They Built It. Now They Want to Bomb It.
Today's Iran crisis didn't start with just the mullahs. It started with a secret deal that Republican operatives made with them— a deal that changed history and may now lead to war.
As the United States moves toward a possible military confrontation with Iran — two aircraft carriers in position, Trump setting a deadline for a nuclear deal — almost no one is asking a key question that needs to be asked: How the hell did we get here?
After all, Iran has been a centerpiece of American national security concerns for decades.
To answer that question, let’s go back to 1979, when the Shah of Iran was overthrown by millions of Iranians—ranging from Islamic fundamentalists to secular leftists— and was replaced by an even more repressive Islamist regime led by Ayatollah Ruhollah Khomeini.
In the nearly five decades since, the Islamic Republic of Iran has executed dissidents by the thousands, imprisoned journalists, and tortured political prisoners in the notorious Evin Prison. It has subjected women to a horrific system of gender apartheid in which they are beaten, imprisoned, and killed for the crime of removing their hijabs. According to CBS News, Yvette Cooper, Britain’s Foreign Secretary, said, “there may have been 2,000 people killed” in recent weeks, perhaps more. And, as if all that were not enough, the regime funds Hezbollah, Hamas, and other terrorist organizations across the Middle East.
How did all that happen to a country with 2,500 years of civilization and a people who are widely considered among the best educated and most cultured in the Middle East?
In large part, the answer lies in the treasonous political crime committed forty-six years ago known as the October Surprise. As I reported in my 2024 book Den of Spies, the October Surprise took place during the 1980 presidential race, when Reagan-Bush campaign manager William Casey made a secret deal with Iran’s militant mullahs regarding the release of 52 American hostages who had been incarcerated since the Shah was overthrown and fled to the United States.
The October Surprise gave birth to the Reagan era and modern conservatism — an entire political dynasty built on an act of treason.
Two things about Casey’s secret deal were particularly disturbing. First, the Republicans were not in power—Jimmy Carter was. As a result, Casey had absolutely no authority to seize control of American foreign policy. What he did was almost certainly a violation of the Logan Act, a federal law that makes it a crime for private citizens to negotiate with foreign governments that are involved in a dispute with the United States.
But Casey’s crime was not merely that he was secretly negotiating with Iran. Not only was he illegally sending arms to a hostile foreign power, he also had one astonishing condition regarding the release of the hostages: He demanded that Iran not release them—at least not immediately. Instead, Casey demanded that the mullahs prolong the incarceration of the hostages until after the November presidential election.
The reason was simple: Casey knew that if the hostages returned before the election, President Jimmy Carter would get credit for it, and a wave of patriotic fervor would likely sweep him back into office. Keeping them imprisoned, on the other hand, allowed the Reagan-Bush campaign to characterize Carter as a weakling who had transformed America into a pitiful, helpless giant.
With scores of rogue arms dealers and spies, secret meetings all over the world, Casey’s treasonous covert operation was so shocking that it was hard to believe—and few people did. Indeed, for decades afterwards, investigative reporters who pursued it (including me) were discredited as tinfoil hat conspiracy nuts, and it is only in recent years that the October Surprise has been accepted as history. (I might add that in Den of Spies, I was able to deliver the actual receipts—that is, invoices of illegal arms sales to Iran by Casey’s operatives.)
For all that, one critical aspect of the October Surprise has never been widely noted. Master spy Bill Casey did more than just hand Reagan the White House. His mission tipped the balance of power inside Iran as well.
Remember, Casey’s covert operation was taking place early in the Iranian Revolution. At the time, President Abolhassan Bani-Sadr was officially in power but was in constant conflict with militant clerics.
More to the point, Bani-Sadr, who wanted Iran to be a secular democracy, was desperately trying to release the hostages and open a path toward normal relations with the West, but he was thwarted because the militant clerics, emboldened by their secret partnership with Casey’s team, tightened their grip on power — and never let go.
For those Iranians who tried to block the October Surprise, consequences proved catastrophic and enduring. Foreign Minister Sadegh Ghotbzadeh, who had publicly warned that the “Reagan camp was trying hard to block a solution of the hostage problem,” was arrested, tortured, and shot by firing squad in 1982. Bani-Sadr was overthrown, survived three assassination attempts, and fled into exile in France.
I learned all about this in September 2016 when I interviewed Bani-Sadr at his home in Versailles, just outside Paris, and he told me about how he and Ayatollah Khomeini, then a close companion, returned to Iran from exile in France together in early 1979.
A devout Shi’ite Muslim and highly regarded Islamic philosopher, Bani-Sadr was also a committed democrat. Before he and Khomeini returned to Tehran together — greeted by more than five million people in the streets — Bani-Sadr had assembled a list of twenty basic principles essential to building a secular democracy in Iran. Khomeini seemed to approve of them all.
But as soon as Khomeini saw those millions cheering him, he changed. “When we got to Iran,” Bani-Sadr told me, “he immediately showed signs that he was not going to hold to those principles.”
Bani-Sadr won the Iranian presidency in January 1980 with 76 percent of the vote — a figure that was, as I write in Den of Spies, “highly misleading in terms of his fragile hold on power.”
He believed the hostages should be released immediately. He understood that prolonging the hostage crisis was destroying Iran — freezing its assets, triggering international sanctions, leaving its military starved of weapons as the threat from Saddam Hussein’s Iraq grew. He had established back-channel communications with the Carter administration through friendly diplomats in Germany and Switzerland who were urgently working toward a resolution.
“Were these Carter people?” Bani-Sadr pressed. The answer was chilling. “No,” Pasandideh replied. “The Republicans.”
What Bani-Sadr didn’t know — what he was about to discover — was that he had a secret adversary working to make sure that resolution never came. In the summer of 1980, a man named Reza Pasandideh — Khomeini’s nephew — requested an urgent meeting with Bani-Sadr. Pasandideh had just returned from Madrid, where he said he had “accidentally” run into American operatives who wanted to discuss the hostage situation.
Bani-Sadr immediately knew it was a lie. In Iran’s Islamist theocracy, where every sensitive conversation required approval from the top, there was nothing accidental about such a meeting. When he pressed Pasandideh — were these Carter people? — the answer was chilling.
“No,” Pasandideh replied. “The Republicans.”
And the Republicans, Pasandideh explained, didn’t want Iran to release the hostages before the election. They wanted Iran to wait — to keep fifty-two Americans in captivity — until Ronald Reagan had won. In return, the arms would flow once Reagan was in the White House.
“That was a very dirty thing to do — using the hostages as a weapon to help Reagan win the election,” Bani-Sadr told me. He refused to play along and told Pasandideh a deal with the Republicans would be “terrible for Iran.” But Pasandideh’s final words were a threat: his refusal, he was told, “would result in my elimination.”
"That was a very dirty thing to do — using the hostages as a weapon to help Reagan win the election."
What followed was described to me by Bani-Sadr as “a creeping coup.” Bit by bit, Khomeini and the hardline clerics stripped him of his presidential powers. His supporters were arrested and executed. His newspaper was shut down. His aides were dragged to Evin Prison — tortured, and in many cases killed. One of them, Hussein Navab Safavi, was offered his life if he would denounce Bani-Sadr. He refused. His last words, according to his cellmate, were, “Long live Bani-Sadr.”
In June 1981, Bani-Sadr was impeached by the Majlis( (Iran’s parliament). There were three assassination attempts — on one of which, he told me, two gunmen approached him sheepishly and handed over their weapons, saying they had been ordered to shoot him but couldn’t bring themselves to do it. His house was bombed, his office was attacked, and he eventually fled Iran in disguise. He spent the rest of his life in exile in Versailles.
When Bani-Sadr died in 2021, his obituaries in the New York Times, Washington Post, and The Guardian as well as Reuters and the BBC, among other media outlets, omitted any reference to his most important utterance regarding American politics—namely, his repeated insistence that the October Surprise was real.
In Iran, the brutal, repressive theocracy that Bani-Sadr had warned against was now fully in place. What he had feared most had come to pass: Iran had escaped the Shah’s dictatorship only to find itself in the grip of a theocracy that proved equally unforgiving—and in some respects worse.
He described watching Khomeini’s transformation this way: “I was like a child watching my father slowly turn into an alcoholic. The drug this time was power.”
In America, the hostages were released on January 20, 1981 — minutes after Reagan took the oath of office. The October Surprise gave birth to the Reagan era and modern conservatism — an entire political dynasty built on an act of treason. And now, nearly half a century later, America may be on the verge of going to war with the very regime that Republican operatives helped consolidate—a repressive Islamist theocracy.
At the end of our interview in Versailles, I asked Bani-Sadr whether, after thirty-six years, the October Surprise still mattered. Whether anyone still cared.
“You have to write it,” he said. “If not, it will happen again.”
It was September 17, 2016. Fifty-two days later, with considerable help from Vladimir Putin, Donald Trump was elected president.
Bani-Sadr, it turned out, had no idea how right he was.
For more information about me, go to www.craigunger.com. And, buy my books!
Den of Spies
Reagan, Carter, and the Secret History of the Treason That Stole the White House
House of Trump, House of Putin
The Untold Story of Donald Trump and the Russian Mafia
American Kompromat
How the KGB Cultivated Donald Trump, and Related Tales of Sex, Greed, Power, and Treachery
Many thanks for that historical vignette and just another reason I'll never be a Republican. Have a blessed evening.
Thank you Craig , great article and a reminder that Jared Kushner is violating the Logan Act daily in the middle east