As early as 7 January 1978, protests started against the Shah in Iran that gained in momentum and intensity as the weeks passed, with Khomeini pulling many of the strings from exile. To the CIA, the protests were a result of the Shah’s modernization, not his close ties with the US. So, the question for Carter was how best to respond to events in Iran that called into question four decades of unwavering support for the Shah, and a large part of that answer was that Carter approved most of the Shah’s military requests. The forces loyal to Khomeini sensed weakness in the Shah, and it would be the Islamic radicals, not the secular opposition, that would seize power after the Shah left Iran. On 5 September 1978, thousands of protesters filled Jaleh Square in Teheran, and the Iranian army killed hundreds.
Ironically, Khomeini would take full advantage of the freedom of the press in France which was something he would not allow once he established an Islamic State in Iran. Khomeini located himself just outside Paris on property owned by an Iranian activist, and Khomeini erected a tent on the grounds for prayers, sermons, and especially for media events. Every day Khomeini’s entourage updated the cleric on what had been done and said by the Shah and President Carter.
After the Watergate Scandal, the CIA no longer used assassination as a tool, so other eans had to be used to contain Khomeini. US diplomats could have pressured the French government to refuse Khomeini’s request to return to Iran, and the CIA could have spied on Khomeini and gathered quality intelligence. Carter was preoccupied with among other things finalizing the treaty between Egypt and Israel, and Carter hadn’t yet held a specific meeting regarding the Shah and the situation in Iran, in large part because he wasn’t properly apprised of the increasingly revolutionary atmosphere in Iran.
Carter asked Senate Majority Leader Robert Byrd (D; WVA), who was already in the Middle East, to travel to Teheran, as was SecTreas Blumenthal, and both separately reported dire news. Added to the mix was another unscripted blunder by Carter. On 7 December 1978, Carter was asked by a reporter if the Shah could survive the revolution, and Carter in effect disavowed the Shah, saying that the situation was in the hands of the Iranian people. Whether or not Carter knew it, that statement meant that he had in effect endorsed the revolution in Iran.
As the Shah’s regime crumbled, on 27 December 1978 he appointed a new prime minister, but at that point the Shah only had two choices: leave the nation or crack down hard with the military. At the same time, Khomeini was trumpeting to the world’s media that he would allow free elections in his Islamic State as well as other freedoms (e.g. freedom of the press). On 16 January 1979, the Shah left Iran, and also on that day Carter admitted to Congressional leaders that there was nothing the US could do and that he didn’t know how events would play out in Iran.
When the Shah left the throne after 37 years in power (technically, he didn’t actually renounce his throne), he blamed everyone but himself, and by that point, he was well past the point of being willing-and-able to shed oceans of blood to hang on to power. Carter was accused of “losing” Iran, which simply wasn’t true, just as Truman never “lost” China in 1949. The Shah lost his own nation, and there were limits to what a President could do to change or maintain a regime, as was seen in the early-1960s with Fidel Castro in Cuba. But the Carter administration didn’t exactly cover themselves with glory, with the lack of quality intelligence concerning Iran the most glaring example.