Good Will Toward Men?

A flood of Christmas cards, a challenge to Khomeini, an exit for the Shah

On a crisp evening last week, Amy Carter stepped up to a podium on the Ellipse, just south of the White House, and pressed the button controlling the lights on a 30-ft. blue spruce and 50 smaller trees around it, one for each state. But for the first time since Calvin Coolidge began the tradition in 1923, the big tree did not burst into light. Only the white star on its top and the tiny blue bulbs on the smaller trees blinked on. "Amy has lit 50 trees--one for each American hostage," explained President Carter to the 7,500 surprised onlookers. "We will turn on the rest of the lights when the hostages come home." The crowd was silent for a moment, then burst into applause.

In a similar outpouring of sympathy across the U.S., hundreds of thousands of Americans sent Christmas cards to a strange address:

260 Taleghani Avenue

Tehran, Iran

It is the address of the U.S. embassy, which has been in the hands of fanatical followers of the Ayatullah Ruhollah Khomeini ever since Nov. 4. No one knows for sure where the idea of sending Christmas messages to the hostages originated, but it caught on with amazing speed. On one day, postal officials sent about 44,000 pieces of mail to Iran. The next day, the total more than doubled. The messages were simple and from the heart. Scrawled an eight-year-old boy in Portland, Ore.: "We hope you are releesed soon." In Tehran the militants guarding the U.S. embassy accepted the mail, and said some of it was being passed on to the hostages.

Meanwhile, the man who triggered the crisis by entering the U.S. last October for medical treatment--Shah Mohammed Reza Pahlavi--suddenly left the country last weekend for Panama. Early Saturday, the Shah with his family boarded an Air Force jet at Kelly Air Force Base in San Antonio, Texas, and flew to the Canal Zone, ending his 54-day stay in the U.S. Just where the Shah would live was uncertain. U.S. officials mentioned the lush resort island of Contadora off Panama's Pacific coast. But Luz Maria Quijano de Murray, Panamanian consul general in Philadelphia, said the Shah will be given asylum for three months on Coi-bita Island, also off the Pacific coast. The arrangement, she added, "could become permanent."

U.S. officials had been scrambling to find a suitable host country for the Shah since Mexico announced last month that he would not be allowed to return there. When Panama expressed interest last week in accepting the deposed monarch, Jimmy Carter dispatched White House Chief of Staff Hamilton Jordan to Panama City to talk with Strongman Omar Torrijos Herrera. The two men had developed a good rapport during the Panama Canal treaty negotiations in 1977, and after a long afternoon session with Jordan, Torrijos agreed to extend a firm invitation.

Washington obviously hopes that the Shah's leavetaking will lead to the release of the hostages, even though the first reaction of their Iranian captors was not promising. "This will make no difference whatsoever," said a spokeswoman for the militants about the Shah's departure.

These developments occurred just as the Iranians finally began to consider letting outsiders see the hostages. Two NBC reporters were allowed to interview a captive Marine corporal, William Gallegos, 21, of Pueblo, Colo., touching off complaints from Administration officials and others about "TV diplomacy" (see PRESS). Despite Gallegos' assurances that "nobody's been mistreated," the interview heightened concern for the hostages.

Khomeini meanwhile in structed Foreign Minister Sadegh Ghotbzadeh to allow a group of foreign observers to visit the hostages. Said a senior Western diplomat in Tehran: "The Iranians have finally recognized that an international inspection of the hostages will go far toward defusing the tension."

An equally plausible explanation was that Khomeini may want to end the hostage crisis so he can tackle Iran's domestic problems. Chief among them: the revolt by the Azerbaijanis in northwestern Iran that has exacerbated unrest among Iran's other minorities, including the Kurds in the west, the seminomadic Qashqais in the south and the Baluchis in the southeast. All of Azerbaijan now appears to be virtually under the control of forces loyal to Ayatullah Seyed Kazem Sharietmadari, Khomeini's chief rival (see following story). Late in the week, local air force and army units joined in a huge demonstration in favor of Sharietmadari in Tabriz (pop. 500,000), capital of East Azerbaijan province. In addition, Iraqi forces firing heavy artillery attacked an Iranian border post; Tehran Radio said several people were killed before the Iraqis withdrew.

In Washington, the Administration was guarded in welcoming Khomeini's statement that there would be visits. But the announcement contributed to a feeling that the crisis might be solved through diplomacy after all. The President's spirits seemed greatly improved. Confidants noted that he had more color in his cheeks, a lift in his step and smiled more often. One reason, no doubt, was the swelling American support for him: a Gallup poll showed that because of his handling of the Iranian crisis, he was leading Ted Kennedy among Democrats for the first time, by 48% to 40%. But Carter also had a new sense that the diplomatic pressure on Tehran was beginning to pay off. To tighten the screws on Iran, the State Department ordered all but 35 of the 218 Iranian diplomats accredited to the U.S. to leave the country in less than a week. This will reduce Iran's embassy in Washington and its consulates in New York City, San Francisco, Chicago and Houston to skeleton staffs.

Summed up a close associate of the President's: "He feels a little cautious optimism that was not there four or five days ago--very, very cautious, almost imperceptible. The pincers are moving in as he had hoped, and there has not been any really bad news."

That Carter could make such an assessment was a measure of how completely his attention is focused on freeing the hostages, for there was some major bad news last week: Saudi Arabia unexpectedly raised its oil prices by a third, to $24 per bbl., and Venezuela, the United Arab Emirates and Qatar soon followed suit. Western oil experts reacted with consternation to the hikes, fearing that they presaged much higher price increases than had been forecast at this week's meeting in Caracas of the Organization of Petroleum Exporting Countries (see ECONOMY & BUSINESS).

Khomeini's apparent willingness to let foreigners visit the hostages at the embassy caused no letup in the Administration's diplomatic and economic campaign to win their freedom. The U.S. last week made another impassioned appeal to world opinion, this time before the International Court of Justice at The Hague, which is an arm of the United Nations that usually deals with more prosaic matters like fishing rights. The court has no enforcement powers and, in fact, has not had a case of worldwide significance since 1971, when it ruled that South Africa had no right to rule Namibia; South Africa has yet to comply with the decision. Nonetheless, the court offered the U.S. another international forum for airing its case against Iran, and Attorney General Benjamin Civiletti made the most of it.

When he rose to voice the American appeal to the 15 judges, across a long polished table in the Great Hall of Justice, a lofty room with imposing stained-glass windows and huge cut-glass chandeliers, all 250 seats were taken--except for the ten reserved for Iran, which boycotted the hearing. Civiletti argued that Iran was violating four international agreements--all signed by Iran--in holding the hostages. He urged the judges to take "the quickest possible action to end a barbarous captivity." Said he: "This imprisonment is illegal and inhuman. I ask you to save [the hostages'] lives and set those human beings free." Moving swiftly, the court delivered its verdict at week's end, calling for the immediate release of the hostages.

For Carter and American allies in Europe, the next step may be new economic pressure on Iran. Specific measures have not yet been determined, but they could include a partial embargo on trade, a clampdown on financial transactions or a freeze on credit guarantees, all of which would further snarl the Iranian economy.

The Administration has even considered asking the U.N. Security Council to impose some form of economic sanctions on Iran. But U.S. allies seem reluctant to go that far, and a resolution calling for sanctions might well be vetoed by the Soviet Union. Moscow has demanded the hostages' release but at the same time expressed sympathy for Iran's insistence that the exiled Shah be turned over for trial.

Secretary of State Cyrus Vance sounded out U.S. allies on possible economic moves against Iran during two days of hopscotching around Western Europe. He consulted with government leaders in London, Paris, Rome, Bonn and finally at the NATO meeting in Brussels. The allied governments previously had denounced Tehran for holding the hostages, but most of them are heavily dependent on Iranian petroleum and seemed unwilling to support any action that might cause Tehran to shut off their oil. Observed Harvard International Affairs Professor Stanley Hoffmann, who is on sabbatical in Paris: " There is on the part of Europeans a tendency to play spectator to world affairs as if they were at a stadium looking at other teams playing soccer and it did not concern them at all."

That Europeans have qualms about further action against Iran was made very clear to Vance. Britain fears that additional economic retaliation might cause its embassy in Tehran to be attacked next. The British government has considered many options on the crisis, said a high official, but "you wind up rejecting most of them because they could endanger the hostages or lead to the taking of more hostages." West German officials warned that if the crisis turned into an economic war that involved other Middle East oil producers, the U.S. might lose its present worldwide support.

On the other hand, the Europeans would rather have the U.S. put further economic pressure on Iran than take military action over the hostages. Thus, reported a senior official on Vance's plane: "There is virtually universal support for [new economic pressure] if there is no satisfactory response [from Iran] in the very near future." He added: "One thing that came through loud and clear is that there is really wholehearted support for us. We are operating against the background of very strong sympathy for the U.S. Everyone realizes that it is a desperate situation, and it may call for desperate solutions." Still, after arriving back in Washington, Vance said: "No decisions have yet been taken."

There is considerable skepticism, however, even in the U.S. Government, that economic retaliation of any kind will provide enough pressure on Iran to force the hostages' release. Confides a Government economist: "There may be a lot of wishful thinking by the Administration on this. Businessmen are very resourceful. Wherever there is a buck to be made, there is always going to be a sizable group of clever people who will get around an obstacle, even an outright embargo." U.N. sanctions against trade with Rhodesia since 1966 and against arms sales to South Africa since 1977 have posed no insurmountable problems for either country.

Iran is beginning to find some ways around the economic measures taken against it by the U.S. The biggest difficulty has been surmounting the international banking tangle caused by Carter's order last month freezing more than $8 billion in Iranian assets held by U.S. banks. Because of it, no sizable bank anywhere in the world is willing to extend credit to Iran. Most banks are also unwilling to handle Iran's international transactions, with the important exception of the Swiss and Japanese. They have made it possible for Iran to keep making oil sales, which amount to about $1 billion a week.

This income has helped Iran partly offset a de facto trade embargo imposed by U.S. longshoremen, who have refused to load cargoes on ships headed for Iran. U.S. exports to Iran in 1978 totaled about $3.7 billion a year and included 25% of Iran's food imports and most of the replacement parts for its weapons and capital machinery. Administration officials maintain that the freeze has furthermore deprived Iran of basic imports such as cooking oils, tires and even valves for Tehran's water supply system. Insisted one Administration spokesman: "The way we see it, the Iranians should start to get cold and hungry this time next month."

Quite the contrary, say skeptical U.S. Government economists and Western experts in Tehran. Iran has found more than enough alternative sources of food; for example, the Australian government supports the U.S. on the hostages but has continued its exports of meat and wheat to Iran, which this year will total $140 million. Similarly, Iran is importing eggs from Turkey, poultry from Rumania and rice from Thailand. Tehran is making up for the cutoff of U.S. medicines by buying some 600 pharmaceutical items from Japan, ranging from aspirin to antibiotics. It is importing U.S.-manufactured oil-drilling equipment from Rumania and could obtain spare automobile parts from a General Motors Corp. assembly plant in any third country. True, the shops in Tehran may no longer be able to stock imported items like detergents, disposable diapers and tooth paste, and there are occasional shortages of bread, eggs, meat and other items. But otherwise, there is scarcely any sign in the city of the U.S. economic squeeze.

Even if the Carter Administration could find ways of making sanctions against Iran stick, they would have little effect over the short run. Concludes Harald Malmgren, a respected international economist and consultant in Washington: "The U.S. near term leverage is simply less than it appears. No matter what the U.S. does economically, Iran can make this thing drag on for many more months to come."

The Administration is particularly peeved about the help that the Japanese have been giving Iran. In Paris, Vance provided an earful of complaints to Japanese Foreign Minister Saburo Okita, who was in the city for a meeting of the International Energy Agency. A U.S. official charged that Tokyo has allowed Japanese banks to "go overboard" in helping Iran circumvent the financial problems caused by the assets freeze. In addition, he said, some Japanese trading companies have rushed "with unseemly haste" to buy 21 million bbl. of Iranian oil that had been destined for the U.S. before Carter halted oil imports from Iran last month. The Japanese firms paid exorbitant sums for the oil, up to $45 per bbl., about twice the average OPEC price. Complained another Administration official: "They never quibbled about price, and when Iran said it would no longer take dollars in payment for its oil, the Japanese were all too willing to give them West German marks."

In their own defense, officials in Tokyo insisted that Japan, like the U.S., was a victim of Iranian blackmail. Unless the oil was bought, they claimed, Tehran threatened to suspend negotiations on Japan's 1980 allotment of Iranian oil, which this year amounted to 11 % of Japanese consumption. Moreover, the officials said, buying the oil helped make up for the cut in oil shipments by U.S. firms to Japan, from 1.4 million bbl. a day in 1978 to about 1 million bbl. because of reduced production by OPEC members and the shippers' decision to fill domestic American orders first. Still, some skeptical U.S. officials noted that Japan's storage tanks are brimming with a 100-day supply of oil-Tokyo's insurance policy against an unforeseen crisis in the Middle East. At week's end Prime Minister Masayoshi Ohira told subordinates that he was "gravely concerned" about upsetting relations with the U.S., which imports $26 billion worth of Japanese goods a year. He ordered the trading companies not to import more oil from Iran in the future than they did before the crisis.

While Vance was collecting promises of support in Europe, the Administration suffered a minor setback at home. In Washington, U.S. District Court Judge Joyce Hens Green directed the Administration to stop its crackdown on Iranians with student visas who are illegally in the U.S. She ruled that the Government had subjected the Iranians to a "discriminatory, 30-day roundup that violates the fundamental principles of American fairness." Since Nov. 13, immigration officials had interviewed 50,437 Iranians, found that 6,042 were in the U.S. illegally and expelled 56 of them. Government lawyers won a temporary stay of the ruling while it is appealed.

Meanwhile, the Shah's sudden departure from Lackland Air Force Base near San Antonio raised hopes that the hostage situation might now be resolved. Earlier in the week, that seemed a remote possibility. The Shah's health had taken a turn for the worse. Aides reported to Washington that he had been sick to his stomach and was running a fever. At Carter's request, Drs. Benjamin Kean and Hibbard Williams, who had treated the Shah in New York City, flew to Lackland to examine him. They prescribed undisclosed therapy for his enlarged spleen but concluded there was no medical problem that would prevent his traveling to Panama.

Even before the Shah's unexpected move, there seemed to be some evidence that Tehran might be modifying its insistence on not freeing the captives unless the U.S. turned him over. Foreign Minister Ghotbzadeh backed away from his announcement of a few days earlier that trials of the hostages were imminent. Instead, he said, Iran would convene an international "grand jury" to expose alleged U.S. involvement in the corrupt rule of the Shah. A day later, Khomeini made Ghotbzadeh's announcement official. In a broadcast from Qum, the Ayatullah declared that the grand jury would consist of reputable Iranian and international lawyers and would "look into the crimes of the Shah" and the "aggressor policies" of the U.S. in Iran. Precisely what Khomeini has in mind was left unexplained. National Security Adviser Zbigniew Brzezinski has warned that if the tribunal turns out to be "a hostile propaganda spectacular directed at the United States, [it would] not be a helpful step."

Nonetheless, the announcement was regarded by Western diplomats in Iran as a sign that the Khomeini government might be looking for a way to compromise on the hostages. The Shah's exit from the U.S. could, of course, increase the chances for such a compromise. Reported TIME Middle East Bureau Chief Bruce van Voorst: "For weeks, the Revolutionary Council has been debating its policy on the hostages at secret meetings around a large rectangular table in a squash-court-size chamber in the Senate building in Tehran. The room's walls are bare, except for a large photograph of Ayatullah Khomeini. He never appears at council meetings, but he nonetheless dominates the group, and whatever steps the council approves are subject to his veto." Thus, say people familiar with the government, the fact that the council decided to summon an international grand jury indicates a major change on Khomeini's part. There is now no doubt among Westerners in Iran that Iran is trying to convert the crisis from an attempt to get back the Shah to an indictment of the Shah and the U.S.

This file is automatically generated by a robot program, so viewer discretion is required.