Margaret Thatcher

Kit Klarenberg looks at how the Thatcher government secretly armed both sides in the war between Iran and Iraq

“It’s a pity they can’t both lose…”

Henry Kissinger, Nobel Peace Prize recipient

Margaret Thatcher’s numerous wrongdoings at home and abroad are generally fairly well-documented. One felonious policy of her conception, however, is little known about today, and rarely spoken of.

In short, in contravention of numerous UN Resolutions and international law, Thatcher pursued a prolonged strategy of supplying the warring Iran and Iraq with weapons during the 1980s; receipts ran into the billions.

The UK arming repressive regimes and questionable groups (often illegally) is a time-honoured tradition. Never previously, however, had the UK endeavoured to supply two opposing sides in a conflict (as far as we know).

You may wish to consider the application this philosophy has in the present day. In Syria, for instance, President Bashar al-Assad’s government has been fighting a progressively pitiless war of attrition against rebel factions since spring 2011. Last Easter, William Hague pledged to “tear up” an international arms embargo and start further weaponising the already well-armed rebel forces, and that summer both the UK and US pushed (unsuccessfully) for military strikes against the Assad regime.

Since then, the insurgents have fractured, with the more fundamentalist elements creating the Islamic State of Iraq and Syria. In response, Barack Obama has announced a plan to train and equip Syrian forces to fight Isis, and John Kerry has mooted cooperating with previously foremost US nemesis Iran to destabilise the group. Meanwhile, Syria continues to be ground into nothingness from all angles.  

Whilst this constant side-switching and the worst of enemies becoming the closest of allies in the blink of an eye might recall a famous phrase in Orwell’s 1984 (‘Oceania has always been at war with Eastasia’), Alan Clark (former Minister for Trade) revealed the true motivation for such initiatives many years ago, when asked to give evidence on the government’s role in the Arms to Iraq Affair;

“The interests of the West were best served by Iran and Iraq fighting each other…the longer the better.”

It was a good wheeze, the Arms to Iraq/Iran affair; it flourished for nigh-on half a decade before discovery and swift cessation. In the process, Parliament was repeatedly deceived, over a million people died, and British politicians and tycoons became very rich indeed.

The story starts in earnest in Iran, circa January 1979. Mass demonstrations and violent campaigns of civil resistance have turned to outright revolution, deposing Iran’s pro-Western ruler (Shah Mohammad Reza Pahlavi) in the process. The US Embassy in Tehran is invaded by militants, and its staff taken hostage. Numerous rescue plots are attempted; every one fails.

Despairing US President Carter then contacts Saddam Hussein – at that point an American ally– offering financial support and killing apparatuses at knock-down rates in return for attacking his presumptuous proximate.

Hussein, seeing Shiite fundamentalism as a threat to his rule, accepts; Iran is invaded on September 22nd 1980. Both he and Carter banked on a swift collapse of Ayatollah Khomeini’s fledgling regime; what resulted was the 20th Century’s longest conventional war.

Enter stage right Republican Presidential candidate Ronald Reagan. His Chief Campaign Organiser was a man by the name of William Joseph Casey, whose avowed approach to justice was “*** the law”.

Knowing Carter stood a cat in hell’s chance of re-election without the return of the hostages, Casey conducted back channel negotiations with Khomeini’s administration. He offered to sell Iran all the weapons it needed to fight its war, provided the hostages were safely released – but only after the 1980 Presidential Election. Khomeini agreed.

On January 20th 1981, the day Reagan was sworn in as President, the hostages were freed; Casey also became CIA Director. The new appointee was now charged with actualising his proposal; the only question was how.

That’s some catch, that Catch-22…

A minor snag in Casey’s plan, of course, was that it was completely illegal; UN export regulations unambiguously prohibited the sale and export of munitions to warring countries, as did US law.

However, legislation in Perfidious Albion afforded Thatcher more latitude. Britain could, theoretically, ship any sort of military paraphernalia to any part of the world; however, their ability to do so was contingent on arms manufacturers and suppliers securing ‘End-User Certificates’, signed off by the Ministry of Defence.

So it was that Reagan got on the ‘hot line’ to Number 10; the Iron Lady’s acquiescence was a formality.

To kick things off, a front organisation named Allivane International was set up in Glasgow in 1982, using CIA cash; the Scottish Business Development Fund dropped the dummy corporation a wodge of UK taxpayer money for both good measure and matters of legitimacy. Allivane’s true owner, Chilean arms dealer Carlos Cardoen, never set foot on British soil; the firm’s Directors were a local father and son duo, both named Terence Charles Byrne.

Fraudulent papers certifying sizeable shipments of flesh-rending ordnance to Cyprus, Jordan and Spain were duly provided to the MoD by Allivane; as the MoD was in on the con, they were reflexively rubber stamped. The arms then snaked across the world on boats and planes to their bogus termini, before being packed up and shipped out anew by the CIA to their true endpoints.

So it was that Allivane dispatched almost £1.5B worth of weaponry to Iran, and over £3.6B worth to Iraq, over the course of four years.

In addition to assisting in the deaths of over one million Iranians and Iraqis, the arrangement made many involved at the state level very wealthy too. Ministers, advisors, and assorted insiders wise to the gimmick saw the setup as a nice little earner, and duly invested in the companies involved, or helped bring in unsuspecting suppliers for a commission fee.

As with most Thatcherite flirtations with redistributing taxpayer money for the advantage of others, the only ones benefitting were the already rich and powerful. With no end to the war in sight, there appeared to be no end in sight to the conspiracy, either.

That was until 1986, when the complex network of deceit, duplicity and fraud began to unstitch and fray – although only at the edges. It came unstuck because of one of Allivane’s suppliers, Astra (an explosives manufacturer based in Kent). Whilst initially an independent supplier unconnected to and unsuspecting of the wider machinations at work, the firm was later penetrated by the intelligence services as the operation hotted up; unbeknownst to senior management not party to the intrigue, factory floor staff were working overtime every single night to meet the increasingly voluminous orders issued by Allivane, at the behest of these plants.

Gerald James, the firm’s Managing Director, became curious as to why millions in unaccountable income was surging into the company’s coffers. He dutifully instigated an internal investigation, but was removed from his post in a boardroom upheaval, engineered by the experts in coup d’état stealthily parachuted onto the company’s board.

Spurned, and not consciously bound by the Official Secrets Act, James began to blurt his suspicions to anyone who would listen. UK cops became aware of his misgivings, and interviewed him – given the global character of his allegations, they were subsequently transmitted to international police forces the world over.

Feds in the Netherlands recognised Allivane’s name from a separate investigation they were conducting into the activities of Dutch gunpowder producer Muiden Chemie, and attempted to subpoena Allivane’s accounts – accounts that were hastily emptied. Quietly, the operation was wound down, and the company left to sputter into insolvency; with the firm’s two Directors tethered by Official Secrecy to non-compliance with any investigation, an extensive tidy up operation was deemed unnecessary.

Allivane was eventually raided by Customs & Excise operatives in 1987 – although too little, too late by that juncture, a ton of documents were confiscated, some of them vaguely incriminating. A whole host of suppliers were directly or indirectly implicated, chief among them machine tool manufacturer Matrix Churchill (their products could be used to make artillery shells and missile parts, amongst other things); the firm’s directors were arrested.

Then, in a cacophonous sonata of intersecting injustice, they were rearrested under the Official Secrets Act when they started to tell their interrogators what they knew (which, in the event, wasn’t very much); Gerald James was asked by police to provide further statements, before being warned by spooks that he faced imprisonment for doing so; the Serious Fraud Office began raiding companies associated with the fiasco and threatening their Directors.

Matrix Churchill’s Directors were eventually taken to court, but the case buckled when Alan Clark admitted that he had been “economical with the actualité” in answering questions posed to him during the trial. He was obligated by Official Secrecy to do so.

This in turn led to the Scott Inquiry, a whitewash farce that took four years to complete; it inevitably exonerated Thatcher and her minions from any wrongdoing. Its conclusion was that;

“The Government only violated the embargo in an effort to keep the country’s machine-tool industry in business.”

The Scott Report’s findings were nonetheless hard to refute, given that roughly 90% of the report was classified – until the release of some substantiating documentation at the National Archives in 2012. Many more documents will remain sealed for another 30 years, and some will never be deemed fit for public consumption.

Despite the pooled illusions of British liberalism, democracy and openness, it’s not an exaggeration to say that the UK’s culture of state secrecy isn’t too far removed from the super-clandestine milieu of such state-mandated enemies as Cuba and North Korea. Whether these states will eventually become valuable Western allies remains to be seen.