a government guesthouse that had formerly belonged to a Japanese auto company. In factionalized Iranian politics, a deal with an American company was a considerable victory for Rafsanjani. The contract could not have been signed without the approval of the Supreme Leader, Ayatollah Ali Khamenei. But that approval must have been very reluctantly given. For Khamenei deeply hated what he called the “Great Arrogance”—the United States—which he declared wanted to impose its “global dictatorship” on Iran. In his worldview, as he once said, that “enmity with the United States” was essential to the survival of the regime.15
The internal struggle within the Iranian leadership may well be why Conoco did not know, almost to the last moment, whether it would win the contract. The competitor, the French company Total, was told that Iran had chosen an American company to send a “big message.”16
Conoco executives had briefed State Department officials a couple of dozen times over the course of its negotiations with Iran, but those briefings turned out to be insufficient. Members of Congress attacked the deal with fury. Secretary of State Warren Christopher, who years earlier had led the arduous negotiations for the release of the American hostages, now denounced the oil deal as “inconsistent with the containment policy.” He added that in the Mideast, “Wherever you look you find the evil hand of Iran.” The deal did not even survive two weeks. On March 15, 1995, President Clinton signed an executive order forbidding any oil projects with Iran. The deal was seen in Washington not as an opening, an opportunity for economic engagement, but rather in the context of Iran’s support for terrorism, exemplified vividly in the attack on a Jewish center in Buenos Aires several months earlier that had killed 85 and wounded hundreds of others. Moreover, at that time, the United States was trying to persuade other countries to restrict trade with Iran.17
With Conoco abruptly forced to withdraw, the deal went instead to Total. Subsequently, at an OPEC meeting in Vienna, Gholam Reza Aghazadeh, Iran’s then oil minister and a Rafsanjani man, summoned two American journalists to his suite in the middle of the night. Speaking in a slow, gravelly tone amid the shadowy light, he talked about the now failed deal and asked, “What is it that I don’t understand about America? Tell me what I don’t understand about America.” Why had the United States rejected the opportunity to open a door? The answer was that, whatever the signal, the door could not be opened; terrorism made economic engagement impossible. Soon after, a 1996 terrorist assault in eastern Saudi Arabia, which was apparently engineered by Iran’s own Hezbollah, killed 19 U.S. servicemen and injured another 372. That seemed to seal the door even more tightly shut.18
But then in 1997, unexpectedly, some possibility of normalization emerged with the overwhelming—and totally unanticipated—electoral victory of Mohammad Khatami as president. A cleric, Khatami was a reformist who wanted to move toward what has been called a “proper constitutional government.” He was also an accidental president, having previously been dismissed as minister of culture for being too lenient toward the arts and the film industry, and then relegated to an insignificant position as head of the national library. His presidential victory seemed to represent a rejection of the harsh theocracy by a large majority of the public. After his election, he reached out to the United States with words about a “Dialogue of Civilizations.” After some delay, Washington positively reciprocated with encouraging words of its own, including a call by President Clinton for an end to “the estrangement of our two nations.”19
It was difficult, however, to assess how to deal with a Tehran in which power was divided between the president and the Supreme Leader. A coalition of hardline clergy, Revolutionary Guards, security services, and judiciary—all under the control of the Supreme Leader—mounted a determined campaign of violence and intimidation to block Khatami’s reforms, neutralize his presidency, limit his flexibility on foreign policy, and undercut his chances for achieving some degree of normalization.20
Thus it was all the more surprising when, in the immediate aftermath of 9/11, Tehran stepped forward to provide limited support for the U.S. campaign in Afghanistan. The Iranians saw the Taliban as an immediate and dangerous enemy that mobilized Sunni religious fervor against Iran’s own Shia religious zeal, and it was an enemy that the United States was prepared to eliminate. Iran provided intelligence about the Taliban, urged the U.S. to move faster to attack the Taliban, cooperated militarily