When the United States began marathon negotiations with Iran over its nuclear program in the framework of the P5+1 nations, many observers anticipated that the U.S. would begin softening its stance toward Iran as its primary enemy in world politics.

But that has not happened.

The Obama administration insists Iran will remain an adversary even if an agreement is reached on the nuclear issue, citing Iran’s alleged role in supporting terrorism and as a “troublemaker” in the region. The U.S. negotiating stance in the nuclear talks, while unacceptable to Israel and its supporters in the U.S., is moreover based on the premise that sanctions must remain in place for many years, even after Iran reduces its enrichment capacity to an agreed level—a position that appears to make agreement politically impossible.

The official explanation for U.S. sponsorship of sanctions that prevent Iran from selling crude oil to existing clients revolves around the allegation that Iran was caught cheating on its obligations under the Nonproliferation Treaty, and even hiding a covert nuclear weapons program. But that narrative weaves together false history and falsified evidence, which have been used to create and sustain a “manufactured crisis” over Iran’s nuclear program. Far from repudiating that narrative, the Obama administration has integrated the narrative into its negotiating position by insisting that Iran provide a satisfactory explanation for documents whose authenticity is highly questionable.

Enmity toward Iran

The apparent unwillingness of the Obama administration to let go of the covert Iran nuclear weapons narrative is the latest episode in the long-running drama of U.S. enmity toward Iran. A period of cold war was perhaps inevitable after the national orgy of anger at the Islamic Republic for holding U.S. diplomats hostage for 15 months at the end of the Carter administration. But it has now lasted three decades, and has seemingly been unaffected by the fact that U.S. and Iranian interests have clearly coincided since the mid-1990s in regard to the most serious threat to U.S. interests in the Middle East: al Qaeda and other Islamic terrorists.

The real reason the Bush White House had abandoned the opening to Iran was that the CIA and the Pentagon desperately needed to replace the Soviet threat as justification for continuing Cold War levels of appropriations.

Further deepening the mystery, the dominant political faction in the Islamic Republic since 1989 is a group of mullahs aligned with business interests that has supported Iran’s full integration into the global capitalist system, and has tried on four occasions (1991, 1995, 1997 and 2003) to get the U.S. to enter into a political dialogue since the death of Ayatollah Khomeini in 1989, only to be rebuffed each time. The failure of successive administrations to strengthen the hand of that faction makes it clear that the global capitalist system has not been the primary consideration in U.S.-Iran policy.

Straining Credibility

The real reason for the long-term cold war against Iran is revealed by a reconstruction of what happened when the U.S. and Iran came closest to a breakthrough in 1992. The opportunity for a thaw had opened up when the leader of the Iranian faction that was eager to obtain capital and advanced technology from Europe and the U.S.—Ali Akbar Hashemi Rafsanjani—won Iran’s first-ever presidential election in July 1989. George H.W. Bush, viewing Iran as a counterweight to Iraq, was open to the possibility of rapprochement. A top secret U.S. national security directive in October 1989 said the U.S. “should be prepared for a normal relationship with Iran on the basis of strict reciprocity.”

Bush had also promised to reciprocate Iranian assistance in freeing U.S. hostages held by Iranian-backed forces in Lebanon and in 1991, Rafsanjani had used Iran’s influence with the Lebanese Shi’a militants to get the hostages released. The last U.S. hostage was set free following a visit by Iran’s foreign minister to Beirut in December 1991. Bush seemed open to reciprocating gestures. U.N. hostage negotiator Giandomenico Picco’s notes from a meeting with national security adviser Brent Scowcroft in January 1992, which Picco shared with this writer, show that Scowcroft revealed that the White House was considering taking Iran off the terrorist list, reducing economic sanctions, and compensating Iranians for the shooting down of an Iranian civilian airbus by the U.S. Navy in July 1988, which killed all 290 people on board.

Those gestures were never made.

Scowcroft told Picco in April 1992 that the administration had “new intelligence” that Iran would support terrorism and was intent on acquiring a nuclear weapon. But those claims strain credibility. The actual national intelligence estimate (NIE) completed in October 1991 had not supported the charge that Iran had made a decision to pursue nuclear weapons, as was made clear by an unhappy administration official who told The New York Times that the NIE had underestimated “the scope of Iranian intentions.”

Searching for New Threats

The real reason the Bush White House had abandoned the opening to Iran was that the CIA and the Pentagon desperately needed to replace the Soviet threat as justification for continuing Cold War levels of appropriations.

To head off deep cuts in the CIA budget, the agency’s new director, Robert M. Gates, had identified Iran and the proliferation of nuclear weapons as a new threat. Just two weeks after Gates became director in November 1991, a “senior administration official” was quoted by the Los Angeles Times as saying that relations with Iran would remain in the “deep freeze,” because of Iran’s “continued support for international terrorism” and its pursuit of weapons of mass destruction.

That comment dovetailed with the argument Gates made in pubic testimony to fend off deep budget cuts. Testifying before the Defense Policy Panel in early December, just two days after the dissolution of the Soviet Union, Gates said the “accelerating proliferation” of weapons of mass destruction and their delivery systems were “probably the gravest concern” among post-Cold War threats.

“With the diminution of the threat from the Soviet Union,” he told the Senate Armed Services Committee in 1992, “technical and human resources collection and analytic talent through the [intelligence] community is being refocused on this [proliferation] threat.”

Gates told senators about a new Nonproliferation Center that the CIA had just organized to focus on proliferation threats. He also cited the need for more investment in human intelligence assets to provide “early warning” of such threats. And he cited Iran as case in point, referring to “ambitious” Iranian military programs, “including programs for weapons of mass destruction.” In testimony before the House Armed Services Committee, Gates warned that Iran was “seeking to acquire a nuclear weapons capability.”

Policy from Israel

The CIA director’s rejection of any rapprochement with Iran in 1992, which also reflected the interests of the Pentagon, was followed by a development that gave powerful impetus to the bureaucratic interests seeking a replacement for the Soviet threat: for domestic political purposes, President Bill Clinton explicitly aligned his policy toward Iran with that of Yitzhak Rabin. After Rabin’s election in June 1992, the Israeli prime minister reversed a well-established low-key Israeli policy toward the Islamic Republic and suddenly began demonizing the regime, referring to Iran’s “Shi’a fundamentalism” as the greatest threat to world peace and warning that Iran would have nuclear weapons within a decade unless it was stopped.

Clinton had run as the pro-Israel candidate in the 1992 presidential race and had chosen as his Middle East policy adviser a professional partisan of Israeli interests, Martin Indyk, who was the first executive director of the pro-Israel Washington Institute for Near East Policy. After his election, Clinton appointed Indyk to the National Security Council as special assistant and senior director for the Middle East. The Clinton administration’s rhetoric on Iran became indistinguishable from that of the Rabin government. Secretary of State Warren Christopher called Iran an “international outlaw” and accused the regime in Tehran of working to develop nuclear weapons.

In May 1993, Indyk gave a speech in which he called for a new policy of “dual containment” under which Iran would be subject to the same treatment as the defeated Iraq, meaning international isolation: no loans, no investment, no arms sales. Robert Pelletreau, who became assistant secretary of state for the region in early 1994, later recalled that it was “pretty much accepted in Washington” that the policy Indyk articulated had originated in Israel.

The Clinton administration’s alignment of its Iran policy with that of Israel increased the incentive of national security officials to treat Iran as a dangerous enemy. Defense Secretary Les Aspin declared the threat of proliferation of nuclear weapons to be the one that “most urgently and directly threatens Americans.” And an analysis by the Joint Staff—the military staff serving the Joint Chiefs of Staff—for congressional briefings portrayed Iran as the new reason U.S. troops were needed in the Middle East. Ignoring the late 1991 national intelligence estimate on Iranian foreign policy that said the opposite, it predicted Iran would become “more aggressive in the Persian Gulf and perhaps elsewhere.”

Proliferation of Counterproliferation

Meanwhile, other bureaucratic organizations were springing up to take advantage of the identification of proliferation as the major new security threat. The Clinton National Security Council created a Directorate of Nonproliferation and Export Controls. The State Department created a new bureau headed by an assistant secretary of state responsible specifically for proliferation. Two years later, CIA official James L. Pavitt exploited his friendship with Deputy CIA Director George Tenet to carve out another center on proliferation within the agency’s Operations Directorate called the Counterproliferation Division (CPD).

The officials in charge of these new bureaucracies came up with analyses, plans, and projects to advance the Clinton administration’s anti-Iran agenda while promoting their own careers. The CIA’s new proliferation center, staffed with weapons specialists and proliferation analysts but no country or regional experts, did what was expected of it and always concluded that Iran was bent on obtaining nuclear weapons. As former Deputy Director of National Intelligence for Analysis Thomas Fingar put it in an interview with this writer, “The guys closely linked [to] stopping proliferation acquired a predisposition to infer malign intentions.”

As the head of the CPD, Pavitt was determined to do his own covert operation aimed at “disrupting” the nuclear program that Iran was presumed to be carrying out—despite the fact that the CIA had no real evidence that Iran had any such program. The result was “Operation Merlin,” which tried in 1999-2000 to get Iran interested in unworkable plans for the system it would need to detonate a nuclear weapon. It was an amateurish flop, and to get the presidential “finding” required by law for a covert operation, Pavitt got the CIA to send the White House a new intelligence assessment suggesting that Iran might already be in the process of trying to design a nuclear weapon.

Vested Interests in Demonizing Iran

A more potent vested interest in demonizing Iran arose in the 1990s when advocates of a national missile defense system shifted the rationale for the program from Soviet missiles to the supposed threat from intercontinental ballistic missiles developed by “rogue states”—Iran, Iraq, and North Korea.

The CIA had concluded in a 1995 intelligence assessment that there would be no such threat for at least 15 years. But the missile defense lobby, consisting of major contractors that stood to make billions annually from the program, got the Republican-controlled Congress to create the “Rumsfeld Commission”—led by missile defense enthusiast Donald Rumsfeld—that would write a report portraying Iran as posing a threat with ICBMs capable of hitting the U.S. within that 15-year time frame.

A more potent vested interest in demonizing Iran arose in the 1990s when advocates of a national missile defense system shifted the rationale for the program from Soviet missiles to the supposed threat from intercontinental ballistic missiles developed by “rogue states”—Iran, Iraq, and North Korea.

After Rumsfeld became Secretary of Defense in the George W. Bush administration and called for the deployment of a missile defense system, the large appropriations for the Defense Department’s Missile Defense Agency and the lucrative contracts for its industry allies became the most immediate motivation for the DOD to ensure that Iran remained the enemy. The anti-missile defense program was the largest single research and development program run by the Pentagon over the next decade, funded at between $8 billion and $12 billion annually.

The original idea was that anti-missile technology installed in Poland and the Czech Republic would protect the U.S. against the threat of long-range missiles. But Gates, who replaced Rumsfeld as defense secretary in late 2006, acknowledged publicly in October 2007 that the Bush administration had no evidence that Iran was even working on a missile that could reach Europe. Gates announced the U.S. would “complete the negotiations, we would develop the sites, build the sites, but perhaps would delay activating them until there was concrete proof of the threat from Iran.”

As Obama’s Secretary of Defense, Gates abandoned the original European missile defense plan in September 2009, admitting that the intelligence had shown the threat of longer-range Iranian missiles had not materialized, and that Iran’s medium-range missile program was “developing more rapidly.” In a press conference, Gates and Vice-Chairman of the Joint Chiefs of Staff, Gen. James E. Cartwright, said the DOD would install somewhat different technology in the same sites in Poland and the Czech Republic. But Cartwright made the revealing comment that he was “relatively sure that the intelligence estimates will be wrong if we’ve got a good adversary.” For the Pentagon, a “good adversary” was one that would make decisions that would justify the anti-missile system on which the Pentagon had so much riding.

Missile Defense Bonanza

A State Department cable conveying to other governments “talking points” on the new European missile defense plan reiterated the claim that Iran was “actively developing and testing ballistic missiles that can reach more of Europe.” Yet another State Department cable reporting on a Joint U.S.-Russian Threat Assessment of Iran’s missile program on December 22, 2009, reveals that the Russian delegation to the meeting with U.S. officials discredited the only piece of circumstantial evidence advanced by the Americans to support the claim that Iran was working on such a missile.

The Russians, who knew the technology on which Iran’s ballistic missile program was based far better than the Americans, pointed out that the longest range achieved in any Iranian missile test was 1,700 kilometers—even with a very small payload. That would hardly even get an Iranian missile halfway to Central Europe. The Russians insisted that Iran doesn’t even have the structural materials and other technical requirements for such a missile program—and that Iran has no reason to target Europe.

Meanwhile, the Bush policy of U.S. and Israeli threats to attack Iran’s nuclear program, especially beginning in 2006, created yet another material interest for maintaining Iran as an enemy: lucrative demands for U.S. missile defense technology among worried Gulf sheikdoms. In December 2008, the United Arab Emirates (UAE) ordered the most advanced U.S. missile defense system, in a deal that would generate about $5.1 billion in revenue for Lockheed and Raytheon. Along with a Saudi arms deal for fighter planes targeting Iran, worth $60 billion, it was the beginning of a new wave of purchases of U.S. anti-missile systems and offensive weaponry by the Gulf regimes, which were expected to reach staggering proportions. The 2010 Saudi deal alone was expected to yield $100-$150 billion in total procurement and service contracts over two decades.

It was all thanks to the Pentagon’s treatment of Iran as a long-term threat, which has been continued by Obama.

The magnitude of the appropriations and private profits that continue to flow into the Pentagon and its private-sector affiliates over the past 15 years, based on the fiction of an Iranian threat, now certainly rules out any dramatic turnabout in U.S. policy. And beneath the missile defense bonanza as primary motivation is a firmly-entrenched set of bureaucratic and political interests in treating Iran as enemy that were established earlier. Iran as a multi-purpose “good adversary” for the U.S. national security state has become a central plank in U.S. policy that is certain to last as long as national security bureaucrats can get away with it.

Gareth Porter is an independent investigative journalist and historian, and the author, most recently, of Manufactured Crisis: The Untold Story of the Iran Nuclear Scare.