sales and investment in Iran, providing an incentive for French companies to get back into the lucrative Iranian market. Some multi-million-dollar projects have already got the green light, including a hydroelectric plant.
Furthermore, The Jerusalem Report understands, the French government has undertaken to repress Iranian dissident activities in France. And on December 29 last year, Taheri and Esfahani, wanted for murder by Switzerland, were quietly placed on a plane to Teheran, and have never been heard of since. An official French statement explained that their release had been agreed on "in the national interest," insisting that the specific reasons had to be kept secret "for reasons of state." Not surprisingly, the Swiss government fired off a furious official protest.
THE DEAL WITH GERMANY The understanding with Germany followed a similar pattern. Again, the Iranians knew that the Germans would probably be willing to make a deal -
after all, in September 1987, Germany was widely reported to have paid a massive ransom and given various "guarantees" to Iran to secure the release from Lebanese captivity of hostage Alfred Schmidt.
Fallahiyan flew into Germany for a two-day visit on October 6-7, and was received by one of Chancellor Helmut Kohl's most senior intelligence officials, Bernd Schmidbauer, who holds the rank of minister of state and whose relationship with the Iranians has become a most serious concern for the Americans.
Germany has long been Iran's most important Western trading partner, regarding itself as a bridge between Teheran and the West. The trading relationship is extensive - estimated at some $8 billion a year. By the time of the last October meeting, Teheran desperately needed the rescheduling of a $2.4-billion debt to Germany.
As with France, Iran was keen to see German government encouragement for an enhanced trading relationship. Again, there were Iranian terror suspects in German jails it wanted freed, and there were German nationals jailed in Iran to give the Iranians even more leverage. And again, the quid pro quo was a guarantee of immunity from terrorism.
Shortly before the meeting, as a sign of Iran's "good intentions," two Germans - Friedel Peter Schlag and Paul Dietrisch Fersh - who had been held on spying charges, were set free and allowed to leave Iran for Germany. That was the carrot. Iran also used the stick, arresting a German company official in Teheran, Hans Bachman, on nebulous spying charges, and demanding $1 million in bail for his release.
After the meeting, which leaked to the media, Fallahiyan crowed publicly that he and Schmidbauer had agreed "that we don't want to work against each other in each other's country" - the closest anyone has come to publicly revealing the Iranian protection racket. He boasted, furthermore, that he and Schmidbauer had been working together for two years - a revelation that brought official protests from Britain and the U.S.
Responding to the protests and the mini-diplomatic storm, an evidently defensive Bernd Schmidbauer exploded: "Many are condemning us from remarkable positions. They lie and cheat their way around the fact that they have also held talks (with Iran)." Meanwhile, the understanding has proceeded relatively smoothly. The debt-rescheduling negotiations were concluded this past spring. German banks and the German government export insurance agency are now taking an active role in promoting trade. Only the element of the deal covering jailed terror suspects has proved sticky, probably because the government has less power over the legal system in Germany than in France.
The five suspects Fallahiyan wants freed are currently on trial in Berlin for the September 17, 1992 murders in Berlin's Mykonos restaurant of four Iranian Kurds, including Dr. Sadegh Sharafkandi, leader of the Iranian Kurdish Democratic Party.
The Jerusalem Report has been told that Iran has sought to have the trial halted, fearing damaging revelations about the past five years of operations of the terror cells it sponsors all over Europe, specifically the way they are linked to Iranian diplomatic missions. The Berlin court charges even tied the quintet's murderous operations to Fallahiyan's ministry, accusing them of acting on its orders. And the prosecutor, Bruno Jost, actually tried to act against Fallahiyan when the latter visited Germany for his talks with Schmidbauer, but said Schmidbauer blocked him.
During their discussions, Schmidbauer promised Fallahiyan to do what he could to shield Iran from embarrassment at the trial, by ensuring that evidence of direct Iranian involvement in terror on German soil is kept out of the proceedings. He is also understood to have promised to arrange the earliest possible release of Hassan Darabi, the leader of the assassination squad, an Iranian intelligence agent.
RELIEF IN TEHERAN The successful renegotiation of its German debt repayments was the central plank of a Europe-wide debt rescheduling platform that has given hard-currency-strapped Teheran an 18-month to two-year breathing space.
The Jerusalem Report has no firm evidence that Fallahiyan's package-deal tactics played a part in the rescheduling deals agreed on in the past year or nearing completion with countries including Denmark, Holland, Spain, Sweden and Italy. But it is known that these arrangements were made against the express request of the United States, that none of these countries has had pro-Iranian terror troubles recently, and that Britain - which has suffered - has rejected Iranian efforts to reschedule a $140-million debt.
Worldwide, Iran is conservatively estimated to have debts of at least $17 billion - a consequence of a massively expensive domestic foodstuffs subsidy, OPEC limits on oil production and the falling price of oil and, most importantly, Teheran's consistently huge arms purchases.
In a May 1993 address in Washington that marked the Clinton administration's first detailed exposition of its policy on Iran, the president's senior Near East adviser, Martin Indyk of the National Security Council, urged America's allies worldwide to resist rescheduling the debt, arguing that this was a unique opportunity to throttle the Rafsanjani regime and force it to scale down its military program. Iran, he stated flatly, "is the foremost state sponsor of terrorism and assassination across the globe."
Noting that Iran suffers from 30-percent unemployment, 30-percent inflation, and was billions in arrears on debt repayment, Indyk called for a "multilateral effort" to contain "the Iranian threat." And, he warned, "If we fail in our efforts to modify Iranian behavior, five years from now Iran will be much more capable of posing a real threat to Israel, to the Arab world and to Western interests in the Middle East."
But to Washington's dismay, the American pleas - reiterated repeatedly through diplomatic channels - were blithely ignored everywhere outside London. With Japan having also rescheduled a $2-billion debt, Fallahiyan and his colleagues have in the past year unburdened themselves of some $6.2 billion of urgent repayments. And they are currently nearing the successful conclusion of negotiations to reschedule another $3.8 billion, primarily with European countries.
The financial relief is crucial to the Rafsanjani regime, in power since 1989. Lacking the virtually unrestricted power of the late ayatollah Khomeini, who died in 1989, Rafsanjani has to tread a fine line between competing interest groups, attempting economic reforms, but also seeking to appease Islamic hardliners led by Ayatollah Ali Khamenei, the stridently anti-Western Iranian spiritual guide. The hardliners want a more Orthodox Islamic state, the maintenance of domestic subsidies, and an uncompromising stance against the West and, needless to say, Israel.
Previous attempts to raise money for debt repayment by ending the subsidies on basic foodstuffs for Iran's 60-million-plus population have had to be scrapped after food riots. Efforts to increase hard currency income by selling more oil have been stymied by OPEC's firm limits - holding Iran to an export maximum of 2.6 billion barrels annually. And the Iranian arms-buying program is regarded as sacrosanct, a $1-$2 billion-a-year drive toward conventional arms self-sufficiency, supported by a chemical, missile and eventually nuclear capability.
Had the debt rescheduling effort not succeeded, Rafsanjani would have been forced to choose between cutting back his arms purchasing and drastically reducing many of the food subsidies. While some Western analysts suggestthere is no opposition figure of sufficient stature to unseat Rafsanjani, many others doubt whether his regime could have survived either of these two options.
IRAN'S ARMS DRIVE Determined to export its Islamic revolution, paranoid about an Iraqi revival, and obsessed with achieving hegemony in the Persian Gulf, Iran has been striding forward with its military program. But there have been setbacks.
Under the shah, Teheran concluded a deal with Germany's Kraftwerk Union (now part of Siemens) for the supply of a massive nuclear power reactor at Bushehr in southern Iran. That deal was canceled when Khomeini came to power in 1979, and Germany has refused since to renew it.
More recently, Russia signed a contract to build a nuclear power plant but the deal is in abeyance, and China agreed to supply a research reactor that would produce plutonium, but is now backing away under U.S. pressure.
Argentina also bowed to U.S. pressure and pulled out of a deal in 1991 to supply a research reactor and heavy water plant. Iran's displeasure, says one informed source, "left Argentina vulnerable" - as was reflected by the choice of Buenos Aires for the 1992 Israeli Embassy bombing that killed 28 people, and last month's central Jewish community building blast, which left some 100 people dead.
Despite the setbacks, analysts suggest that Iran is already nearing a capability to produce tiny experimental amounts of fissionable fuel, such as plutonium, and is heading toward a nuclear bomb-making capacity within a decade.
It is known to be actively seeking nuclear materials and components from the former republics of the Soviet Union. Last October, for example, five Turks and two Iranians were arrested in Istanbul, caught trying to smuggle 2.5 kilograms of low-grade uranium into Iran, via Turkey, from the former Soviet Union. The five Turks are still awaiting trial; the two Iranians were released after three days in detention, and have since disappeared. The Turkish authorities initially said they suspected that Iranian intelligence had been involved. The Iranian Embassy in Ankara has denied any knowledge of the case.
Iran has also sought to purchase multi-million-dollar "pressure reactors" -
a vital component in the nuclear program - manufactured only by U.S. firms, by Japan's Mitsubishi, by Siemens and by the Czech government-owned firm Skoda. With the U.S. off-limits, Japan susceptible to American pressure, and Siemens already involved in a joint investment project with Skoda, Iran is understood to be pitching to purchase control of Skoda, if the firm is put up for privatization. The U.S. has warned the Czech government against such a deal, but the Iranians are still hopeful. And Czech and Iranian officials are understood to have met recently to discuss the issue. That cash-strapped Iran is enthusiastically exploring such a purchase speaks volumes about its spending priorities.
Needless to say, the Iranians insist that all their nuclear ambitions are for strictly peaceful purposes, professing a desire to eventually meet 20 percent of national electricity needs through nuclear power.
Meanwhile, efforts toward an independent poison gas manufacturing capability have been aided, The Jerusalem Report has learned, by some success in purchasing components and raw chemical materials in Asia and from the West. Iran can produce several hundred tons a year of various agents, and may even already have deployed chemical missile warheads. It is also developing biological weapons.
Teheran relies on North Korea for assistance in developing an independent missile manufacturing program, having already purchased 200-300 Scud B and C missiles from the Koreans. Since 1989, it has bought submarines, 25 Mig-29 fighters and 12 Su-24 strike aircraft from Russia; 20 F-7 fighter jets from China; and other weaponry all over the world.
HOLLOW DENIALS In the wake of the July 18 Buenos Aires Jewish community center bombing, the July 19 explosion that killed 12 Jewish businessmen and nine other passengers on a plane in Panama, and the two July 26 London blasts, Iran issued a stream of indignant denials of involvement.
In fact, while the details of Iran's network of global terror remain vague, there is accumulating evidence to support Prime Minister Yitzhak Rabin's talk of an international Iranian-sponsored terror infrastructure, supported by Iran directly and through surrogates.
An Israeli defense official has told The Jerusalem Report of regular training for Hizballah gunmen carried out by Iranian Revolutionary Guards in Lebanon's Biqa Valley, in the Sudan, Algeria and elsewhere. Tentacles of the operation worldwide, it is believed, have often been supplied through Iranian diplomatic pouches, and through sympathizers acquiring explosive materials locally.
Says Martin Kramer, an expert on Islamic fundamentalism at Tel Aviv University's Dayan Center: "The Iranians often detail the cultural attaches at their embassies to recruit susceptible local Muslims. The idea is to build in as many veils of deniability as possible. Frequently, locals carry out the bombings. If they're caught, Iran can always deny any involvement."
With much of Western Europe now off-limits to terror operations following the Fallahiyan-negotiated secret understandings, London has in recent months become an increasingly central focus for Hizballah.
Britain's own BBC broadcasting authority can vouch for the well-organized Hizballah network there. Months before the July blasts, The Jerusalem Report has learned, a BBC journalist was "vetted" by Hizballah operatives, at one or more London hideouts, before proceeding to Lebanon on assignment.
Fuming over the new wave of terrorism, Rabin has been urging an urgent international cooperative effort to "strike at this viper and crush its skull."
Secretary of State Warren Christopher, testifying on July 28 before the House Foreign Affairs Committee, reiterated the call for cooperation and, in a pointed reference to Germany, France and the other countries which have rescheduled Iran's debts, spoke witheringly of nations which "still conduct preferential commercial relations with Iran and... take steps to appease that outlaw nation."
But back in Teheran, Information Minister Ali Fallahiyan can afford to breathe easy, confident that there is no prospect of complete international coordination in the fight against Islamic terror. After all, he knows full well that the likes of Germany and France have already decided with whom they are cooperating.
1994
 |
|
 |
|
© The Jerusalem Report 1999-2000 |  |