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In 1953, the CIA deposed Mohammed Mosaddegh, the Prime Minister of Iran, and replaced him with Mohammed Reza Pahlavi, the man we call “the Shah,” whose autocratic rule led to the 1979 Iranian Revolution and 40 years of enmity between Iran and America. 

How did we get there? In 1905-06, widespread protests compelled Mozaffar ad-Din Shah of the Qajar Dynasty, until then the absolute monarch of Persia, to permit the adoption of Iran’s first constitution, indeed the very first in the Middle East, with a constitutional monarchy and an elected parliament, the Majlis. In 1935, reflecting its new, however tenuous, independence from the British and Russians, Persia would become Iran – meaning in the predominate language, Farsi, the “Land of the Aryans.”

Mohammed Mosaddegh, born into a prominent Tehran family, was educated in France and Switzerland, and was the first Iranian to earn a doctorate in law. In 1921, he was appointed Finance Minister, like his father before him, and in 1923 as Foreign Minister, and then was elected to the Majlis.

In 1925, powerful interests in the Majlis deposed the young Shah Ahmad Qajar, and anointed Reza Khan, then Prime Minister, as Reza Shah Pahlavi I, the first of a new dynasty. Mosaddegh opposed the move, arguing, to no avail, that it subverted the constitution. At odds with the new regime, he left politics. 

In the footsteps of Kemal Atatürk of Turkey, Reza Shah moved quickly to modernize, indeed Westernize, Iran across the board, not just railways, industry and finance, but also the place of women in society, integrating restaurants, schools and cinemas and discouraging wearing of the hijab. But he gave democracy short-shrift, directly and indirectly controlling who could be a candidate for the Majlis, which soon became a perfunctory rubber stamp for his policies

Geopolitics, however, were out of his control. In the late 1800’s, oil was discovered in Iran, and in 1901 William Knox D’Arcy, an Australian who already had made a fortune in gold mining and moved to a big estate in England, convinced Mozaffar al-Din to grant him the exclusive right to exploit Iran’s oil resources for 60 years. D’Arcy greased the deal, bribed is the word, with 5,000 British pounds – $791,000 in today’s dollars – and a promise of 16% of the annual net profits from what became known as the D’Arcy Concession, then 10% of the world’s oil reserves. 

In 1908, oil finally started flowing, leading in 1909 to the formation of the Anglo-Persian Oil Company (APOC) to manage D’Arcy’s Concession, and in 1914 the British government acquired 51% of the shares. In effect, Persian oil was now British oil.

APOC took 84% of the profits, paid a big chunk of it in taxes to the British Treasury, and refused even to let Iran audit the books. By 1932, Reza Shah, reflecting festering popular resentment that it was a very bad deal, wanted to renegotiate. The British stalled, in large part because it was in the midst of converting its mighty navy from coal-power to oil. Impatient, Reza Shah informed APOC that he was cancelling the concession. But when push came to shove, he blinked, acquiescing in 1933 to a new agreement with nominally better terms, but at the price of extending it 32 more years. In 1935, APOC was renamed the Anglo-Iranian Oil Company (AIOC), but nothing else changed.

Not that Reza Shah had much leverage. Iran was strategically, one could say precariously, caught between two 20th century superpowers, the Soviets, in the aftermath of the Bolshevik revolution pushing for a warm water port on the Persian Gulf, and the British seeking to protect its control of both Persian oil and India. He tried to triangulate, playing one off against the other and hedging his bets by encouraging German investment in the country. 

But in 1941 and World War II, the Soviets and British ended up on same side and both sent troops into Iran to protect its oil fields from the Nazis. To buttress their position, the British forced Reza Shah to abdicate in favor of his more malleable son, Mohammed Reza Pahlavi.

In 1944, Mosaddegh reentered the political arena and was reelected to the Majlis. He pushed hard for electoral reform. Growing anger that the Shah and his government had rigged elections led in 1949 to widespread, sometimes violent, protests, and to the formation of the National Front party, headed by Mosaddegh, which took control of the Majlis. In 1951 the charismatic Mosaddegh became Iran’s 24th Prime Minister.

On May 1, 1951, Mosaddegh, with the unanimous consent of the Majlis, nationalized AIOC, which had turned down his offer of a 50/50 split, precisely the deal the Saudis had struck with Aramco, the Arabian-American Oil Company, the consortium that became ExxonMobil, Chevron and Texaco, and formed the National Iranian Oil Company (NIOC) in its stead. In a speech seven weeks later, June 21, 1951, Mosaddegh elaborated on the reasons for his decision:

“The long years of negotiations [with the British] . . . have yielded no results thus far. With the oil revenues we could meet our entire budget and combat poverty, disease and backwardness among our people. Another important consideration is that by the elimination of the power of the British company, we would also eliminate corruption and intrigue, by which the internal affairs of our country have been influenced. Once this tutelage has ceased, Iran will have achieved its economic and political independence. The Iranian state prefers to take over the production of petroleum itself. The company should do nothing else but return its property to the rightful owners. The nationalization law provides that 25% of the net profits on oil be set aside to meet all the legitimate claims of the company for compensation.”

Hard to quarrel with Mosaddegh’s rationale, but in response to his “communist” policies, the British organized a world-wide boycott of Iranian oil, including blockading Abadan, the main oil refinery and port, interdicting tanker traffic in and out of Iran – oil revenues dropped 95% – and launching a covert campaign to bribe military officers, clergy and members of parliament, even the Shah himself. Mosaddegh, wary of a British-instigated coup, closed their embassy and expelled everyone carrying a British passport.

Winston Churchill’s government drew up a plan to send in troops to seize Abadan, but backed down under pressure from U.S. President Harry S. Truman, who had leverage because Britain’s fragile post-war economy was being kept afloat with U.S. loans. 

The British then asked the U.N. Security Council to rescind Mosaddegh’s order expelling 350 British technicians from the Iranian oil fields. Mosaddegh went to New York himself and, October 16, 1951, addressed the Council:

“The Security Council has not and cannot have competence to deal with this matter. The reason is simple. The oil resources of Iran, like its soil, its rivers and its mountains, are the property of the people of Iran. They alone have the authority to decide what shall be done with it, by whom and how. They have never agreed to share that authority with anybody else. . . . They have not submitted and will not submit their authority to review or judgment by any persons or body outside Iran. That ownership and that authority are inalienable. They are part of the foundations on which stand our national sovereignty and our equality among other sovereign states of the community of nations and the body in which it is organized, the United Nations.”

Spoken like a man who could have helped write our Declaration of Independence.

Mossadegh’s arguments prevailed. However, although opposed to British military action to seize the Iranian oil fields, Truman also fretted about nationalization of the AIOC, because he feared it would spread to Saudi Arabia, where U.S. companies had oil concessions. Dean Acheson, Truman’s Secretary of State, believed that the British had been arrogant and highhanded in their dealings with Iran, but to defuse the conflict tried to convince Mosaddegh to accept what Acheson called a “compromise.” The U.S. would agree to the nationalization of the AIOC provided “a foreign-owned company acted as agent for the NIOC in conducting operations in Iran.” “We can’t do that,” Mosaddegh told Acheson, “It would only revive the AIOC in a new form.” No fool. 

Impasse. Until the 1952 elections when Republican Dwight D. Eisenhower defeated Adlai Stevenson and ended a 20-year run of Democrat presidents. Now Churchill had a more receptive audience. Ike’s new Secretary of State, John Foster Dulles, and his brother, CIA Director Allen Dulles, rabid anti-communists both, convinced him that the Russians would try to control Iran via the Iranian Communist Party, Tudeh, which had supported Mosaddegh’s National Front. Not the first time and certainly not the last that the U.S. would conflate a nationalist movement with communism. 

Mosaddegh warned Eisenhower that, under the British oil boycott, Iran desperately needed U.S. aid to fund his social reforms and fend off Soviet influence. But Ike dug in his heels, effectively telling Mosaddegh, “no dice,” no more American aid unless you “settle your oil controversy” with the British.

In 1953, with negotiations dead in the water, Ike, fretting about a “communist take-over,” reluctantly gave the go-ahead to a plan to depose Mosaddegh. CIA operatives, led by Kermit “Kim” Roosevelt, Jr., Teddy’s grandson, along with the British Secret Intelligence Service (MI6), led by Norman Darbyshire, launched Operation AJAX (Operation Boot in MI6 lingo). Working out of the American embassy in Tehran, they recruited General Fazlollah Zahedi, who had served as Mosaddegh’s Interior Minister, to replace him, paid newspapers to run “communist take-over” stories, and hired thugs to instigate brawls and demonstrations in the streets to destabilize Mosaddegh’s government.

In a 1985 documentary, End of Empire, Darbyshire said frankly, “My brief was very simple. . . . Go out there, don’t inform the ambassador, and use the intelligence service for any money you might need to secure the overthrow of Mossadegh by legal or quasi-legal means,” adding, “I was personally giving orders and directing the street uprising.” Kim Roosevelt later bragged that although he “had spent only $100,000, we had 10 times that amount stashed in a safe the size of a large closet.”

With chaos in the streets and his government starved of oil revenues, Mosaddegh’s position became increasingly tenuous. August 15, 1953, the Shah, at the urging of U.S. Ambassador Loy Henderson, issued a firman, a royal decree, dismissing Mosaddegh and appointing Zahedi in his stead. Mosaddegh rejected the decree as unconstitutional and arrested dozens of Zahedi’s co-conspirators. Zahedi went into hiding and the Shah and his family fled to Bagdad and then to Rome. 

But four days later, August 19, Zahedi emerged from the basement of the American embassy and backed by 30 tanks went to Mosaddegh’s home and arrested him. With assurances of U.S. support, the Shah flew back to Tehran and restored the monarchy. Zahedi lasted less than two years as a figurehead prime minister, and Mosaddegh died in 1967 after 14 years of house arrest. It was the end of Iranian democracy

In 1979, on the eve of the Iranian Revolution, Kim Roosevelt published Countercoup: The Struggle for the Control of Iran, a breathless day-by-day account of his leading role in Mosaddegh’s overthrow. To justify his actions, Kim characterized Mosaddegh as a “rich, reactionary, feudal-minded Persian” who wanted “dictatorial  powers” and was “stealing Iran little by little” so that the Soviet Union could take control. 

Self-serving double talk. Kim had never even met Mosaddegh, who wanted to limit the role of the monarchy, the Shah, and put in place real democracy and progressive social reforms. Hardly reactionary, much less feudal. Indeed, Mosaddegh was, one could say, the George Washington of Iran, throwing off its colonial shackles. He was Time Magazine’s 1951 Man of the Year. 

Mosaddegh’s real “crime” was insisting that Iran should control Iran’s oil. So the Dulles brothers, Kim Roosevelt and the CIA took it upon themselves, doing the dirty work for the British, to remove the democratically elected Prime Minister of Iran and replace him with a king, the Shah, and create a security service, the Savak, trained by the CIA, that imprisoned, tortured and executed thousands of Iranians, anyone who spoke out against the Shah’s autocratic rule. 

In 2000, U.S. Secretary of State Madeline Albright acknowledged: “The Eisenhower administration believed its actions [deposing Mosaddegh] were justified for strategic reasons. But the coup was clearly a setback for Iran’s political development and it is easy to see now why many Iranians continue to resent this intervention by America.” 

Setback? In Iran, as in Syria, we smothered democracy like a baby in a crib. 

Elsewhere in the post-war world, countries like Japan, India and Thailand had time to gradually develop democratic institutions and norms, but – here’s the rub – they didn’t have oil. Syria and Iran did, so instead of elections and the rule of law, they got, thanks to our hacking of their democracy, autocrats and despots. Bottom line: what we demand for ourselves we have repeatedly undermined in other countries, especially countries with oil. Blowback to follow.

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Coda: On May 8, 2019, Brian Hook, Donald Trump’s special representative for Iran, speaking at a Center for Strategic and International Studies event commemorating the first year of the administration’s “maximum pressure” campaign against Iran, blamed “domestic Iranian actors,” especially Shiite clergy, acting on their own, for Mosaddegh’s ouster, discounting the central role of the CIA and British intelligence services in recruiting, mobilizing and, not least, paying the coup plotters. 

Hook is just one of the hardliners, vociferously critical of the Obama administration’s 2015 nuclear deal with Iran, trying to rewrite the history of the 1953 coup, including Ardeshir Zahedi, the son of Gen. Fazlollah Zahedi, and Ray Takeyh, a member of the Iran Task Force of the Jewish Institute for National Security Affairs. Hardly an objective bunch. 

Moreover, their “blame it on the mullahs” revisionist narrative flies in the face of declassified documents released in 2017 by the Office of the Historian of the United States, which maintains the archives of U.S. foreign policy, FRUS (Foreign Relations of the United State). The documents, 375 in all, confirm the full extent of the CIA and MI6 role in the 1953 coup against Mossadegh. 

One from MI6, entitled the “Battle for Iran,” includes this blanket admission: “The military coup that overthrew Mosaddeq and his National Front cabinet was carried out under CIA direction . . . [and] conceived and approved at the highest levels of government.” In another, General Zahedi admitted, “It is impossible for Iranians to remove the present government by their own efforts.” 

Another is an August 19, 1953 telegram from Kim Roosevelt to CIA headquarters in Washington: “Overthrow of Mossadeq [sic] appears on verge of success. Zahedi now at radio station. Ambassador Henderson and I request urgently that five millions dollars be held immediately available to support new govt and enable it meet govt payroll. Will advise later how money should be deposited but see no need to ship money out here now.”

And then there is the January 2, 1954 Statement of Policy from the National Security Council confirming that in September, 1953, the U.S. gave Iran $45 Million in emergency assistance (by the end of 1954 economic and technical aid would total $120 Million). It states in part:

“Due to the events of mid-August, 1953, there is now a better opportunity to achieve U.S. objectives with respect to Iran. The Shah’s position is stronger and he and his new Prime Minister look to the United States for counsel and aid. . . . If it receives substantial revenues from renewed operation of its oil industry, . . . Iran should be [able] to establish a self-supporting, stable government and carry out much-needed economic and social welfare programs. . . . [But] the problem of Mossadegh must be solved. Zahedi’s position is threatened by the Shah’s inherent suspicions of any strong Prime Minister. Any non-communist successor government would encounter similar difficulties.” [Emphasis mine.]

As for Iran’s unresolved “oil dispute” with the British:

“. . . Granting of other than emergency aid . . . may make Iran less interested in coming to an early settlement and . . . harm our relations with the UK. . . . [And] the timing and extent of U.S. aid to Iran should not be such as to encourage other nations to emulate Iran in nationalizing her oil resources. . . . While the present government of Iran has shown itself to be favorably disposed to seek an early settlement of the oil dispute, too great or too obvious pressure from the outside may, because of internal political reasons in Iran, have the opposite effect.” [Emphasis mine.]

All there in black and white. 

And in fact, in 1954, under pressure from the U.S., AIOC, now renamed British Petroleum (BP), was forced to enter a consortium with other oil companies, the Iranian Oil Participants (IOP), to bring Iranian oil back onto the international market. The founding members: BP (40%), Gulf Oil, (8%), Royal Dutch Shell (14%), Compagnie Française des Pétroles (which became Total S.A., 6%), with the four Aramco partners each holding an 8% stake. 

IOP operated and managed Iran’s oil facilities, and just like the Saudi-Aramco deal agreed to share the profits 50 – 50, “but not to open its books to Iranian auditors or allow Iranians onto its board of directors.” These companies (excepting Total) became known as the Seven Sisters and now controlled 85% of the world’s known oil reserves. 

The bottom line? First, the British were back in the Iranian oil business, but now entitled to only 40% of the IOP’s 50% share of the profits instead of the 50% of 100% Reza Shah offered them. They overplayed their hand and it cost them dearly. 

Second, although Iranian oil was not a primary driver in the U.S. decision to depose Mosaddegh, American oil companies now had a 40% stake in IOP and, for better and worse, were now in Iranian oil too. 

Last, Iran got 50% share of the profits but without even one seat on the board of directors and no way to make sure IOP didn’t cook the books. Worse, it ended up with its parliament emasculated and the Shah in absolute control for the next 26 years. Until it all came crashing down in the 1979 Islamic Revolution.

Iran has been a nation for more than 2000 years, dating from the 6th Century B.C., and it was not part of the Ottoman Empire, not a made-up country like Iraq created out of whole cloth by Sykes-Picot after WWI. It is the world’s 18th largest country by population, 17th largest by area. Iranians are a highly educated – literacy rates north of 90% – and very proud people with a rich cultural history. Imagine what Iran would be today if, instead of the autocratic Shah between 1953 and 1979, it had 26 years of organic democratic and economic development. Good odds that the Islamic Revolution would have never happened, and Iran would be a friend, if not an ally, of the U.S. 

Not just my opinion. William Warne, director of the U.S. Point Four foreign aid program in Iran from 1951 to 1955: “If we had supported Mosaddegh to the same degree we supported Zahedi, he would have succeeded and we would never have had Khomeini.”  

Ryan C. Crocker, who served as U.S. Ambassador to six countries, Lebanon, Kuwait, Syria, Pakistan, Iraq and Afghanistan, between 1990 and 2012, said in a 2013 interview with Radio Free Europe: “We tried regime change once in Iran, . . . with Mosaddegh in 1953. That did not turn out well, . . . and I think the seeds of the 1979 revolution were planted in ’53.”

Barack Obama in a July 14, 2015 interview with Tom Friedman: “Clearly part of the psychology of Iran is rooted in . . . their experience that their country was undermined, that the United States . . . meddled first in their democracy, and then in supporting the Shah, and then Iraq and Saddam in an extremely brutal war [against Iran].”

Unintended consequences? No. Accidentally shooting ourselves in the foot? No. These were not innocent mistakes, but unprincipled and shortsighted decisions, and the people of Iran and America too are still paying the price.  

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Recommended: 

Stephen Kinzer, All the Shah’s Men (2003)

Christopher de Ballaigue, Patriot of Persia: Muhammad Mossadegh and a Tragic Anglo-American Coup (2012)

Ali Rahnema, Behind the 1953 Coup in Iran: Thugs, Turncoats, Soldiers, and Spooks (2014)

Brian Lapping and Norma Percy documentary, End of Empire (1985)

Ray Takeyh, What Really Happened in Iran: The CIA, the Ouster of Mosaddegh and the Restoration of the Shah (Foreign Affairs – July/August 2014) 

Arash Narouzi, Original Sin: The 1953 Coup in Iran – Response to Ray Takeyh (Mosaddegh Project – December 2014)