Iran: Arms For the Ayatullah

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Yet the Iran traffic is far beyond the rumor stage. TIME has seen proof in the form of hundreds of documents provided by Carlos Vieira de Mello, an international arms dealer who worked with the purported rug merchant, Hashemi. TIME has also examined secret records from the State Department's Office of Munitions Control and papers from private arms companies showing that U.S. tank engines and fighter-plane spares were routed to Iran through Canada and Britain. The records indicate that much of the trade is directed from London.

Iran's dependence on the U.S. for military supplies stems from the Shah's purchase of some $17 billion in American munitions between 1970 and 1979. This huge stockpile of sophisticated U.S. weaponry, which included 80 F-14 fighters so advanced that they were sold to no other foreign country, fell into the hands of the Ayatullah's revolutionary government after the collapse of the Shah's regime in February 1979. To promote ties to the moderate government of Mehdi Bazargan and the armed forces, the Carter Administration conducted secret negotiations with Tehran, creating a framework for the subsequent delivery of most of the $5 billion worth of military supplies ordered by the Shah. Explains a former high U.S. intelligence official: "We were desperate for any contact at all."

American military advisers, TIME has learned, traveled secretly to Iran in the summer of 1979. They test-fired two Hawk antiaircraft missiles for the Iranian air force and offered to repair Iran's Hawk defensive system. The Carter Administration also authorized some major U.S. arms manufacturers to continue sales of military equipment to Iran covertly. This, in turn, encouraged private arms dealers to continue supplying Iran. All official cooperation with Iran ended when the embassy in Tehran was seized. Carter impounded $300 million worth of spare parts that the Shah had paid for, and ordered a complete boycott of American trade with Iran.

The President's decision had little effect on the world's arms merchants. In the week after Carter announced the boycott, some 300 U.S. and Western European companies contacted Tehran with offers to sell munitions and other banned items. After the Iraqi invasion in September 1980, the Iranian air force set up an office in London's exclusive Kensington district to coordinate its purchases.

Ironically, although the Ayatullah and his followers are violently anti-Israel, one of the countries that has violated the U.S. boycott most blatantly is Israel. When Iraq invaded Iran, the Tehran regime urgently needed U.S. supplies. Former National Security Adviser Zbigniew Brzezinski confirmed in his recently published memoirs that the Carter Administration clandestinely offered to supply spare parts to Iran in return for the hostages' freedom. "We learned, much to our dismay," he wrote, "that the Israelis had been secretly supplying American spare parts to the Iranians, without much concern for the negative impact this was having on our leverage with the Iranians on the hostage issue."