By James Fergusson

05-01-04 When Ayatollah Khomeini came to power in Iran in 1979, he famously re-baptised the United States as the "Great Satan." Most Americans were baffled. What, they wanted to know, had they done to deserve such hatred?
Stephen Kinzer’s fascinating and timely book, All The Shah’s Men: An American Coup and the Roots of Middle East Terror, provides the answer.

The CIA-led plot in 1953 to depose Iran’s popular nationalist prime minister, Mohammad Mossadegh, and replace him with a stooge called Zahedi and a puppet shah, was high, arrogant imperial trickery. Even today, little is known about the interlude. Apologists argue that "Operation Ajax," as it was known, was necessary if the country’s precious oil reserves were to be saved from the clutches of communism.
But at what price? Handled differently, Iran might well have matured into a proper democracy, a valuable US ally in the Mideast. Instead it became one third of the "Axis of Evil," the Old Glory-burning, nuclear bomb-making epicentre of the Islamist movement that so troubles the world today.

In the last 20 years, Iran’s revolutionary leaders have armed and funded Hamas and Hezbollah. They were linked to the 1983 suicide bombing that killed 214 US marines in Beirut, and to the 1996 attack that killed another 19 marines in Saudi Arabia.
They were a source of inspiration to Muslim fanatics everywhere, including in Afghanistan. As Kinzer points out, it is not too far-fetched to draw a line from Operation Ajax through the shah’s repressive regime and the Islamic revolution to the Sept. 11, 2001 attacks on New York. As ye sow, so shall ye reap. Operation Ajax was a turning point in history.

The coup was orchestrated by the Americans, but it was instigated by the British; and as ever in the Middle East, the reasons for it began with oil. British prospectors first struck oil in western Iran in 1908. By 1920 the Anglo-Persian Oil Company ­- later renamed British Petroleum ­- was producing 1.5 mm tpy at its vast new refinery at Abadan on the Gulf.
Iranian oil proved vital in World War I. As Lord Curzon put it, the Allies "floated to victory on a wave of oil." It was not an asset they would ever give up lightly.
Iran was ruled then by the Qajar shahs, a weak and decadent dynasty almost bankrupted by its own corruption which had sold the Iranian oil concession to the British for a pittance. It was Britain’s refusal to renegotiate this concession that ultimately led Mossadegh to expel them, expropriate the Abadan refinery, and nationalize the industry in 1951.

The Anglo-American alliance is now so well established that we tend to forget the Atlantic was not always so narrow. After World War II, Clement Atlee’s Britain was still rooted in the mindset of empire. Former US President Harry S. Truman, meanwhile, had strong sympathy for the new nationalist movements emerging around the world; and no-one epitomized those movements better than the charismatic Mossadegh.
Tall, bald and with a great beak of a nose, Mossadegh was a brilliant and passionate orator. His belief in an independent -­ and democratic ­- Iran was unshakeable. Iranians, and indeed Americans, adored him. In 1951 there was a showdown with the British at the United Nations. Washington tried to adjudicate but the result, to the chagrin and fury of the British, was a stalemate. Time Magazine promptly nominated Mossadegh their Man of the Year.

A compromise over the oil concession might still have been reached, but when Atlee and then Truman were replaced by Winston Churchill and Dwight D. Eisenhower, it was all over for Mossadegh, whose domestic position had been much weakened by the economic collapse brought on by the blockade of Abadan.
With the Cold War gathering momentum, London cleverly convinced Washington that the Free World could not afford to let Iran fall into Soviet hands; and that only the expulsion of Mossadegh, whom they called "unbalanced," could prevent such a catastrophe.

When Britain was expelled from Iran, its formidable local network of spies and agitators was handed wholesale over to the Americans. The kingpin was one Kermit Roosevelt, grandson of Theodore, who ran the covert operation directly from the US Embassy. Using great imagination as well as suitcases full of cash, Roosevelt suborned key police and army units and organized a series of "spontaneous" street demonstrations that culminated in the storming of Mossadegh’s house. Hundreds were killed. Some of the civilian victims were found with 500-rial notes still in their pockets.
Kinzer reconstructs the heady days of the coup with lucidity and a good eye for the telling detail. For instance, when Zahedi first addressed the nation via Radio Tehran, it was decided that martial music should be played. One of Roosevelt’s agents had brought along a likely looking record from the embassy library. As Zahedi approached, a technician played the first song. To everyone’s embarrassment, it turned out to be The Star-Spangled Banner.

Britain never recovered its near monopolyon Iranian oil. The concession was assumed instead by an international consortium -­ 40 % British, 40 % American, and 20 % French and Dutch. The new consortium agreed to share its profits on a 50-50 basis with the Iranians, and to retain the name Mossadegh gave it ­ the National Iranian Oil Company ­ to preserve the facade of nationalism. Mossadegh was placed under house arrest in his village west of Tehran, where he died in 1967.
It was not until 2000 that the US officially acknowledged its involvement, in a carefully worded speech by Secretary of State Madeleine Albright, who said: "The Eisenhower administration believed its actions were justified for strategic reasons. But the coup was clearly a setback for Iran’s political development. And it is easy to see now why many Iranians continue to resent this intervention by America in their internal affairs."

Albright’s statement amounted to a kind of apology; but it will take more than soothing words to restore the cordial relations enjoyed by Iran and the US during the Truman era.
Washington trampled on a nascent Middle Eastern democracy in the interests of oil and its own ideology. Is it any wonder that America is now struggling to convince Iraqis -­ and the world -­ that its occupation of Iraq is about the establishment of democracy rather than oil rights?

James Fergusson is the author of Kandahar Cockney, the story of an Afghan refugee in England, forthcoming from HarperCollins.