Carter immediately established diplomatic relations with the Khomeini regime, and in the end, as with the Bolshevik Revolution in 1917, the most organized, ruthless, and radical forces prevailed in Iran, even though Khomeini’s forces were nowhere near a majority in February 1979. To the Carter administration, the idea of a popular revolution that would lead to a theocracy was ludicrous. The US and the world were shocked twice: first with the popular revolution in Iran, and then that a theocracy took control. Nothing like that had occurred since the Reformation, and secular observers like Carter just could not fathom the possibility.
Carter and his top officials held out hope that the moderates in the transitional Khomeini government would survive, which therefore would result with Iran playing ball with the US; that proved to be fanciful thinking. The real battle in Iran was an ideological power struggle over the constitution which took well over half-a-year, but in essence the moderates had no chance, in that they brought bananas to a knife fight.
On 4 November 1979, what Khomeini called the 2nd Revolution started when the US Embassy was overrun by radicals, and 50+ Americans were taken hostage. The result of that hostage-taking was that Khomeini was able to solidify his hold on power in Iran The US Embassy in Teheran normally had over 1000 workers, but that number had been reduced to around 70. The US Embassy’s security was reinforced in terms of the building and the grounds, and food was stored for a prolonged siege. But even though additional Marines were brought in, the embassy was not an impenetrable fort, and it is the host nation that is the guarantor of security. Added to the mix was that the entirety of the US Embassy in Teheran was over 27 acres. Khomeini had isolated himself in the city of Qum, and was determined to never allow a US presence in Iran, which he found toxifying. And then there was the decision to allow the Shah of Iran into the US, where he and his highly-placed US supporters cannot escape blame.
Khomeini was initially very pleased that the Shah had left Iran, even if it was for the US. But on 22 February 1979, when the Shah told the US Ambassador to Morocco he was ready to head to the US at long last, the CIA station chief in Morocco was told to inform the Shah to delay his departure. By then, Carter had been directly advised that if the Shah came to the US, hostages would be taken at the US Embassy in Teheran again, and this time their release would be dependent on turning over the Shah to Khomeini. Carter was more than happy to let the Shah stay in Morocco, but of course, the Shah had worn out his welcome in Morocco, and he would not take no for an answer in terms of delaying his arrival to the US (which he had been doing for weeks anyway).
David Rockefeller, put pressure on Carter, indignant that a decades-long ally of the US was treated in a disrespectful manner. Kissinger and Rockefeller arranged for the Shah’s temporary home in the Bahamas, and then to a resort just outside of Mexico City, and then to Panama. Finally, Sadat sent a plan to Panama to take the Shah back to Egypt. By then, the Shah had decided that it was Carter’s fault that he was no longer the ruler of Iran, and Kissinger fanned those flames.
It was during that period that Iran warned Carter there would be trouble if either the Shah or his wife were allowed into the US. Carter was told by a highly-placed official in the US Embassy in Teheran, via a secret cable, that it would be foolhardy to allow the Shah into the US, as it would endanger Americans in Iran. That embassy official (Bruce Laingen) correctly forecast that in order to deflect receiving blame for the many problems facing Iran, Khomeini would find ways to make America the nation’s scapegoat. Further cables by that Laingen indicated that even though Khomeini’s loyalists were starting to take power in the government, it would take quite some time to settle who was in control of the nation. Laingen also stated that the Shah would have to officially renounce his throne, which was something the Shah absolutely refused to do.
On 18 October 1979, David Rockefeller, believing that he was acting on humanitarian ground (but in actuality it was a very manipulative action) , told Carter that the Shah had cancer. The Shah had kept is illness secret since finding out in 1974 during a ski trip to Switzerland (he didn’t even tell his family). It was another staggering lapse in intelligence on the part of the CIA which lasted five years.
In Iran, Khomeini and his flock were fearful that the US would re-install the Shah in power if he was admitted to America. On 21 October 1979, at Camp David, Carter decided to notify Iran that he was allowing into the US for medical reasons only, but Khomeini et al had no way of knowing that the Shah was really ill. Carter had a monstrous dilemma on his hands, in that not allowing the Shah in the US meant there would not be any American hostages in Iran. However, once word got out that the Shah required entry and was very sick, Carter knew that he would be blamed for betraying an ally and also seen as being weak.
Carter was not provided very good information by his circle of advisors in that the Shah could have been well-cared in Mexico City. The medical care that the Shah received in NYC was actually substandard for what should have occurred in terms of treatment, since the doctors didn’t want any negative publicity for using experimental drugs/procedures, so the Shah’s treatments were very conservative. The admission of the Shah to America was the spark that set off the 2nd Revolution in Iran and solidified Khomeini’s power base, since the 1953 US-backed coup that restored the Shah into power loomed large in the minds of millions of Iranians.
On 1 November 1979, protests around the US Embassy were the most intense so far, and to this day it is hard to comprehend why the 70+ Americans weren’t evacuated at that moment. On 4 November 1979, the radical students stormed the 27 acre complex that was the US Embassy; the Marines used tear gas to no avail. Khomeini didn’t order the attack, he but he most certainly didn’t try to stop it or end it.
Khomeini concluded that it would be a poor political move to stay silent, so he publicly applauded the radicals, calling it a second revolution, and as a result, those radicals became instant national heroes. Khomeini had his finger on the pulse of the Iranian people, and he knew that the vast majority were anti-US. The storming of the US Embassy rallied Iranians to Khomeini’s fold, and he used the event to consolidate his power. The US hostages were never more than pawns in an internal power struggle in Iran.
Once Carter made it certain that he was unwilling to use military force to rescue the hostages, or even a show of force, he lost possible leverage with Iran. Carter was able to negotiate a peace between Egypt and Israel, but Khomeini so hated the US he refused to negotiate at all, which meant that Carter was powerless. The fact that the Carter administration had been outmaneuvered by a 76 year old Islamic radical cleric gave serious juice and momentum to Reagan’s Presidential campaign.
Until Carter authorized the rescue mission in April 1980, he followed SecState Cyrus Vance’s advice of pursuing negotiations. The economic sanctions lacked bite since our traditional allies didn’t follow suit. Zbig wanted a blockade on Kharg Island, the nexus point for Iranian oil exports, the lifeblood of the nation’s economy. Zbig even suggested that the US heavily mine the harbor as well as the waters around Kharg Island.
Addendum: The Media and the Iranian Hostage Crisis . . .