Page 309 - Arabia the Gulf and the West

306 Arabia, the Gulf and the West

Grumman should dispense with their original agent and deal directly through
him. Toufanian, who was in charge of the Persian arms procurement pro­

gramme, was merely acting, however, as in other instances, on his master’s
orders. The latter now intervened in person to castigate Grumman for resort­
ing to bribery (a practice unheard of in Persia), and to demand that the aircraft
company deduct from the cost of the F-14 contract the $28 million paid out in
douceurs. The shah’s own family, however, was not exactly immune to the lure
of commission money: according to testimony given before the Senate Foreign
Relations Committee later in 1976, the Northrop Corporation, for example,
paid several hundred thousand dollars to one of his nephews for services
rendered. Meanwhile Grumman had unhappily complied with the shah’s
edict, without anyone, it would seem, knowing for certain where the $28
million, or the bulk of it, eventually wound up. What made the loss (which was
$5 million more than Grumman’s total profits for the previous year) doubly
hard to bear was that the company had to put up with a good deal of unctuous

moralizing by the shah’s ministers - in particular by the prime minister, Amir
Abbas Hoveida, who piously protested when the matter became public, ‘For
God’s sake, foreign businessmen should be more ethical in our country!’ In
November 1978, on the eve of the shah’s departure from Persia, Hoveida was
himself indicted on charges of corruption on a grand scale.
A fall in oil revenues in 1975-6 caused a temporary lull in the pace of arms
procurement, although some $12,000 million was budgeted from all sources
for expenditure upon weapons and related services, construction and equip­
ment in 1976-7. At the time of his indignant outburst against Grumman,
General Toufanian somewhat heavy-handedly suggested that Persia might
have to cut back her arms purchases if the price and volume of her oil exports
were not increased. His remarks did not go down well in Washington, where
Congress was growing more and more uneasy about the scale of arms sales to
the Gulf countries, and to Persia and Saudi Arabia in particular. There had
been hearings on the subject by either the Senate Foreign Relations Committee

or the House Foreign Affairs Committee in nearly every session since I973>
hearings which had revealed a sharp difference of opinion between those
senators and congressmen who suspected that the arms race was getting out of
control and officials from the State Department who exhibited considerable
equanimity, not to say complacency, about the whole business. At the
Department of Defence, however, doubts had begun to arise over the wisdom
of the Persian arms procurement programme, especially as United States
military advisers and technicians in Persia had begun to report on the difficu -
ties which the Persian armed forces were experiencing in assimilating the
advanced weaponry they were receiving. At the end of 1973 the secretary 0

defence, Schlesinger, had sent a retired army colonel to Persia in an unof cia
capacity to act as an independent adviser to the shah on arms procurement an
to keep Schlesinger himself informed about the shah’s views. To judge rom