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swimmingly, which seems a little odd seeing that the United States Navy itself
was experiencing problems in adjusting to the F-14. Ellsworth, however, was
not in the least put out by the implications of the contrast. The reason why the
Persians had been successful, he told the Senate committee in all seriousness,
was that ‘the government of Iran is turning to innovative and modern manage­
ment to stay on top’. It need hardly be said that the Defence Department had

reasons of its own to present as flattering a picture as possible of the arms­
training programme. Ever since it received the presidential directive of 1972 it
had consistently omitted Persia from the list of Middle-Eastern countries
whose requests for arms were subject to regular review by the department,
concentrating instead upon the more rewarding work of meeting the shah’s
wishes. Within the department the individual armed services competed among
themselves to sell him weapons, largely with an eye to recouping some of the
research and development costs of the weapons in question and to reduce, by
means of longer production runs, the cost of the weapons to their own services.
Thus, the United States Air Force and the Navy both strove to persuade the
Persian government to purchase their respective versions of the F-14.
The case of the F-14 purchase is a highly instructive one for the light it sheds
upon the way in which arms contracts were negotiated with the shah’s govern­
ment. The F-14 Grumman Tomcat is the most advanced and expensive fighter
ever produced in the United States. With its associated Phoenix missile system
and ground control each fighter costs, by all reports, around $20 million. The
Grumman Corporation, which had a contract for the development of the

aircraft for the United States Navy, had almost bankrupted itself in putting the
plane into the air: it lost $18 million on the project in 1971, $70 million in 1972.
Desperate to recoup its losses and to make the plane a financial success,
Grumman undertook to pay commissions amounting to $28 million to
individuals who promised to secure purchase orders from the Persian govern­
ment. The first such order, for thirty aircraft, was obtained in 1973 through an
acquaintance of General Muhammad Khatami, the commander-in-chief of the
Persian air force and a brother-in-law of the shah. A second order for a further
fifty aircraft, bringing the value of the total contract to about $2,000 million,
was secured in the summer of 1974. To help Grumman overcome the financial
difficulties it was experiencing at this time, the Persian state bank, Bank Meili
Iran, loaned the corporation $75 million.
General Khatami was killed in a water ski-gliding accident in September

T975- Whether the timing was significant or merely incidental, the Persian
vice-minister of war, General Hasan Toufanian, began to make noisy protests
in public about Grumman’s large payments to commission agents. ‘This shows
at the foreign companies want to loot us,’ he exclaimed at a press conference
in February 1976. ‘We will not allow this and we will pull the extra money out
0 their throats.’ What the general forbore to mention was that he himself had
emanded, at the time of the signing of the second F-14 contract, that