A Game of Winks and Nods

By Richard Lacayo

In his Inaugural Address last January, George Bush obliquely appealed to Iran to work with him for the release of nine American hostages held by Islamic groups in Lebanon. Since then the U.S. and Iran have carried on a delicate game of winks and nods, feints and gestures. The game sometimes requires both sides, for their own reasons, to pretend that they are not actually playing. And for the Americans, there is always the suspicion that the Iranian aloofness is for real.

Nonetheless, a subdued hope of movement surrounded the news last week that the U.S. had consented to repay $567 million in frozen Iranian assets. The agreement was reached after two days of negotiations between State Department legal adviser Abraham Sofaer and a senior adviser to Iran's President Ali Akbar Hashemi Rafsanjani. The two met in the Hague, site of the Iran-U.S. Claims Tribunal that was set up as part of the 1981 deal that freed the 62 American embassy hostages in Tehran. Both sides agreed that Iran will be paid most of the balance remaining in an account established to settle claims from U.S. banks that made loans to the Shah's government before the 1979 Islamic revolution.

Several months ago, Iran informed the tribunal that in its view most of the claims had been paid out. Tehran wanted the balance, now about $820 million, that remained of the $1.4 billion the account originally held. In 1987 the Reagan Administration had unsuccessfully resisted a similar $500 million claim by Iran against a different account. This time the Bush Administration responded by dispatching Sofaer to the Hague. As part of the deal that was eventually reached, Iran agreed that $243 million from the account will be transferred to a third fund, covering claims against Iran by individual American citizens and corporations.

Iran has several times linked any effort on behalf of the hostages to the release of Iranian assets. It calculates those to be worth far more than the amount unfrozen last week, including perhaps what it claims are $12 billion in weapons purchased from the U.S. but never delivered. So the Iranians' public response to the deal in the Hague was lukewarm. Perhaps leery of giving domestic hard-liners grounds to charge that the Islamic republic is negotiating with the Great Satan, Deputy Foreign Minister Mahmoud Vaezi described the deal as a decision made by the Hague tribunal and not by Washington. "It has nothing to do with the U.S. Administration's goodwill," he insisted.

In fact, the deal had been reviewed in the White House by the National Security Council and approved by George Bush, who had been urging the State Department to press ahead in the complicated claims-settlement process. At his press conference last week the President admitted to a hope that the agreement would eliminate a further obstacle to cooperation by the Iranians. "I'd like to get this underbrush cleaned out now," he said. "I hope they will do what they can to influence those who hold these hostages."

But with memories of the Iran arms-for-hostages swaps still fresh, American officials too have been careful to reject suggestions that the two nations are conducting anything like hostage negotiations. "You want to do things that are justifiable on their own merits and defensible in terms of U.S. interests," said a State Department official. "And if Iran wants to take it as a signal, fine."

The next "signal" from the U.S. may be an agreement to pay compensation to survivors of those killed in the Iran Air passenger plane shot down in July 1988 by the U.S.S. Vincennes. The U.S. has already begun paying families of non-Iranian passengers, but compensation to Iranians, who account for most of the 290 people aboard, has been held up by a lawsuit the Tehran government is pursuing against the U.S. in the International Court of Justice.

Iran's Rafsanjani is believed by Washington to be anxious to dispose of the hostage issue quickly so he can open his war-ravaged country to the outside world. But powerful hard-liners still want to block any contact with the West. Former Interior Minister Ali Akbar Mohtashami, one of the most intransigent of the revolutionary mullahs, was excluded from Rafsanjani's government earlier this year. He can still get mobs out into the streets, however, as he proved by leading large anti-American demonstrations in Tehran earlier this month to mark the tenth anniversary of the seizure of the U.S. embassy.

Events like that make the White House think Rafsanjani cannot yet deliver even if he wants to. "We're continuing behind the scenes to try to follow ; certain rabbit trails," the President said last week. "So far, they've ended up at dead ends." Earlier this month U.S. intelligence sources reported rumors that the hostages would be released on the anniversary of the embassy seizure. That hope also proved false. Now Americans must wait to see if the agreement in the Hague will amount to a further move in the hostage game, or just another dead end.

With reporting by William Dowell/Cairo and Jay Peterzell/Washington