What Tom Cruise and Top Gun Teach Us About the Strait of Hormuz: How America Made Its Own Enemy
In 1957, the administration of President Dwight D. Eisenhower entered into a civil nuclear cooperation pact with Iran under the Atoms for Peace program.
The “Atoms for Peace” program is the name given to the initiative launched by the US in the 1950s, starting with President Dwight D. Eisenhower's famous “Atoms for Peace” speech at the UN, which proposed the use of nuclear energy for civilian, not military, purposes.
On December 8, 1953, Eisenhower gave the “Atoms for Peace” speech to the UN General Assembly, in which he proposed that the great powers transfer some of the fissile material to an international body, which would use it for civilian nuclear projects (energy, agriculture, medicine) around the world.
The central idea was to transform the “atom” from an instrument of destruction (the atomic bomb) into an instrument for development and prosperity, under international control to limit military proliferation.
The speech and initiative led to the creation of the International Atomic Energy Agency (IAEA) in 1956, with the mission of encouraging the peaceful use of nuclear energy while overseeing that states do not divert it to weapons.
Ten years later, the United States provided Iran with a five-megawatt research reactor, which remains in use today, and a stockpile of enriched uranium to fuel it, writes Edward Fishman in “Stick Points: American Power in the Age of Economic Warfare.” The Iranian government also sent dozens of young scientists to study at MIT and other top American universities, where they received elite education in nuclear engineering. They returned home to build the foundations of what would become Iran's nuclear program.
This was during the repressive but staunchly pro-American reign of Shah Mohammad Reza Pahlavi. In the 1970s, Richard Nixon sought to rely on Iran, as well as Saudi Arabia, to oversee the Middle East and ensure the free flow of oil to world markets.
The 1979 revolution turned Iran from a US friend to an enemy
To bolster the Shah's regime, the Nixon administration sold Iran billions of dollars in US military hardware. Included in that massive arms shipment was a fleet of F-14 Tomcat fighter jets, made famous by the 1986 hit Top Gun, many of which are still operational in Iran today.
The 1979 revolution turned Iran from friend to foe virtually overnight—certainly in November of that year, when a group of radical Iranian students stormed the US embassy in Tehran and took fifty-two Americans hostage. President Jimmy Carter responded by invoking IEEPA, the 1977 law that gave the president extraordinary powers. In the first use of the law, Carter froze $12 billion in Iranian assets and severed America's trade and diplomatic ties with Iran.
Iran was heavily dependent on the United States (the main trading partner and accounting for 20% of the country's trade with the rest of the world). As a result, US restrictions hit hard. After 444 agonizing days, Washington and Tehran reached a truce on January 19, 1981—Carter's last day in the White House.
United States Unfreezes $12 Billion in Iranian Assets; instead, Iran released the hostages. As one of Carter's top advisers later reflected: “Indeed, the leverage provided by the frozen assets solidified the final deal. The aging Iranian regime was in desperate need of cash.”
The agreement, known as the “Algiers Accords”, lifted most of the sanctions, but the damage was already done.
Ronald Reagan was sworn in on the very day the hostages were released, and the Iranians released them minutes later, in a moment meant to humiliate Jimmy Carter
The accords are unusual from the point of view of international law because the US basically accepted some conditions in exchange for the release of the hostages – which domestically caused controversy.
Ronald Reagan was sworn in on the very day the hostages were released, and the Iranians released them minutes later, in a dramatic moment designed to humiliate Jimmy Carter. There are even today unconfirmed theories (October Surprise) that the Reagan team would have secretly negotiated with Iran to postpone the release until after the election.
By 1981, American imports from Iran were about 99 percent lower than they had been before the revolution, and trade relations between the two countries never recovered. This was largely due to the new Iranian regime, whose disruptive acts did not end with the hostage crisis and continued to spook American investors.
Immediately after the revolution, Ayatollah Ruhollah Khomeini—soon to become the first supreme leader of the Islamic Republic of Iran—ordered the creation of the Islamic Revolutionary Guard Corps (IRGC), a paramilitary group tasked with defending Iran's harsh theocratic system at home and spreading its ideology abroad.
The Islamic Revolutionary Guard Corps oversaw the creation of Hezbollah
In 1982, the IRGC oversaw the creation of Hezbollah, a Lebanese extremist group. In the years that followed, Hezbollah—with training and resources from the IRGC—launched a series of violent terrorist attacks, including the 1983 bombing of an American barracks in Beirut that killed 241 American servicemen. Meanwhile, the Iranian regime has resumed investment in the nuclear program through a top-secret cell called the Physics Research Center. With the help of Vyacheslav Danilenko, a former Russian scientist, nuclear weapons expert.
As Tehran engaged in these deadly activities, the United States gradually increased sanctions to the point they had reached during the hostage crisis.
This time, Iran's economy didn't suffer too much either. After the hostage crisis, Iranian business deliberately moved away from the United States.
The futility of US sanctions was highlighted in 1995
The futility of US sanctions was highlighted in 1995 when Conoco, an oil company based in Houston, signed a contract to develop a massive Iranian oil field offshore. It was the first energy deal between a US company and Iran since the revolution and exceeded the limits of US sanctions. (Conoco circumvented US restrictions by signing the contract through one of its foreign subsidiaries, which was legal at the time.)
Under intense political pressure, President Bill Clinton issued an executive order that explicitly prohibited American companies from participating in Iranian oil projects. Conoco quickly backed out of the deal, but just months later, French energy giant Total announced it had signed a contract to develop the same oil field that Conoco had abandoned. In quick succession, Iran signed nearly a dozen additional energy deals with non-US companies. American sanctions were causing damage, but the damage was hitting American interests, not Iran.
Outraged, the US Congress swung into action. In July 1996, the House and Senate unanimously passed a groundbreaking piece of legislation known as the Iran-Libya Sanctions Act (ILSA). The ILSA pointed America's sanctions cannon not directly at Iran, but rather at foreign companies doing business with Iran, many of which are based in countries that were US allies. The legislation threatened sanctions against any firm, regardless of location, that made a sizeable investment in Iran's energy sector — just as Total had done after Conoco pulled out.
The ILSA marked one of the first attempts by the United States to apply what became known as “secondary sanctions.”
The main achievement of ILSA remained only the breach in transatlantic relations
It was an extraordinary measure and naturally did not sit well with US allies in Europe. Sir Leon Brittan, the EU's trade commissioner, denounced ILSA as an unjustified attempt by Washington to dictate decisions in which it should have no say. At Brittan's urging, the EU passed a law making it illegal for European companies to comply with ILSA or any other secondary US sanctions in the future.
In 1997, a year after ILSA was approved, Total and several other foreign companies announced major plans to develop the South Pars gas field in Iran. Under the new US law, these investments should clearly have triggered US sanctions, and members of Congress have called for action. Under the guidance of Secretary of State Madeleine Albright, US officials met with Sir Leon Brittan, the EU's trade commissioner, and after tough negotiations reached an agreement: If the EU was willing to cooperate with the United States on Iran, Washington would refrain from penalizing European firms that violated the ILSA.
In the following years, European energy companies continued to channel money and expertise into Iran's oil and gas sectors. In turn, the Iranian regime has amassed billions of petrodollars, and its nuclear program has grown rapidly. The secondary sanctions established by ILSA remained unused, and the main achievement of the law remained only the breach in transatlantic relations.
