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The Iranian Coup

The world premiere of Damian Lewis: Spy Wars, features the star of Homeland, Band of Brothers and Billions in his first factual role. The series looks back at incredible moments in espionage, with one particularly fascinating episode telling the real story that inspired the movie Argo.

It’s the stranger-than-fiction tale of how the CIA concocted an incredible plan to smuggle out a group of terrified diplomats trapped in Tehran after the US embassy was stormed in 1979. Their idea? To get the diplomats to pretend they were film crew, visiting the Iranian capital to scout locations for a (completely make-believe) sci-fi movie. 

The attack on the US embassy itself had come in the wake of the recent Iranian Revolution, when the Shah of Iran – Mohammad Reza Pahlavi – was dramatically toppled, with the monarchy replaced by an Islamic republic. This event was partly ‘blowback’ from an event that unfolded decades earlier, when the CIA and British intelligence secretly conspired to remove the Iranian prime minister. It was one of the 20th Century’s most audacious adventures in spycraft.

A world-changing discovery

The story really begins back in 1901, when a wily British entrepreneur changed the course of history. He was William Knox D’Arcy, who – having made his fortune in business elsewhere – turned his attention to the untapped potential of oil reserves in Iran. This one man literally bought the rights to almost all the oil in the country, the deal being that Iran would get 16% of any profits made from D’Arcy’s discoveries in the country. 

When oil was eventually found, after several grueling years of working in harsh, sun-scorched conditions, fending off bandits and disease, William D’Arcy became a very, very rich man – and the oil potential of the Middle East became the focus of the world’s attentions.

The UK government bought majority shares in William’s baby, the Anglo-Persian Oil Company, and vast sums of money started pouring into Britain’s coffers. But things would soon change in a very big way.

The upstart in the east

As the decades went by, there was simmering resentment in Iran over the terms of the agreement with the UK. Simply put, the meagre percentage of profit was seen as a national humiliation, and there were widespread grievances over the treatment of Iranian workers (‘Wages were 50 cents a day,’ wrote the director of Iran’s Petroleum Institute, ‘there was no vacation pay, no sick leave… the workers lived in a shanty town without running water.’)
 
A nationalist fervour grew in 1951 with the rise of Prime Minister Muhammad Mossadegh, veteran politician who had sweeping reforms in mind for the country. Mossadegh was passionate, prickly, moody and mercurial – his biographer Christopher de Bellaigue describes him as a ‘mixture of visionary and fusspot’, prone to fainting and weeping in public.

The British pulled out their technicians, essential to the running of the oil fields

He was also Britain’s worst nightmare, determined to nationalise the Iranian oil industry. The UK regarded this as a gross violation of the D’Arcy settlement. Mossadegh was also at loggerheads with the young Shah of Iran, Mohammad Reza Pahlavi, whom Mossadegh wanted to manoeuvre into being a merely ceremonial figurehead rather than an all-powerful monarch.

Nationalising Iranian oil plunged the country into financial crisis. The British pulled out their technicians, essential to the running of the oil fields, and took revenge on Iran by slapping the country with economic sanctions and a naval blockade to stop Iran from exporting the oil which Britain considered its own stolen property. 

Mossadegh stood firmer than ever, and was even granted emergency powers, allowing him to bring in left-wing land reforms and further undercut the authority of the Shah. For the British, the situation was intolerable. Prime Minister Winston Churchill, who had once gloatingly described Iran’s oil as ‘a prize from fairyland beyond our wildest dreams’, decided the upstart leader had to be overthrown. The stage was set for regime change.

Operation Ajax

British intelligence joined forces with the CIA to put the plan – Operation Ajax – into action in 1953. Until recently, the United States had no appetite for meddling in the Anglo-Iranian dispute, but the new administration of President Eisenhower regarded Iran in Cold War terms. The worry was that the political chaos unfolding under Mossadegh would, in the words of a CIA report, ‘lead to a complete breakdown of the Iranian government… from which a pro-Soviet regime might well emerge.’

There was plenty of opposition to Mossadegh prior to the covert CIA intervention. Those loyal to the Shah were concerned that Mossadegh was just steps away from becoming an all-out dictator, while the Islamic clergy resented Mossadegh’s modernising policies. The conditions were ripe for Western intelligence agents – overseen by Kermit Roosevelt Jr, grandson of President Teddy Roosevelt – to sow discontent against Mossadegh. Newspapers were bribed to print stories against the leader, and the Shah was pressured to sign a decree which would dismiss Mossadegh from office and install a new prime minister approved by the West.

When the Shah did just that in August 1953, the CIA sat back and expected the coup to unfold. Instead, Mossadegh ignored the decree, even having the soldier who delivered the decree arrested. 
 
Just what happened in the aftermath of this first, failed coup is still controversial. According to espionage lore, Kermit Roosevelt Jr continued to plug away, arranging for thugs and gangsters to pose as both ‘pro-Shah’ and ‘pro-Mossadegh’ street protestors, while also ensuring news of the Shah’s decree was spread via Iranian newspapers and media broadcasts. Some historians dispute the importance of the covert action in this stage of the coup, arguing that natural pro-Shah feeling was ignited when the public learnt Mossadegh had so brazenly brushed aside the monarch’s ruling. 

The CIA itself noted, ‘The Royalist movement… contained a large element of spontaneity and there seemed to have been a genuine reaction of shock and dismay on part of the Tehran populace.’

Either way, the headstrong prime minister’s time was up. He was eventually arrested and imprisoned, and would eventually die in 1957 while under house arrest.

Blowback

Mossadegh’s fall heralded a new era for the Shah. Iranian oil began flowing again, with the Anglo-Iranian Oil Company changing its name to British Petroleum (BP). The Shah strengthened his hold on the country, setting up SAVAK, a much-feared secret police service which received CIA training and cracked down on dissidents.

The 1953 coup is widely regarded as a decisive moment in modern history, setting the template for covert US shenanigans in country’s like Guatemala and Cuba. As it also led to the Shah being reviled as a puppet of the West, the coup has also been blamed for sowing the seeds of the Iranian Revolution, the rise of the Islamic Republic of Iran, and the anti-Western animosity that still rages to this day.

None other than US Secretary of State Madeleine Albright summed it up in the year 2000, saying: ‘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.’

Damian Lewis: Spy Wars starts Monday 7 October at 9pm.