US embassy cable - 73TEHRAN8233

S E C R E T TEHRAN 8233 
 
Declassified/Released US Department of State EO Systematic Review 30 JUN 2005 
 
E.O. 11652: GDS 
TAGS: PINT, IR 
SUBJECT: SHAH ON CORRUPTION 
 
1. AFTER AMBASSADOR BYROADE'S AUDIENCE WITH SHAH WAS 
FINISHED, I ASKED TO STAY BEHIND TO DISCUSS WITH SHAH 
APPROACH OF SOVIET AMBASSADOR TO SWEDISH AMBASSADOR AND 
OTHERS ABOUT ALLEGED INCREASE IN DOMESTIC OPPOSITION TO 
GOI AS RESULT SHAH'S RECENT DECREES ON CORRUPTION AND ON 
NEW REQUIREMENT THAT GOVERNMENT MINISTERS AND IMMEDIATE 
SUBORDINATES DIVEST THEMSELVES OF ANY SHARES THEY HOLD IN 
ANY COMPANIES OR INDUSTRIES. SHAH WAS OBVIOUSLY STARTLED 
TO LEARN THAT SOVIETS WERE CLAIMING TO NOTE INCREASED 
OPPOSITION AND ASKED RHETORICALLY HOW ANYONE COULD IMAGINE 
SUCH A THING. WE AGREED THAT THIS WAS SOVIET PSYCHOLOGICAL 
WARFARE DESIGNED TO UNSETTLE THE GOVERNMENT. 
 
THE SHAH IMMEDIATELY TIED IT IN TO THE RECENT 
TUDEH PARTY/IRAQI COMMUNIST PROCLAMATION CRITICIZING GOI 
ACTIVITIES. SHAH IS CONVINCED THAT SOVIETS ARE ATTEMPTING 
TO RECREATE TUDEH PARTY AND PUT MONEY INTO STRENGTHENING 
OF IRANIAN COMMUNIST MOVEMENT. 
 
2. BEING PENSIVE FOR A MOMENT ABOUT WHAT WE HAD BEEN 
DISCUSSING, THE SHAH SAID, "PERHAPS I HAVE BEEN TOO TOUGH 
ON CORRUPTION." TO WHICH I IMMEDIATELY REPLIED, "NO, SIR, 
YOU CANNOT BE TOO TOUGH ON CORRUPTION." THERE THEN ENSUED 
A DISCUSSION OF WHAT WILL HAPPEN IN IRAN IN THE YEARS AHEAD 
IF CORRUPTION IS NOT STEMMED WITH BILLIONS OF DOLLARS 
FLOATING AROUND IN THE ECONOMY. IT WAS QUITE CLEAR FROM 
THIS DISCUSSION THAT THE SHAH INDEED IS CONVINCED THAT HIS 
PROGRAM AND THE COUNTRY'S FUTURE WILL GO RIGHT DOWNHILL 
IF HE IS NOT ABLE TO DEAL WITH THE CORRUPTION ISSUE. 
 
3. WHEN THE SHAH MENTIONED HIS INSISTENCE THAT CERTAIN 
HIGH GOVERNMENT OFFICIALS DIVEST THEMSELVES OF STOCKS 
AND HOLDINGS, I SAID, "WON'T MANY OF THEM HAVE TO UNLOAD?" 
THE SHAH REPLIED, "A FEW, NOT ALL." 
 
 
HELMHD