An Informal Empire

Although British commercial interests in Persia were established as early as the 1500s, the country took on new importance in 1908, when gold magnate William Knox D’Arcy won concessionary rights for the exploitation of oil and struck rich, with the Anglo-Persian Oil Company being founded in 1909. The chief source of oil for the Admiralty, the British government became majority shareholders in 1914 and rechristened it the Anglo-Iranian Oil Company (AIOC) in 1935. Today, it is known as BP.

Although Iran was never a colony, it nonetheless bore the weight of British imperialism. Through capital, corruption, and coercion, the AIOC and the diplomatic service ensured that Iran was subsumed into the “informal empire” and its oil industry operated for Britain’s benefit. In 1937, the AIOC produced over 10 million tons of oil, returning £7.4 million in net profits and £1.6 million in British taxes. The Iranian government received just £3.5 million — and in some respects, this was a good year, since in 1931, they received a figure equivalent to barely 12 percent of the AIOC’s annual profits.

The flagship Abadan oil refinery was among the empire’s most profitable assets but relied on local workers — including child laborers — who endured squalid conditions in the workplace and the company’s inadequate housing. Following visits to “puking Abadan” and Tehran, Dylan Thomas wrote viscerally on conditions, drawing sharp contrasts between the company’s tennis and polo clubs (off limits to non-European workers), the open sewers in the streets, and the distended stomachs of local children.

To preserve its political stability, the company built a network that included politicians, newspaper editors, and tribal warlords. They employed Herbert John Underwood, a former colonel in the Indian Army with links to British intelligence, to oversee informers among the workers and distribute weapons when required. Although the Labour government under Clement Attlee erred towards coercion and institution building over outright control, they too had planted intelligence operatives, financed the dissemination of propaganda to improve Britain’s image and meddled deeply in Iranian politics.

Nationalization Crisis

Throughout the 1940s, opposition to British exploitation grew with trade unionism, Marxism, and popular nationalism. The lopsided Anglo-Iranian relationship had, nationalists argued, kept Iran weak, undermining the material conditions of its population and creating a servile political class — charges that were difficult to deny. By 1951, the movement was insatiable and Mossadegh, the de facto leader, became prime minister on April 28, 1951. Just three days later, the edifice of British power in Iran crumbled as the AIOC’s assets were expropriated in the name of the people. Iran may not have been a colony, but Mossadegh had dealt the empire a bloody nose.

At the Foreign Office and the AIOC’s headquarters on Finsbury Circus, there was no question that this action could be allowed to stand. In an initial show of strength, export-import restrictions were placed on Iran by the British, along with clear warnings that no third country should intervene or offer Tehran anything by way of trading or diplomatic support.

Beyond this initial step, however, how Britain should respond was contested. Foreign Secretary Herbert Morrison and Defense Minister Manny Shinwell were particularly bombastic advocates of an invasion, with Morrison hoping that military action would not only safeguard Iranian oil but also “produce a salutary effect throughout the Middle East and elsewhere, as evidence that United Kingdom interests could not be recklessly molested with impunity.” Overruled by Attlee, it appears on first reading that a negotiated compromise was the Labour government’s preferred solution.

In truth, the groundwork was being laid for Mossadegh’s removal by covert means. Perhaps the first figure to propose this was Ann Lambton, an academic and press officer at the British Embassy in Tehran, who discussed how a coup might be facilitated with Eric Berthoud, an AIOC executive turned diplomat. The British must, Lambton argued, change the “climate” in Iran and destabilize Mossadegh’s regime while it was still in its infancy.

On her recommendation, Robin Zaehner was sent to Tehran. The annals of British intelligence history are littered with eccentrics, but even among these Zaehner stands out. A diminutive Oxford don in milk-bottle glasses, Zaehner’s passions ranged from Zoroastrian mysticism to Tommy Steele. His talents for languages (he reportedly spoke more than twenty) were matched only by his love of gin and gossip. According to Zaehner’s assistant, Norman Darbyshire, the mission was simple: “go out, don’t inform the ambassador, use the intelligence services to provide you with any money you might need and secure the overthrow of Mossadegh by legal or quasi-legal means.”

Zaehner rapidly established a network running throughout every level of Iranian society: in the royal palace, the Shah’s secretary Ernest Perron was a ready source. Through him and other courtesans, the British hoped to cajole the monarch into supporting a coup against Mossadegh. His ambitious and powerful sister, Ashraf, took on a similar role, helped no doubt by wads of cash and a mink coat supplied by Darbyshire.

Crucial to British operations were Seyfollah, Qodratollah, and Assadollah Rashidian, Anglophile brothers who were adept at using manipulation, bribery, and intimidation to ensure friendly media stories were distributed. According to CIA agent Richard Cottam, the Rashidians’ reach extended to around 80 percent of Iran’s newspapers. British diplomat Sam Falle euphemistically suggested that the brothers also played a key role in “passing a few demands to a likely lad” and “paying a crowd.”

In reality, they were responsible for organizing the anti-nationalist movement’s street-fighting wing. In the name of toppling Mossadegh, they recruited thugs from street gangs, forged links with the neo-Nazi SUMKA, and wooed Islamic fundamentalists. They received more than £1.5 million for their efforts, much of it in tightly wrapped notes doled out by Zaehner from a biscuit tin.

The First Coup

By early 1952, street violence became common as Rashidian-sponsored gangs clashed with nationalists. Rumors swirled that Mossadegh had aligned himself with communists — perhaps even with the Soviet Union — and would use ballot rigging to safeguard his position in forthcoming elections. The veracity of these claims is dubious, but they served to sew mistrust and deepen divisions within Mossadegh’s coalition. Conscious of the plotting against him, he ordered the closure of Britain’s Iranian consulates. Assessing the turbulent situation, Ambassador Sir Francis Shepherd reported that “the only hope of getting rid of Dr. Mussadiq lies in a coup d’etat,” urging that immediate action be taken to insert a dictator. The man selected for the task was Ahmad Qavam, a four-time former prime minister and confidant of Robin Zaehner, who promised to suppress the nationalist movement through force.

The operation rested on the Shah’s ability, as head of state, to dismiss Mossadegh and appoint his successor, offering them an immediate source of legitimacy. However, despite months of inducement from British agents, the monarch continued to vacillate. By early summer, a political vacuum was opening; sensing an opportunity, Mossadegh demanded he be given extraordinary powers to deal with plots against him, including oversight of the armed forces, or he would resign. With pressure coming even from within the royal household, the Shah refused and Mossadegh left office on July 16, 1952, issuing a statement that lay blame for his resignation at the palace gates. Believing they had snatched victory from the jaws of defeat, the British began discussions with the AIOC for a new oil settlement.

Such talks were most premature. As news of Mossadegh’s resignation circulated, thousands of his supporters poured onto the streets to demand his return. Buoyed by calls for “holy struggle” against the British, thousands descended on parliament to be met with gunfire, leading to at least twenty deaths. Terrified by the prospect of revolution, the Shah withdrew soldiers and Qavam resigned after less than a week in office. The coup’s failure was underscored when Mossadegh not only returned to office but was granted the additional powers he had previously demanded.

Preparing the Ground

Although the British government returned to the negotiating table, leading figures like charge d’affaires George Middleton remained adamant that Mossadegh had to be removed. This couldn’t, Middleton argued, be achieved through “normal constitutional methods,” necessitating further coup planning. However, with his position seemingly secure, Mossadegh now faltered. He withdrew from talks with Britain, declared previous agreements invalid, and refused to appoint monarchists to his cabinet. To British and American officials, these steps were proof that Mossadegh was beholden to the mob and ideologically vain, and British intelligence agents began drip-feeding American counterparts with “evidence” that he was aligning with Moscow.

Although discouraged by Qavam’s failure, Assadollah Rashidian continued to plan Mossadegh’s removal. Following discussions with conservative military leaders, he introduced British officials to General Fazlollah Zahedi, a former nationalist known only to British intelligence for his Nazi sympathies. Sam Falle reported that a cadre of retired officers had pledged fealty to Zahedi and sworn an oath to remove the prime minister from office.

British officials also noted Zahedi’s links with the anti-nationalist trade union movement and Amir Keivan in particular. An anti-communist member of the Iranian Trades Union Congress, Keivan had discussed strategies to remove Mossadegh with AIOC representatives as early as June 1951 and appears to have been in receipt of British funding. More surprisingly, Zahedi boasted ties to Islamic fundamentalists, including Ayatollah Kashani, an anti-British firebrand who was one of the few nationalists with a public profile remotely comparable to Mossadegh.

Having broken off negotiations, Mossadegh had little to lose by ordering the closure of the British Embassy and demanding Zahedi’s arrest. On October 23, Anglo-American officials and intelligence agents met at the embassy to consider “The Communist Danger in Persia,” a paper predicated on the suggestion that Mossadegh “would not hesitate to cooperate with the Communists if it served anti-British purposes.” It was followed by more overt attempts to cajole the United States into supporting a coup on the ground that it was a necessary means not of preserving Britain’s oil monopoly but preventing Iran from falling to the Soviets.

MI6 agent Monty Woodhouse travelled to Washington to persuade the State Department and “particularly with the CIA”  that Mossadegh must be removed. According to lead CIA operative Kermit Roosevelt, Woodhouse and Falle already had a “sketched out plan for battle” based on the Rashidians’ network and instructions delivered remotely by MI6 agents in Cyprus.

At a diplomatic level, a concerted effort was made to create an “anti-Communist mood” and link Iranian nationalism to the Soviet Union. At a time of rising Cold War tension, this unsurprisingly found a ready audience on Capitol Hill, and soon joint operational meetings on “British Proposals to Organize a Coup d’état in Iran” had taken place between the Foreign Office and State Department. Although these came to nothing, the CIA was highly receptive, agreeing that conditions in Iran were “developing favourably” for the Soviet Union.

When Dwight Eisenhower became president in January 1953, he appointed John Foster Dulles as secretary of state and his brother Allen as CIA director. The brothers were not merely hawkish in their anti-communism but zealots in their defense of American capitalism. According to Nasrollah Fatemi, Iran’s delegate to the United Nations, the former had promised that Mossadegh would “not get away with” nationalizing the oil industry.

Although minutes remain unavailable, British foreign secretary Anthony Eden discussed Mossadegh’s future when he visited Washington, DC, in early March, with notes subsequently relayed to Roosevelt. According to Eden, Mossadegh’s threat to seek new buyers for Iranian oil was treated in the United States as a clear justification for their newfound firmness. After years of planning, the British appeared to have secured American support for a coup against Mossadegh.

In mid-May CIA and MI6 operatives sketched out an operational plan for Mossadegh’s removal. According to Darbyshire, Britain’s junior status was made clear and MI6 agents were “on instruction . . . more forthcoming than the CIA were with us.” According to the plan, public opinion against Mossadegh would “be fanned to fever pitch” before networks would spark chaos on the streets. At the same time, pressure would be brought to bear on the Shah, pushing him to order Mossadegh’s resignation and replacement by Zahedi. The plan was approved by London on July 1, with Washington following ten days later. In a further climbdown, the British government acknowledged that it would have no power to force the terms of a new oil settlement on Zahedi but would instead be expected to reach an accord acceptable to both parties. An agreement was also struck between MI6 and the CIA on which military and civil leaders and civilians would be arrested in the post-Mossadegh cleanup.

Countdown to Midnight

Under British instruction, the Rashidians circulated anti-Mossadegh propaganda through their media contacts. While some of it was tame, forged articles framing him as part of a communist or Jewish plot were common. At least $60,000 was passed onto Zahedi to curry favor with influential politicians and clerics. British agents can also be linked to a series of violent plots. Anti-nationalist gangs posed as communists to threaten religious leaders with “savage punishments” should they oppose Mossadegh. Tehran’s chief of police, Brigadier-General Mahmoud Afshartous, was abducted and murdered by a British-linked group.

Such provocations made it difficult for MI6 or the CIA to preserve any veil of secrecy, and, as in 1952, Mossadegh was wise to their machinations. He demanded the dissolution of parliament — a power that rested with the Shah alone. When the monarch refused, Mossadegh called for a public referendum which quickly descended into farce — thanks to corruption and a boycott from Mossadegh’s opponents, he won a ludicrous 99.9 percent of the votes. The plebiscite was, the New York Times reported, “more fantastic and farcical than any ever held under Hitler or Stalin.” His movement divided and under threat, Mossadegh cut a distant figure at the top of Iranian politics but still felt able to call on the legitimacy of the people.

Although conditions were turning in their favor, the British and Americans still lacked a key ingredient for a successful plot: the Shah. Indecisive by nature and shaken by last summer’s events, the monarch feared foreign agents would leave him to hang if conditions deteriorated. To prove the plan was supported at the highest levels of government, Darbyshire arranged for the BBC to broadcast words selected by the Shah during their Persian-language programming: rather than “it is now midnight,” the BBC’s presenter instead said, “it is now exactly midnight.”

Kermit Roosevelt, meanwhile, impressed upon him that Prime Minister Churchill and President Eisenhower were personally behind the operation, the former using a public address in Seattle on August 4 to condemn Mossadegh’s antidemocratic tendencies. After a final round of CIA arm-twisting, the Shah relented and signed orders dismissing Mossadegh from office. These were received by American agents close to midnight on August 12.

On August 15, Zahedi met with supportive officers and retired to a safehouse while monarchist soldiers arrested Mossadegh. Tipped off that a coup was imminent, he had fled and the mutineers were arrested by his guard. Nationalist army units took the initiative and seized key strategic points across Tehran, including Radio Tehran, which broadcast a triumphant message on the coup’s failure. As spontaneous rallies began, British and American agents considered whether the operation could be salvaged.

During a “council of war” on August 17, the CIA, the Rashidian brothers, and Zahedi agreed they would launch a second attempt to topple Mossadegh. The crux of the new plan, according to Darbyshire, was to “bring the boys out onto the streets” and unleash the hooligan army assembled since 1951. In exchange for $10,000, Ayatollah Kashani lent his support to the operation: on August 19, a mob of over 3,000 people assembled in southern Tehran. By the Foreign Office’s own admission, they had “been hired for the purpose,” marching north chanting not only “long live the Shah!” but “death to Mossadegh!” Within hours, the mob had torched a dozen nationalist newspaper offices, claimed Radio Tehran, and broadcast a message proclaiming Zahedi as Iran’s rightful and legitimate leader.

Mossadegh, previously attuned to the plots against him, had finally come unstuck. The bold “countercoup” executed on the instruction of foreign intelligence agents was a surprising move and one that, without institutional military support, he could offer little resistance. Able to count on the loyalty of his bodyguards and just a handful of soldiers, Mossadegh surrendered to arrest on August 20, 1953.

A menacing opponent of British imperialism, the Mossadegh government’s collapse was celebrated in Whitehall. However, the operation could not have been executed without America. Incapable of executing a truly independent foreign policy, Britain’s use of the Rashidian brothers’ contacts in Tehran’s politics, press, and criminal underbelly was a somewhat less impressive method of upholding influence than the AIOC.

In a clear demonstration of British diminution, the Anglo-Iranian Oil Company — now rechristened BP — was forced to accept membership of the consortium Iranian Oil Participants (IOP) and equal profit sharing with the Zahedi government. Holding just a 40 percent stake in the new consortium, BP was awarded compensation of £214 million from its new partners and £25 million from the Iranian government.

Ann Lambton, the revered scholar who was among the first to openly advocate for Mossadegh’s overthrow, subsequently used a series of public lectures to describe his fall from office as a result of him becoming “spoiled by power and adulation” and aligning himself with the Soviet Union.

This narrative was perhaps a comforting one, but it ignored the reality of British and American involvement in the events of August 1953. Seven decades later, Lambton’s attitude is mirrored by the British government, which continues to deny researchers access to crucial documents concerning the coup and will not comment on — either to confirm or deny — its involvement. Given the weight of evidence to demonstrate British culpability, we can only speculate on the reasons for this continued veil of secrecy and wonder perhaps if it reflects a modicum of institutional regret.