Dames & Moore v. Regan

A 1981 case about how the president doesn’t really have to follow the text of the law if Congress already let them ignore it. Oh yeah, and Iran is involved. If you're not a 5-4 Premium member, you're not hearing every episode! To hear Premium-only episodes, access to our Slack community, and more, join at fivefourpod.com/support http://fivefourpod.com/support. 5-4 is presented by Prologue Projects. This episode was produced by Andrew Parsons. Leon Neyfakh provides editorial support. Our website was designed by Peter Murphy. Our artwork is by Teddy Blanks at Chips NY, and our theme song is by Spatial Relations. Transcriptions of each episode are available at fivefourpod.com http://fivefourpod.com Follow the show at @fivefourpod on most platforms. On BlueSky, find Peter @notalawyer.bsky.social, Michael @fleerultra.bsky.social, and Rhiannon @aywarhiannon.bsky.social. Our Sponsors: * Check out Mint Mobile and use my code mintmobile.com/fivefour for a great deal: https://www.mintmobile.com * Check out Quince and use my code FIVEFOUR for a great deal: https://www.quince.com Advertising Inquiries: https://redcircle.com/brands

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  We'll hear arguments this morning in number 80, 2078, Dames & Moore, it comes to the Secretary of the Treasury.

• 0:14Speaker 01

  Hey, everyone. This is Leon from Prologue Projects. On this episode of Five to Four, Peter, Rhiannon, and Michael are talking about Dames & Moore v. Reagan, a case from 1981 that offers a window into the long, tortured history of American foreign policy towards Iran. The case arose when President Jimmy Carter made a deal with Iran to free the American hostages who had been taken at the US Embassy in Tehran back in 1979.

• 0:40Speaker 02

  President Carter worked in the Oval Office throughout the night and before dawn this morning, signed the executive orders that triggered the hostages' release.

• 0:48Speaker 01

  The terms of the agreement called for terminating by executive order all private lawsuits that have been filed against the Iranian government by American companies and moving the disputes into arbitration. One of those companies, Dames & Moore, sued the US government, arguing that Carter's executive order, now being enforced by the Reagan administration, overstepped the bounds of executive power. The Supreme Court disagreed, even though the law did not allow the president to intervene on private legal proceedings. This is Five to Four, a podcast about how much the Supreme Court sucks.

• 1:30Peter Shamshiri?

  Welcome to Five to Four, where we dissect and analyze the Supreme Court cases that have constricted our civil liberties, like the war is constricting our oil supply, thereby causing gas prices to rise. Hmm. I'm Peter. I'm here with Michael.

• 1:45Michael Liroff?

  Hey, everybody.

• 1:46Peter Shamshiri?

  And Rhiannon.

• 1:47Speaker 05

  Hi, y'all.

• 1:48Peter Shamshiri?

  Now, everyone said I couldn't do a metaphor that worked about oil prices going up. I mean, I pulled it off flawlessly.

• 1:55Speaker 05

  Yeah.

• 1:56Peter Shamshiri?

  No seams. And that'll be very relevant for the 2% of our listeners who can afford a car.

• 2:07Michael Liroff?

  No, the price of oil affects everything. Plastic gets more expensive. Supply chain stuff gets more expensive. So that means every, all your imported goods get more expensive.

• 2:16Peter Shamshiri?

  That's good for me because I plan to sell the plastic in my bloodstream later this year.

• 2:25Peter Shamshiri?

  All right, folks. Today's case, Dames and Moore v. Regan. This is a case about executive power in the 1979 Iranian hostage crisis. Two of the hottest things going on right now, all rolled up into one case.

• 2:40Speaker 05

  Yep.

• 2:41Peter Shamshiri?

  In 1979, following the Islamic Revolution in Iran, students with support from the new regime seized the American embassy in Tehran and held several dozen Americans hostage for over a year. I imagine that most of our listeners are familiar with this basic story.

• 2:59Speaker 05

  Yeah.

• 3:00Peter Shamshiri?

  Right?

• 3:00Speaker 05

  Yeah.

• 3:01Peter Shamshiri?

  This is one of the most definitive moments in American-Iranian relations and the one that most colors modern American perceptions of Iran, especially at the elite levels. So we're going to talk about how this case, which is about the US freezing Iranian assets, how it expanded executive power, and also just maybe use this as an excuse to talk about the hostage crisis itself and the nature of the relationship between America and Iran.

• 3:32Speaker 05

  Yeah, I think there's some history we can get into. I mean, obviously, current events, like we're at war with Iran right now. And so this case, of course, is highly relevant. This history is highly relevant. And this is one of those episodes where it's like maybe a little bit less about exactly what the majority opinion says and more about how this case fits into a really complicated and, and long history of American executive power in war making, foreign relations, all of that good stuff. You know, we've been talking, I guess, the last couple of episodes, certainly last week in the Patreon episode, about how...

• 4:14Speaker 05

  War and war powers for the US government that really we're talking about extralegal frameworks that the US government is operating in here, right? What we have here for this episode is, yes, it's a case from the Supreme Court. But what we've been talking about for a long time now is how the executive really operates, like, without a lot of constraints at all on foreign policy by the Supreme Court or Congress. And so we're talking about a space really that seems like it's actually accepted from American law and just want to make clear and like discuss and like break down how in part that lack of legal accountability and legal clarity results in what we see today.

• 4:59Speaker 05

  So yeah, let's get into some of this history. I want to say also before we step into this discussion, like, I think it's important that people understand that what you know about the America-Iran relationship comes through a filter, that American understandings of Iran, of the Islamic Revolution, the hostage crisis, and today are extremely different from how Iranians understand those events and also how the rest of the world understands those events. And the filter through which Iran and the rest of the world see those events transpiring today between the US and Iran is different from the filter that we have too. So let's start in the 50s. Iranian governance at this time, just to put it really simply,

• 5:41Speaker 05

  was engaged in an internal power struggle between the Shah of Iran, Mohammed Reza Pahlavi, who was a monarch, and the Prime Minister of Iran, Mohammed Mosaddegh, right? Mosaddegh makes moves to nationalize Iran's oil industry, which up until that point, from the early 1900s, had been owned by Great Britain. This was a privatized corporation, but owned in part by the British government, called the Anglo Persian Oil Company. That is the predecessor to British Petroleum, BP. And so Iran is a very oil-rich, very well-natural resourced country. And within Iran, Britain, a foreign country, owns that resource.

• 6:23Speaker 05

  Owns the oil. And so Moazadeh, at the time, is making moves as a leader in the Iranian government to nationalize the oil industry. Now, Britain and the United States don't like that. No, no, no, no, no. We own the oil. So the CIA and MI6 back Iranian royalists, who are loyal to the Shah, to the monarchy, in a coup. And Moazadeh, the prime minister, is deposed. So the Shah takes over and rules Iran as an absolute monarch for the next two decades.

• 6:58Peter Shamshiri?

  This is like the formative event in Iranian minds. When Moazadeh is deposed and the Shah starts cracking down, which you're about to talk about, but this is like very important to the Iranian consciousness. Because Western powers have been very active in the country since they struck oil in the early 1900s. And this was sort of like proof to the mind of the median Iranian that they were not pulling the strings in their own country, that Western powers were pulling the strings.

• 7:29Speaker 05

  Yeah.

• 7:30Peter Shamshiri?

  That's what sticks with them through the revolution.

• 7:33Speaker 05

  Yeah, that's right. And through today even, certainly, right? So the Shah takes over, Moazadeh is deposed. And what characterizes the Shah's reign over the next two decades, until the Islamic Revolution in the late 1970s, is repression, torture of dissidents, you know, corruption, a monarchy acting like a monarchy. And again, with, from the perspective of the Iranian people, this is Western backed. He's backed by the United States and Great Britain in doing all of this, right? So this period is characterized in Iran as having a lot of unrest, a lot of disapproval for the Shah's rule. And so social and political opposition across broad swaths of Iranian society are coalescing over this time.

• 8:18Speaker 05

  The unrest and the opposition to the Shah in Iran is happening in a connected and a very parallel way with growing opposition to the United States in the region, to the role that the United States is playing in the Middle East and North Africa. West's role in the creation of the State of Israel in 1948, and then further expansion of the State of Israel in 1967. And in 1973, there are developments in the Israel-Palestine issue, including all-out wars. And the United States at this time is outright supporting aggression and these wars, and at the same time is fomenting sectarianism across the Middle East.

• 9:00Speaker 05

  These things are very, very clear to the people in these countries. Mm-hmm. Right? The people clock what the United States is doing, and that it leads to unrest, right? And so, you know, this is just to say that disapproval of the Shah and the way the monarchy is sort of ruling over Iran is very connected to the idea that the United States is trying to exert this control over Iran and the Iranian people. Right? So mass protests of the Shah and this, you know, dynastic rule of Iran start in late 1977, again, representing really broad coalitions of Iranian society.

• 9:45Speaker 05

  Clashes happen between protesters and state police. I'm simplifying here. We're talking about different groups taking up arms against the state or civil disobedience, nonviolent protests, all of these things clashing with state law enforcement and the power of this monarchy. And then, you know, you hate to reduce these things to like one event, but something that certainly doesn't help stop the Islamic Revolution from, you know, breaking out in earnest is that in late 1977, on New Year's Eve, in fact.

• 10:17Speaker 06

  President Carter toasted the Shah's leadership at a New Year's celebration in Iran.

• 10:22Speaker 05

  President Jimmy Carter gives a televised toast to the Shah. Iran.

• 10:29Speaker 07

  Is an island of stability in one of the more troubled areas of the world. This is a great tribute to you, Your Majesty, and to your leadership and to the respect and the admiration and love which your people give to you.

• 10:48Speaker 05

  And it pisses people off and it just adds fuel to the fire that the Shah is actually to some extent a puppet regime of the United States in Iran.

• 10:57Peter Shamshiri?

  It's coming in an era where not only has political repression amped up, like in 75, the Shah bans all political parties other than his own, but the country has gotten a good amount richer because of oil, but it has been distributed very unequally across class. A lot of economic reforms have failed at this point. The Shah has like a very weird relationship with Islam, which is a major part of the society, and he is spending a huge amount of the country's oil money on American weaponry,

• 11:40Peter Shamshiri?

  including like an air force that they literally don't have anyone qualified to manage. They don't have pilots that can fly fucking F-16s and shit like that. And so all of this together has convinced huge swathes of Iranian society that not only is the Shah incompetent, but that he's just doing whatever America tells him to do. Which isn't entirely true, but there's sort of like this underlying truth to it. At the same time, because his position in Iran is weakening, the Shah is looking for validation from the United States. He wants his primary backer to support him, and every time they do, it backfires back at home.

• 12:19Speaker 05

  Exactly, exactly. So, over the course of 1978, you have all of this culminating in a really broad-based uprising in earnest against the Shah. And it's undeniable that the Shah has lost all credibility to the Iranian people and that the Iranian people want him out. So. The Shah leaves Iran for exile in January of 1979. And the next month, another key figure that maybe even more than the Shah's name, Pahlavi, people associate with Iran for sure. The next month, February 1979, Rohla Khomeini comes back to Iran. So now, Khomeini had been a prominent cleric in the 60s, who was exiled at that time for criticizing the Shah.

• 13:04Speaker 05

  Khomeini had been living in Iraq. And now, once the Shah was exiled, Khomeini came back to Iran and becomes the de facto leader for most of 1979. The de facto leader of the groups taking up the fight against the monarchy. A few months after the Shah leaves for exile, the monarchy is really ousted for real. Now, the Islamic Revolution, so to speak, isn't quite over with just the Shah and the monarchy being exiled. A revolution is a period of transformation, and that is certainly the case for all of Iranian society. It was a period of transformation for all of the Iranian government.

• 13:47Speaker 05

  There was a provisional revolutionary government in 1979. There are still all of these changes happening, and the people of Iran figuring out what the government is going to look like now that the people are in charge. So, you know, the uprising, the struggle is still continuing throughout 1979. In October of that year, President Jimmy Carter makes another mistake in the eyes of the Iranian people. Against State Department advice, he allows the exiled Shah to come into the US for cancer treatment. This deeply, deeply upsets Iranian revolutionaries,

• 14:30Speaker 05

  who are at once afraid that this is a sign that there's going to be another coup backed by the United States to reinstall the Shah. And they also are angry because they are demanding that the US return the Shah to Iran to stand trial.

• 14:46Peter Shamshiri?

  Carter was initially quite skeptical of allowing the Shah back in because he's not a total dumbass. He's sort of like, well, this would be bad, right? For our relations with the new regime. But he was convinced by several people. Including Henry Kissinger.

• 15:02Michael Liroff?

  Oh.

• 15:03Peter Shamshiri?

  Allow our friend, the Shah, back into America for cancer treatment. By the way, he died like the next year. I don't know what treatment he got, but it wasn't like mega effective.

• 15:14Speaker 05

  Yeah. Did Kissinger ever once give a US president good advice? No. It's all ridiculous.

• 15:21Peter Shamshiri?

  It depends on what your goals are, right?

• 15:23Speaker 05

  True.

• 15:23Peter Shamshiri?

  Kissinger might have enjoyed all of this.

• 15:25Speaker 05

  Yeah, that's true.

• 15:26Peter Shamshiri?

  Every time he caused unrest in another country, his head got a little lower.

• 15:33Michael Liroff?

  I was gonna say his dick got a little harder, but.

• 15:36Peter Shamshiri?

  That as well. No, I'm, I'm simply referring to his very low head by the end of his life.

• 15:41Speaker 05

  Okay, so with the Shah invited into, permitted into the United States, a group of revolutionary students in Iran, plan and eventually execute a takeover of the American Embassy in Tehran in November of 1979. They take hostage of dozens of Americans inside the embassy for what we now know ends up being over a year, some 440 days. These students have certain demands of the US government. They are demanding that the Shah be returned to Iran for trial. They demand that the Shah's assets be unfrozen by the United States so that the Shah's assets will be returned to Iran and the Iranian people.

• 16:25Speaker 05

  And they want the United States to apologize for interfering in Iranian affairs and quit interfering in Iranian affairs. So responding to the hostage crisis, Jimmy Carter, just a few days after the American Embassy is taken, Jimmy Carter freezes Iranian assets inside the United States. So what are we talking about with this freezing of assets? You can imagine, of course, that the Iranian government has deals with American corporations, for example. There's a flow of money between the two countries. And in response to the hostage crisis, Jimmy Carter says, okay, that flow of money is halted and any of those assets that are in the United States are frozen. Carter does this under the IEEPA, the International Emergency Economic Powers Act,

• 17:10Speaker 05

  which again is legislation that we talked about a couple of episodes ago because Trump used it as justification for his tariffs. In this case, of course, the statute authorizes the president to make economic decisions during times of emergency, during times of war. But as part of the freezing of Iranian assets, Carter also sort of freezes court proceedings in the United States that have to do with any of Iran's interests. So let's take the example at issue here in this very case. Dames & Moore is an American corporation. It's an engineering and construction firm that was saying it was owed money for work that actually they did for the Shah's government, right? Years back. And they were suing to recover that money

• 17:55Speaker 05

  in the United States in federal court. But judgments on these cases were frozen by Carter's executive order. Dames & Moore's legal proceedings are ongoing over the course of the Iranian hostage crisis. Now separately, as the Iranian hostage crisis negotiations are culminating in an agreement, part of that agreement is that in exchange for release of the hostages, President Carter agreed that all legal proceedings brought by Americans against Iran would actually be terminated, not just frozen, not just the judgments not moving forward, but terminated and that those disputes, instead of being in federal courts, they're going to now be decided in like this administrative arbitration process.

• 18:40Speaker 05

  Like y'all go work it out with arbitrators. We're not in US federal court anymore. All of this is again justified according to the Carter and then later the Reagan administrations as within the president's powers under the IEEPA. But this part of it, that legal proceedings would be terminated, that the president can decide, oh, no, you can't file a lawsuit in US district court over this. You have to go through arbitration all of the sudden, right? That's quite unprecedented at this time. And so Dames & Moore, this American company that is suing for money it was owed by the Shah's government, actually files a lawsuit against the United States government, the Carter and Reagan administrations,

• 19:24Speaker 05

  for telling them they have no lawsuit. They have to go through arbitration. That's how we get to the Supreme Court.

• 19:30Peter Shamshiri?

  Yeah, and I haven't done it yet, so let's just do it for a bit now. Dames and more, folks.

• 19:36Michael Liroff?

  Mm hmm.

• 19:40Peter Shamshiri?

  That's what I'd name my old fashioned saloon, you know, back in 1860. We got, come on in, folks, we got dames and more.

• 19:47Speaker 05

  Dames and more, take me to dinner first.

• 19:50Michael Liroff?

  Strip clubs in the 1950s, dames and more.

• 19:53Peter Shamshiri?

  We got exactly what you're looking for, kid. We got dames and more in here.

• 19:58Speaker 05

  Use your imagination on the more.

• 20:01Peter Shamshiri?

  Before we move on from the background, I want to share two little bits. One is just one of my favorite parts of the hostage crisis, and there are so many. At one point, Khomeini receives a letter ostensibly from Jimmy Carter that does in fact seem to apologize in some sense for American interference in Iranian affairs, identifies numerous injustices and does so ostensibly with the purpose of opening up negotiations. Like, look, we admit that we have committed some crimes. The Iranian government does not use this to open negotiations. Instead, they publish it, they release it to the public.

• 20:43Peter Shamshiri?

  And then Washington denies it that Carter wrote this letter. And some people have claimed that this was forged by one of the emissaries that the United States was using. They were using a couple of schmucks to do the initial negotiations. And some people believe that it was in fact a letter from Carter that Washington just denied it because they couldn't publicly acknowledge that they had admitted to these crimes or whatever. But it does appear that at one point, someone on the American side sent a little apology for their various crimes. And the Iranian government just published it to the world. And then everyone in Washington was like, no, no, that's.

• 21:19Speaker 05

  No, we would never do that.

• 21:21Michael Liroff?

  What? Doesn't sound like me.

• 21:25Peter Shamshiri?

  And you gotta admit, it doesn't. You know what I mean?

• 21:29Peter Shamshiri?

  The other thing I want to talk about a little bit here is the end of the hostage crisis, because there's a lot of mythology about why the hostage crisis ends. Why were the hostages released right at the exact moment of Reagan's inauguration? Right? Our best understanding of this is that they wanted to humiliate Carter. So I think there's this like right wing fantasy that Reagan had a real plan and he was gonna kick some ass, but there's a lot of reason to believe that that was just bullshit. That's just made up. It's really just a fantasy. In fact, there's credible reporting that the Reagan campaign during the 1980 presidential

• 22:07Peter Shamshiri?

  campaign met with Iranian emissaries in Madrid behind the United States government's back to coordinate a late release that would make Reagan look good and make Carter look bad. So the Reagan campaign was collaborating with the Young Islamic Republic to embarrass Jimmy Carter.

• 22:30Michael Liroff?

  And all it cost was keeping the hostages detained for just a little bit longer.

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• 24:29Peter Shamshiri?

  So let's talk about the law. So again, as part of the agreement to release the hostages, the president orders that all legal proceedings brought by Americans against Iran would be suspended, terminated, and that those claims would all be funneled into like this newly established arbitration tribunal. And Dames and Moore, who have claims against Iran, they challenged the legality of these executive orders. They say that they were outside the scope of the president's power. So the legal question is, does the president have the power to do this under the International Emergency Economic Powers Act or otherwise? And the Supreme Court, in an eight to one decision, says yes.

• 25:11Peter Shamshiri?

  So first, the court says that some of the things the president did are expressly allowed for in the IEEPA. He froze assets, he nullified attachments on those assets, he transferred those assets, all of which is relatively expressly allowed for by the law. Okay. But then there is this whole suspension of claims thing. The whole terminating lawsuits and then forcing them into arbitration. That is not really in the law. The court openly admits that the law does not authorize that, which you'd think would be the end of the case, right? It feels, when you're reading it, like it's the end of the case.

• 25:52Speaker 05

  Yeah, like they're about to rule that way.

• 25:54Peter Shamshiri?

  Yeah.

• 25:55Speaker 05

  Yeah. They're like, the law doesn't actually say the president can do this.

• 25:58Peter Shamshiri?

  The president does not have this power under the law. And you're like, okay, game over, right? No, the court said it doesn't matter because Congress has acquiesced on this issue. They say, basically, there have been similar agreements entered into with foreign nations in the past to settle claims, although they don't specify. You're like, are they similar?

• 26:21Speaker 05

  Right.

• 26:22Peter Shamshiri?

  It's kind of hard to believe.

• 26:22Speaker 05

  Oh, yeah, this is exactly like how it went down with France, you know, five years ago. But it's like, they don't talk about it.

• 26:29Peter Shamshiri?

  When you read it, they're sort of like, well, like, we've settled stuff with China. And it's like, right, but that's not exactly what's happening here, right? It's not just a settlement. But they say, look, this has happened before and Congress never objected to it. And therefore, it has implicitly accepted these types of settlements as legitimate. So this is a very bizarre understanding of constitutional power, right? What the court is saying is that one branch of government can effectively seize power from another simply by exercising the power and then hoping the other branch doesn't object. Right? For law students and lawyers out there, this has been called the constitutional law by adverse possession.

• 27:13Peter Shamshiri?

  Adverse possession is this idea in property law that like, if you inhabit a property for long enough without objection, then it will become yours. So from a pure constitutional theory perspective.

• 27:27Peter Shamshiri?

  It's as if the Constitution only serves as guidance here. And then like, the actual law is sort of like a mud wrestling match between the branches or something. And it's not to say that what the branches have done historically should be irrelevant, but it feels bizarre for it to sort of override the realities of the written law. Right? For them to say like, look, the law doesn't authorize this, but we've sort of been acting like it does, so now it does.

• 27:53Speaker 05

  It's not even a wrestling match here between the two branches. It's that Congress didn't do anything.

• 27:59Peter Shamshiri?

  Right, right.

• 28:00Speaker 05

  It's like, the Constitution is guidance, but then if one of the branches does something and the other branch doesn't do anything, then they can actually do whatever they want.

• 28:11Peter Shamshiri?

  Right, you're not defending yourself.

• 28:13Speaker 05

  Right.

• 28:13Peter Shamshiri?

  And so, we're gonna take that as surrender.

• 28:16Michael Liroff?

  Yeah, it's not surprising that when the executive and Congress are sort of figuring out the division of powers and foreign affairs, that it might be informal in a way. Right? It might be like a sort of informal political, see how things shake out thing. But then, once it hits the Supreme Court, you'd expect them to be like, but there are formal limits to this. The Constitution says XYZ, the statutes say XYZ, and that's that. And instead, they're like, just eyeballing it, you know?

• 28:49Peter Shamshiri?

  Yeah.

• 28:49Michael Liroff?

  Presidents have done stuff similar to this in the past, so I guess it's good.

• 28:53Peter Shamshiri?

  There's a parallel situation that you might imagine that comes up quite a bit, where a statute is ambiguous. Right? And so, it's sort of unclear. Does the statute authorize this or not? We're not sure. And then you start to look towards historical practice. Well, the president's been acting like it authorizes it. The Congress has been acting like it authorizes it. Maybe it does, right? But here, you have a situation where the statute is not ambiguous. The court says, oh, this is clear. It doesn't authorize this.

• 29:22Michael Liroff?

  Right.

• 29:23Peter Shamshiri?

  And yet, we're still going to act as though the president can just sort of like forge his way through. It doesn't quite make sense. And it's a, it's sort of butchering this, this old case from the 50s, from the Korean War, Youngstown Sheet and Tube. We talked about this in our last premium episode, too. This is a big war powers case because- Basically Truman tried to seize some steel mills to break a strike during the Korean War and the Supreme Court was like, no, you can't, you can't seize the steel mills. You can't just do that. Just because there's a war doesn't mean you can seize steel mills, you know? And there's a concurrence in that case where Justice Jackson breaks all this down. He's like, there are areas where a statute clearly authorizes it.

• 30:08Peter Shamshiri?

  There's a twilight zone where it's unclear. And then there are areas where the statute clearly doesn't authorize it. And this majority sort of just like butchers that whole analysis. And like just turns it on its head and is like, yeah, just because it doesn't authorize it doesn't mean anything.

• 30:27Peter Shamshiri?

  Part of me doesn't want to put too much weight on what the court's trying to do here because the actual bottom line is that this case is about the deal that ended the hostage crisis. Right? You have to look at it in that framing. The court heard this case on an expedited schedule. I think it was only like a month or so. And that means that like, to some degree, the court might think, oh, if we rule against the administration here, the legitimacy of the deal to end the hostage crisis is at issue. Right?

• 30:58Michael Liroff?

  Right.

• 30:58Peter Shamshiri?

  This is going to fuck up international relationship in a way that's like way beyond our scope. And like, what's the simplest, easiest political decision for the court is just to be like, all right, now you, the administration can do this. Like, we're not getting involved with this shit. Right? But they don't have the balls to say that. They don't have the balls to be like, no fucking way. We're not touching this. No way. What are you talking about? But that, I think that is what's happening here.

• 31:26Michael Liroff?

  While we're talking about the executive branch sort of extending itself, acting in this almost extralegal manner in regards to Iran in the early eighties, we have to discuss the Iran contra affair and the absolute insane shit the Reagan administration was up to in the region in this time.

• 31:47Speaker 05

  Yeah.

• 31:48Michael Liroff?

  Yeah. So in the history leading up to this, we talked about how, you know, the Shah was buying lots of US weapons, right? Buying fighter planes, buying guns and what have you from the US government. And we talked about how right when, you know, 1980 is ending, end of 1980, Iraq evades Iran.

• 32:13Michael Liroff?

  Now, this creates a demand in Iran for American weapons and American parts, replacement parts for their weapons that are breaking down. At the same time, the political conditions in America are such that, you know, Reagan is out here saying, "We are not going to send any weapons to Iran." And what's more, they're going out and lobbying other nations not to send weapons to Iran. At the same time, there are people in his administration saying, "Hey, if nobody in the West is going to sell weapons to Iran, what if the Soviet Union does? What if the Soviet Union starts expanding their influence?"

• 32:58Michael Liroff?

  Other people are saying, "Hey, we could maybe sell weapons to quote unquote 'moderates' we like in Iran and strengthen their hand against, you know, the regime we don't like." And still, other people are saying, "Hey, Hezbollah has six hostages over in Lebanon, and if we sell weapons to Iran, maybe they can help us broker a deal to get those American hostages out." Depending on who you ask and when you ask them years later, one of these explanations is like the reason why the US secretly started selling weapons to Iran.

• 33:40Michael Liroff?

  Hard to know which is the real one, or maybe it's all three. But the bottom line is, the Reagan administration does start secretly selling weapons to Iran and does it for several years. And they use Israel as a go-between, they use Saudi Arabia as a go-between. Now, this is going on for a few years, and the guy in charge of it leaves his position and is replaced by who was then a little-known, sort of mid-level national security guy, Oliver North, now somewhat infamous in political circles. And Oliver North takes over, and he's like, "Hey, you know what I noticed?

• 34:24Michael Liroff?

  The Sandinistas are running Nicaragua, and we don't like them."

• 34:27Speaker 05

  Layers of history, bro. Just geopolitics happening all the time.

• 34:34Michael Liroff?

  And there are these Contras that we do like that oppose the Sandinistas, right? But Congress has said, we can't arm them anymore. We can't fund them anymore. We can't help the Contras. Well, if we want to secretly sell arms to Iran and we want to secretly fund the Contras, maybe we could like roll this together into one thing. Maybe we can sell weapons to Iran at a markup and then take the proceeds and give it to the Contras, thereby solving both our problems. And they did.

• 35:11Speaker 05

  It's called the Iran-Contra affair.

• 35:14Michael Liroff?

  That's right. The Iran-Contra affair, where they were secretly selling weapons to Iran and secretly funding the Contras expressly against congressional prohibition against funding the Contras. You know, they're thinking being like, well, we're not using congressional appropriated funds, are we?

• 35:33Speaker 05

  Yeah, we're using weapons proceeds.

• 35:34Michael Liroff?

  Right. We're using all these great profits we're getting from our secret arms sales to Iran. Funny, funny story. Another alternative method was they tried to get money from Brunei and Ali North's like secretary, I think her name is Fawn Hall, something like that, messed up the Swiss bank account number, like transposed numbers. And some random guy just got $10 million in his bank account.

• 35:57Speaker 05

  Sick.

• 35:58Michael Liroff?

  It was like, I don't know where this came from. And it like reported to the authorities and had to be returned to Brunei. And it was like too public then for them to like, you know, try again. Yeah. Real, just real top shelf stuff.

• 36:12Peter Shamshiri?

  How rich do you have to be to call the cops when they?

• 36:15Michael Liroff?

  Somebody gave me $10 million.

• 36:17Peter Shamshiri?

  They've already got a Swiss bank account. They're probably loaded. Like that was what you did in the eighties, right? If you were quite rich. Imagine you get 10 mil and you're like, there's been a mistake. I'm waiting five years before I say anything.

• 36:32Michael Liroff?

  I didn't notice. I didn't, I didn't notice at all.

• 36:34Speaker 05

  Yeah, I'm starting to talk about adverse possession. You know what I mean?

• 36:38Michael Liroff?

  Seriously. So this all comes out in 1986. It becomes very public. It's a huge scandal. There's a commission appointed. There's a special counsel appointed. A bunch of people are indicted. Most of them, if not all of them, are convicted. Some of those convictions are overturned on appeal. Some of them only result in probation as a sentence. One guy goes to prison. Some, but ultimately, everyone, including some who were awaiting sentencing, I believe, got pardons. They got pardoned by George H. W. Bush at the end of his term. And so really, nobody involved paid any price, other than that one guy who went to prison. Sucks

• 37:23Michael Liroff?

  for him. But I do think it's an interesting lesson in how unrestrained the executive branch often is. We talk about how this is an extralegal area and how courts want to stay out of it. And there's just a lot of political wrangling. And you can see that here, where these guys were cowboys, right? They were just doing whatever the fuck they wanted. They were like, yeah, let's just gouge Iran on weapons because they need them for the war with Iraq, and then use that money to fund the Contras in Nicaragua. Like, what the fuck, right? Like, they're just doing whatever they want and daring someone to call them out on it. And the political fallout ended up being very little, right?

• 38:08Michael Liroff?

  Like Reagan's VP won election two years later, and he pardoned everyone involved.

• 38:14Peter Shamshiri?

  Yeah. And not just that, like, but Oliver North became like a talk show host.

• 38:20Michael Liroff?

  Right, like.

• 38:20Peter Shamshiri?

  He's a right wing hero because he's a criminal piece of shit. You know what I mean?

• 38:25Michael Liroff?

  Who got away with it. Yeah.

• 38:26Speaker 05

  Yeah.

• 38:27Peter Shamshiri?

  Right.

• 38:27Speaker 05

  And what you see here, too, is when Congress does act, Congress had acted in

• 38:34Michael Liroff?

  Right.

• 38:34Speaker 05

  the Iran-Contra affair, at least leading up to the Iran-Contra affair, in prohibiting the executive to act the way it did. And we said this on the last episode as well, right? In this extra legal world playing field that we're in, what actually is incentivized is for presidential administrations to do whatever they want and maybe have to ask for forgiveness afterwards. Or maybe they give themselves forgiveness.

• 39:03Michael Liroff?

  Right.

• 39:04Speaker 05

  And there's no accountability at all to what is a huge presidential overreach and a violation of the separation of powers.

• 39:12Peter Shamshiri?

  Yeah, maybe in light of some of the discussion of the malfeasance of the Reagan administration. It makes sense to circle back to the end of the hostage crisis. And I'm going to read from the Alger's Accords, which was our agreement with Iran to end the hostage crisis.

• 39:33Peter Shamshiri?

  Point one, non-intervention in Iranian affairs. The United States pledges that it is, and from now on will be, the policy of the United States not to intervene directly or indirectly, politically or militarily, in Iran's internal affairs. What happened subsequent to that was that the United States funded Saddam Hussein's invasion of Iran. And then also illegally sold Iran weapons on the other side of that, immediately after the agreement was struck.

• 40:08Michael Liroff?

  Yeah.

• 40:08Peter Shamshiri?

  All the Iranians had to do was release the hostages, which they did. And among other things, the United States would stop meddling in Iranian affairs, which they didn't even for a fucking second. Not for a, not for a moment.

• 40:22Michael Liroff?

  Blink.

• 40:22Peter Shamshiri?

  You know, I want to use this as just like a big picture framework for understanding American Iranian relations. Because for us, it's 1979 and the hostage crisis. And anyone in government now.

• 40:37Peter Shamshiri?

  Believes that Iran is basically this like evil terrorist state. And that has been the case for 50 years because of the hostage crisis. Meanwhile, in Iran, ever since 1953, it's been a belief that the West, spearheaded by the United States, is just constantly meddling in Iranian affairs. Right? Right. Now, I think to some degree, everyone is correct. But, you know, the Iranian state is sort of characterized by its paranoia about the Americans. And that paranoia at times exceeds the level that it should.

• 41:19Peter Shamshiri?

  There are times during the Shah's reign where people believed that everything that was happening economically was sort of the result of American meddling, when it wasn't. But there has never been a time since 1953, really since the 40s, when the Allies attacked Iran to gain a supply route, but whatever. You can keep walking. You know what? Let's walk it back. 600 B.C., Cyrus the Great is born in a small village. But the real dynamic between these countries is sort of, yes, this seething hatred from the Iranian side toward America on one side, but nonstop interference from Americans, right?

• 42:02Peter Shamshiri?

  Interference that has resulted in hundreds of thousands of dead in the Iran-Iraq war alone, and is now going to result in tens of thousands more dead, more likely than not, right?

• 42:14Michael Liroff?

  To say nothing of, you know, all the people killed and tortured and imprisoned by regimes that were backed by the U.S., right?

• 42:22Peter Shamshiri?

  Right. And the victims of sanctions, right?

• 42:25Michael Liroff?

  Oh.

• 42:25Peter Shamshiri?

  It's always so interesting to me to hear people talk about, like, well, what, why is the war in Iran justified? And maybe they point to the hostage crisis. More likely these days, they point to the rhetoric, right? They say, "Death to America." And it's like, yeah, there has not been a generation of Iranians that hasn't had their life made materially worse by...

• 42:49Peter Shamshiri?

  America, of course, they say death to America. How do you get to a point where students believe that everyone in your embassy is a spy? To the point where they want to capture it? By interfering in the country's affairs for 25 consecutive years? That's how, you know?

• 43:04Speaker 05

  Yep.

• 43:05Peter Shamshiri?

  I don't know that I have a broad point here exactly. Other than the disconnect between the rhetoric about Iran and like the dangerousness of the regime that you see from American media is completely detached from the actual reality of America's impact on Iran, right? It is to them this one way thing. This country is full of radicals who hate us irrationally, right? And my real pitch here is that there's some truth to that. There is an irrational anti-Americanism in Iran, but it is the natural output of 70 years of interference in Iranian affairs.

• 43:46Speaker 05

  Yeah, you can call it irrational, you can call it whatever you want, but when hundreds of thousands of Iranians are in the street just last week to demonstrate their opposition to the US bombing their country and US F-35 jets are purposely flown over those demonstrations and how loud that is, right?

• 44:07Peter Shamshiri?

  Yeah.

• 44:07Speaker 05

  Irrational, rational.

• 44:08Peter Shamshiri?

  It's irrational in the same sense that like paranoia can be irrational, but also a product of your experience.

• 44:15Speaker 05

  Mm hmm.

• 44:15Peter Shamshiri?

  If you are consistently traumatized, it might create a paranoia. The paranoia is simultaneously rational and irrational, right?

• 44:24Speaker 05

  Mm hmm.

• 44:24Michael Liroff?

  There's a term for that in like actual trauma, right? It's called hypervigilance for people with PTSD.

• 44:29Speaker 05

  Exactly, yeah, exactly.

• 44:31Peter Shamshiri?

  I have sort of like a broad takeaway from a lot of these cases because a lot of them are predicated on the idea that we need like strong executive leadership in foreign policy, right? This is why presidents must be allowed to act untethered by Congress or courts or whomever when it comes to foreign policy, because we need strong men being decisive. And I think many people believe that that philosophy speaks for itself, right? Of course, of course, you can't do war by committee, right? You need a strong, clear voice to cut through the bullshit and get things done.

• 45:07Speaker 05

  Totally.

• 45:08Michael Liroff?

  You don't need a schoolmarm telling you what the rules are.

• 45:11Peter Shamshiri?

  And in practice, look at these bumbling dipshits. Look at these callous, disgusting freaks who are unbound by any rules, right? That's where it has led us, right? The outcome of this case in a vacuum, not super offensive, right? The hostage crisis ends and we sort of all move on and that's sort of how it goes, right?

• 45:35Speaker 05

  Yeah.

• 45:36Peter Shamshiri?

  But behind it is this idea that like you need the president to be able to act. You need him to be able to act freely. And if Congress cedes their power to him, then he can seize it and use that power forever. I think that philosophy has led us to terrible places over the span of our country's existence.

• 45:59Michael Liroff?

  Peter, it sounds like you are becoming a convert to my theory that I first floated on the Patreon episode last week, that our political elites are bloodthirsty, subhuman morons. What do you think?

• 46:13Peter Shamshiri?

  You know, Michael, you have been slowly winning me over with this new and exciting theory you have.

• 46:25Peter Shamshiri?

  All right, folks, we're taking off next week because once again, I have got to go to the Caribbean. I'm doing it twice a month now. And then in a couple of weeks, we are going to come back with Hudson v. Michigan, a case from 2006 about the Fourth Amendment. Follow us on social media at 54pod, subscribe to our Patreon, patreon.com/54pod, all spelled out for access to premium and ad-free episodes, special events, our Slack, all sorts of shit. See you in a couple of weeks.

• 46:57Michael Liroff?

  Bye, everybody.

• 46:58Speaker 05

  Bye, y'all.

• 47:05Michael Liroff?

  Five to Four is presented by Prolog Projects. This episode was produced by Andrew Parsons. Leon Nafok provides editorial support. Our website was designed by Peter Murphy. Our artwork is by Teddy Blanks at Chips NY, and our theme song is by Spatial Relations. If you're not a Patreon member, you're not hearing every episode. To get exclusive Patreon-only episodes, ad-free episodes, discounts on merch, access to our Slack community, and more, join at patreon.com/fivetofourpod.

• 47:47Speaker 05

  Yeah, we don't need to take this week off. Third host, Afro Man.