The Front

This article is reprinted from The American Prospect.

For Iranians in exile – and the Americans who become embroiled in their intrigues – Paris has long been the city of shadows. This is where the Ayatollah Khomenei awaited the ominous victory of his Islamic revolution; and where the deposed ministers and brutal spies from the late shah's government washed up in the 1979 revolution's bloody aftermath.

For well over two decades now, dreamers and schemers who hope to overthrow the mullahs have been lurking along the banks of the Seine, passing secrets and lies through proxies, back channels, and middlemen. Among the Persian plotters marooned in the French capital is a former minister of commerce in the shah's government, who has recently acquired the code name of "Ali."

To the influential U.S. congressman who bestowed that somewhat unoriginal alias on him, the elderly bureaucrat is actually an oracle who passes along invaluable intelligence about terrorist conspiracies emanating from Tehran, and an important asset who should be cultivated by the CIA.

Yet "Ali" is actually a cipher for Manucher Ghorbanifar, the notorious Iranian arms dealer and accused intelligence fabricator – and the potential instrument of another potentially dangerous manipulation of American policy in the Persian Gulf region.

"Ali's" fervent advocate on Capitol Hill is Rep. Curt Weldon, the conservative Pennsylvania Republican who serves as vice chair of the House Armed Services Committee. The nine-term congressman has long nurtured a penchant for the dramatic. With a degree in Russian studies from West Chester University in his home state, Weldon has often displayed his language skills on official trips to Moscow to discuss Russia's "loose nukes" and the urgent need for a missile-defense system. Since the end of the Cold War, he has carved out a niche as an expert on such truly frightening topics as nuclear proliferation and high-tech terrorism.

As chairman of the House Subcommittee on Military Research and Development, Weldon has held numerous hearings on the threat of Russian suitcase bombs being infiltrated into American cities and similar cataclysmic scenarios. He often shows up in the press as a Cassandra warning against elaborate foreign plots, from terrorist hackers destroying the Pentagon's Internet capacity to North Korean nuclear weapons exploding in the atmosphere of the United States, creating an electromagnetic pulse that would cripple the nation's electrical utilities and electronic systems. He possesses a genuine gift for elaborating these nightmare visions, which he may have sharpened while reading the works of Tom Clancy. Indeed, he sometimes cites catastrophic attack scenarios devised by the suspense novelist, an acquaintance of his who has occasionally helped to raise money for Pennsylvania Republicans.

Unlike the stock characters in Clancy's novels, however, the source Weldon calls "Ali" is a real person; in fact, he's a former Iranian government official. And so convinced is Weldon of the man's veracity that he has not only tried to persuade the CIA to pay Ali, he is also shopping a book based on the startling information that the Iranian exile has passed along to him. According to a report last December in The New York Sun, Weldon hopes to soon publish an expose of Iranian terrorist conspiracies, including an alleged 2003 plot to crash a plane into New Hampshire's Seabrook nuclear-power plant that the congressman claims was later confirmed in the press.

"Ali" first mentioned the Iranian threat to the Seabrook reactor at a Paris meeting with Weldon on May 17, 2003, according to the Sun article. Three months later, on Aug. 22, The Toronto Star reported the arrest of 19 men in Canada for immigration violations; mostly Pakistanis (and one Indian), they were suspected of being involved in a terrorist conspiracy. One of the men in the suspected cell was reported to have been taking flight lessons, and to have flown an airplane directly over an Ontario nuclear-power plant, according to the Star.

But as things turned out, the Canadian terrorism case is considerably more ambiguous than Weldon's breathless version. Ultimately the Canadian government didn't pursue terrorism charges against the 19 men, but deported them for holding improper visas. Following up on the case in late November 2003, The Toronto Star reported that "what started out as a sensational terrorism case has devolved into one of simple immigration fraud, with officials now backing away from their initial claim that the men posed a threat to national security." The case is still a subject of intense controversy in Canada, with human-rights groups charging that the government trumped up the terrorism accusations based on flimsy evidence.

Unimpressed by such scary but unsubstantiated stories, the CIA rejected Weldon's entreaties to engage with "Ali." Frustrated by the agency's negative decision, the congressman complained in a letter to the chair of the Senate Select Committee on Intelligence, with an attached memo titled "Ali: A Credible Source."

Responding to inquiries from the Prospect, Weldon's office confirmed that the representative has met twice with "Ali" in Paris, and maintained an active correspondence with him. Their meetings were arranged by Peter Pry, a former CIA strategic-weapons analyst and House Armed Services Committee staffer, who advises the congressman on nuclear-proliferation issues. Eventually Weldon tried to interest the CIA in "Ali," but the agency was wary because the informant won't elaborate on his sources in Iran. Frustrated by what he sees as a failure of the intelligence community, Weldon wants to take the "Ali" story to the public. His press aides say that former CIA Director James Woolsey – a neoconservative stalwart who endorsed the theory that Iraqi agents were probably behind the Sept. 11 attacks – has read Weldon's new book manuscript and was most impressed by it.

The Prospect has learned that the true identity of "Ali" is Fereidoun Mahdavi, formerly the shah's minister of commerce and, more importantly, the close friend and business partner of Ghorbanifar, legendary arms dealer, infamous intelligence fabricator, and central figure in the Iran-Contra scandal that almost brought down the Reagan administration. It was "Gorba," as he was known back then to Lt. Col. Oliver North, the rogue National Security Council officer, who lured the Reagan administration into secretly selling U.S. missiles to the Islamic regime in exchange for the release of Western hostages.

"I knew him to be a liar," North eventually acknowledged. Robert McFarlane, the national-security adviser who approved the Iran-Contra arms trades, once described Ghorbanifar as "one of the most despicable characters I have ever met."

* * *

Like Ghorbanifar, who maintains a family residence in Nice and frequents certain Paris hotels, Mahdavi has lived in France ever since he fled Iran. He currently occupies a Paris apartment with his wife, who is suffering from cancer. Not long ago he was stricken by a heart attack, and is regarded with sympathy by many in the local Iranian exile community, who consider him an honorable figure. Reached on the telephone in January, he discussed his various dealings with Weldon and Ghorbanifar.

"Maybe I met with Weldon one time," he recalled. Told that Weldon plans to publish a book based on his conversations with "Ali," Mahdavi demurs. "I will deny any quote," he says. "I gave information to Weldon from Ghorbanifar." He insists that, because he cannot contact anyone in his homeland, he could not have been the original source for the information that the arms merchant asked him to pass to the congressman. "I am very well-known in Iran," he says. "Everyone knows me. I cannot call there."

Mahdavi denied that he has received any money from the U.S. government or any U.S. official. "I am 74 years old," he says. "If I have got one dollar from one American, I will give you a million. I never got any money from the Americans, and I don't want any American money." He sounded more circumspect about his relationship with Ghorbanifar, though. "I know Ghorbanifar and I am close with him, but I don't want to be confused with him."

Another former minister in the shah's government, who also lives in Paris, says that Mahdavi and Ghorbanifar have maintained long-standing commercial and personal connections. According to Akbar Etemad, who served as head of the Atomic Energy Organization in the Pahlavi regime, the pair went into business together after the 1979 revolution, working mostly in Arab countries. Etemad also confirmed that Mahdavi has been passing along dubious "intelligence" information, supposedly from inside Iran.

"Mahdavi says that he has this network in Iran that he gets information from," says Etemad. "Each time, he says his information will come true in two months' time. But all that information is fake. Ghorbanifar and Mahdavi work very closely together. Ghorbanifar is unreliable. In that sense, he might be dangerous."

The CIA shares that harsh assessment of Ghorbanifar. If the intelligence agency had any clue to Mahdavi's association with Ghorbanifar, it is scarcely surprising that its officials rebuffed Weldon's overtures on behalf of "Ali." Many years ago, the CIA issued an unusual "burn notice" on Ghorbanifar, instructing its personnel not to deal with him and warning that he was known to spread false information to advance his own interests.

Indeed, to CIA analysts still smarting from the humiliations of the Iraqi intelligence fiasco, the reappearance of Ghorbanifar behind "Ali" must have set off loud alarms. The Iranian arms dealer not only symbolizes one of the most disgraceful episodes in the history of American covert operations, which involved selling sophisticated weapons to a terrorist regime in exchange for hostages; with his neoconservative sponsors and opportunistic methods, Ghorbanifar very much resembles Ahmad Chalabi, another slick operator who eventually came to be viewed with the deepest suspicion – but not before his faulty "intelligence" about Iraq's weapons of mass destruction helped to draw America into war.

* * *

Among those who have compared Ghorbanifar to Chalabi is Michael Ledeen, the neoconservative writer and historian who has befriended both men. As the "freedom scholar" at the American Enterprise Institute and a contributing editor to the National Review, he now spends much of his time urging the Bush administration to support efforts by Iranian dissidents to topple their country's theocratic rulers. Coming from Ledeen – who also played a central role in the Iran-Contra affair alongside Ghorbanifar, and who still defends Chalabi – the comparison of the shadowy pair is meant as a compliment. He says that their poor reputation at the CIA and the State Department simply proves the inflexibility of the American bureaucrats.

"They never liked Ghorbanifar, [which was] similar to them not liking lots of other people, including Chalabi," insisted Ledeen in a recent interview with the Prospect. "It's because [Chalabi and Ghorbanifar] want to work with the American government and not for it. The CIA and State Department have a difficult time with such people. But Chalabi is first and foremost an Iraqi; Ghorbanifar is an Iranian. There are times when their interests coincide with those of the U.S. government. But they do not wish to be agents of the American government. They are very happy to help when interests coincide."

Considering that they don't wish to serve as "agents" of the American government, both Ghorbanifar and Chalabi have eagerly accepted American money and weapons. In any case, Ledeen's fine distinctions are unlikely to assuage the worries of anyone disturbed by what Chalabi has done to U.S. policy in Iraq – or what Ghorbanifar might do to U.S. policy in Iran. Indeed, the revived debate over Ghorbanifar's character and competence is particularly pressing now because neoconservatives such as Ledeen, who listen closely to him, have gained influence over the Bush administration's Iran policy.

(While the Bush administration's decision in early March to go along with European allies in offering Iran economic incentives to abandon its nuclear program was hailed as a decisive shift toward a diplomatic solution [and a setback for the neoconservatives], the second part of the U.S.-European agreement is equally important. The Europeans agreed that should Iran fail to abide by international nuclear agreements, they will support the United States in referring Tehran to the United Nations Security Council for noncompliance with the Nuclear Nonproliferation Treaty. That could help the United States to isolate Iran at the United Nations, reprising the prelude to the Iraq invasion. Given the pending nomination of Undersecretary of State [and uber-hawk] John Bolton as Washington's new UN ambassador, the administration is clearly prepared to pursue a more aggressive, and perhaps unilateral, policy toward Iran.)

Alone among those involved in the Iran-Contra scandal, Ledeen has never lost faith in Ghorbanifar. In a December 1985 meeting with the CIA, he described the Iranian as a "wonderful man ... almost too good to be true." He still says Ghorbanifar "is my best source of information on Iran for 20 years. And the CIA made a mistake about him and they don't know how to get out of it. Once a burn notice has been issued on somebody, they are never going to change it. I think the CIA is a hopeless, stupid organization."

Ledeen also insists that "the information Ghorbanifar provided during the Iran-Contra period was invaluable. Ghorbanifar was the first person I ever met who knew what Hezbollah really was ... . He was the first person who was able to identify factions within the Iranian regime about which we know nothing. His information has been spot-on all along."

* * *

It isn't easy to measure the extent of Ghorbanifar's renewed influence on American policy. Even to his cohorts among the Iranian exile community in Paris, he remains mysterious. Almost everywhere his name is mentioned, the doubts about his integrity persist. A former intelligence officer serving the shah's military chief of staff, the 59-year-old Ghorbanifar has used his connections with members of Iran's current theocratic regime to sell the promise of regime change to Washington contacts for more than two decades.

To his current American contacts, he markets himself much as he did during the Iran-Contra era – as the indispensable purveyor of intelligence information about political machinations inside the Islamic Republic and the Tehran regime's sponsorship of nefarious terrorist plots. He is frequently traveling, completing deals recently in such places as Spain and Iraq; his trading has covered commodities from petroleum to peas to Persian carpets, from small arms to guided missiles.

His ancestral family home is in the Iranian city of Isfahan. In an interview last summer, he said that he had earned a doctorate in history by the time he was 23 years old. During the twilight years of the shah's government, Ghorbanifar managed Star Line, a shipping company whose ownership was partly taken over by Israeli businessmen in 1980. While he is often alleged to have had ties with SAVAK, the shah's brutal secret police, he and others say that he worked for the intelligence unit of the Iranian armed forces.

After the revolution that overthrew the shah in 1979, but before the theocratic rule of the mullahs solidified, Ghorbanifar was embroiled in clandestine struggles for power. Two of his Paris associates recall that he and other members of his family participated in a July 1980 conspiracy against Khomenei. The "Nojeh" plot was a failed coup attempt led by Iranian air-force officers. When it collapsed, Ghorbanifar's sister was among those sentenced to death by the Islamic regime.

Seeking to save her life, Ghorbanifar, according to one of his friends, found an intermediary in Dubai who made a covert arrangement with the Iranian authorities. Ghorbanifar paid the intermediary a million francs, and the Iranians commuted his sister's death sentence to five years in prison. That deal was the beginning of his connections with the new regime in Tehran.

By then the Shia revolutionaries were at war with Saddam Hussein's Iraq, and apparently thought they could use Ghorbanifar's shipping experience – and his Israeli connections – to help them procure American weapons and spare parts for systems the shah had purchased from the United States.

To obtain weapons for Iran, Ghorbanifar aggressively courted Israeli and American officials. At first he hooked up with the CIA as an informant, but the agency soon decided that he was a fabricator and issued the burn notice, discouraging any contact with him. In 1984, when he tried to open another line of communication to the State Department, his advances were again rebuffed.

His big break came later that year, when he met the Saudi billionaire arms dealer Adnan Khashoggi. "The way that Ghorbanifar first came to the attention of the Israelis was because he was introduced to Khashoggi as one of those who knew the people who controlled these very expensive, duty-free Persian carpets in Hamburg," recalls Ledeen. "These were very expensive carpets, some used to belong to the shah, and Khashoggi was interested in buying those carpets. Ghorbanifar was helping him, and they became friends."

Through Khashoggi, Ghorbanifar was able to link up with Israeli policy-makers and intelligence officials, who in turn introduced the arms dealer to Ledeen, then working as a consultant to Ronald Reagan's national-security adviser, Robert McFarlane. And through Ledeen, Ghorbanifar at last found receptive ears for the deal he had long been trying to broker: The United States and Israel would supply sophisticated weapons to Iran; in return, Ghorbanifar convinced McFarlane, "moderate" elements in Tehran would be empowered and enabled to release U.S. hostages held by Shia radicals in Lebanon.

"And then as usual, the Americans betray their friends," says an old Ghorbanifar friend. As the Iran-Contra machinations proceeded, the Reagan White House opened a "second channel" to the Iranians that bypassed Gorba. His friend recalls that this decision caused "a very hostile relationship between Ghorbanifar and the Americans. After that, they started to give bad information about him." If Ghorbanifar felt betrayed by the Reagan administration, the feeling was certainly mutual.

Following the 9/11 terrorist attacks, Ghorbanifar saw an opportunity to reopen his connections with the United States government, just as he had perceived such an opportunity during the hostage crises of the Reagan era. In the months after 9/11, the Bush administration was desperate for actionable intelligence on terrorist threats and state sponsorship of terrorist groups by hostile governments in Iran, Iraq, and Afghanistan. Around that time, Ghorbanifar called his old friend Ledeen, who no longer consults officially for the U.S. government but is very well-connected in both the White House and the Pentagon. He convinced Ledeen that he could produce Iranian informants with crucial intelligence about an alleged Tehran-backed terrorist threat to U.S. troops in Afghanistan.

"Ghorbanifar called me, and at first I said, 'Are you insane?'" Ledeen later told The New York Times. "But he said he could arrange meetings with Iranians [who had] current information about what Iran was doing. It wasn't information coming from him. He was just arranging the meetings."

As first reported in Newsday, Ghorbanifar secretly met with officials from the Pentagon's Office of Special Plans in Rome in December 2001. The main topic was the supposed threat to U.S. forces in Afghanistan, but the options for regime change in Iran were also discussed.

How the Bush administration came to authorize the initial December 2001 meeting in Rome is a curious tale that suggests how far Ghorbanifar can reach. The meeting included two Farsi-speaking Pentagon officials, Defense Intelligence Agency Iran expert Larry Franklin and Harold Rhode, a polyglot Middle East specialist, both then working for Undersecretary of Defense Douglas Feith.

In a recent letter to the Washington Monthly, Feith explained what he called "the real story" behind the Rome meeting. "The Department of Defense learned from the White House that there were some Iranians who had information about terrorist threats to U.S. forces in Afghanistan and who wanted to defect," he said. " (It turned out that the Iranians did not want to defect, but they did want to share information directly with the U.S. government.) The Iranians did not, however, want to deal with the CIA. [The Defense Department] was asked to handle the contact."

Feith concluded, "After the December 2001 meeting, it was decided not to pursue the matter further. One factor in that decision was the involvement of Ghorbanifar, whose participation in the Rome meeting surprised the senior officials at [the Defense Department] who authorized the trip."

That unusual letter from Feith, who recently resigned and will leave his post this summer, indicates that the White House had learned of the talkative Iranians from a source outside the usual intelligence or diplomatic channels at the CIA and the State Department. That means that Ghorbanifar may have a contact who is passing his messages directly to the White House. And according to Feith, that source didn't warn the Pentagon that Ghorbanifar would be present at the Rome meeting. One person familiar with the Rome meeting, who asked not to be named, expressed skepticism that the Pentagon was surprised by Ghorbanifar's presence there.

An official from SISMI, the Italian military intelligence agency, was also present. In an interview with Italy's La Republica newspaper, SISMI Director Niccolo Pollari confirmed that he was asked to facilitate the Rome meeting, and that he sent an aide. (The Washington Monthly first reported SISMI's involvement in the encounter between Ghorbanifar and the Pentagon.) Pollari didn't explain why the U.S. Defense Department would interview Iranian informants in the presence of a foreign military intelligence service, without the knowledge of the U.S. embassy in Rome and without any assistance from the CIA, which would normally assume responsibility for such contacts. In his letter, Feith asserts that the White House understood the would-be defectors refused to deal with the CIA, which was why the Pentagon took over.

In June 2003, Rhode met with Ghorbanifar once more, this time in Paris. The publicity about the meetings, combined with opposition from the State Department and the CIA, reportedly led to the shutdown of the arms dealer's back channel the following autumn. Ghorbanifar's contacts with the U.S. government remained dormant. But by then "Ali" had commenced his discussions with Congressman Weldon about Tehran's terrorist plots. Cut off once more by the Pentagon and the CIA, Ghorbanifar had already opened a second channel via the unwitting Weldon.

* * *

The most striking aspect of Weldon's sponsorship of "Ali" is how precisely it follows the Ghorbanifar pattern of making a connection by telling a prospective client what he wants to hear. Weldon has a long history of being fascinated by fantastic foreign plots. Using "Ali" as an intermediary, Ghorbanifar was able to feed that appetite, to penetrate Republican circles in Washington again – and to stoke neoconservative hostility toward the Iranian regime.

Whatever political aims Ghorbanifar may be pursuing remain as murky as ever. But given the controversies that have surrounded him for more than two decades, and the messy aftermath of the Iran-Contra affair, it is remarkable that he has once again surfaced as a middleman and intelligence source. Yet the return of Ghorbanifar is merely one symptom of a much graver problem: the paucity of reliable U.S. intelligence about people and events in Iran. Lacking well-placed sources there, the U.S. government finds itself listening again to someone with a track record of supplying false information and playing both sides.

To see through the complex web woven by Ghorbanifar, it may help to remember his friend Ledeen's praise of the arms dealer as "almost too good to be true." That description is double-edged, of course, because someone who tells us exactly what we want to hear is usually too good to be true. From Oliver North to Curt Weldon, Ghorbanifar has an uncanny ability to exploit the vulnerability of Americans trying to glean critical information about Iran.

Ghorbanifar's handling of his cats-paw "Ali" offers a glimpse of the dark side of this master manipulator, who willingly uses a frail and ailing associate as a front for his operations. Perhaps the last word on Ghorbanifar should be left to one of his countrymen in Paris. "The culture in Iran is to hide the thing that you mean," the man explained. "There is a proverb: 'You have a tongue to hide your idea.'"

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