U.S.-Iran Nuclear Negotiations in 1970s Featured Shah's Nationalism and U.S. Weapons Worries
Newly Declassified Documents Reveal Remarkable Continuity with Today's U.S.-Iran Nuclear Controversy

National Security Archive Electronic Briefing Book No. 268

Edited by William Burr
Posted - January 13, 2009

For more information contact:
William Burr - 202/994-7032

President Gerald R. Ford and the Shah of Iran confer over a map during the Shah's May 1975 visit to Washington, D.C. Secretary of State Henry Kissinger sits in the background. (Photo courtesy of Gerald R. Ford Presidential Library)

Washington, D.C., January 13, 2009 - During the 1970s the Shah of Iran argued, like current Iranian leaders today, for a nuclear energy capability on the basis of national "rights," while the Ford and Carter administrations worried about nuclear weapons possibilities, according to newly declassified documents published today by the National Security Archive for the first time. Uranium enrichment capability is now the major point of controversy between Tehran and the world community, while during the 1970s Washington's greatest concern was that Iran sought a capability to produce plutonium, but in both instances the implication was that a nuclear weapons option might not be far away.

The documents, obtained by the Archive through a mandatory review request, show that two U.S. presidents dealing with the Shah of Iran, Ford and Carter, put concerns over proliferation and the Shah's possible desire to build a nuclear bomb front and center when they approved negotiating positions for a deal to sell nuclear reactors to Iran. While Iranian officials argued then, as they do today, that Iran had "rights" under the Nuclear Nonproliferation Treaty to develop nuclear technology, the U.S. government successfully sought an agreement that put nonproliferation controls over U.S.-supplied nuclear material.

The 1979 Iranian Revolution derailed the agreement, but the approach that the Ford and Carter administrations took shows significant continuity with contemporary U.S. and world policy, which holds that Iran must not use its technological capabilities to produce nuclear weapons. The documents contradict the 2005 claim by former Secretary of State Henry Kissinger that non-proliferation was not an issue in the 1970s negotiations; this was a "commercial transaction," Kissinger told The Washington Post.

The 1970s nuclear negotiations have other parallels with the current situation. The Bush administration has raised questions about Iranian claims that its interest in a nuclear energy program are peaceful, while the declassified record indicates that U.S. policy-makers during the 1970s were also skeptical of, but ultimately willing to accept, the Shah's similar claims, as long as a nuclear agreement with Iran restricted its freedom of action in the nuclear field. Significantly, the Bush administration also disparages Iran's assertion that it needs to develop alternative fuels in anticipation of the eventual decline in the country's extensive oil reserves. But the Shah and his government made the exact same statements in the 1970s.

The record also shows that the Shah's regime and the current Iranian government have made the same claims that their pursuit of nuclear technology was an inherent national entitlement. No country "has a right to dictate nuclear policy to another," said the Shah's chief atomic energy official in 1977.

Among the disclosures in the new documents:

In 1974 Department of State officials wrote that if the Shah's dictatorship collapsed and Iran became unstable, "domestic dissidents or foreign terrorists might easily be able to seize any special nuclear material stored in Iran for use in bombs." Moreover, "an aggressive successor to the Shah might consider nuclear weapons the final item needed to establish Iran's complete military dominance of the region."

According to national security adviser Brent Scowcroft, the Ford administration hoped that the Shah would commit himself to a "major act of nuclear statesmanship: namely, to set a world example by foregoing national reprocessing."

When officials from Oak Ridge National Laboratory received briefings on the planned Esfehan Nuclear Technology Center (ENTEC), they concluded that the "bears watching" because "unusually large" size of the facility "makes it theoretically possible to produce weapons-grade material (plutonium)" and the ENTEC plans include a "large hot lab," the first step toward reprocessing.

Questioning U.S. efforts to restrict Tehran's freedom of action, Iranian officials argued that "Iran should have full right to decide whether to reprocess" and the "right to effective control of the management and operation of … reprocessing facilities."

By the summer of 1978, Tehran and Washington had overcome differences and agreed to a nuclear pact that met U.S. concerns and the Shah's interest in buying reactors, but the agreement closely restricted Iran's ability to produce plutonium or any other nuclear weapons fuel using U.S. supplied material without Washington's "agreement."

Drawing on the new documents, National Security Archive senior analyst William Burr has written an article to give perspective to the nuclear talks: "A Brief History of U.S.-Iranian Nuclear Negotiations," now appearing on-line in the January-February 2009 issue of The Bulletin of the Atomic Scientists. While the documents available so far illuminate the negotiations, more needs to be learned from U.S. government files. To a great extent the intelligence side of the story remains an unknown. So far, the Central Intelligence Agency has denied all documents gleaned from the Archive's mandatory review request, although they are presently under appeal.

The Iranian Nuclear Program, 1974-1978
Edited by William Burr

Next to a statement by the Shah disavowing an interest in reprocessing plutonium, a staffer at the Pentagon's Office of International Security Affairs drew a little picture of a bull to express his skepticism. (See Document 30)

To provide some historical background on the current controversy over the Iranian nuclear program, National Security Archive senior analyst William Burr has written an article, "A Brief History of U.S.-Iranian Nuclear Negotiations," now appearing in the January-February 2009 issue of The Bulletin of the Atomic Scientists. The Iranian nuclear controversy makes it worth looking at the years before the 1979 revolution, when the Shah of Iran was setting his sights on major nuclear power investments. Seeking a huge electrical power generating capability, Shah Mohammad Rez Pahlavi negotiated nuclear reactor deals with France and West Germany and wanted to buy eight reactors from the United States. This nuclear power initiative overlapped with Washington's growing concern over nuclear proliferation triggered by India's "peaceful nuclear explosion" in May 1974. While the Shah had publicly disavowed a nuclear weapons capability, the Iranians declared that they had the "right" to a full nuclear fuel cycle, including reprocessing of spent fuel. Not sure about the Shah's ultimate purposes, neither the Ford nor the Carter administrations would sell reactors without strings attacked.

Washington policymakers tried to use the nuclear negotiations as leverage to minimize the extent to which Iran could develop any of the critical elements of a nuclear weapons capability. The Carter administration would go further than its predecessor in attempting to reduce Iran's freedom of action, but both Presidents insisted on the tightest controls possible over Iran's ability to use U.S.-supplied nuclear technology and fuel for producing plutonium. While the Iranians made nationalist arguments asserting their "rights" to reprocessing and other activities under the NPT, by the summer of 1978, the two sides had reached an agreement, which the Iranian revolution effectively nullified.

Interestingly, former Secretary of State Henry Kissinger, who presided over the negotiations during 1974-1976, has downplayed the role of proliferation during the nuclear negotiations with Iran. In a 2005 Washington Post interview, he said that "I don't think the issue of proliferation came up"; "They were an allied country, and this was a commercial transaction. We didn't address the question of them one day moving toward nuclear weapons." (Note 1) Certainly no one saw an Iranian nuclear weapons capability as a likely near-term possibility, but Kissinger and the State Department never treated the agreement as simply a "commercial" proposition. First, Ford administration officials wondered whether the Shah of Iran would move toward a nuclear weapons option, should the regional balance of power change. Second, Kissinger and his senior advisers would only sign off an agreement that constrained Iran's capability to use U.S.-supplied resources for producing nuclear weapons material. This was no less true of the Carter administration; both Ford and Carter wanted to ensure that the terms of the agreement met U.S. nuclear nonproliferation goals. (Note 2)

What made the The Bulletin of the Atomic Scientists article possible is the ongoing declassification of documentation on the nuclear negotiation from the Ford and Carter administrations--State Department and Tehran embassy cables, Defense Department papers, and White House and National Security Council memoranda and studies—that provide significant insight into the positions that Washington and Tehran took on the nuclear deal. All of the documents cited in the footnotes of the article, as well as a few more items, are reproduced in this briefing book (see below). As rich as the documentation is, however, more needs to be learned from U.S. government files, including materials at the Ford and Carter presidential library. For example, to a great extent the intelligence side of the story remains an unknown. So far, the Central Intelligence Agency has denied all documents gleaned from a mandatory review request to the Department of Defense, although they are current under appeal.

Read the Documents

Documents 1a-d: The Shah's Statements on Nuclear Weapons: "Without Any Doubt"

1a: U.S. Embassy Paris cable 15305 to Department of State, "Interview with Shah," 24 June 1974, Unclassified
1b: U.S. Embassy Paris cable 15445 to Department of State, "Further Remarks by Shah on Nuclear Weapons," 25 June 1974, Unclassified
1c: U.S. Embassy Tehran cable 5192 to Department of State, "Shah's Alleged Statement on Nuclear Weapons," 25 June 1974, Confidential
1d: U.S. Embassy Tehran cable 5389 to Department of State, "Iran's Intentions in Nuclear Matters," 1 July 1974, Confidential
Sources: Mandatory review (MR) request to Department of Defense and Access to Archival Documentation (AAD), National Archives and Records Administration

Not long after the Indian "peaceful nuclear explosion," the Shah of Iran caused a flap when asked by a journalist whether Iran would have nuclear weapons: "without any doubt, and sooner than one would think." Iranian officials quickly denied that the Shah had said any such thing; instead, "HIM (His Imperial Majesty) actually said Iran is not thinking of building nuclear weapons but may revise its policy … if other non-nuclear nations do." In another statement, this one to Le Monde, the Shah ridiculed the nuclear arms race, but observed that if other nations in the region acquired nuclear weapons, "then perhaps the national interests of any country at all would demand the same." Ambassador (and former CIA chief) Richard Helms was satisfied with the corrections offered by the Shah and his advisers. In a cable to the Acting Secretary of State, Helms wrote that "I want to emphasize to you personally that there has been no change in Iran's declared policy not to acquire nuclear weapons."

Later in 1974, CIA analysts suggested that under some circumstances, Iran's declaratory policy could change. In light of the Shah's "ambition to make Iran a power to be reckoned with," if he "is alive in the 1980s, if Iran has a full-pledged nuclear power industry and all the facilities necessary to make nuclear weapons, and if other countries have proceeded with nuclear weapons development, we have no doubt that Iran will follow suit." (Note 3)

Document 2: Office of Assistant Secretary of Defense for International Security Affairs to Secretary of Defense, "Nuclear Energy Cooperation with Iran (U) – Action Memorandum," n.d. [Late June 1974], enclosing Atomic Energy Commission and Department of State memoranda, Confidential, with handwritten note attached
Source: Mandatory Review

These memoranda provide a sense of the concerns that shaped the U.S. position throughout the nuclear negotiations with Iran. Not only did Defense Department officials observe that the nuclear power plants sought by the Shah would provide a capability to produce hundreds of nuclear weapons, Department of State officials worried that should the Shah's dictatorship collapse and Iran became unstable, "domestic dissidents or foreign terrorists might easily be able to seize any special nuclear material stored in Iran for use in bombs." Moreover, "an aggressive successor to the Shah might consider nuclear weapons the final item needed to establish Iran's complete military dominance of the region." It was those concerns that made the Ford administration seek special controls to ensure that U.S.-supplied nuclear materials in Iran were safeguarded for peaceful uses only.

The agencies raised legitimate issues, but the Ford administration had ample incentive to make nuclear sales to Iran. When the nuclear deal was first proposed the United States was heading toward a deep recession, so reactor sales would be a plus. Moreover, just like the Nixon administration, the Ford White House saw the Shah and Iran as a critically important ally in the volatile Middle East, and not only as a source of oil, but as a major proxy in support of U.S. interests in the region. Despite the notoriety of the Shah's police state, the importance that Ford and Kissinger attached to a stable Iran made them willing to conciliate the Shah by keeping their eyes blind to the human rights abuses associated with the dictatorship. For his part, the Shah sought close relations with Washington to strengthen his domestic position as well as to counter the Soviet Union, such rivals as Iraq, and radical forces in the region generally. No puppet, the Shah was relatively impervious to U.S. importuning against oil price increases, although he recycled billions of petrodollars in arms purchases from the United States. Indeed, the White House maintained a "green light" for arms sales to improve the balance of payments. In light of the varied interests at stake, U.S. senior officials worked hard at cementing the relationship, to the point where Vice President Nelson Rockefeller compared "His Imperial Majesty" to Alexander the Great. (Note 4)

Document 3: "The Proliferation Problem is at a Crucial Juncture"
NSC Under Secretaries Committee to Deputy Secretary of Defense et al, "US Nuclear Non-Proliferation Policy," 4 December 1974, enclosing Memorandum for the President from Robert S. Ingersoll, Chairman, 4 December 1974, and NSSM 202 Study, "Executive Summary," Secret
Source: National Archives, CIA Research Tool (CREST)

Other priorities, including an ongoing interagency nuclear proliferation policy review, put the Iranian nuclear deal on the backburner. The policy review completed in early December 1974 recommended an "intensified program to inhibit the further spread of independent nuclear explosives capabilities." Worried that inhibitions to nuclear proliferation and security guarantees were weakening, the NSC Under Secretaries recognized that it might be possible only to delay proliferation, but that even a "partially effective strategy" could serve U.S. national security policy. Any action taken, however, had to be cooperative because the United States was beginning to lose its dominant position as a nuclear exporter.

To meet non-proliferation goals, the report called for 1) concerted action by nuclear industrial states to tighten controls on nuclear exports, especially to "sensitive regions" (e.g., Middle East), 2) intensified efforts to support the NPT and to secure treaty ratification by Japan and EEC countries, among others, 3) multilateral efforts to discourage further proliferation in South Asia (e.g., discourage further Indian tests and encourage India to place IAEA safeguards on nuclear exports), and 4) a U.S. interagency mechanism to "formulate and oversee future U.S. nonproliferation policies."

One of the key proposals in the report was for a conference of nuclear exporters; this was the germ of the idea of the Nuclear Suppliers Group, which has played a key role since the mid-1970s in decisions on exports of sensitive technology. Another cooperative approach was to consider the possibility of "regional multinational plants …offering favorable terms for reprocessing services to smaller countries," thus avoiding independent national reprocessing capabilities. Some of the ideas in the report, for example on "peaceful nuclear explosive" (PNEs), represented a compromise. While emphasizing the need to prevent non-nuclear states from developing PNEs, which was the same as a weapons capability, some language in the report suggested that Washington should support Article V of the NPT encouraging the accessibility of "potential benefits of peaceful applications of nuclear explosions" to signatory states so that Moscow did not get an advantage in that area.

Document 4: "Minimize Proliferation Risks"
Executive Secretary Samuel R. Gammon to Sidney Sober, Bureau of Near Eastern Affairs, and Thomas Clingan, Bureau of Oceans, International Environmental, and Scientific Affairs, "Nuclear Energy Agreement for Cooperation with Iran," 11 December 1974, enclosing memorandum to Secretary Kissinger from Alfred Atherton, Bureau of Near Eastern Affairs and Nelson F. Sievering, Bureau of Oceans, International Environmental, and Scientific Affairs, "Nuclear Energy Agreement for Cooperation with Iran," 6 December 1974, Confidential
Source: RG 59, Record Group 59. Department of State Records. Executive Secretariat Records. Memorandums of the Executive Secretariat, 1964-1975, box 11, S/S memos - December 74

Among his other ambitions, the Shah of Iran wanted a "full-pledged nuclear power industry" to power new industries when petroleum resources began to decline. Toward that end, the Shah negotiated the purchase of reactors and other technology with a number of nuclear exporters: France, West Germany, and the United States. The Ford administration also encouraged the Bechtel Corporation to propose to the Shah an investment of hundreds of millions of dollars in a U.S.-based uranium enrichment plant. On the U.S. side, the Nixon, and then the Ford, administration, wanted to initial a nuclear cooperation agreement that would set the policy conditions for the sale of eight rectors to Iran; it could not be simply a commercial sale. Necessarily, the Indian PNE was part of the backdrop for the negotiation and Congressional concern about nuclear proliferation had grown exponentially, especially because New Delhi had used a Canadian-supplied reactor as its source of plutonium. These conflicting pressures led senior State Department officials to recommend a position that was not so "strong" that it would encourage the Shah to buy elsewhere, but not so "weak" that Congress would reject it. Secretary of State Kissinger accepted the recommendation for option three, giving Washington "veto rights" so that it could insist either on "external processing and storage" of spent fuel or set standards "for internal disposition and possible construction of a multilateral reprocessing plant." Nevertheless, plainly irritated that his subordinates had already told Congress that the agreement would "include additional bilateral provisions that go beyond IAEA requirements," Kissinger wanted them to explain why they had limited his freedom of action.

Documents 5a-d: National Security Study and Decision Memoranda: Balancing Proliferation Concerns and Export Interests

5a: "Report of the NSSM 219 Working Group [,] Nuclear Cooperation Agreement with Iran," [April 1975], Secret
5b: U.S. Embassy Tehran cable 3437 to Department of State, "Draft Agreement on Atomic Energy,"15 April 1975, Secret
5c: Deputy Secretary of State Robert Ingersoll to Assistant to the President for National Security Affairs [Kissinger], "Department of State Response to NSSM 219 (Nuclear Cooperation with Iran)," 18 April 1975, Secret
5d: National Security Decision Memorandum 292, "U.S.-Iran Nuclear Cooperation," 22 April 1975, signed by Henry Kissinger, Secret
5e: Secretary of Defense James R. Schlesinger to Assistant to the President for National Security Affairs, "Nuclear Cooperation Agreement with Iran: NSSM 219," 25 April 1975, Secret
Source: Digital National Security Archive, Presidential Directives on National Security, Part II: From Harry Truman to George W. Bush, Jeffrey Richelson, editor. (Except B which is AAD)

While Kissinger already had signed off on a policy position, the Iranian deal had to go through a major review so that it would have the support of all of the relevant agencies. During the early spring of 1975, before the Shah's scheduled visit to the United States in May, the agencies considered possible approaches to the reactor sale, trying to secure an optimal balance between proliferation "principles and objectives" and such goals as export business and good relations with the Shah. After reviewing a number of options, ranging from a veto over reprocessing to allowing Iran to "perform reprocessing" with adequate safeguards, the White House issued a National Security Decision Memorandum, signed by Henry Kissinger on 22 April 1975. While Kissinger took a flexible position on fuel supply issues, the initial negotiating position on reprocessing would be hard: "Continue to require U.S. approval for reprocessing of U.S. supplied fuel," with the establishment of a multinational reprocessing facility an "important factor" for securing such approval. For a fallback position, the U.S. would approve reprocessing in Iran so long as the supplier of technology and equipment was a "full and active participation in the plant," with the possibility of U.S. participation to be held "open." As long as the U.S. was able to ensure additional safeguards, the possibility of a binational option was generally consistent with Richard Helms' advice that Washington work for a tacit veto by acquiring "a voice in management decisions" in a reprocessing plant.

Document 6: Department of State Briefing Paper, "Peaceful Nuclear Cooperation," May 1975, Confidential
Source: National Archives, Record Group 59, State Department Briefing Books, box 215, State Visit of the Shah of Iran May 15-18, 1975

Records of the late April 1975 nuclear talks in Tehran are not yet available, but apparently the Shah's representatives wanted more give on reprocessing: If they made a "strenuous" effort to get a supplier involved in a reprocessing plant, but it did not work out, they should not be penalized. U.S. negotiators, however, insisted that the Iranians get suppliers involved: "the added assurances against [proliferation] which accompany supplier involvement depend on its actually being achieved." The Ford administration had to take into account Congressional concerns, which strongly opposed concessions that could weaken non-proliferation and the White House could not even be sure that its fallback would satisfy the Hill. The nuclear issue did not come up during the Shah's May visit and the negotiations would continue.

Document 7: The Shah's Motives Are "Not Entirely Clear"
Tehran Embassy cable 5939 to State Department, "Multinational Nuclear Centers: Assessment of Iranian Attitudes toward Plutonium Reprocessing," 17 July 1975, Secret
Source: AAD

Deputy chief of mission (DCM) Jack Miklos explored the Shah's interest in nuclear power and why Iranian officials objected to the U.S. proposal for a multinational reprocessing facility. He did not rule out the possibility that the "interest in acquiring nuclear know-how and plutonium is, in part, motivated by the desire to preserve [the nuclear option] should the region's balance of power shift toward the nuclear [states]." Whatever the Shah's intentions were, Miklos argued that Iran wanted to develop uranium enrichment capabilities and to "possess [its] own fuel reprocessing facility." In light of those objectives, it was possible that the Iranian's opposed proposals for a multinational reprocessing facility because of an "unwillingness to submit their plant to foreign surveillance."

Document 8: Lewis A. Dunn, Hudson Institute, "Iran and Nuclear Weapons," Briefing Notes for Office of Director, Near East/South Asia Region, International Security Affairs, Major General Gordon Sumner, Jr., The Pentagon, 29 July 1975
Source: Mandatory Review

Before he joined the Reagan administration in 1981, political scientist Lewis A. Dunn was an analyst at Herman Kahn's Hudson Institute, where he worked on nuclear proliferation issues. A major contract study, written with Kahn, for the Arms Control and Disarmament Agency, developed a "proliferation chain" argument, suggesting that the Indian PNE had unleashed a chain reaction that could lead to significantly widespread proliferation. (Note 5) Some talking points from Dunn's briefing at the Pentagon in July 1975 outlined the considerations that might influence an Iranian decision during the 1980s to develop a weapons capability as well as the various shapes that such a capability could take. A chart prepared for the briefing exemplified the proliferation chain approach by showing possible time-lines for national nuclear decisions influenced by the Indian PNE. The "chain" for Iran could be either a straight line from India or the influence of earlier decisions by Israel to develop an overt capability, by Egypt to announce an intent, and by Libya to develop a bomb in the "basement."

Documents 9a-c: "Incompatible with our Sovereignty"

9a: State Department cable 254826 to Embassy Tehran, "Nuclear Agreement for Cooperation," 25 October 1975, Secret
9b: Tehran Embassy cable 11089 to State Department, "Shah's Interview by Business Week Given Prominent Coverage by English Language Kayhan," 13 November 1975, Confidential
9c: Tehran Embassy cable 11539 to State Department, "US/Iran Nuclear Agreement," 26 November 1975, Secret
Sources: A and B: AAD; C: Mandatory review request

Discussions at Vienna disclosed serious disagreements over the nuclear cooperation agreement, with Iranian atomic energy chief Etemad rejecting Washington's insistence that, through the multinational plant, it participate in decisions on reprocessing of U.S.-supplied spent fuel. Kissinger was not ready to back down from this position; a telegram that he approved asked Ambassador Richard Helms to explain U.S. motives to the Shah and to make the point that "we are not in any way singling out Iran for special, disadvantageous treatment"; the issues at stake were not technical ones but "directly related to security and stability in the region." But Helms was worried "how serious a problem the nuclear deadlock has become," especially after the Shah observed, in an interview, that the U.S. position conflicted with Iran's "sovereignty" and that Washington was asking for things "that the French or Germans would never dream of doing." Given the Shah's frame of mind, Helms concluded that the proposal for a regional reprocessing facility could not be sold and that if Iran insisted on a reprocessing plant it should be under joint U.S.-Iran control with "stringent safeguards.

Document 10: "Focused Solely on Energy"
U.S. Embassy Tehran Cable 73 to State Department, "Iranian Nuclear Policy," 6 January 1976, Confidential
Source: Mandatory review request

While the negotiations were in abeyance, Dr. Ahmad Etemad, the Chairman of Iran's Atomic Energy Organization traveled to India where he reportedly discussed Iran's nuclear program and mentioned his interest in "peaceful nuclear explosions" (PNEs). Meeting with DCM Jack Miklos, who was seeking clarification of the press coverage, Etemad confirmed that he was indeed interested in PNEs, but that Iran would seek them only in the context of an "international agreement that nuclear explosions might be found economically useful and feasible to move mountains, dig canals, etc." To underline the point, he confirmed that Iran was not interested in building reprocessing facilities, which were necessary to develop PNEs. Assuring Miklos of Iran's commitment to the NPT, even a stronger version with more safeguards, Etemad stated that Iran sought nuclear power for economic reasons only. Nevertheless, Iran would not accept "safeguard terms or conditions that go beyond its present commitments if they are dictated by nuclear-have nations." To dispel notions that the impasse on the nuclear cooperation agreement reflected larger problems in the U.S.-Iran relationship, Etemad suggested he visit Washington for technical discussions.

Document 11: "To Set a World Example"
National Security Adviser Brent Scowcroft to President Ford, "Letter to the Shah," n.d. [Circa 19 February 1976]
Source: Gerald R. Ford Library, President's Correspondence with Foreign Leaders, box 2, Iran - The Shah (Folder 1)

The stalemate in the nuclear negotiations led President Ford to approve recommendations that a high-level team visit Tehran for meetings with the Shah and his advisers. The outcome, Brent Scowcroft, hoped, would be a commitment by the Shah to a "major act of nuclear statesmanship: namely, to set a world example by foregoing national reprocessing."

Document 12: National Security Adviser Brent Scowcroft to President Ford, "Response from the Shan on nuclear Cooperation," 22 March 1976, Confidential
Source: Gerald R. Ford Library, President's Correspondence with Foreign Leaders, box 2, Iran - The Shah (Folder 1)

Describing recent correspondence with the Shah of Iran and the meeting between the Shah and Robert Seamans, director of the Energy Research and Development Administration (ERDA, predecessor of the Energy Department), and Caryle Maw, Under Secretary for Security Assistance, Scowcroft observed that the Shah's "remarks to Seamans and Maw give us some hope that a mutually acceptable compromise formula may be attainable."

Document 13: Exploring New Options
Memorandum from Deputy Secretary of State Charles W. Robinson to Henry Kissinger, "Meeting on Nuclear Negotiations with Iran," 14 April 1976, with memorandum attached from Myron B. Kratzer and Alfred L. Atherton to the Secretary, "Next Step in Our Nuclear Negotiations with Iran," 25 March 1976, Secret/Exdis
Source: RG 59, Records of Deputy Secretary of State Charles W. Robinson, box 7, Memos to the Secretary, April 1976- June 1977 (2 of 2)

The Maw-Seamans talks with the Shah led the ERDA chief to conclude that the Shah would not accept an "ultimate U.S. veto to prevent Iranian reprocessing." Nevertheless, if a multinational or binational reprocessing facility proved unworkable, he suggested that Washington might be able to persuade him to accept some level of U.S. "consent", including participation in a reprocessing facility, assignment of U.S. personnel to the facility, and "continuing requirement that we be satisfied the safeguards applied to these activities by the IAEA are effective." State Department officials believed that the discussions with Seamans suggested that the Shah "may be willing to join the U.S. in an act of leadership to explore alternatives to national reprocessing." Nevertheless, other alternatives were under consideration such as an option for the United States to "buy back" spent fuel rods so that Washington would have more leverage over any Iranian decisions on national reprocessing.

Document 14a-b: Iran's Atomic Energy Structure

14a: U.S. Embassy Tehran Airgram A-76 to State Department, "The Atomic Energy Organization of Iran," 15 April 1976, Confidential
14b: U.S. Embassy Tehran Airgram A-69 to State Department, "The Atomic Energy Organization of Iran," 11 May 1977, Confidential
Source: MDR release

These airgrams provide a detailed overview of the Atomic Energy Organization of Iran, the key officials who managed it, Iran's nuclear power policy, power plant projects, and nuclear relations with the United States and West Germany, among other countries. Also discussed is Etemad's program for developing a cadre of nuclear scientists by sending students for training in the West so that they could operate reactors and staff research facilities. Iran already had a Nuclear Research Center in Tehran; in the works was a Nuclear Technology Center to be located near Esfehan. The biographical detail here is interesting; for example, in the 1977 report, the director of Raw Materials and Fuel, Dr. Ghassem Arabian, is identified as "probably the only one in AEOI with an anti-American bias."

Document 15: David Elliott, Robert Oakley, National Security Council Staff, to Brent Scowcroft, "Nuclear Negotiations with Iran," 16 April 1976, Secret
Source: Gerald R. Ford Library, NSC Institutional Files, Box 64, NSSM 324, Nuclear Agreement with Iran

In light of Etemad's forthcoming visit to Washington, the State Department made suggestions on the approach that U.S. negotiators could take. "Buy-back" should be explored with the Iranians, but if they were not interested, Washington should try to secure a "strong political commitment" to a multinational/binational reprocessing facility, as well as "to consult closely with us on its prospective reprocessing plans before making any firm decisions." If, however, the multinational option failed, the United States would accept an Iranian reprocessing facility as long as IAEA safeguards applied and the Iranians accepted supplemental safeguards "with the assignment of U.S. personnel." A memorandum from ACDA chief Fred Ikle emphasized the importance of statements made by the Shah to the effect that Iran would not be interested in exercising rights for reprocessing facilities "approximately ten years from now." The statements, Ikle believed, suggested the possibility of "common ground" that would leave Tehran with a "reasonable set of options to handle its spent fuel." His basic position dovetailed with the State Department's interest in buy-back, multinational plants, or effective safeguards if Iran established a national reprocessing facility.

Document 16: Brent Scowcroft to the President, "Negotiation of a Nuclear Agreement with Iran," 19 April 1976, Secret
Source: Gerald R. Ford Library, NSC Institutional Files, Box 64, NSSM 324, Nuclear Agreement with Iran

Reporting on the Seamans conversations with the Shah and the Shah's recent letter to President Ford, National Security Adviser Scowcroft observed that the sticking point was that the monarch remained "unwilling to commit to … a joint [reprocessing] venture as the sine qua non for our approval of the reprocessing of U.S.-supplied fuel in Iran." Worried that the lack of a nuclear agreement "represents a serious irritant in our relations with Iran, Scowcroft argued that it was pointless to press for the multinational option. Instead, he suggested that president Ford approve a second option, involving "buy-back" of spent fuel. If the Iranians rejected "buy-back", then the United States could, as a fall back, insist on bilateral measures that supplemented the safeguards of the International Atomic Energy Authority. Ford approved that recommendation.

Document 17: "[We Should] Not Fall on Our Own Swords to Push Others into Multinational Projects"
Memorandum of Conversation, "Proposed Cable to Tehran on Pakistani Nuclear Processing," 12 May 1976, Secret/Nodis

Besides negotiating an agreement with Iran that he could live with, Kissinger also faced dilemmas created by Pakistan's nuclear program and the German nuclear sale to Iran, which also raised concerns about reprocessing. While Kissinger believed it important to oppose national reprocessing, as the quote about "falling on our own swords" appears to suggest, he was doubtful about the viability of the multinational concept.

Documents 18a-b: Draft Nuclear Agreement

18a: State Department cable 132760 to Embassy Tehran, "Iranian Nuclear Power Agreement," 28 May 1976, Confidential
18b: State Department cable 135220 to Embassy Tehran, "Nuclear Power Agreement with Iran," 2 June 1976, Confidential
Source: MDR request

Even if Kissinger was getting sour over the concept of multinational processing, it had gone too far in the negotiations with Iran to be abandoned. During talks with Iran's atomic energy chief Etemad in April, the two sides appeared to converge on the basic principles of an agreement, including the new U.S. "buy-back" concept. Based on the talks with Etemad, on 28 May, ERDA and the State Department sent the Embassy a draft agreement and, a few days later, talking points to be used in discussions with the Iranians. Designed to serve as a model for future nuclear agreements with other countries, the text included complex requirements to ensure that the nuclear materials and technology were used only for purposes that were consistent with non-proliferation goals.

The key provisions concerned reprocessing and safeguards. In keeping with earlier discussion of the principle of "consent," the draft stipulated that any reprocessing of Iran's spent fuel must be "performed in facilities acceptable to the parties." But even before reprocessing could be a possibility, the U.S. proposed buying back spent fuel, with payment in money or in the equivalent value of reactor fuel. Alternatively, Iran could transfer spent fuel to another country or group of nations, as long as it was used for peaceful purposes under mutually acceptable safeguards. In addition to the safeguards imposed by the IAEA to prevent diversion into military applications, the U.S. draft spelled out additional arrangements to safeguard nonproliferation interests. For example, the United States would have right to review "design of any reactor" or other equipment and devices "determined to be relevant to the effective application of safeguards." Moreover, the designated U.S. personnel would have "access in Iran to all places and data necessary to account for … special nuclear material."

Besides the agreement, the U.S. included a note designed to reflect "special" aspects of the U.S.-Iran relationship. If the U.S. did not exercise the buy-back option and Iran chose to establish reprocessing facilities, Tehran would be required to "achieve the fullest possible participation in the management and operation of such facilities of the nation or nations which serve as suppliers of technology and major equipment." Moreover, Iran would invite the United States to "participate fully and actively in [the] management and operation" of the facilities. Nevertheless, if Iran's "strenuous" efforts to secure multinational participation failed for "reasons beyond [its] control," and, again, Washington had not exercised the buy-back option, Iran could develop reprocessing facilities "acceptable to the parties" and following the rigorous safeguards spelled out in articles XI and XII of the agreement. While Etemad wanted the agreement to include the provisions of the note, U.S. negotiators did not want to change the procedure because they expected that agreements with other countries would include notes to reflect the circumstances of the negotiations.

Documents 19a-b: "Proliferation is Anathema to Iran"

19a: U.S. Embassy Tehran cable 5735 to State Department, "Iranian Nuclear Power Agreement," 7 June 1976, Confidential
19b: U.S. Embassy Tehran cable 5765 to State Department, "Iranian Views on Non-Proliferation and US/Iran Nuclear Cooperation," 7 June 1976, Secret
Source: MDR release

On 6 June 1976, Ambassador Richard Helms and science attaché Albert Chapman presented atomic energy chief Etemad with the draft agreement and note. Once Tehran had digested the U.S. proposals, ERDA and the State Department could send a team for detailed negotiations. Helms stated that he supported Etemad's earlier proposal for a "high-level exchange," once the agreement was finalized, during which the two parties could reaffirm non-proliferation commitments and "announce our intentions to explore diligently the binational/multinational fuel reprocessing concept." Comments by Etemad suggested that the Shah was not interested in the high-level exchange, but he emphasized Iran's support for the NPT's goals, noting that "proliferation can only weaken Iran's position vis-à-vis its neighbors, and therefore proliferation is anathema to Iran." He was especially concerned about Indian pressure on Pakistan and suggested that Washington provide a "guarantee against nuclear attack by India," implying that such action would reduce pressure on Pakistan to go nuclear.

Document 20: The Iran-West German Agreement
Memorandum of Conversation, "The Secretary's Meeting with FRG Ambassador Von Staden on the FRG/Iran Agreement for Nuclear Cooperation," 2 July 1976, Secret/Nodis
Source: Digital National Security Archive

The Iran-West German nuclear negotiations mentioned earlier (and related talks with Brazil) were a source of heartburn for Kissinger and the State Department because they believed that Bonn did not take a tough enough position on reprocessing. As Kissinger reminded Ambassador Von Staden, "we had strongly urged that the FRG not transfer reprocessing to Iran." While Von Staden argued that the agreement included a number of safeguards designed to limit Iran's freedom of action, he conceded that the agreement did not prevent reprocessing in Iran. This prompted Kissinger to observe that "This agreement is not greeted with enthusiasm by the US … [W]e cannot avoid saying that we did not approve of this agreement."

Document 21: "Iran Shall Have Full Right to Decide"
U.S. Embassy Tehran cable 7485 to State Department, "Iranian Counterproposals for Atomic Energy Agreement," 23 July 1976, Confidential
Source: MR request

On 22 July, Etemad gave Helms his government's response to the U.S. draft agreement. Embassy officials later characterized Tehran's paper as "extreme", probably because it rejected the U.S. veto of Iranian reprocessing of the spent fuel supplied by the United States. The Government of Iran "seriously intended to have [reprocessing] performed in facilities established in Iran" and in "all fairness [Washington should] be prepared to supply Iran with the means to establish all facilities which … constitute integral part of [Iran's] nuclear power program." So that Iran could control the entire nuclear fuel cycle, it should "have the right to effective control of the management and operation of the reprocessing facilities." U.S. participation would be appreciated, but Washington would have only minority voting rights" and no veto. "Iran should have full right to decide whether to reprocess or otherwise dispose or treat the materials provided under the agreement." Nevertheless, the U.S. buy-back option remained on the table; if Iran did not want to reprocess the United States could either provide financial compensation or enriched uranium "equivalent in energy value to the recoverable special nuclear material" contained in the spent fuel.

Document 22: "How We Gave the Farm Away"?
Tehran Embassy cable 7886 to State Department, "Nuclear Energy Discussions," August 3, 1976, Confidential, with annotations and cartoon by Pentagon official
Source: Mandatory Review

In early August 1976, Henry Kissinger and other U.S. officials traveled to Iran for meetings of a joint U.S.-Iran Economic Commission for talks on the nuclear agreement, among other issues. Etemad held on to his position about a U.S. "obligation to assist Iran in all areas of nuclear technology" and his view that Iran would not "accept discriminatory treatment." Nonetheless, he acknowledged that Washington was in no position to assist with reprocessing and conceded that the key issue for Iran was an "assured fuel supply." U.S. officials could not make assurances about anything, but they explained that they wanted the agreement to reflect "U.S. intent to perform," within "necessary practical and legal limits." "They also stressed that bottom line of U.S. May 31 draft enables reprocessing in Iranian national facilities, thus ensuring that Iran is not foreclosed from every solution to reprocessing problem." In the ensuing discussion, the Iranians showed readiness to consider the alternatives to the "bottom line," e.g., the buy-back ("fuel exchange") or third-country reprocessing.

While Ambassador Helms saw a "promising basis for continuing discussion," a skeptical official at the Iran desk of the Pentagon's Office of International Security Affairs (ISA) was far from satisfied. Probably worried that the "bottom line" position enabling Iranian reprocessing under some circumstances was a danger (and unaware of Kissinger's position on buy-back), the official believed that Washington was giving the "farm away" and drew an amusing cartoon of the Shah standing in front of a prostrate Uncle Sam, with the latter saying "Oh – please walk all over me."

Documents 23a-b: "We'll Insist on Reprocessing in [the] US"

23a. Memorandum for the Secretary from Charles W. Robinson, "Nuclear Negotiations with Iran," 13 August 1976, Secret/Nodis
23b. Memorandum for the Secretary from Charles W. Robinson, "Nuclear Negotiations with Iran," 18 August 1976, Secret/Nodis
Source: RG 59, Records of Deputy Secretary of State Charles W. Robinson, Box 6, CWR- Memos to the Secretary, July 1976- Sept 1976

Besides meeting with the Joint Economic Commission, Kissinger had meetings with the Shah to discuss the nuclear deal. Records of Kissinger's discussions with the Shah are not yet available, but State Department memos include some significant details on the negotiations. Apparently, Kissinger explained to the Shah that a "purely national" Iranian reprocessing plant would not be acceptable. The nuclear cooperation agreement would provide alternatives to national reprocessing--"buy-back," binational reprocessing, and reprocessing in a third country (e.g., in Western Europe)--but the U.S., as Kissinger saw it, would consistently exercise the buy-back option. Thus, while Iran would have a theoretical right to reprocess U.S.-provided spent fuel as a "last resort," it would never exercise it.

From Tehran's perspective, one problem in the buy-back option was the possibility of "commercial risks" for Iran. If, at some point, the commercial value of enriched uranium and plutonium increased, the spent fuel rods would be worth more and the Iranians would have made money if they had held on to them. Under proposed new terms of the agreement, the U.S. would compensate Iran for "any loss it has suffered as a result of our reprocessing of the spent rods." Deputy Secretary Robinson told Kissinger that he "didn't believe that there would be any great financial burden to the U.S. in assuming the 'commercial risks.'"

A more significant complication was the extent to which Washington could provide "ironclad assurances" to Iran that it would be a reliable supplier of nuclear fuel under the agreement. For example, the Nuclear Regulatory Commission would have to review each nuclear shipment to Iran separately; it had authority to block any nuclear export that it deemed inconsistent with U.S. security interests. While the Ford administration could explore the possibility of changing NRC procedures so that it could provide a blanket license to cover export commitments to Iran, the "policy and institutional issues appear so profound" that it would require major changes in nuclear export procedures to implement the agreement with Iran.

With the 1976 presidential campaign under way, the U.S.-Iran nuclear negotiations came to a halt, although serious conflict with the Shah over petroleum prices, which exacerbated in November, probably contributed to the standstill. Nevertheless, an important policy development occurred during the final days of the campaign, when President Ford belatedly responded to Jimmy Carter's criticisms, as well as public concern generally, by issuing a major statement on nuclear proliferation policy. Consistent with the approach that the administration had been taking toward the negotiations with Iran, Ford took a highly restrictive stand on reprocessing: It "should not proceed unless there is sound reason to believe that the world community can effectively overcome the associated risks of proliferation." To support that judgment Ford called for changes in domestic nuclear policies, cooperation between nuclear exporters on behalf of "'maximum restraint in the transfer of reprocessing and enrichment technology," and international cooperation to ensure that "customer nations have an adequate supply of fuel for their nuclear power plants," among other measures. (Note 6)

Document 24: "We Should Move Heaven and Earth"
Memorandum of conversation, "Secretary's Meeting with the General Advisory Committee on Arms Control and Disarmament," 6 January [1977], Secret
Source: Digital National Security Archive

As secretary of state, Kissinger held periodic meetings with the General Advisory Committee on Arms Control and Disarmament (GAC), which was the statutorily-mandated advisory body to the late lamented Arms Control and Disarmament Agency (ACDA). During this particular meeting, which included reviews of SALT policy and developments in China, the discussion turned to the problem of nuclear proliferation. Worried about loose command-and-control arrangements in new nuclear states and the possibility that nuclear use in an India-Pakistan conflict could "increase temptations for their use elsewhere," Kissinger asserted that "we should move heaven and earth" to curb proliferation. "Even if we can buy only a decade [it is] worth it to prevent it."

Documents 25a-b: The ENTEC Facility "Bears Watching"

25a: U.S. Embassy Tehran Cable 1232 to State Department, "Nuclear Power: Comments of Head of Atomic Energy Organization of Iran (AEOI)," 7 February 1977, Unclassified
25b: U.S. Embassy Tehran Cable 1437 to State Department, "GOI/AEOI Plans for Isfhahan Nuclear Technology Center, ENTEC," 14 February 1977, Secret
Source: Mandatory Review

Following President Ford's electoral defeat, Richard Helms resigned from his post in Tehran in late 1976, and a void at the Embassy's top level ensued for some months. Nevertheless, with a new administration at the White House determined to make major changes in nuclear proliferation policy, the government of Iran was waiting with interest for a U.S. announcement. During a press conference in February 1977, Etemad, perhaps realizing that the Carter administration would also oppose reprocessing, declared that Iran had given up the option of a national reprocessing facility and was, instead, looking closely at binational and multinational options. In addition, Etemad said that he assumed that safeguards would be integral to the U.S. approach, but asserted that no country "has a right to dictate nuclear policy to another." He also announced the beginning of construction of the third and fourth French-supplied nuclear power plants.

Officials at the U.S. Embassy and Oak Ridge National Laboratory, who had been visiting Iran, were not taking on faith Etemad's statements on reprocessing. When Oak Ridge officials received a briefing on the planned Esfehan Nuclear Technology Center (ENTEC), U.S. officials commented that the location reminded them of the geologically similar site ("between two mountains") of the Sandia Weapons Laboratory in New Mexico. According to the Oak Ridge scientists, the "unusually large" size of the facility "makes it theoretically possible to produce weapons-grade material (plutonium)", although it was not yet possible to make "categorical statements." It would be just as possible for the facility to produce "mixed oxide appropriate for reactor cores." In any event, that the plans for ENTEC included a "large hot lab," the first step toward reprocessing, as well as a "fuel nuclear fuel cycle … but only on a pilot plant scale" encouraged the Oak Ridge officials to "conclude that the … entire facility 'bears watching.'"

Document 26: U.S. Policy Review
State Department cable 42988 to Embassy Tehran, "U.S.-Iran Bilateral Agreement for Nuclear Cooperation," 25 February 1977, Confidential
Source: Mandatory Review

The nuclear negotiations with Iran could not be resumed until the Carter White House had finished its nuclear proliferation policy review. Realizing that the "ball is in our court," the State Department asked U.S. diplomats in Tehran to assure Etemad that "the new administration is moving along expeditiously in its comprehensive policy review" and that decisions would be made in March or April.

Document 27: Carter's Nonproliferation Policy Announcement and Its Impact
U.S. Consulate Shiraz Airgram A-16 to Department of State, "The Persepolis Conference on Transfer of Nuclear Technology: A Layman's View," 18 April 1977, Confidential
Source: Mandatory Review

The Carter administration's policy review took longer than anticipated, but on 7 April, President Carter issued his first official policy statement on nuclear proliferation. The key announcement was the decision to defer "indefinitely" commercial reprocessing in the United States in order to discourage other countries from reprocessing. While acknowledging that nuclear exporters like France and West Germany had a "perfect right" to reprocess spent fuel and that Washington did not want to "impose [its] will on them," he wanted to reach a "worldwide understanding" with them to curb the risks of widespread reprocessing capabilities. To show that the United States would be a reliable supplier of nuclear fuel, President Carter announced that he would be proposing to Congress "legislative steps to permit us to sign … supply contracts and remove the pressure for the reprocessing of nuclear fuels." In response to press questions about the multinational reprocessing option that the Ford administration had considered, Carter said that he had not made a decision but that "regional plants under tight international control" were a possibility that would be explored. (Note 7)

Carter's statement came on the eve of an international conference on nuclear technology in Persepolis that the Iranian government sponsored. As Victor Tomseth, the U.S. consul in Shiraz later reported, the reaction at the conference was "immediate and for the most part quite negative." U.S. businessmen in the atomic industry were nonplussed because they believed that White House policy would hurt them; Washington, they believed, should not worry about curbing sales of "technology [that developing nations] can get from other sources." U.S. competitors in the nuclear field, for example, in West Germany, were disturbed because Carter's statements cast doubt on the "wisdom of … reprocessing and the breeder reactor." Commercial competitors also believed that Carter's policy would have only a "marginal" impact on nonproliferation. Representatives of Third World countries agreed with that, but what especially worried them was that "their lives had once again been impinged upon by policy decisions in the United States over which they had no control." This dovetailed with the views expressed by Iranian officials that "no country had the right to dictate nuclear policy to another."

Document 28: Explaining Carter's Policy
U.S. Embassy Tehran cable 4313 to State Department, "US-Iran Nuclear Cooperation Agreement and US-Iran Energy Discussions," 16 May 1977, Confidential
Source: Mandatory Review

A visit to Tehran by Deputy Assistant Secretary of State for Near Eastern Affairs Sidney Sober provided an occasion for a discussion with Etemad on the Carter administration's nuclear nonproliferation policy, including its commitment to be a "reliable supplier" to countries that shared U.S. nonproliferation objectives. Commending Etemad for his statement disavowing reprocessing, Sober observed that Iran's decision would "substantially facilitate our bilateral negotiations." Once Congress had finalized nuclear energy legislation, Tehran and Washington could resume the nuclear power negotiations. While Etemad suggested that Washington should be doing more to share nuclear technology as required under Article 4 of the Nonproliferation Treaty, Sober reminded him that such actions could not endanger NPT objectives.

Documents 29a-b: Request for Highly Enriched Uranium

29a: U.S. Embassy Tehran cable 4198 to State Department, "Highly Enriched Uranium (HEU) Export to Iran," 12 May 1977, Confidential
29b: State Department cable 115011 to Embassy Tehran, "HEU Exports to Iran," 19 May 1977, Confidential
Source: Mandatory Review

The State Department's decision to put on hold an Iranian request for 20.2 kilograms of highly-enriched uranium [HEU] for the Tehran Research Reactor met with a skeptical response from DCM Miklos, who worried that it might "feed [Iran's] worst fears" about the U.S.'s reliability as a nuclear supplier. The HEU at issue was slated to refuel, and help increase the power level of, the Tehran reactor. Under existing agreements with Iran, however, the limit was 6 kilograms; moreover, Washington's concern about overseas inventories of HEU and the "special risk" that they posed influenced new guidelines requiring presidential approval for exports. According to Deputy of State Warren Christopher, the United States did not want to "impugn" Iran's nonproliferation intentions and was confident that Iran would understand U.S. motives. Moreover, negotiation of the nuclear power agreement would provide an opportunity to address the problem of the ceiling of HEU exports to Iran.

Document 30: Waiting for the Iranians to "Put All their Cards on the Table"
U.S. Embassy Tehran cable 5397 to State Department, "Audience with Shah," 20 June 1977, Confidential
Source: Mandatory Review

In June 1977, a new ambassador, career foreign service officer William Sullivan, arrived in Tehran, presenting his credentials to the Shah on 18 June. During their meeting, the Shah told Sullivan that he was ready to resume the nuclear power negotiations and expressed hope that the reactors would be sold. As Sullivan explained in his cable, he did not follow up on the Shah's observations because he wanted the Iranians to "put all their cards on the table" before using the guidance that President Carter had given him. Sullivan did not want to "look too eager." Moreover, he was concerned that U.S. government agencies had not fully digested President Carter's new policies and needed time to "catch up" so they would be ready for the negotiations with Iran scheduled to begin on 25 July.

The Shah's "specific disavowal of interest in reprocessing plant" met with a skeptical response from the cartoonist at ISA's Iran desk who drew a little picture of a bull next to those words.

Documents 31a-b: Final Agreement
31a: State Department cable 125971 to Embassy Tehran, "U.S.-Iran Nuclear Cooperation Agreement," 17 May 1978, Confidential
31b: Department of State cable 226045 to Embassy Canberra, "Provisions of US-Iranian Nuclear Agreement," 6 September 1978, Secret/Limdis
Source: Mandatory Review

Documentation on the U.S.-Iran nuclear negotiations during 1977 and early 1978 is scarce, pending future declassifications. While State Department officials had hoped that early Congressional action on White House nonproliferation objectives would expedite the agreement with Iran, Carter did not sign the Nonproliferation Act until March 1978. The month before, U.S. and Iranian officials had completed the negotiations, perhaps expedited by a brief conversation that President Carter had with the Shah during his visit to Iran in late December 1977. (This was the visit where Carter had famously referred to Iran as an "island of stability.") (Note 8)

In May 1978, the State Department sent a draft agreement to Tehran. Like the 1976 agreement, the objective was to avoid proliferation risks, but the Carter administration took a slightly different approach to reprocessing. In article 6, Iran would not reprocess spent fuel or enrich uranium supplied by the U.S. "unless the parties agree." This was not terribly different from the Ford administration's language that reprocessing must be "performed in facilities acceptable to the parties." The United States retained a veto. The key differences were in the separate note, which was more detailed than the 1976 version. Besides including language on physical security, expeditious NRC action on licenses, and international fuel cycle studies, the note provided alternative arrangements for spent fuel resulting from U.S.-supplied material: 1) storage in Iran, 2) storage in the U.S., or 3) storage, processing, or other disposition … in accordance with internationally accepted arrangements." The latter could involve reprocessing in the UK, France, or "other mutually agreed states and return of recovered plutonium in the form of fabricated fuel to Iran, under arrangements which are deemed to be more proliferation resistant than those which currently exist."

There would be no reprocessing in Iran under any circumstances and buy-back was no longer an option. Moreover, to a great extent, reprocessing in Western Europe could occur only if storage was not possible in Iran, the United States, or in Western Europe. According to a cable sent some months later, during the negotiations Washington wanted reprocessing in Western Europe to be "an option of last resort," but Tehran wanted it to be an "equal choice." What the Iranians feared was a discriminatory outcome: the "US would strike a deal with others to allow commercial-scale reprocessing subsequent to US-Iran agreement." To accommodate the Iranians on that point, without sacrificing nonproliferation objectives, Washington agreed to a separate paragraph which spelled out circumstances under which non-discriminatory treatment would be possible and reprocessing in Europe would be more than a "last resort." In any event, any such option would be "subject to US law which includes determination of no significant increase in the risk of proliferation associated with approvals for reprocessing."

Documents 32a-b:
32a: U.S. Embassy Tehran cable 7863 to State Department, "Reassessment of Iran's Nuclear Energy Plans," 17 August 1978, Confidential
32b: U.S. Embassy Tehran cable 9154 to State Department, "Nuclear Activities in Iran," 21 September 1978, Confidential
Source: Mandatory Review

By the early summer of 1978, senior U.S. and Iranian officials had "initialed" the nuclear agreement, but President Carter had not yet approved it, so it had not been formally signed by either party. State Department officials acted as if signing was a possibility, but the ongoing collapse of the Shah's regime put everything, including the Iranian nuclear program, up in the air. The Embassy interpreted an editorial on nuclear policy in Kayhan International as a sign that some in the government wanted to renegotiate the nuclear deal with Washington, partly because of the provisions on reprocessing. A month later, a new prime minister, Jafaar Sharif-Emami, was in charge and Etemad resigned his position as atomic energy chief, with other changes at the nuclear agency possible. Major cut-backs in government capital investment programs, the Embassy reported, have "essentially paralyzed the decision-making process in both AEOI and Ministry of Energy on matters nuclear." Except for the four reactors under construction, "Nuclear activity …has come to a halt." Nevertheless, Iranian officials told a local representative of the Westinghouse Corporation that the government wanted to work with the U.S. nuclear industry and that "the bilateral would certainly not be scrapped." That, however, proved to be wishful thinking; with major cities under martial law, a revolutionary crisis was unfolding that put an end to any possibility of U.S.-Iran nuclear cooperation.

Notes

1. Dafne Linzer, "Past Arguments Don't Square With Current Iran Policy," The Washington Post, 27 March 2005.

2. For useful background and analysis of nuclear proliferation policy during the 1970s, see J. Samuel Walker, "Nuclear Power and Nonproliferation: The Controversy over Nuclear Exports, 1974-1980," Diplomatic History 12 (Spring 2001): 235-236.

3. Special National Intelligence Estimate 4-1-74, "Prospects for Further Proliferation of Nuclear Weapons,"23 August 1974.

4. For a helpful overview, drawing on the earlier work of James Bill, Mark Gasiorowski, and Barry Rubin, among others, see Kenneth Pollack, The Persian Puzzle: The Conflict Between Iran and America (New York Random House, 2004), 101-108. For Rockefeller, see Asadollah Alam, The Shah and I: The Confidential Diary of Iran's Royal Court, 1969-1977 (New York: St. Martin's Press, 1992), 476.

5. William C. Potter and Gaukhar Mukhatzhanova, "Divining Nuclear Intentions: A Review Essay," International Security 33 (2008): 160-161.

6. Andrew Scott Cooper, “Showdown at Doha: The Secret Oil Deal That Helped Sink the Shah of Iran,” Middle East Journal 62 (Autumn 2008): 582-58; Walker, "Nuclear Power and Nonproliferation," 235-236.

7. Public Papers of the Presidents of the United States Jimmy Carter 1977, Book I (Washington, D.C., Government Printing Office, 1977), 582-584. See also Walker, "Nuclear Power and Nonproliferation," 237-239.

8. Gary Sick, All Fall Down: America's Tragic Encounter with Iran (New York: Random House, 1985), 29.