35. Summary of Conclusions of a Special Coordination Committee Meeting1
SUBJECT
- Iran
PARTICIPANTS
- The Vice President
- Hamilton Jordan
- Jody Powell**
-
State
- Secretary Vance
- Warren Christopher
- Dave Newsom
- Harold Saunders
-
Defense
- Secretary Brown
- Graham Claytor
-
White House
- Zbigniew Brzezinski
- David Aaron
-
CIA
- Admiral Turner
- Frank Carlucci
-
Justice
- Attorney General Civiletti**
-
Treasury
- Secretary William Miller**
- Robert Mundheim**
-
Energy
- Secretary Charles Duncan**
- John Sawhill**
-
NSC
- Gary Sick
- Bill Odom
**Present for discussion of domestic issues only.
SUMMARY OF CONCLUSIONS
Domestic Issues:
1. Hostages. Secretary Vance briefed on the announcement this morning that women and blacks not guilty of espionage would be released.2 The decree by Khomeini has been confirmed by the students. Arrangements have been made with the Swiss to fly them out when the release actually occurs. They will go to Frankfurt for medical exami[Page 78]nation and a rest of a day or so before coming back to the U.S. We expect about 10–12 people. We do not know how the transfer will actually take place. The hostages may be released to the PLO or some other intermediary. (C)
2. Demonstrations. The Attorney General believes that the ruling yesterday permitting demonstrations will be upheld by the Circuit Court on appeal. However, in view of the strong belief of the Secretary of State that the danger to the hostages created by any incidents is very great, the ruling will be appealed. (U)
3. Iranian Assets. Transactions involving the FMS trust fund under control of the Department of Defense will be licensed. Operation of the Bank Melli in New York was unilaterally assumed by New York authorities. Secretary Miller believed this was unfortunate, but it is now an accomplished fact. The Iranian Embassy officials state that they need $20 million per month to maintain remittances for students in this country. Treasury is still investigating the actual procedures used, but intends to authorize new Iranian funds (i.e. beyond those blocked by the action earlier this week) to pay for these remittances as well as financial obligations.3
Iran also holds accounts in foreign branches of U.S. banks in currencies other than dollars. These amount to $300–500 million total. Continued blocking of these assets will intensify the conflict of laws problem, e.g. preventing transactions in British pounds in a London bank. The SCC agreed with Treasury that these funds should be unblocked.4
The British have thus far refrained from issuing any counter order and are being generally cooperative. Secretary Miller intends to stop in London for further discussions on his way back from the Middle East. The latest figures on total Iranian assets are as follows: $1.2 billion in the Federal Reserve (hard figure); $5.9 billion in foreign branches of U.S. banks. The $5.9 billion includes the foreign currency accounts of $300–500 million and may include double counting of some oil payment accounts of as much as $1 billion. Iran has claims of about $1.8 billion on U.S. banks, so the net advantage in U.S. favor is about $5 billion. Other claims may also appear, including up to $1 billion of U.S. direct investment in Iran. The Export-Import Bank has a technical default on an Iranian loan for failure to meet a payment of $2,000. Treasury intends to proceed very deliberately in declaring a default since Iran may have been unable to make the payment as a result of our action. Private banks, however, may declare default on Iranian [Page 79] loans, and we have no authority or any inclination to interfere in what is a private banking matter. Thus far there has been no attempt to interfere with U.S. accounts in Iran. (C)
4. Energy. Secretary Duncan drew attention to press indications that we are requesting other nations not to purchase the oil freed by our embargo. He noted that it was in our interest to permit this oil to enter the world market. All agreed that we would not attempt to interfere with contractual purchase of the oil, but no public statement is necessary.5 (C)
5. Visas. Dr. Brzezinski relayed the President’s approval of postponing revocation of visas until Monday. (C)
Political-Military Issues
1. Security. The Attorney General reported that preliminary evidence resulting from a search of the premises of the Iranian students arrested in Baltimore suggests that there may be some truth in an earlier report that Khomeini has ordered agitators in this country with false documentation and specific instructions to stir up violence. There may be a security issue separate from the prior decision to revalidate visas. (S)
2. White Paper. The Department of State, in coordination with the NSC, will prepare a White Paper on administration actions dealing with Iran.6 (C)
- Source: Carter Library, National Security Council, NSC Institutional Files (H–Files), Box 106, SCC 204a Iran. Top Secret. The meeting took place in the White House Situation Room.↩
- In a November 16 telephone conversation at 5:30 p.m., Dean informed Saunders that Khomeini would agree to release women and African-American hostages because “as far as the Blacks are concerned their release is on the grounds that they are underdogs in US and sympathetic supporters of the PLO,” and the release of the women “is consonant with mercy and compassion which characterize Islam.” (Department of State, Official Files of [P] David D. Newsom, Under Secretary of State for Political Affairs, Lot 82D85, Iran 1979) The White House issued a brief statement on November 17, welcoming the development and urging Iran to release all remaining hostages. (Public Papers: Carter, 1979, Book II, p. 2141)↩
- Carter approved this item with a checkmark.↩
- Carter initialed in the margin next to this paragraph and approved the item with a checkmark.↩
- Carter approved this item with a checkmark and initialed next to it.↩
- Carter wrote “good, expedite” in the right margin.↩