Big Oil Provokes Iran
by Dean Henderson
(Excerpted from Chapter 1: David Rockefeller & the Shah of Iran: Big Oil & Their Bankers in the Persian Gulf…)
In 1872 British Baron Julius du Reuter was granted an exclusive 50-year mining and communications concession in Persia by that country’s Peacock Throne monarchy. By 1921 the British government had installed Shah Mohammed Reza Khan in a palace coup. 
With their puppet in place, du Reuter’s firm, one of the British Empire’s most important tentacles, busied itself exploiting the rich oil reserves in what is now known as Iran. The Anglo-Persian Oil Company grew swiftly, first changing its name to Anglo-Iranian Oil, and later becoming British Petroleum (BP).
Prior to WWII du Reuter’s BP dominated the Persian oil patch. Following the war Britain dumped its puppet Shah in favor of his yet more pliable son Shah Reza Pahlevi, whose Nazi sympathies were less overt. By 1943 the US had established a military command in Iran and signed the Tehran Agreement, cutting the US half of the Four Horsemen a generous slice of the Iranian oil pie. 
Iran was coveted for its expansive reserves of crude and remains the most geopolitically strategic Middle Eastern nation, bordering both the unprecedented Persian Gulf oilfields to the south and the vast, largely untapped Caspian Sea crude reserves to the north.
After World War II the Iranian people became increasingly hostile towards Big Oil and their puppet Shah. Anger was especially prevalent among oilfield workers of the Khuzistan region who formed the main constituency of the Tudeh (Masses) Party.
In 1951 Tudeh formed a coalition with the National Front Party and elected Mohammed Mossadegh Prime Minister of Iran. Mossadegh, who first campaigned against Soviet occupation of northern Iran, became a vocal critic of Four Horsemen control over Iranian oil. He soon announced plans to nationalize BP interests in Iran. 
BP responded by organizing an international boycott of Iranian crude and called on two long-time associates for more drastic measures.
US Secretary of State John Foster Dulles and his brother, CIA Director Allen Dulles, both worked for the Washington law firm Sullivan & Cromwell before joining the State Department. The firm represented BP in the US. 
After failed negotiation attempts in Tehran with the populist Mossadegh led by Averell Harriman and Vernon Walters, the Dulles Brothers took charge of a joint CIA/MI6 smear campaign painting the Iranian leader in the most brilliant colors of Red. When this anticommunist rhetoric failed to convince the Iranian people to turn on their popular leader, a military expedition was organized.
Financing for the CIA coup, code named Operation Ajax, came from Deak & Company, founded by OSS operative Nicholas Deak. The company was the largest currency and gold bullion trader in the US after WWII and financed CIA adventures in Vietnam and the Belgian Congo through their Hong Kong gold monopoly.
Operation Ajax was led by H. Norman Schwartzkopf, father of the Gulf War General of same name, and Kermit Roosevelt, grandson of President Teddy Roosevelt. A palace coup led by Shah loyalist General Fazlollah Zahedi was organized in 1954. Mossadegh was deposed and the Shah flew into Tehran from exile in Rome seated next to Allen Dulles. 
The Four Horsemen had their puppet back in the National Palace. Kermit Roosevelt stayed in Tehran, his CIA Deputy Director of Plans income soon augmented by a new job as salesman of military aircraft for Northrop Corporation.
In 1952 the US Federal Trade Commission (FTC) published a report detailing collusion and price-fixing on the part of the Four Horsemen. Titled The International Petroleum Cartel, the report detailed secret production quotas, joint ventures, marketing agreements and other evidence of collusion.
The Justice Department responded to the 1952 FTC report by bringing an anti-trust case against the US faction of Big Oil. Exxon, Mobil, Chevron, Texaco and Gulf hired Sullivan & Cromwell, but the hotshot lawyers were never needed.
Ten days before the coup against Mossadegh’s democratically-elected government, President Eisenhower dismissed the FTC case on national security grounds. Ike granted the Horsemen immunity from prosecution, while his envoy former President Herbert Hoover traveled to Tehran to help Big Oil and their puppet Shah establish the Iranian Consortium, which consisted of the Four Horsemen and French oil giant Compaignie Francaise de Petroles (now Total Fina). BP held a 40% share. 
SAVAK Terrorism and US Multinationals
Wherever the Four Horsemen gallop the CIA is close behind. Iran was no exception. By 1957 the Company, as intelligence insiders know the CIA, created one of its first Frankensteins – the Shah’s brutal secret police known as SAVAK.
Kermit Roosevelt, the Mossadegh coup-master turned Northrop salesman, admitted in his memoirs that SAVAK was 100% created by the CIA and Mossad, the Israeli intelligence agency that acts as appendage of the CIA. For the next 20 years the CIA and SAVAK were joined at the hip when it came to matters of Persian Gulf security.
Three hundred fifty SAVAK agents were shuttled each year to CIA training facilities in McLean, Virginia, where they learned the finer arts of interrogation and torture.  Top SAVAK brass were trained through the US Agency for International Development’s (USAID) Public Safety Program, until it was shut down in 1973 due to its reputation for turning out some of the world’s finest terrorists.
In 1963 when JFK was assassinated SAVAK Chief Hassan Pakravan joined the Shah in Tehran to celebrate Kennedy’s death.  CIA, MI6 and Mossad supported 30 paramilitary groups in Iran and provided support to Shah-loyalist groups.
Popular anger towards Big Oil, the Shah and his new police state resulted in mass protests. The Shah dealt with the peaceful demonstrations with sheer brutality and got a wink and nod from Langley. From 1957-79 Iran housed 125,000 political prisoners. SAVAK “disappeared” dissenters, a strategy replicated by CIA surrogate dictators in Argentina and Chile.
SAVAK’s campaign of terror reached its nadir on June 15th, 1963. That day over 1,000 people were butchered by SAVAK forces, in what became known as the 15th of Khordad Massacre. In 1974 the director of Amnesty International declared that no country had a worse human rights record than Iran. The CIA responded by increasing its support for SAVAK. 
A small group of elite families close to the Shah assumed total control of the Iranian economy. The Aalam, Sadri, Bakhtiyari and Eqbal families were part of this tiny but powerful aristocracy, as were the Rafsanjanis, who owned thousands of hectares of pistachio groves and whose son Hashemi would later become Iran’s President.
Under the Shah’s reign, the Rafsanjanis made millions in real estate transactions, selling much of their land to the throngs of multinational corporations who flocked to Tehran, where they were awarded tax holidays, exemptions of duties on imported machinery and low-interest US-taxpayer-guaranteed Export-Import Bank loans. 
In 1971 the Shah held an extravagant coronation to celebrate the 2,500-year anniversary of the Peacock Throne. Guests included Chase Manhattan insider John McCloy and George Ball, the long-time State Department hack who was now a senior partner at Lehman Brothers. Chase Manhattan, the Bank of America and Morgan Guaranty had been doing business in Iran for a very long time. Now they were joined by a horde of other banking giants.
In 1968 Citibank bought a 35% stake in Bank Iranian. Manufacturer’s Hanover Trust (now part of JP Morgan Chase), led by Minos Zombanakis, became intimately involved in Iranian affairs. Chase Chairman David Rockefeller presented the Shah with a hunting rifle and bought up Iranian art. Soon Chase had a 35% share of the Industrial Credit Bank of Iran. Bankers flocked to the Hilton and Intercontinental Hotels in Tehran to put together loan deals, which led to huge contracts for the multinational corporations which these same banks controlled.
B.F. Goodrich, Allied Chemical and Amoco established huge petrochemical joint ventures in Khuzistan. Chase Investment, Diamond Agatel, Mitsui and Hawaiian Agronomic built an agro-industrial complex. The world’s first aluminum smelter popped up at Arak in a joint venture between Reynolds, Kaiser, British Metal and General Cable.  Dow Chemical, FMC and John Deere set up agribusiness operations, while Cargill, Continental and other international grain giants flooded the Iranian market with US taxpayer-subsidized wheat, corn and feed grains.
Iran had been self-sufficient in foodstuffs. Now the country embarked upon an export-led development strategy that benefited a handful of Tehran elite and their multinational partners. Cotton, sugar cane and sugar beet cultivation for export replaced traditional subsistence crops like maize and rice with help from USAID.
In 1961, before this “White Revolution”, 79% of Iranian agriculture was for domestic consumption. Ten years later only 50% of production stayed in country while the other half was exported. Most multinationals operating in Iran went through either Chase Manhattan or Bank Omran, which became known at the USDA as “the Shah’s bank”.
Food deficits weren’t far behind. Soon Iran found itself importing basic foods like wheat and corn to feed its increasingly urbanized population. Destitute farmers, plowed under by foreign agribusiness, flooded into Tehran and other large cities. In 1963 there had been over 40,000 villages in Iran. When the Shah was deposed in 1979 there were less than 10,000. The population of Tehran doubled during the 1970’s, with many of the newcomers living in the growing shantytowns. Ironically, many built their shanties out of US military crates, which were now arriving daily. 
War is Business
No corporations profited more than US defense contractors. From 1950-63 the Middle East received 3% of US military aid to the world. From 1971-75 it received 60.2%.  The bulk of it went to Israel, Saudi Arabia and Iran.
Iran and Saudi Arabia were the “Twin Pillars” in President Nixon’s 1972 Guam Doctrine. Nixon and his cronies saw these two nations as critical to ensuring a steady cheap supply of crude oil to the US. Saudi reserves are estimated at 261 billion barrels, while Iran sits atop nearly 100 billion barrels.
In return for cranking out cheap oil for the Four Horsemen these nations, both ruled by dictatorial monarchs, were armed to the teeth by US defense contractors and served as surrogates in financing and implementing US covert actions in the Middle East region aimed at nationalist and pan-Arab governments that threatened Big Oil interests.
In addition, oil revenues received by both the Shah and his House of Saud counterparts were recycled back into US money-center banks JP Morgan, Chase Manhattan and Citibank. These banks own huge blocks of stock in the Four Horsemen and in the defense contractors which now jostled for position in both Tehran and Riyadh. Chase Manhattan owned Iran’s Central Bank – Bank Markazi. The international bankers were the main beneficiaries of this new oil for arms quid pro quo.
In Iran the Shah was given carte blanche on US arms purchases. Iran came to account for 25% of US military sales. Westinghouse and Hughes Aircraft worked with Iran Electronics Industry to build a missile assembly and repair plant. Bell Helicopter constructed a helicopter assembly plant at Isfahan. Grumman, Rockwell, Lockheed, Fairchild, TRW, GTE, Boeing and McDonnell Douglas all profited from deals with Tehran.
Bribery of Iranian officials was the norm in procuring defense contracts. Grumman coughed up $24 million in bribes to sell its F-14 fighters. Textron paid $2.9 million in baksheesh. Kermit Roosevelt’s new employer, Northrop, paid $2.1 million in bribes to sell the Iranian Air Force its F-5 aircraft. When Roosevelt’s memoirs Countercoup came out in 1979, many defense contractors were caught with their pants down as a now disillusioned Roosevelt named names. BP pressured publisher McGraw-Hill to pull the book from circulation due to Roosevelt’s contention that BP had hatched Operation Ajax to overthrow Mossadegh. 
US government officials passed through the revolving door to private industry to get a piece of the US-taxpayer-funded action in Iran. Admiral Thomas Moorer, only months after retiring as head of the Joint Chiefs of Staff, joined Stanwich International Corporation as that ship repair company’s sales representative in Iran. Retired 4-star General Hamilton Howe signed on with Textron’s Bell Helicopter division in Tehran.
The Shah gave bribes to the US media, which portrayed his government in a favorable light. CBS anchor Walter Kronkite received cigars and caviar, as did NBC anchor John Chancellor. David Brinkley, Mike Wallace, Rowland Evans, Robert Novak and Washington Post publisher Catherine Graham were “gifted” as well. The Shah made a $750,000 donation to the secretive Aspen Institute, which distributed pro-Shah booklets around the US. Politicians were also beneficiaries of the Shah’s largesse. Marion Javits, wife of Sen. Jacob Javits (R-NY), an important member of the Senate Foreign Relations Committee, received a $67,500 public relations contract from the Shah.
The US sold $20 billion worth of weaponry to the Shah, though only $8.7 billion worth was actually delivered.  Some of what did arrive was totally useless. One shipment of Tang class submarines purchased by the Iranians was never deployed because they weren’t designed to operate in the shallow waters off the Iranian coast.
Iranians were trained in the US to operate the systems that did work. From 1964-72, nearly 5,000 Iranians received training at US Air Force Schools.  The US was careful not to train the Iranians on militarily sensitive weapons. By 1977 there were 4,500 US technicians in Iran operating these more advanced systems.
For his efforts as loyal servant in supplying cheap oil to the Four Horsemen, the Shah would become one of the richest men in the world.
When Israel invaded Egypt’s Sinai Peninsula in 1967 Egyptian President Gamal Abdel Nasser, a strident nationalist and foe of Big Oil, responded by closing the Suez Canal to tanker traffic, then called on OPEC to launch an oil embargo. Even the Saudis concurred. But the Shah ordered Iran to step up oil production.
The huge refinery at Abadan was upgraded, providing Big Oil with enough crude to break the embargo. The Suez closure ended up hurting independent oil companies most, since the majors had already developed supertankers, which were too large to pass through the canal anyway. Still the Shah’s decision radicalized many moderate members of OPEC.
Led by Algeria and Iraq, the nationalists began to exert their influence. In 1969 Colonel Mohamar Qaddafi took power in Libya following a bloodless palace coup which toppled that country’s monarchy. Palestinian guerrillas targeted TAPLINE, a pipeline owned by ARAMCO – the Four Horsemen-controlled Saudi consortium and largest oil company in the world. TAPLINE crosses Syria on its way to the Mediterranean port of Sidon in Lebanon. After one such attack, Syria guaranteed Libya that it would keep the pipeline down for 270 days to drive up oil prices. But again the Shah opened the spigots and prices remained stable.  Part of the reason the Israelis came to occupy parts of southern Lebanon was so they could guard the strategic port of Sidon for Big Oil.
Qaddafi responded to the Shah’s moves by initiating the Tripoli I and II plans, which placed non-negotiable demands on Big Oil. Both plans gained quick support among OPEC nations, but again the Shah countered, this time with the Tehran Agreement, which guaranteed the oil companies unlimited supplies of crude. With this guarantee in place, the Four Horsemen were actually able to stockpile petroleum during the ensuing Arab oil embargo of 1973. Though the Saudis cut production by a full 25%, world output actually increased 8% due to the flood of oil coming out of Iran.
While US consumers saw gasoline prices quadruple at the pump, Big Oil reaped a huge windfall from the embargo. Had the whole event had been staged as a pretext to permanently raise gasoline prices in the US?
Indeed, prices have never returned to pre-1973 levels. In 1972, the year before the embargo, the Four Horsemen showed a collective profit of $5.4 billion. The year the embargo ended their combined profits jumped to $8.4 billion – a 56% increase.
Exxon’s profit during 1973, the year the embargo began, was $2.5 billion, which was at that time the best yearly profit ever in the company’s long history.  The embargo also ran many independent oil companies out of business, wiping out Four Horsemen competition. It was not the first time the Horsemen would profit from a crisis. Nor would it be the last.
 “Iran and the West: A Century of Subjugation”. Eqbal Ahmad. Christianity in Crisis. 3-3-80. p.30
 Diplomacy in the Near and Middle East: A Documentary Record: 1914-1956. J.C. Hurewitz. D. Van Nostrand Company Inc. Princeton, NJ. 1956. p.160
 Ibid. p.25
 Tell the American People: Perspectives on the Iranian Revolution. David Albert. Movement for a Free Society. Philadelphia. 1980. p.24
 Ibid. p.31
 Who Owns the Earth. James Ridgeway. MacMillan Publishing. New York. 1980. p.77
 Plausible Denial: Was the CIA Involved in the Assassination of JFK? Mark Lane. Thunder’s Mouth Press. New York. 1991
 Multinational Corporations and Third World Development. Pradip K. Ghosh. Greenwood Press. Westport, CT. 1984. p.261
 Albert. p.5
 Beyond the Storm: A Gulf Crisis Reader. Phyllis Bennis and Michel Monshabeck. Olive Branch Press. Brooklyn, NY. 1991. p.38
 Endless Enemies: The Making of an Unfriendly World. Jonathan Kwitney. Penguin Books. New York. 1986. p.183
 “Arms and the Shah”. Michael Klare. Progressive. August, 1979.
 The Gulf: Scramble for Security. Raj Choudry. Sreedhar. New Dehli. 1983. p.19
 OPEC: The Falling Giant. Mohammed E. Ahrari. University of Kentucky Press. Lexington, KY. 1986. p.29
 Webs of Power: International Cartels and the World Economy. Kurt Rodolf Mirow and Henry Mauer. Houghton-Mifflin Company Boston. 1982. p.87
Dean Henderson is the author of five books: Big Oil & Their Bankers in the Persian Gulf: Four Horsemen, Eight Families & Their Global Intelligence, Narcotics & Terror Network, The Grateful Unrich: Revolution in 50 Countries,Das Kartell der Federal Reserve, Stickin’ it to the Matrix & The Federal Reserve Cartel. You can subscribe free to his weekly Left Hook column @www.hendersonlefthook.wordpress.com