Policy, Perception, and Misperception
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Abstract: When recalling U.S.-Iranian relations during the 1979 Iranian Revolution, many sources blame the fall of the shah on the failure of U.S. intelligence to accurately predict the crisis and keep Washington, DC, policymakers informed. That argument, however, ignores the reality that a reassessment of U.S. policy never occurred during that troubled time, even as the quality of intelligence improved, since the James E. “Jimmy” Carter administration did not believe the shah might be forced from power. By shifting attention away from a notion of an intelligence failure and toward an understanding of failed policy, it becomes clear that policy failure was the most important factor that the United States contributed to the shah’s downfall.

Keywords: Iran, Islamic Revolution, Pahlavi dynasty, Mohammad Reza Shah Pahlavi, Ayatollah Khomeini, intelligence community, foreign policy, Jimmy Carter, Zbigniew Brzezinski, Richard M. Nixon, Henry Kissinger

Discussing the 1979 Iranian Revolution more than a decade later, Admiral Stansfield Turner, former director of the Central Intelligence Agency (CIA), referred to a meeting in which Vice President Walter F. Mondale presented a fundamental question: “What’s an ayatollah?” Turner, the ranking U.S. intelligence chief, could only offer a meager response: “Damned if I know, but I’ll find out and get back to you.”1 This was not an isolated incident in which the intelligence community failed to respond to queries from the highest levels of government. On the contrary, it is a constant theme that ran throughout the Iranian crisis.

Discontent with the intelligence community had come to a head on 11 November 1978. In a letter addressed to Secretary of State Cyrus R. Vance, National Security Advisor Zbigniew Brzezinski, and Turner, President Jimmy Carter sharply expressed his disappointment with the quality of intelligence that was being gathered.2 He ordered a review for the intelligence community to improve its performance in intelligence collection and analysis. The White House was unhappy, and the implication was clear: intelligence, not policy, was at fault for the United States’ failure to grapple with the revolutionary turmoil that was then engulfing Iran.

Even before the Iranian Revolution concluded, the press disseminated the narrative of a monumental U.S. intelligence failure. The Washington Post published a story in late November 1978 discussing Carter’s letter to his advisors, placing Turner at the center of the controversy. While the article related that institutional rivalries may explain why the knives were out for Turner, White House press secretary Jody Powell’s statement that the letter “wasn’t a chewing out” of the intelligence chief nevertheless suggested to the public which direction to look for an explanation for the government’s sluggish and uneven response to the crisis.3 The problem had nothing to do with White House policy or Brzezinski’s unflinching support for Mohammad Reza Shah Pahlavi, the pro-Western king of Iran and chief opponent of the revolution. Rather, a “failure to remedy the intelligence deficiencies” left the White House “flying blind in a still-developing situation of great international importance.”4 The narrative had thus already been written, and intelligence was to blame.

In various memoirs by key U.S. officials of the era, the issue of intelligence is at the forefront when explaining the fall of the shah. It is largely taken for granted that the performance of the CIA represented a disaster. Many believe that if only the U.S. intelligence community had been functioning with more effectiveness, the devastating effects of the revolution could have been avoided, and that if the White House had been informed in a timely fashion, the Iranian monarchy could have been maintained. The shah may have been pressured into making necessary concessions to the moderate faction of the opposition, and a new system of power-sharing might then have taken shape, thus preserving U.S. interests in Iran.

While this line of thinking is persuasive, it presents a complicated counterfactual. It will never be known, for instance, if U.S. interests could have been preserved had the Carter administration been presented with an accurate assessment of the situation in late 1977 or early 1978. Intelligence was severely lacking from the summer of 1977, when signs of unrest in Iran began, to the fall of 1978, thus making it unlikely that the White House would take any action. In this case, it is clear that there was an intelligence failure during the early stages of the revolution. However, by September 1978, a clearer picture of what was happening in Iran was forming among the U.S. intelligence community. Dire reports were distributed that, if viewed by open-minded policymakers, would have questioned their faith in the shah. The Carter administration could have pressured the shah into serious negotiations with the more liberal components of the opposition, thereby preserving the monarchy, instituting a new structure of governing based on power-sharing, and undercutting the still-developing forces under revolutionary leader Ayatollah Ruhollah Musavi Khomeini.

This scenario offers another intriguing counterfactual: that a political settlement may have been reached between the shah and the revolution’s moderate faction. Yet another equally persuasive argument posits that the moderates of the prodemocracy National Front and Liberation Movement of Iran (LMI) organizations were weak following years of exile in the Iranian political wilderness and that both moderate groups held little sway with the working class, the section of a population that historically drives revolutions. This line of thinking maintains that Khomeini’s more conservative movement would have inevitably swept up the moderates on its way to overthrowing the monarchy.

The only certainty regarding these two competing accounts is that it will not be known what was possible because the Carter administration never questioned its preconceived perceptions of Iran. The most compelling argument, then, is that the focus on an intelligence failure offers only a narrative of half-truths and an incomplete picture of the United States’ role in the Iranian Revolution. First, the idea that the revolution would have turned out differently if only the U.S. intelligence community had performed at a higher level implies that the United States had the ability to dictate the direction of events in a foreign country. Contemporary history shows that the United States’ ability to determine events abroad is limited, and the final arbiters of the Iranian Revolution must be recognized as the shah and Khomeini. Second, while the intelligence community certainly failed during the early months of the crisis, it is erroneous to explain away the unimpressive response by the U.S. government due to an intelligence failure alone. Had a clearer picture of the situation been presented to individuals who were willing to look at U.S. policy in Iran from a more flexible and creative perspective, it may have led to a more favorable end for American interests.

This leads to the conclusion that a reassessment of U.S. policy did not occur. The White House—most notably Brzezinski—was unwilling to even consider that the shah may be finished as an absolute monarch and would have to share power with parliament. The Carter administration proved disinclined to depart from the policies that had become the bedrock of U.S. Middle East security policy in the 1970s. Indeed, unquestionably supporting the shah fit neatly into the U.S. Cold War-era grand strategy of containment, since Iran served as the northern barrier blocking a Soviet push for the Persian Gulf. The shah had reached a rare status guaranteeing unconditional U.S. support and confidence. The nature of that relationship made it extremely difficult for men such as Brzezinski to detach U.S. policy from the shah, even when reality said it was essential.

It is therefore necessary to shift the historical literature’s attention away from the notion of an intelligence failure and toward an understanding of failed policy. Though it is accepted that the U.S. strategy of absolute support for the shah contributed to his downfall and the success of the Iranian Revolution, accusations of an intelligence failure obscures the reality of events and places the notion of poor policymaking in the backseat.5 It became orthodoxy in the 1970s to regard the shah as invincible, a frame of mind that blinded policymakers even when reviewing intelligence that said otherwise. Once the historical record demonstrates the negative implications of U.S. strategy regarding Iran, while at the same time considering the half-truth of an intelligence failure, a clearer picture takes shape regarding the United States’ role in the Iranian Revolution.

The Intelligence Community in the First Months of Revolution

During a brief respite in Iran’s unrest in mid-1978, director of the CIA’s National Foreign Assessment Center (NFAC) Robert R. Bowie testified before Congress.6 When a new wave of demonstrations began, his testimony became inconsequential as events quickly surpassed the intelligence community’s assessments. Intrigued as to how the CIA could be so wrong, Bowie paired Robert L. Jervis, an outside consultant and academic, with an intelligence community analyst to evaluate the NFAC’s performance during the revolution. The report concluded that there was an intelligence failure in two senses: 1) the “NFAC did not anticipate the course of events”; and 2) “bits of information were available during summer 1978 that indicated that the Shah was in serious trouble, but they were not recognized nor were any warnings conveyed.”7 This report offers important insights into why intelligence frequently fell short of the situation on the ground in Iran.

Jervis, a scholar of perception, misperception, and images in international relations, provided a crucial point that “the problem lay less in the incorrect interpretation of specific bits of information than in a misleading analysis of the general situation which pre-dated the crisis.”8 Analysts with the CIA, the State Department’s Bureau of Intelligence and Research (INR), and the Defense Department’s Defense Intelligence Agency (DIA) in Washington and the American embassy and consulate staffs in Tehran operated under the premise that the shah’s Iran represented a success story for U.S. policy in the Middle East.9 A nation surrounded by turmoil and division, Iran had wisely undertaken Western-style reform. The White Revolution, the shah’s modernization program, deeply impressed observers in Washington and allowed Iran to make great leaps forward in terms of governance, military power, and the population’s standard of living.10 When surveying those welcome developments, the shah and his Western partners concluded that modernization and liberalization would, in theory, create an Iran with preponderant power in the Middle East.

While U.S. estimates of the strength of the shah’s Iran fell well short of reality, the most acute shortcoming of the intelligence community’s assessment was its perception of the shah himself. The White Revolution injected Western ideals into a region that had long rejected foreign systems, and the seeming success of Iran’s modernization made Western observers overconfident. This significantly limited Washington’s ability to see the shah for what he was: a weak, indecisive leader frequently susceptible to bouts of depression in times of crises or tough choices. The shah’s ability to Westernize Iran and integrate his country into U.S. Cold War policies led successive administrations to fall prey to what the American academic James A. Bill calls the “Pahlavi premise,” the idea that the monarchy was in total control of events.11

That disastrous assumption discounted the shah’s early years of tutelage under his father, Reza Shah Pahlavi. Many Iranians viewed the shah as an unimpressive figure in the shadow of his father. This image extended to the dynamics of the royal family. A gentle and shy personality, the shah was chronically plagued with poor health and appeared weak when juxtaposed with his domineering and robust sister, Princess Ashraf Pahlavi.12 A 1972 report produced by the CIA’s Directorate of Intelligence assessed that the “Queen Mother appeared to hold her eldest son in contempt . . . intriguing against him and promoting [his younger brother] Ali as a more worthy successor, and on one occasion she remarked that it was a pity Ashraf was not the Shah.”13

The royal family’s criticisms of the shah continued during World War II, when the Allies removed his father and placed him on the Peacock Throne. In the immediate postwar years, the young shah struggled to assert himself on the political scene as he tried to find a proper balance between the competing interests of the United States and Soviet Union. Princess Pahlavi frequently berated the shah, in one instance furiously bucking up her brother to act like a man “or else be revealed to all as a mouse.”14

In the early 1950s, when the Iranian monarchy faced its first test in the nationalist fervor espoused by Prime Minister Mohammad Mosaddegh, the shah’s performance was overwhelmingly disturbing for Western interests. An indigenous opposition had formed against the increasingly unpopular Mosaddegh, who had been forced to align with the Communist Tudeh Party of Iran. The CIA and its British partners had the tools it needed to stage Operation TPAJAX, a coup d’Ã©tat that would overthrow Mosaddegh and secure Western petroleum interests in Iran, but a serious issue remained.15

According to the CIA, “the biggest question mark for TPAJAX planners was the Shah’s role in the coup—not only how he would play it, but would he even play it at all?” A 1951 U.S. embassy assessment reporting that the shah’s “fears, questionings, and indecisiveness are permanent instabilities of character” proved correct when the shah fled his country at a critical moment during the coup. However, due to the actions of TPAJAZ operatives; Iranian civilians who filled the streets; and the strong-arm tactics of General Fazlollah Zahedi, who replaced Mosaddegh as prime minister, the shah was able to return from his exile.16 The survival of the monarchy during its first crisis under the shah thus depended on decisive action from both the Iranian military and foreign partners.

A decade later, the shah faced a new crisis: his first confrontation with Ayatollah Khomeini. By the spring of 1963, the shah was ready to embark on the White Revolution, with Iran’s middle and working classes enthusiastically accepting it via referendum.17 Khomeini and his radical followers—representing a minority compared to the supporters of more moderate clerics, who were advocates of a parliamentary form of government with which the shah shared power—vehemently opposed the perceived attack on tradition. With the ability to fill the streets with demonstrators, most of whom were religious students, Khomeini momentarily threatened to overwhelm the shah.18 The shah removed himself from the situation, abhorring that its resolution demanded an iron fist. Like General Zahedi in 1953, Prime Minister Amir Asadollah Alam was forced to play the critical role. As rumors spread throughout Iran that the shah was once again preparing to flee, Alam ordered military and security forces to fire on the demonstrators. Later, Alam would tell Anthony Parsons, the British ambassador, that the Shah “is very soft-hearted and does not like bloodshed.”19 Again, the Shah had required another’s firm hand to maintain control.

Throughout the duration of the Iranian Revolution, the U.S. intelligence community based its analysis on the mistaken assumption that the shah, if faced with an existential threat to the monarchy, would restore order with force as he had before. Either selective memory or the stunning successes of the White Revolution—or both—had dispelled any lingering notion in Washington that the shah required power outside of the palace to maintain the throne. Charles W. Naas, the American embassy’s chargÃ© d’affaires during the revolution, attests to this, believing there existed “implicit but very Western assumptions which I’m afraid misled us at times.”20

Figure 1. A meeting between President Jimmy Carter and the shah of Iran in 1977. National Security Advisor Zbigniew Brzezinski is at Carter’s left; Secretary of State Cyrus Vance is at Carter’s right.

Source: National Archives and Records Administration

More Intelligence Failures Amid a Continuing Revolution

Even when the summer 1978 respite ended in Iran and reporting on the revolution became more pessimistic, the DIA noted after serious disturbances in the city of Isfahan that the “swift imposition of martial law in the industrial and tourist center indicates the seriousness of the situation and the government’s intention to confront extremists with the force required to restore order.”21 Intelligence collected between January and August corroborated that the situation in Iran must have been relatively containable because the shah would have used force if it had become threatening. A second assumption that plagued the U.S. government’s ability to see the situation clearly was that the shah’s opposition was so divided that it would eventually shatter, thereby either reducing itself to insignificance or allowing the Iranian security apparatus to easily mop it up.22

As the assessment of the NFAC’s performance shows, perceptions of both the shah and the opposition failed to trigger any alarms prior to the fall of 1978 because “no events short of those which actually shook the foundations of the regime could bring these beliefs into question.”23 This explains why intelligence during the first months of the revolution reported serious opposition to the shah yet never reached the conclusion that the shah’s government faced collapse. The revolution kicked into high gear on 7 January 1978, when a Tehran newspaper ran an article accusing Khomeini as being a “foreign agent of Britain and of Indian descent.”24 In the religious town of Qom, two hours south of Tehran, the mood of seminary students boiled over as they lashed out at government facilities. Reports from the American embassy described the situation as “the most serious incident of this sort [in] years.”25 Demonstrations spread throughout Iran in January, leading the embassy to conclude on 26 January that the “Moslem [sic] establishment [was] potentially in [its] strongest position since 1963,” while the government was “demonstrating considerable uncertainty in facing up to the challenge.”26

Even at that early stage of the revolution, the embassy’s coverage accurately depicted events while placing the growing opposition in historical context. Ambassador William H. Sullivan provided a picture of a burgeoning opposition, painting the clerics as dangerous reactionaries and contrasting their movement with a government that was failing to mobilize the public. The upheaval resembled the events of 1963, a fact that was not lost on observers at the American embassy. Sullivan reported that the demonstrations threatened to end the 15-year peace that had followed Khomeini’s exile.27 The INR offered a similar perspective, indicating that although the opposition “was not an immediate threat to the Shah’s regime, [it] may have put his traditionalist Islamic opponents in their strongest position since 1963.”28

Both the embassy and INR presented an accurate depiction of events on the ground, but neither moved beyond simply reporting events. Intelligence analysts proved unwilling to forecast not only where events might lead but also alternative scenarios that could play out if their assumptions came into question with discrepant information. A CIA report on 11 May related that the religious opposition maintained constant pressure on the government and that the “Shah is frustrated with his failure to contain the unrest and seems baffled as to how to deal with the underlying causes of Muslim fundamentalist dissidence.”29 Since intelligence rested on the assumption that the shah would ultimately use force when the situation called for it, analysts never moved beyond narrating events in their reports, since there was no perceived need for projections as to the Shah’s future ability to lead Iran. That same CIA report surmised that there was little possibility of a negotiated settlement with radical elements of the clergy, so alternative scenarios were never drawn.

Gary G. Sick, the principal White House aide for Iran on the National Security Council staff, believed that the embassy had succeeded in accurately reporting events as the situation developed. Washington was kept abreast of the tactics of the opposition and the various views it held. From January through August 1978, however, Sick maintained that reporting from the embassy never strayed beyond a simple retelling of events. “There was very little digging below the surface,” he wrote in a detailed account of the revolution. The embassy finally grasped the seriousness of the situation as September approached, “although they were studiously non-alarmist and clearly did not anticipate just how serious the troubles would be.”30 At no time did analysts evaluate whether the opposition would succeed, because the shah’s immediate future was never questioned.

Such confidence in the shah explains how intelligence could at once note the seriousness of the situation yet maintain an optimistic position. An August 1978 CIA study titled “Iran after the Shah” concluded that “Iran is not in a revolutionary or even a ‘prerevolutionary’ situation.” The CIA was operating under a premise solidified in a longer study conducted the year before, the contents of which asserted that the shah would survive well into the 1980s and that “there would be no radical change in Iranian political behavior in the near future.31 Naas’s embassy traffic attests to how these reports misled embassy officials. In a meeting with Hedayat Eslaminia, a deputy in the Iranian parliament, U.S. political officer John Stempel and Naas were warned to “keep an eye on the Shah . . . and if something were wrong, they should urge him to convene the Regency Council and prepare Iran for change.” Stempel responded that this was premature, but Eslaminia “merely smiled sadly and noted it pays to think ahead.”32

The two men would not heed Eslaminia’s advice. The opposition increasingly radicalized itself as moderate clerics and intellectuals became engulfed by the fiery rhetoric of Khomeini. Naas observed the dangerous shift in the opposition, noting that “moderation apparently does not beget followers from the workers, small shop keepers and artisans at this time.” However, the current trajectory of the opposition failed to raise any significant concern, even though the martial law imposed by the shah was so restrained that “many Iranians of the middle and wealthy classes believe that the Shah is not acting forcefully enough, that he is weak and indecisive.”33

It was at this point that the embassy realized that the “Shah and those around him . . . have underestimated the challenge.” Despite this observation and the likelihood that the “Shah may be forced to repress an outbreak with the iron fist and not the velvet glove if Iran is to retain any order at all,” Naas had “no doubt that he will do so if that becomes essential.”34 These assumptions had impaired intelligence. The opposition continued to gain strength, but the situation appeared containable because the U.S. intelligence community worked from a premise that ruled out drawing a line that, once passed by the demonstrators, required analysts to reassess the situation.

A Clearer Picture: Alarm Bells and a Window of Opportunity

During the spring of 1978, reports from Tehran raised a degree of uneasiness in Washington. Ears perked up following the shah’s disastrous performance during an interview on state television. The interview, which marked the Shah’s first comments on the crisis and reached millions of Iranians, was meant to reassure the public that their leader was in command of the situation.35 The government’s firm hand would provide security as it continued the planned rollout of political liberalization, an initiative the shah had begun in 1977. Conversely, as historian Andrew Scott Cooper notes, Iranians “saw instead a king on the defensive, unsure of himself and in denial about the challenges facing the country.”36 The shah wavered, at times lashing out against a grand conspiracy and at other moments withdrawing completely, becoming moody and visibly depressed. Ambassador Sullivan reported that sympathetic Iranians were concerned with this shocking display of “indecisiveness, nervousness and imprecision.”37 The U.S. embassy’s political officer, George B. Lambrakis, related that the opposition became more confident, with one of the shah’s dissident contacts stating that he “sounded like a man in retreat, unable to concentrate or grasp hold of anything.”38

Following the incident, Gary Sick ordered a National Intelligence Estimate (NIE) in early June 1978.39 Those involved in the crisis often cite the NIE as a prime example of inadequate intelligence. This is certainly true, as Stansfield Turner shelved the unfinished study in early September because the draft predicted that “the Shah would survive for another ten years” despite clear signs that he faced “problems.”40 The process required to initiate NIE studies is “inherently cumbersome and time-consuming” and, in this case, the effort dragged on through the summer until it was finally scrapped. The nature of revolutions guaranteed that events overwhelmed any interagency efforts to provide a coherent picture. Sick, like Turner, found the intelligence “singularly unhelpful in attempting to understand the nature of the forces at work in Iran.”41

However, as Michael Donovan has shown in his revealing article, “National Intelligence and the Iranian Revolution,” those interagency processes actually helped the intelligence community reach an assessment closer to the reality on the ground.42 The differences between the INR and CIA that had been brought to the fore during the production of the NIE were soon ironed out. The CIA concluded that Iran was not in a revolutionary state and that the shah would rule well into the 1980s before being succeeded by his son.43 The INR, on the other hand, brought their more pessimistic opinion to the forefront, having indicated in a January assessment that the Shia clergy was in its strongest position since Khomeini’s exile.44

In an 11 September note attached to the NIE, the INR stated, “We are dubious that the Shah, in the near term, can suppress urban violence without substantial use of force.” The analysts believed that force “would further aggravate his difficulties by enlarging the circle of opposition against him and possibly calling into question the loyalty of the armed forces and security services.” The most penetrating insight struck at the heart of the shah’s dilemma: “We see a basic unresolvable conflict between the Shah’s liberalization program and the need to limit opposition which raises serious questions about his ability to share power and to maintain a steady course in his drive to modernize Iran.” The INR arrived at the conclusion that the shah faced the real possibility of being forced to abdicate by 1985, rating the possibility of his removal at less than 50-50.45

On 7 September, Sick’s position had shifted closer to that of the INR after he consulted with specialists both in and out of government. He wrote a memorandum to the president that summarized the various impressions of the shah as “universally pessimistic” and explained that a “deep sense of dissatisfaction revealed by the continuing demonstrations and riots suggested that Iran could be ripe for full-scale revolution.”46 The next day, in a defining moment of the revolution known as Black Friday, a massive clash ensued between demonstrators and Iranian security forces in Tehran. Casualty estimates varied widely—the government claimed 87 dead and 205 wounded while the opposition numbered the dead in the thousands—but what proved certain was that the radical opposition had gained momentum at the expense of the moderates.47

It was now clear to many that the shah was in serious trouble. The INR called for a paper analyzing the situation’s shorter-term questions on 12 September, but due to bureaucratic wrangling with the NFAC, it took a week for the study to begin.48 On 29 September, the final product, an Interagency Intelligence Memorandum (IIM), was distributed, stating that “while the Shah no longer appeared to be in immediate danger of being overthrown, ‘there was still considerable question, however, of his ability to survive in power over the next 18 to 24 months’.”49 In his article, Donovan argues that the U.S. intelligence community’s differences “had been put to rest by ‘Black Friday’.”50 That, however, was not entirely the case, since the NFAC continued to issue assessments offering degrees of reassurance of the shah’s position. Indeed, the NFAC concluded that the IIM would not be followed up “on the grounds that it considers too immediate a time frame.”51

To say that the intelligence picture was a coherent one would simplify a highly complex and difficult situation. But this is not to say that the general thrust of Donovan’s argument—that the U.S. intelligence community now had a far better read on the situation in Iran—is wholly inaccurate. Considering the growing pessimism within the intelligence community from late August to the distribution of the IIM on 29 September, a conclusion can be drawn that intelligence provided U.S. policymakers with a picture, though dizzying and constantly shifting, that was enough to trigger alarms. If the consistently pessimistic reports of the INR had been given equal weight with the NFAC’s rosier projections, and if the NFAC’s less sanguine assessments had been plucked from its more optimistic, the period from late August to late October 1978 would not have passed without a single policymaking meeting on Iran. That period represented a window of opportunity for the White House and the last chance for reconciliation between the moderate opposition and the shah. Instead, the U.S. government simply drifted, refusing to even contemplate the shah’s prospects. The leading moderate figures of the opposition, Karim Sanjabi and Mehdi Bazargan, publicly aligned with Khomeini in the last week of October, thus ending any hope of a power-sharing system with the shah.52

In crises, and particularly during revolutions, intelligence can rarely present policymakers with a full picture, let alone a coherent one. In the classic text On Revolution, author Hannah Arendt illustrates how the original aims of revolutions are quickly overrun by events, far surpassing the expectations of even its leaders. There is nothing inevitable about revolutions, and the end result can only be known after the situation has calmed.53 As is now known, Khomeini was surprised that he was swept into power by the masses, believing that in the end the shah would ultimately use the force required to retain power.54

Intelligence may have stumbled during the Iranian revolution, but despite that and the inherent nature of revolutions, it did not paralyze the ability of U.S. policymakers to take decisive action. Instead, policymakers were paralyzed by their own perceptions of Iran. Richard Jervis provides important insights into this issue: “The same factors that lead policymakers to underestimate trade-offs make them reluctant to develop fallback plans and to resist information that their policy is failing.”55

Nixon, Kissinger, and New Policies in the Middle East

For President Carter and his national security advisor, Zbigniew Brzezinski, too much was at stake in Iran. Brzezinski, an ardent anti-Communist and grand strategist, understood that the shah was the foundation of U.S. security policy in the Middle East. The “Twin Pillar” policy, which relied on Iran and Saudi Arabia to maintain American interests in the region, was a strategy in name only, since only Iran had the ability to secure the Persian Gulf.56 Consequently, the United States had invested heavily in the shah. Throughout the 1970s, the shah had deftly positioned himself as a partner of the United States rather than a mere client, becoming the United States’ man in the Middle East. Policymakers have a natural tendency to stick with their first choice for as long as possible.57 To change course is often too expensive, and in this case, for the United States to lose Iran was unthinkable both politically and strategically. Years of building up the faÃ§ade of Pahlavi strength contributed to the environment in which the Carter administration acted.

The fall of the shah was a manifestation of his poor governance, enthusiastically abetted by the policies of former president Richard Nixon and former secretary of state and national security advisor Henry Kissinger. Nixon and Kissinger, who served together in the White House between 1969 and 1974, operated in an international context in which they believed the U.S. position in the world had been greatly reduced by the burdens of the Vietnam War.58 Consequently, the Nixon administration sought to preserve U.S. interests by diffusing responsibility to regional allies. Equally troubling was the 1968 surprise announcement that the British would withdraw from the Persian Gulf. The Nixon administration made the fateful decision to scrap balancing in the Middle East for Iranian primacy, since due to the complexities of larger issues such as “Vietnam, the Soviet Union, China, and a re-election campaign, Nixon and Kissinger had little time to devote to the complexities of Iraqi or Gulf politics.”59 Gone were the John F. Kennedy and Lyndon B. Johnson years when the United States maintained the upper hand in its relationship with Iran. In crafting a new American strategy, the Nixon administration submitted itself to the shah’s understanding of the Middle East.

Nixon and Kissinger relegated U.S. policy in the Middle East to the purview of the shah from the onset of its time in the White House, largely driven by Nixon’s positive relationship with the shah when he served as vice president in the 1950s and by Kissinger’s geopolitical understanding of the region. It was Kissinger who pushed for Iranian primacy because he saw the House of Saud as an unstable regime ill-suited to protect American interests. For the national security advisor, it was critical that the United States “recognize that Iran is in fact the preponderant power in the Gulf. . . . If a radical regime were to take over in Saudi Arabia, the U.S. would have little choice but to move closer to Iran—and there is no reason now not to go on preparing for that contingency.”60

The Nixon administration formulated Iranian policy based on this assessment from the beginning. Prior to the shah’s state visit to the White House on 21 October 1969, Nixon aides grew increasingly concerned that the shah would dominate the president in negotiations and end the Twitchell Doctrine, the U.S. policy during the Kennedy and Johnson years that ensured that the shah’s arms expenditures did not spiral out of control and send the Iranian economy into a tailspin.61 It also confirmed that the shah would remain dependent on the United States in his quest for preponderant power in the Persian Gulf.62 This tight restraint on the shah’s ambitions loosened during his White House meeting with Nixon and quickly unraveled.

At the White House, the shah urged Nixon to permit him to increase oil prices. In return, Iran would spend its increased oil income on arms expenditures with the United States. After the shah left the Oval Office, he informed a stunned Douglas MacArthur II, U.S. ambassador to Iran, that the problem of safeguarding the Persian Gulf had been resolved.63 Nixon, enticed by the opportunity to both strengthen the northern tier in the Middle East and improve the balance of payments between the United States and Iran, had apparently relented to the shah. After the U.S. National Security Council staff reached a consensus in April 1970 that Iran’s economy and military could absorb the shah’s wish for increased petrodollars and arms expenditures, Nixon and Kissinger gave into the shah completely.64 During a White House meeting of the foreign ministers of the Central Treaty Organization, an anti-Communist alliance of northern tier states, Nixon pulled Iranian minister of foreign affairs Ardeshir Zahedi into a side room and quietly informed him to “tell the Shah you can push us as much as you want on oil prices.”65

As historian Andrew Scott Cooper has noted, Nixon and Kissinger made this momentous backchannel decision with absolutely no cost-benefit analysis. Risks for both the United States and Iran were not calculated prior to the decision to grant the shah the power to “redistribute national wealth from the industrialized West to the oil kings of the Middle East.”66 The centralization of power at the White House—where Nixon and Kissinger frequently formulated in a vacuum wholly separate from the State Department, the Defense Department, and the CIA—allowed critical decisions to be made on a whim. In Tehran, the U.S. military mission had completed an assessment concluding that Iran was purchasing “exotic equipment which they are not prepared to use and, in many instances, cannot afford.”67 The CIA’s Office of National Estimates submitted more dire reports in October 1971, warning that Iran’s “planned expenditures are far larger than projected revenues.” In the next few years, the shah “will have to make painful choices between military hardware and development priorities” and “will only ease off on military expenditures after several prophets of doom have sounded Iran’s economic death-knell.”68

The CIA report, in one respect, was optimistic in the sense that the analysts foresaw the shah recognizing his dilemma and its consequences before disaster struck. It is possible that the shah may have recognized that the White Revolution, his ambitious modernization program, had pushed too far and too quickly his grandiose vision for Iran; however, he certainly did not expect the resulting trouble to envelop him at the rate and manner in which it did. The shah’s unrestrained quest for the most sophisticated weapons and intelligence equipment derailed an economy that could not absorb the heavy costs of the purchases. While inflation in Iran was nearly eliminated by the late 1960s, a more acute form “reappeared with a vengeance in the early 1970s, raising the cost-of-living index from 100 in 1970 to 126 in 1974.” The Economist calculated that rents in 1976 had risen 300 percent in five years, and that Iran’s once thriving middle class would have to spend 50 percent of its annual income on housing alone.69 The economic origins of the Iranian Revolution are directly linked to this runaway inflation.

However, arms expenditures alone cannot explain the dramatic downturn of the Iranian economy. While the Nixon administration’s enthusiasm to feed the shah’s appetite for military hardware accounted for much of the problem, Nixon and Kissinger’s acquiescence to the shah on oil pricing would come back to haunt them. The oil shock following the 1973 Arab-Israeli War (a.k.a. Yom Kippur War) illustrated to the White House the pitfalls of granting Iran complete control of both pricing and production of oil. It was to the shah’s great misfortune that at the very moment the United States realized this, he announced on 23 December 1973 a $7-per-barrel increase, a decision that raised the price of oil by 470 percent in 12 months. The increase was directly tied the shah’s insatiable appetite for sophisticated military equipment, as he planned to overspend $5 billion on arms, a bill which would be footed entirely by American oil consumers.70

That critical juncture marked the beginning of the U.S. shift toward Saudi Arabia. Throughout the oil crisis, the shah proved intransigent toward the Nixon administration’s efforts to lessen the burden for U.S. oil consumers. King Faysal of Saudi Arabia, contrariwise, was much more amenable to overtures from the White House. In early March 1974, Nixon granted Faisal “the king’s long-cherished goal of sealing a separate military and economic alliance with the United States” in exchange for ending the oil embargo, increasing oil production, and maintaining stable prices. Kissinger would later tell U.S. deputy secretary of defense William P. Clements that the administration was “going all out now on the Saudis.”71 The Twin Pillar policy now became more than just a name, as the new relationship expected Saudi Arabia to combine with Iran to safeguard U.S. interests in the Gulf. By suddenly detaching themselves from the shah in respects to the petroleum market, Nixon and Kissinger latched themselves to the House of Saud as quickly as they had succumbed to the shah’s desires.

Balancing Saudi Arabia and Iran proved to be another momentous decision for the Nixon administration. It would be during the Gerald R. Ford administration that the Saudi card was played and during the Carter administration that the United States would deal with the ramifications of that policy. By the end of 1976, President Ford and Kissinger, who was serving as Ford’s secretary of state, had grown weary of the shah’s megalomania. The House of Saud, acting jointly with the United States, flooded the market and stabilized oil prices, sending the Iranian economy into a downturn from which the shah’s monarchy would never recover. On 4 January 1977, Kissinger offered the president and himself a moment of self-congratulation, arguing that they “should also get credit for what happened to the OPEC [Organization of the Petroleum Exporting Countries] prices,” due to their “great diplomacy with the Saudis.” Three days earlier, the shah—furious with what he saw as Saudi betrayal and a Western conspiracy to punish him for raising oil prices in December 1973—informed royal court minister Asadollah Alam that Iran was bankrupt and that modernization efforts were “doomed to grind to a standstill.”72

However, the shah believed the halt was temporary and merely an inevitable result of the growing pains all modernizing states experience. He failed to heed warnings from a small contingent of advisors who urged him to consider that the Iranian economy could not simultaneously sustain an ambitious military buildup and domestic development program, neglecting to recognize that those two initiatives would stretch the economy until it ripped at the seams. Tied to this was the shah’s confidence that oil prices would continue to climb. With that line of thinking, it seemed entirely plausible that he could continue to recycle petrodollars to maintain his agenda.

Iran’s economy and society nevertheless suffered from acute inflation in early 1978 as a result. In an attempt to lessen the impact of inflation, Iranian prime minister Jamshid Amouzegar attempted to take pressure off an overheated economy by reducing civilian expenditures. Since the shah refused to reduce arms expenditures, $3.5 billion in infrastructure projects was cut from the country’s current five-year plan.73 Inflation was reduced, but unemployment skyrocketed due to the loss of construction contracts. The reinforcing relationship between inflation and unemployment, combined with an Islamic revival throughout the country, dictated the type of environment a weakened shah was facing at the beginning of the Carter presidency and during the revolution.

Figure 2. The shah of Iran and President Richard Nixon meet in 1973.

Source: National Archives and Records Administration

The Collapse of Imperial Iran

The Carter administration failed to recognize the condition of the Iranian monarchy when it first took office in 1977. Despite the loss of petrodollars, Washington continued to acquiesce to the shah’s weapons wish list. Prior to arriving in Tehran for his new post as U.S. ambassador to Iran, William H. Sullivan met with Carter and Brzezinski to discuss the administration’s Middle East policy. Sullivan, who sought to reinstate the arms sales restraints of the Kennedy and Johnson years, was surprised to hear similarities to Nixon’s strategy, with Carter explaining that he “wished to be quite generous with the Iranians, and there was nothing currently on their shopping list under consideration that [he] felt it necessary to deny them.”74 This allowed for the Iranian procurement of the airborne warning and control system (AWACS) surveillance aircraft, a system that was still being integrated into the U.S. Air Force and one that Iran could ill afford. In addition, Secretary of State Vance notified the shah during his first visit to Iran in May 1977 that the pending sale of 160 General Dynamics F-16 Fighting Falcon fighter planes would be given the go-ahead despite “the serious political problems [it] would pose with Congress.”75

That there appeared to be more similarities than differences between the Nixon and Carter administrations comes down to the convictions of the grand strategists that operated in Washington. Both Kissinger and Brzezinski viewed national security through a Cold War lens in which decisive American action would be needed to balance Soviet ambitions. This demonstrated to both men the significance of Iran in the defense of U.S. interests in the Persian Gulf. During the Nixon and Ford years, the shah’s image in Washington policymaking circles took on a semblance of great strength. Through an impressive military buildup and modernization program, the shah had shed his reputation of weakness that had plagued him during the early Cold War. On 30 November 1971, Iran, armed with U.S. weapons and equipment, successfully stormed the Persian Gulf islands—Greater and Lesser Tunbs and Abu Musa—and claimed them for the Pahlavi dynasty. The Nixon administration, impressed by this show of force, discarded any lingering doubts it may have had about the shah’s ability to serve as the “Guardian of the Gulf.”76 Even when Saudi Arabia became a second pillar of defense in the Middle East following Nixon’s 1974 alignment with King Faisal, Iran maintained its importance in U.S. Cold War containment policy.

The image of a strong and decisive Shah became an institutional reality during the 1970s and carried over into the Carter administration. Charles Naas, the U.S. chargÃ© d’affaires in Tehran, posited that the importance of Iran in U.S. security policy guaranteed that the Nixon Doctrine was “put into the Bible for future foreign policy practitioners.”77 According to Vance, “We decided early on that it was in our national interest to support the Shah so he could continue to play a constructive role in regional affairs.” Notably, Iranian forces under the shah had supported the pro-Western government of Oman to stamp out a leftist insurgency in Aden, and the shah “had provided important economic assistance to countries in the area . . . and had been helpful in reducing tensions in Southwest Asia.”78 Perhaps most enticing for the Carter administration was Iran’s positive relationship with Egypt and the shah’s close friendship with Egyptian president Anwar Sadat. As Israel’s critical source of petroleum, Iran could perhaps play an important role in bringing Sadat and Israeli prime minister Menachem Begin to the peace table, a major White House initiative.

The Carter administration’s predispositions of Iran—a product of both the institutionalization of the shah’s image and a desire to maintain the defense of the northern tier—explain its decisions made during the Iranian Revolution. Robert Jervis offers a framework that provides a revealing glimpse into officials’ behavior during the crisis. In his book, Perception and Misperception in International Politics, Jervis argues, “Those who are right, in politics as in science, are rarely distinguished from those who are wrong by their superior ability to judge specific bits of information.” Individuals consume and evaluate facts based on their understanding of the context in which they are acting. As a result, an accurate understanding of a crisis can result from “doing injustice to particular facts.”79 It is often the case that those who possess a better understanding of the facts are wrong, while those who are right may have been led to their conclusions entirely from their predispositions rather than by correctly analyzing a situation.80

The lesson from this analysis is that “successful detection of military and diplomatic surprises is less likely to be explained by the skill of the intelligence service in piecing together arcane bits of information than by the degree to which the service’s predispositions and expectations fit the actions that the other is planning to undertake.” Thus, when officials come across discrepant information, as they did during the Iranian Revolution, they are more likely to fit it into their pre-existing understanding of the situation. Jervis’s perceptual framework demonstrates that analysts are either right due to luck or because a “person’s predispositions fit the environment.”81 It is therefore important that the predispositions of intelligence and military analysts match the environment in which they perceive stimuli.

Unfortunately, no mid-level officials or those at the policymaking level of the U.S. government viewed the revolution with a clear perception of the shah or the forces at work in Iranian society. Henry Precht, the State Department’s Iran desk officer, was one of the first to recognize that the shah was finished. Following the Black Friday massacre, Precht decided “that the Shah wasn’t going to make it . . . that sometime in the not too distant future he was no longer going to be a factor on the Iranian scene.”82 However, Precht came to that conclusion due to his deep contempt for the shah rather than because he understood that the shah would never use force to crush the opposition as the Iranian government had in 1963. Precht contacted Ibrahim Yazdi, Khomeini’s representative in the United States, because he “harbored a visceral dislike for the Shah and the Pahlavi regime.”83 Precht’s search for alternatives therefore stemmed from convictions gathered aside from a clear perception of the situation’s stimuli.

Ambassador Sullivan was the first senior official to recognize that Iran might be moving toward a post-Pahlavi era. In May 1978, he authorized his political counselors to reach out to the leaders of the Liberation Movement of Iran (LMI), a faction of the opposition that had allied itself with Khomeini. At that point, Sullivan still held out hope that the monarchy could negotiate with prominent figures, such as LMI leader Mehdi Bazargan, to form a government that would preserve the Pahlavi dynasty in some form. When Sullivan returned to Tehran from a three-month summer vacation in August, the opposition, which now combined the forces of Iran’s middle and working classes, was able to flood the streets of Tehran with half a million demonstrators calling for the end of the shah. The ambassador’s previous rosy forecasts quickly darkened, and he believed that the shah was doomed.

On 9 November, Sullivan sent Washington his now infamous cable, “Thinking the Unthinkable.” In a cleverly worded message that distanced him from the very policy he now endorsed, Sullivan presented a hopeful scenario in which U.S. interests could be protected in a post-shah Islamic government. Opposition leaders such as Bazargan would lead a new government that would depend on the U.S.-oriented Iranian military, since the “religious people would find it useful for the military to remain intact because they have no Islamic instruments for maintaining law and order.” Khomeini would “return to Iran in triumph and hold a Ghandi-like position in the political constellation.” While the new Iranian government would be decidedly less inclined toward the West, Iran could still be counted on by the United States to fulfill its role as defender of the northern tier.84

Since his return to Tehran, Sullivan underwent a dramatic transformation. He had gone from confidently reporting in May that the Iranian crisis had passed to proclaiming in November that a post-Pahlavi government and the return of Khomeini to Iran would not destroy the U.S. position there. Like Precht, he understood that the shah was finished, though for the wrong reasons. The ambassador’s “Thinking the Unthinkable” cable was heavily influenced by his encounters with Bazargan, and the cable’s depiction of what a new Iranian government would look like had been taken from the vision of one of the opposition’s leaders.85 Although Sullivan seemed to grasp that Iran’s future may not be with the shah, his understanding was incredibly naÃ¯ve and the result of a faulty predisposition. He, too, misperceived the situation’s stimuli.

Perhaps no other individual had more influence in formulating U.S. policy during the Iranian Revolution than Zbigniew Brzezinski. The national security advisor’s tenacious bureaucratic infighting assured that Precht and Sullivan’s advocacy for a shift away from the shah was dashed. Having sidelined Admiral Turner’s CIA by leaking the president’s note condemning the quality of intelligence to The Washington Post, Brzezinski opened up his own independent intelligence shop through a backchannel with Ardeshir Zahedi, Iran’s ambassador to the United States. Zahedi reinforced Brzezinski’s view that the revolution was driven by external Communist subversion and that the shah must use force to put it down. But it had become apparent in December 1978, when demonstrations took on an increasingly violent manner, that the shah was unwilling to use force due to his belief that his son could not successfully succeed him in an environment in which the military was empowered after preserving the Pahlavi dynasty.

Brzezinski, however, never strayed from his preferred course of action. His backchannel with Zahedi served to confirm his predisposition that the shah would indeed use force. The Iranian ambassador held great ambitions to become prime minister and serve, as his father had done in 1953, as the figure around whom pro-shah forces rallied to put down the revolution. To fulfill his goal, Zahedi carefully calculated the information he dispensed to Brzezinski to win over the national security advisor, giving the impression that he spoke for the shah and had urged him to crush the opposition. Brzezinski accepted that information because it neatly fit into his predisposition of Iran and the shah. When faced with discrepant evidence, such as the shah’s speech on 6 November that made clear he would not revert to the iron fist, Brzezinski simply ignored it, since the speech did not support his understanding of Iran.86 Moreover, Brzezinski’s Cold War disposition influenced the way he reacted to the Iranian Revolution’s stimuli. He was already sensitive to signs of Communist subversion, so each time the shah or Zahedi spoke of external Soviet subversion, it reinforced his refusal to search for alternatives to the use of force.

In August 1978, Brzezinski had invited William E. Griffith, an expert on Communism who had just returned from Iran, to a meeting at the White House. Griffith proved to be “that rare Cold War warrior who understood that something new was taking shape not only in Iran but also throughout the region.”87 Rejecting Brzezinski’s conclusion that Soviet influence was spreading across the Middle East, Griffith attributed the disturbances in Iran to an Islamic revival. Again, when faced with discrepant information that did not fit into his paradigm, Brzezinski chose to ignore it. Like many of his fellow U.S. policymakers at the time, he understood the world through a Cold War context and filtered out data that did not fit that paradigm as a result.

Conclusions

Events transpired quickly in the opening weeks of 1979. On 16 January, the shah left Iran in exile and was replaced as head of the Iranian government by Shapour Bakhtiar, a leading member of the opposition. Ayatollah Khomeini returned to Tehran on 1 February and quickly consolidated power. Before that pivotal year was out, Iran had become an Islamic republic with Khomeini serving as its supreme leader. The shah spent the remainder of his life in exile, dying in Cairo, Egypt, in July 1980.

It is impossible to know whether the shah’s position in Iran could have been maintained, but what is certain is that most ranking U.S. officials viewed the entire crisis with a false perception of Iran. The institutionalized image of the shah as a strong and decisive leader misled the Carter administration and U.S. intelligence community and ensured that an effective strategy to support the shah was never formulated.

Ultimately, policy failure—not intelligence failure—was the most important factor that the United States contributed to the shah’s downfall. To say that U.S. policy alone condemned the shah to his fate would be to exaggerate the American role in the crisis and minimize the shah’s own agency. However, a catastrophic set of policy prescriptions dating back to the Nixon administration represents a fundamental U.S. failure in Iran, for those early policies significantly weakened the Iranian economy, and it was that declining economy that allowed for the Islamic revival that spurred the revolution. If there is a lesson to be learned from the American experience in the Iranian Revolution, it is that long-term policy that fails to undergo frequent risk assessments can lead to disastrous consequences that appear with little warning. It is therefore important that all policy decisions are carefully calculated prior to and during their implementation.

Robert Bowie, reflecting on the NFAC’s performance during the revolution, argued, “By September ’78 we [the CIA] had a better grasp of the situation than the policy establishment, but we were providing intelligence they were not necessarily interested in using.”88 This statement certainly reflects the fact that by the fall of 1978, the intelligence community, though failing to foresee the immediate collapse of the shah, was accurately reporting day-to-day political events in Iran and gauged the seriousness of the revolution. However, the “Pahlavi premise,” the idea of the infallibility of the shah, led policymakers astray. Assumptions, despite evidence to the contrary, were not questioned.

When dealing with the Middle East, U.S. administrations must understand the limits of intelligence while formulating policy. Assumptions and preconceptions at the policymaking level, as evidenced during the Iran Revolution, distort reporting from the field. Therefore, officials should be cognizant of the premises undergirding policy. Intelligence should serve as a tripwire to alert the administration of a policy’s soundness, and stimuli that could cause a reevaluation of policy should be identified beforehand by officials. Today, the Trump administration has centered its Middle East strategy and efforts to counter Iran on the strength of Saudi Arabian crown prince Mohammad bin Salman. At what point should—or, rather, what needs to transpire for—the administration to question this approach? Policymakers would do well to remember that intelligence rarely predicts events or can even set the agenda. Intelligence should instead serve as a guide to informing policy as long as policymakers are willing to use it.

Endnotes