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The "Grand Bargain" Fax: A Missed Opportunity?

A few weeks after the U.S. invasion of Iraq in 2003, a strange document arrived in Washington. It came as a fax, on plain paper, from the Swiss ambassador in Tehran.

The fax laid out the terms for a "grand bargain" -- in essence a peace treaty between the U.S. and Iran. It put everything on the table: Iran's support for terrorism, its nuclear program, even its hostility towards Israel. In exchange, Iran asked Washington for security guarantees, an end to sanctions and a promise never to push for regime change.

Iran's reformists were again trying to reach out to Washington, as they had after 9/11 (see Chapter 2 of the film). But the State Department thought Khatami's reformist government was politically weak and promising more than it could deliver. And the White House, newly victorious in Iraq, saw no need to negotiate with Iran. The fax never received a reply.

Flynt Leverett
Middle East director, U.S. National Security Council, 2002-03

photo of leverett

The cover letter described how the Swiss ambassador had come into possession of the document; who his Iranian interlocutor was -- a senior foreign ministry official. … And he lays out that the senior Iranian foreign ministry official told him that this had been seen and discussed in multiple meetings with all of the major power centers in Iran -- including the Supreme Leader, including the president at the time, President [Mohammad] Khatami -- and that it was a fully authorized document from the Iranian government.

The content of the document, essentially, [was] an agenda for a diplomatic process to resolve all of the outstanding bilateral differences between the United States and Iran. On the Iranian side, they acknowledged that they would need to be prepared to deal with our concerns about their WMD activities, their links to terrorist groups like Hezbollah and Hamas, and they said in there that they would be prepared to eliminate military support for these organizations and to work to turn Hezbollah, for example, into a purely political and social organization in Lebanon. They recognized that this would be something they would need to do as part of a rapprochement.

What was your reaction?

... I thought it was an extraordinary proposal, basically on comparable scale to the kinds of representations from [Chinese Prime Minister] Zhou Enlai that were passed through Pakistan in 1971 that paved the way for [then-Assistant to the President for National Security Affairs Henry] Kissinger's secret trip to Beijing and then the Nixon trip to China. I thought they were proposing something on that scale of historic and strategic importance. ...

Was that the time to make a deal?

From an American perspective it was absolutely the time to try and make a deal. We were at the height of our apparent power in the region. Iran was not yet spinning centrifuges, not yet enriching uranium. The president of Iran was not Mahmoud Ahmadinejad, but Mohammad Khatami. Iraq had not yet fallen apart. And early cooperation with Iran, I think, might have been very helpful in forestalling the worst of what we've seen in Iraq over the past four years. …

Why didn't the U.S.?

Because important power centers in the administration -- the vice president, the secretary of defense, and I think even in the end the president himself -- were opposed to this kind of diplomatic effort with Iran.

Richard Armitage
U.S. deputy secretary of state, 2001-05

It had been our view that the Swiss ambassador in Tehran was so intent -- and I mean this positively -- but he was so intent on bettering relations between "the Great Satan," the United States, and Iran that we came to have some questions about where the Iranian message ended and the Swiss message may begin.

I remember talking with people from our Near East division about a fax that came in from the Swiss ambassador, and I think our general feeling was that he had perhaps added a little bit to it because it wasn't in consonance with the state of our relations. And we had had some discussions, ... particularly through intelligence channels with high-ranking Iranian intelligence people, and nothing that we were seeing in this fax was in consonance with what we were hearing face to face. So we didn't give it much weight.

... Some of those who were involved at the time have come out saying this was a huge opportunity.

I've seen Flynt Leverett, for whom I've had a lot of respect. I must say that speaking for me and most of my colleagues at the State Department, we didn't see it that way, and I don't think many others did at the time because it didn't fit with some of the other things, as I said, that we'd been hearing from Iran.

Such as?

After the terrible devastation of the earthquake in Bam [in December 2003], President Bush authorized me to get ahold of the Iranian ambassador to the U.N. ... I gave him the message from the president, basically, that because of the devastation and completely as a humanitarian and not as a political matter we would be willing to offer immediate assistance and earthquake relief and things of this nature. ... And we followed up, by the way, with the USAID project in Bam. If there had been a desire on the Iranian side to seek a better relationship, it would have been an ideal time afterward to send that signal, and we got no such signal to my knowledge.

You were open to it?

Rich Armitage, Secretary Powell were open to it. As you know, we've argued that we need to speak with our enemies perhaps even more than we need to speak with our friends. So we took the point of view that no matter how difficult relations are with any one country, we should not cut ourselves off from them, and we ought to talk them. So I'll say those two individuals, Secretary Powell and I, were very interested.

How about the vice president and secretary of defense?

I suspect they were much less interested, it appears. And the fact that it's been so difficult even now, two years-plus on, to get real engagement with the Iranians, notwithstanding the significant efforts, as I understand them, of the secretary of state, shows that some people in the administration are still disinclined to engage.

John Bolton
U.S. ambassador to the U.N., 2005-06

photo of Bolton

Did you see the fax that came in?

I've seen a variety of things; I'd rather not comment on exactly what they were. I was aware of the proposal; I spoke to Secretary Powell about it. I thought it was a bad idea and I told him so. …

I thought it was a fantasy. I don't think Iran is ever going to give up its nuclear weapons capability voluntarily. They're happy to talk about it. They've been talking about it now for close to five years with the Europeans, during which entire period of time they have expanded their scientific and technological mastery over virtually every element of the nuclear fuel cycle. I think they have used diplomacy as a cover very effectively, and I think they'd love to find ways to engage us in further discussions to buy more time. Time is the only thing they can't purchase with their oil revenue, but they can get time if they can dupe Europeans or Americans into negotiations. So I thought this was an unhelpful idea to say the least. …

Did you think it was legitimate and that it came from high levels within the Iranian regime?

I think all kinds of things come out of the Iranian regime that are intended to get gullible Americans to say that sweetness and light are about to break out, the consequence of which is to give Iran more time to do what it's busily been doing in a clandestine fashion for close to 20 years.

Patrick Clawson
Deputy director for research, Washington Institute for Near East Policy

It was extremely clear -- it has been for a decade -- that the way in which you bring about a grand bargain is through feelers between the two sides' intelligence services. That's how it's always been done in the Middle East. That's how [Egyptian President Anwar] Sadat's breakthrough with the Israelis was done; that's how the Israeli-Palestinian breakthrough was done. It's being done by people who clearly have the ear of the leaders and are very good at keeping secrets.

What the Iranians were doing in 2003 was the exact opposite of all that. They were going through imminently untrustworthy intermediaries … The Iranian who was writing this had, after all, been formally dismissed from his position as a deputy foreign minister for unauthorized contacts with the Americans.

He was?

He was probably authorized to make those contacts and he was appointed to another high post, but he was certainly a guy who the Iranians could disavow if they wanted to. …

[W]ith the Iran-Contra affair, the United States had gotten badly burned by dealing with what appeared to be official Iranians, who, in fact, could be disavowed by the authorities. So given the history of the Iran-Contra affair, given the people doing the negotiations in 2003, it's not surprising that the professional foreign service officers at the State Department responsible for Iran recommended not to proceed with this deal. Now, I think that the political appointees were probably at least as unenthusiastic about this as the professional foreign service officers. But it was their judgment that this was not a deal worth proceeding with. …

The U.S. was talking to Iran at the time over Afghanistan so they could have just handed it over. There was plenty of opportunities.

… Iran's ambassador to the U.N., one of the most respected and skilled diplomats, met one week after this famous May 2003 offer with Ambassador [Zalmay] Khalilzad, who not only was the senior American official, but everybody knew, because he's a native speaker of Persian, that he was going to be the one whose opinion about these issues was going to be taken very seriously in the White House, where he had previously worked. Had the Iranians been seriously interested in approaching the United States, the obvious channel would have been through Ambassador Khalilzad.

And something of an official document, rather than a blank piece of paper faxed?

… Look, if the head of the Revolutionary Guard Corps' intelligence services had met with Ambassador Khalilzad, and they had an oral conversation, that would have been much more serious than a piece of paper [from] the Swiss ambassador and an Iranian diplomat who'd been disciplined in the past for unauthorized enthusiasm about contacts with Americans.

Vali Nasr
Author, The Shia Revival

photo of Nasr

… [A] lot of U.S. officials say, look, if they were serious, it should have come through different channels. We were talking to the Iranians at the time. …

It's true, but there are many reasons why it came through the channels that it did, because it was a very bold offer on the part of those who put it forward. ... It was a huge risk. And there is reason why they would not want to stick their neck out having a certain degree of assurance that it would be reciprocated.

We forget that this offer came after Iran made its boldest cooperation with the United States over Afghanistan, only to be put on the "axis of evil" list afterwards. That convinced the hard-line people like Ahmadinejad, the Revolutionary Guard, people around the Supreme Leader, that it is pointless to concede to the United States, that concession is going to be seen as a sign of weakness.

So as the Khatami government, the reformist government, is making one last effort to make a pitch to the U.S., it is running a risk. And I assume that their hope was that the U.S. would test the proposal by coming back, which then would have made a signal to the Iranian leadership that the U.S. was interested, and then you could see whether the Iranians would come back with something more concrete. The Iranians were testing, and the test came back negative.

Mohammad Ali Abtahi
Iranian vice president, 2001-'04

This news came out in the press in Iran as well; it wasn't something hidden, and it didn't lead to anything.

Was the proposal approved by the Iranian government?

What is certain is that it didn't get anywhere and that case is now closed. …

[Some] in America [say] that: "Oh, it wasn't a serious offer. It was not to be taken seriously, and therefore we shouldn't even be talking about it." So it's important for the history to know whether or not it was real and legitimate.

Look, when this was revealed in Iran, it was a point of contention as to whether it had been agreed upon by all levels of government. That's the reason why I'm reluctant to discuss it, because when this issue came out, its various aspects were not clear; it was not clear whether all levels of leadership were in agreement about it or not.

Hossein Shariatmadari
Editor, Kayhan newspaper, Iran

These types of issues, including negotiating with the United States, are among the major policy issues, and according to the law, such major decisions are to be made in the National Security Council of Iran. ... The issues are debated there and should be approved and signed by the Supreme Leader. Until such a process is followed, it will not become a policy to execute. …

… Are you clear in your mind that it was definitely not approved by the National Security Council and the Supreme Leader, or is there a chance maybe that it was but somehow kept quiet?

No, I'm very confident that that was not the case. I'm quite aware of the Supreme Leader's views; those viewpoints are well known by the public. Not at all. I'm quite certain that this did not happen. We are even a bit suspicious that the Swiss ambassador wrote that fax himself; we don't know it for sure. ... It was not an important issue, and I'm sure the Supreme Leader and the National Security Council had nothing to do with it.

Gary Sick
White House aide for Iran, Carter and Reagan administrations

When we spoke on the phone about this fax, I think you used the phrase "willful misunderstanding on both sides." …

… To the extent that both Iran and the United States have very serious domestic constituencies that are opposed to any kind of opening to each other. Iranians have their hard-liners, who really want to maintain the status quo and are very concerned that any change would undermine their own power in the system, and would, in many cases, upset some of the really cozy financial deals that they've got.

In the U.S., you have people who are basically ideologically committed to regime change in Iran and feel that nothing can be done with Iran except to overthrow the regime, one way or the other, either by encouraging dissent and rebellion in Iran, or by doing it militarily …

Those two constituencies on either side basically prevent any kind of understanding between the two sides and in many cases wilfully increase the misunderstandings that exist. … And thus far, they've been extremely successful, both sides, in terms of their domestic influence on the foreign policy-making on either side. …

So the Iranians prove they can't deal with us, and we prove that we can't deal with the Iranians, and as a result, nothing happens, but the factions in either of these countries who really would like to see more open political relations between them tend to get drowned out in the noise of the hardliners on both sides touting their particular views. …

Do you think that this offer, the "grand bargain" put on the table in 2003, was a real, serious offer? And was it a missed opportunity?

Oh yes. I mean, I've talked to the people who drafted it, and there's no questions that this was carefully considered, it was drafted, and then it was revised twice, and it was then presented to all of the key leaders in the country for approval before it was sent to the United States. So yes, I mean, the Iranians took this very seriously.

Was it the solution to all of our problems? No, I don't think so. It was an opening. It was saying, "Here are the kinds of things we're prepared to talk about seriously with you," and that included all the things that we cared about. Did that mean that they were simply going to give away the store and do whatever we wanted them to? No, but they were taking the initiative to say, "Here are the issues that we're prepared to discuss with you."

And basically on the U.S. side, we were busy invading Iraq, and we were very confident that we didn't need Iran at all, and we just ignored it completely. It was a missed opportunity, yeah, one of the most significant that we've had. There have been others certainly.

And the fact that it was rejected or ignored, how did that go down inside Iran?

The Iranians that I talked to, some of whom were involved with that process, say that they regard that as sort of par for the course. They make a positive gesture, and it's either ignored or is actually turned against them.

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posted october 23, 2007

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