U.S. RENEWS BID FOR TIES WITH IRAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000504850010-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: February 6, 2012
• Sequence Number: 10
• Publication Date: December 21, 1986
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2012/02/06: CIA-RDP90-00965R000504850010-2
. AL.
WASEINGTON POST
21 December 1986
U.S. Renews Bid
For Ties With Iran
Officials Not Optimistic About Relations
By Don Oberdorfer
/j and David B. Ottaway
Washington Pxt staff Writers
The Reagan administration in
recent weeks has sent new mes-
sages to Iran encouraging improved
relations, although arms sales
would not be part of the bargain, ac-
cording to State Department offi-
cials.
The messages, which were sent
in late November or early Decem-
ber amid the escalating uproar in
Washington over secret U.S. arms
sales to Iran, were routed through
Switzerland, which officially repre-
sents U.S. interests in Iran, and
through other governments friendly
with Tehran.
U.S. officials said they are not op-
timistic, however, about immediate
improvement in relations between
the nations.
"We won't be running after them
in the way we were since mid-
1985," said an official familiar with
the new overtures. Despite the cur-
rent furor, the official said it is im-
portant for the United States to
continue making serious and per-
sistent efforts to improve relations
because Iran is a key country in a
strategic area.
At least some of the recent com-
munications included "an attempt to
discuss the hostage thing" and to
ask about "specific cases," especial.
ly at least one American hostage
who is reported to be ill, according
to diplomatic sources. Five Amer-
icans are believed to be captives of
pro-Iranian extremists in Lebanon,
including three who were kidnaped
in September and October. White
House concern about American hos-
tages was a principal motivation for
the secret arms-sales program,
which began in September 1985
and ended last month after it was
disclosed publicly.
Administration officials conceded
that it will not be easy under cur.
MR Circumstances to obtain the co-
operation of the Tehran regime in
freeing the two long-term hostages,
Terry Anderson and Thomas Suth.
erland, who are still being held by
the shadowy Islamic Jihad, or the
three most recently seized Amer-
icans. At least two of these three
are believed to be captives of a
group closely associated with Islam-
ic lihad.
"We don't expect any early action
on the remaining hostages," one of-
ficial said. In a sense, he added,
these unfortunate Americans are
victims of the uproar over arms and
Iran because any negotiation for
their release has become more dif-
ficult.
Secretary of State George P.
Shultz continues to strongly oppose
an Islamic Jihad demand that the
United States pressure Kuwait to
release 17 pro-Iranian terrorists
convicted of bombing the U.S. and
French embassies and Kuwaiti gov-
ernment buildings in December
1983, State Department sources
said.
The Reuter news agency quoted
Kuwaiti Foreign Minister Sabah
Ahmed Sabah as saying he received
a message from Shultz yesterday
repeating that the United States
does not link freedom for the con-
victed terrorists to the release of
the remaining U.S. hostages.
Shultz, testifying before the
House Foreign Affairs Committee
Dec. 8, made public what the Unit-
ed States is asking of the Tehran
regime of Ayatollah Ruhollah Kho-
meini. "Iran cannot expect a better
relationship with us until it acts to
end the war (with Iraq, ceases its
support for terrorism and uses its
influence with those who hold our
hostages to achieve their freedom,"
Shultz said.
President Reagan and other
White House officials have sug-
gested that the seven shipments of
U.S. arms to Iran had helped mod-
erate Iran's support for internation-
al terrorism, a claim disputed by the
State Department. Shultz also in-
sisted in his Dec. 8 testimony that
"no further arms shipments will be
made to Iran by the United States,
and we will exert all our influence
to discourage arms sales to [ran by
others."
Shultz's remarks restate long-
standing U.S. positions that were
undermined by the secret arms
dealings. State Department officials
say they think that in order to re-
store the credibility of these posi-
tions it is necessary to convey them
to [ran in "a sterner tone" and with
persistence. "We have got to show
them that we are ready to hang
tough," said a mid-level State De-
partment source.
The belief at the State Depart-
ment-notwithstanding occasion-
ally contradictory White House
statements-is that the Iranians
with whom the administration was '
secretly dealing were not some sep-
arate group of "moderates" but
were an integral part of the central
leadership in Tehran. The negoti-
ations with Washington were prob-
ably authorized by Khomeini, State
Department officials think.
A possible problem in the U S.
government is that some offi vials,
espectallll _in the Central Intelli-
gence genA cy, ap ar to be more
atarmedTann--State Department of-
ficia s a u e po enti, or aFie.
scT viet mains m ran when the
ailin Khomeini 84. dies.
Graham Fuller, vice chairman of
the government's umbrella National
Intelligence Council, said at a con-
ference in Philadelphia Dec. 11 that
Khomeini's death might trigger
"immense chaos" allowing pro-So-
viet radicals to seize power and call
for help from Moscow. An internal
CIA memo from Fuller in early
citing suc possibilities was
instrumental in touching off the in-
ternal discussions that led to che.se-
cret arms saes, according to se_eral sources.
For their part, the Iranians have
recently restated their conditions
for better relations with Washing.
ton, including assistance in freeing
the five hostages.
In a Friday prayer sermon Nov.
28. Ali Akbar Rafsanjani, the speak-
er of the Iranian parliament, said
that "if the Americans will stop bul-
lying and will return our assets
which have been confiscated in the
tad States, then from this po-
unt we shall ask the Lebanese
i-eople to assist you in the problem
f hostages."
Rafsanjani repeated Friday, for
Lie fourth time in three weeks, his
eniand that the U.S. administra-
tion release Iranian "assets," an ap-
!,irent reference to arms bought by
Fran before the overthrow of the
Shah in early 1979 and to funds be-
u:g held in the Federal Reserve
(sank in New York.
The amount and value of those
arms is in dispute. Iran has formally
Declassified and Approved For Release 2012/02/06: CIA-RDP90-00965R000504850010-2
 Declassified and Approved For Release 2012/02/06: CIA-RDP9O-00965ROO0504850010-2
at
claimed at a special tribunal at the
Hague, which is arbitrating U.S.
and Iranian claims, that the United
States owes Tehran $11 billion, an
estimate one U.S. official described
as "a fantasy figure" that includes
mostly "consequential damages"
from losses on "nondelivered equip-
ment."
More recently, Iranian leaders
have claimed that the United States
is holding $300 million in arms that
Iran wants returned.
By U.S. reckoning, the amount of
arms in Iranian title still in U.S.
warehouses today is worth $115
million. This includes mostly spare
parts for planes and helicopters,
which officials said have. deterio-
rated and are largely "junk."
A Defense Department official
said the United States, after the fall
of the shah, had sold "over $800
million" in military equipment, in-
cluding three destroyers, paid for
by Iran. Of that sum, $300 million
was returned to Tehran between
February and November 1979 be-
fore the release of U.S. hostages
seized in the American embassy in
Tehran. The remainder, $500 mil-
lion, is held in a Pentagon "trust
fund" set tip for the shah.
U.S. officials indicated that there
is little likelihood of an early return
to Tehran of either the spare parts
or the Pentagon trust fund money
because of unresolved U.S. claims
against Iran and the fact the two
sides are far apart in their negoti-
ations at the Hague tribunal over
this issue.
On the other hand, the two sides
are only "a banker's quibble" away
from resolving outstanding differ-
ences over nearly $500 million in
money Iran overpaid in 1981 to the
Federal Reserve Bank in New York.
The Hague tribunal had asked
Washington and Iran to try to re-
solve their differences over this
fund by yesterday.
A U.S. official said that while
there were "no serious problems"
remaining, it might take "a political
decision" in Washington and Tehran
to reach a final agreement.
Declassified and Approved For Release 2012/02/06: CIA-RDP9O-00965ROO0504850010-2