Foreign Relations of the United States, 1977–1980, Volume XI, Part 1, Iran: Hostage Crisis, November 1979–September 1980

275. Summary of Conclusions of a Special Coordination Committee¹

Washington, May 2, 1980, 9:15–10:30 a.m.

SUBJECT

• Iran

PARTICIPANTS

• State

  • Acting Secretary Warren Christopher (very briefly at beginning)
  • Harold Saunders*
  • Roberts Owen*

• OSD

  • Secretary Harold Brown
  • Frank Kramer*

• JCS

  • General David Jones*
  • Lt. Gen. John Pustay

• CIA

  • Admiral Stansfield Turner
  • Frank Carlucci

• Treasury

  • Secretary William Miller*
  • Robert Carswell*

• Justice

  • Attorney General Benjamin Civiletti*

• White House

  • Zbigniew Brzezinski
  • David Aaron
  • Hedley Donovan*
  • Lloyd Cutler*
  • Henry Owen*

• Office of the Vice President

  • Denis Clift*

• NSC

  • Gary Sick

*Present only for items 1–6

SUMMARY OF CONCLUSIONS

1. Claims Legislation. The legislation is currently in draft,² and a number of points of disagreement are being worked out at the staff level. The key question of a policy nature is whether the legislation should contain standby authority to vest (seize) assets. Mr. Cutler noted that it was previously decided not to include such a provision. He wondered if, in the wake of the rescue attempt, we may not wish to toughen the legislation by adding such authority. Otherwise, the legislation provides nothing more than administrative regulations for handling claims which would be resolved either by litigation or negotiation with the Iranians. (C)

Secretary Miller strongly opposed including vesting authority. He did not believe that this action would help free the hostages, but it does have very serious disadvantages for us by adding to the world view that the U.S. is unreliable as a recipient of deposits. Certainly such authority should not be put in merely for show; and if we really intend to use it—especially to vest assets abroad—there will be serious controversy with our friends and allies. One of the effects of vesting assets would be to eliminate immediately the present system of offsetting claims against deposits. Those institutions which have claims but no attachable assets will press hard for vesting out of pure self-interest. However, it will be a net loss to the United States and would have an adverse effect on the dollar. Miller hoped that we would not act in a way which would do irreparable harm to Western financial institutions in the interest of a short-term advantage. (C)

Secretary Brown acknowledged the clear disadvantages, but noted that we must be seen to be doing something. The more we can do in the economic or other fields, the less pressure there is on us to do something else. Paying compensation to the hostages would be useful in that regard. He thought the rest of the world would understand that this is a totally unique situation and not aimed at others, e.g. Saudi Arabia. Dr. Brzezinski said that the question was what it does for the Iranians and what it does for the President domestically by showing concern and taking a tough line. It was true that it would not budge the Iranians. There is a real question whether this is the moment. He thought that this single step now gave the appearance of dribbling out our actions. Perhaps it should be reserved for use later as part of a package. (S)

Henry Owen agreed with Secretary Miller that such action would hurt the dollar, and the symbolism of a weakening dollar would also hurt the President. Mr. Cutler made clear that there was no consideration of seizing assets outside the United States. We have no authority to do so. He acknowledged that this action will probably not budge the Iranians, but that was true of each individual act we have taken in the sanctions area. If the situation was sufficiently grave to justify the risk of a rescue mission, he thought we could take this risk. (S)

The Attorney General said he believed there were advantages in the legislation as now proposed. It provides the basis for settling claims by hostages and others. Inclusion of standby authority to vest would immediately result in pressure to exercise the authority so payment can begin. He thought such action now would be precipitous. We have not yet even reviewed the results of the census of claims. (C)

Mr. Saunders argued that vesting assets at this stage would greatly complicate negotiations with the Iranians later, since they would demand that all the seized assets be returned as part of the hostage release. Once the President had taken this action, it would be difficult to back down and return the seized assets. Secretary Brown disagreed. He thought that would be a small price to pay for return of the hostages. (S)

The SCC agreed that a decision was not required immediately. The legislation will be completed by next week, and the SCC will return to the question at that time. (U)

2. Status of Allied Sanctions and Commitments. The Department of State circulated a brief paper summarizing the status of the allies’ position on sanctions at this point. The SCC agreed it was very useful and that it should be forwarded to the President (attached at Tab A).³ (U)

3. Diplomatic Strategy. Dr. Brzezinski noted that the strategy paper prepared by the Department of State had been discussed at the Foreign Policy breakfast just prior to the SCC meeting.⁴ The President wishes to read the paper himself. The subject will be discussed at Camp David tomorrow, so the President asked that the SCC not present formal recommendations at this point. (C)

Mr. Saunders reviewed the main points of the paper for the SCC, noting that the intent was to begin a process of reopening lines of communication with key individuals in Tehran. No proposals would be offered until we had a feeling for the Iranian response to our feelers. The problem in the past had been the division between the Beheshti faction and Bani-Sadr which had prevented a unified position by the Revolutionary Council. Our objective, recognizing the severe limitations, should be to promote a unity of views in Tehran that the release of the hostages is critical to Iran’s own interests. He noted that Archbishop Capucci might be very helpful to us. Dr. Brzezinski noted that he might be able to assist personally. He had just received a personal letter from the Pope in Polish. Mr. Saunders agreed that the Vatican was one channel of influence in Capucci. One of the French lawyers had also represented Capucci in his trial for gun-running in Jerusalem and could be helpful.⁵ Secretary Miller recommended an attempt to contact religious authorities in Mashhad and other areas who were influential but had been eclipsed by Khomeini. (S)

Admiral Turner commented that the odds of accomplishing anything for the hostages in this manner were extremely slim. He wondered if we did not appear weak by starting negotiations again immediately after the failure of the rescue attempt. The Iranians will probably ask us to make more concessions. Secretary Brown said we want to establish contacts with a broad range of Iranian authorities in any event, since that will be important in the longer term. Mr. Aaron observed that we need an effective program which focuses public attention not only on the hostage issue but the larger dangers of a possible Soviet takeover. (S)

Dr. Brzezinski said he was concerned that we were not focusing beyond the immediate crisis. He saw the danger of Iran merging with Afghanistan. We could find ourselves in the situation where the hostages are rescued by Soviet tanks. The key question is whether we wish to keep the pressure up or deescalate. Can we maintain a high level of pressure while continuing on the diplomatic track? (S)

Mr. Saunders noted that Bani-Sadr has called a large meeting of Islamic and Nonaligned nations in Tehran to “view the evidence of U.S. aggression.” Without prejudice to the outcome of policy discussions this weekend, we will need to get messages out to key parties if we wish to have any influence on the event or possibly turn it to some useful purpose. He proposed selecting half a dozen key Islamic and Nonaligned leaders and sharing our thoughts with them in advance of the meeting. Mr. Aaron suggested using the themes developed in the strategy paper, for them to present in Tehran. All agreed. (C)

Approve⁶ Avoid contact or association with this event

4. Legal Action Concerning the Shah. The judge in the New York court suggested in a bench conference that the issue should be resolved by Iran’s release of the hostages and some payment by the Shah. Mr. O’Dwyer (representing Iran) is now seeking permission to go to Tehran, while Mr. Jackson intends to meet with the Shah. All agreed that, if the Shah is unwilling to make an offer, it would be pointless—and possibly counterproductive—to raise the issue with the Iranians who are likely to demand payment of billions of dollars by the Shah. (C)

5. Islamic Conference. Mr. Cutler had been informed by the Saudi Ambassador that the forthcoming Islamic Conference will be held in Islamabad on May 17, the same date as the anticipated imposition of sanctions by the allies. If the two events coincide, the Conference can be expected to denounce the sanctions. State acknowledged the point and said this would be taken into account.⁷ (C)

6. Rescue Mission Debrief. General Jones gave a brief summary of the rescue operation for the SCC, responding to the many rumors that are flying around. Secretary Brown said they are preparing to put something out in organized form which would assist in responding to the many queries and rumors. (U)

(At this point the meeting was reduced to those involved in the rescue operation.)

7. [less than 1 line not declassified] Dr. Brzezinski noted that CIA had prepared a paper. Since Mr. Christopher could not be here, we could not discuss it in detail. It was agreed that a copy of the paper would be delivered to Christopher for his personal information, and the subject would be taken up by the SCC early next week.⁸ (S)

Admiral Turner noted that the State Department had been maintaining contact with several individuals who are in contact with Admiral Madani. They are interested in returning to Iran. The SCC agreed that there was no objection to their returning to Iran at this point since we wanted to keep the contacts open. (S)

8. Testimony on the Rescue Operation. Secretary Brown said that he had previously believed it would be impossible to avoid testifying on details of the rescue operation beyond the termination point. He now believed that it would be difficult, but perhaps not impossible to hold the line with the SFRC and the SASC. It was obviously going to be far more difficult for the DCI to hold the line with the Intelligence Oversight Committees. Admiral Turner agreed, noting that the Committees are building up to a major confrontation on their right to be informed of the CIA role in detail. The SCC agreed that there were certain aspects of the operational plan which we would not wish to reveal, since they might be valuable in a future effort. It was difficult to determine exactly which points we would wish to hold back. Admiral Turner agreed reluctantly to provide a copy of his testimony for next week for review, noting the problems of submitting CIA testimony for White House clearance. He was concerned that a major confrontation with the Committees could result in undesirable new legislation. The Committee was already very angry and had threatened to cut off CIA Reserve funding. (S)

Dr. Brzezinski acknowledged the problem, but observed that a review of the actual testimony was the only means of clearly identifying those elements which should be protected. It needed to be reviewed by the group and, if there were areas of disagreement, it should be referred to the President for decision. He suggested that the hearing be postponed from Tuesday⁹ until later in the week if possible to permit a review. Admiral Turner said the testimony could be provided today. The SCC agreed to review it on an urgent basis. (S)

Approve¹⁰ Other

[Omitted here is material on Afghanistan.]

1. Source: Carter Library, National Security Council, NSC Institutional Files (H–Files), Box 112. Top Secret. The meeting took place in the White House Situation Room. Carter wrote in the upper right corner: “Zbig. J.”
2. The draft is attached to a May 1 memorandum from Owen to Cutler. (Carter Library, Records of the White House Office of Counsel to the President, Lloyd Cutler’s Files, Box 33) Explanations of the draft legislation and the arguments on expanding it to include vesting are in two memoranda: The first is a memorandum from Owen to Christopher, April 30. (Department of State, Records of David D. Newsom, Under Secretary of State for Political Affairs, Subject Files, 1978–1981, Lot 81D154, Iran Claims/Assets Litigations) The second is a memorandum from Cutler to the SCC, May 1. (Carter Library, Records of the White House Office of Counsel to the President, Lloyd Cutler’s Files, Box 13)
3. Tab A, not attached, is “Allied Response on Iranian Sanctions,” a chart of sanctions and the response of U.S. allies in “Yes/No” format. It was submitted to Brzezinski under an April 30 covering memorandum from Tarnoff. (Department of State, Records of David D. Newsom, Under Secretary of State for Political Affairs, Subject Files, 1978–1981, Lot 81D154, Economic Sanctions Against Iran) The paper had been requested at the April 29 SCC meeting. See Document 271.
4. See Document 273. No minutes were taken at the foreign policy breakfasts.
5. Bourguet.
6. Carter approved this option with a checkmark and initialed in the right margin.
7. In the left margin, Carter wrote: “No change in date.”
8. See Document 277.
9. May 6.
10. Carter approved this option with a checkmark and initialed in the right margin.