DNI-NEWS Digest - 14 May 1998 to 15 May 1998

There are 3 messages totalling 423 lines in this issue.

Topics of the day:

1. Sport: Iran, best asian football team in 97:-) 2. NYTimes:U.S. Arms Embargo on Iran Has Loophole: Canada 3. Montazeri Denounced by Isfahan Marchers

Sport: Iran, best asian football team in 97:-)

Hi, Here is the latest from Asian Football: Best Asian young player: Mehdi Mahdavi-kia, Iran Best Goal of 1997: Mahdavi Kia's first goalagainst China (Iran 4-2 China) Best Asian team: Team-e Melli-e Iran Lets wait until the start of the WorldCup to see what our guys are capable of :-)

Regards, Farhad A.

NYTimes:U.S. Arms Embargo on Iran Has Loophole: Canada

NYTimes: U.S. Arms Embargo on Iran Has Loophole: Canada


VANCOUVER, British Colombia, May 14 -- Several times over the past few years, Reza Akrami, an Iranian, left his home in the Vancouver area and flew to San Francisco to see a mysterious man who spoke in Persian and called himself Dr. Afshar.

They met at a swank hotel or an expensive restaurant. A few times they lunched on a private yacht docked in the bay. There were thick steaks and fine wines.

Eventually, a shadowy deal was put on the table. Dr. Afshar would arrange delivery of American-made jets and military parts, including electronics to guide anti-aircraft missiles. The destination for the parts was Iran, and the suggested payment was a large shipment of heroin, according to a fax sent from Iran to Akrami that outlined the arrangement.

The deal never came off. "Dr. Afshar" was an undercover agent for the United States Government posing as an arms dealer bent on evading the American embargo against Iran.

Akrami and an associate were arrested in Vancouver this week and are being held pending extradition to the United States. They face charges of conspiring to smuggle sophisticated military parts to Iran in violation of the United States embargo.

A joint investigation by The New York Times and CBS News has found that this is not an isolated case. A significant portion of the weapons that Iran buys illicitly move through Canada, taking advantage of regulatory loopholes and the Canadian Government's decision not to support the American embargo.

The result, say American officials and the Iranians involved, is a steady flow of American-made military parts across the border into Canada and on to Iran. "Sanctions against Iran make no sense because they get everything they want through other countries," Akrami said in an interview here before his arrest.

According to an indictment returned this week by a grand jury in San Francisco, Akrami, 60, told undercover agents the Iranian Government wanted to buy as many klystron tubes -- the heart of missle guidance systems -- as he could find.

"There is a significant amount of circumvention of our sanctions through Canada," said Raymond Kelly, an Under Secretary of the United States Department of the Treasury, who is awaiting confirmation as the new head of the Customs Service. "Because of the relaxed border situation that we have with Canada, the potential for abuse there is greater than perhaps with other allies."

Among the Iranian arms deals involving Canada are these:

A Long Island man was arrested last year by United States Customs agents as he tried to deliver engines and parts for F-14 Tomcat fighters to Iran; some of the items were to be routed through Canada. He is awaiting trial.

A Canadian businessman was indicted in Washington, D.C., last year on 27 counts of shipping embargoed aviation parts to Iran by way of Canada and then Germany. He is currently a fugitive.

In Miami in 1994, an Irish businessman pleaded guilty to charges of attempting to send military night-vision goggles to Iran by way of Canada.

And Iran is not the only destination for embargoed American military equipment from Canada.

Several Americans and Canadians were arrested last August and charged with attempting to sell to Iraq 35 American-made military helicopters that Canada had declared surplus. The buyers had asked that some helicopters be outfitted with chemical-spraying equipment. Two Canadians have already pleaded guilty; the other defendants are awaiting trial.

Last fall a Toronto businessman pleaded guilty to selling $6 million worth of jet parts, including some that could have military uses, to Libya.

"I'll be honest with you: Canada does not pretend that it is enforcing a U.S. embargo," said Lynda E. Watson, director of the export controls division in the Canadian Ministry of Foreign Affairs and International Trade. While Canada tries to make sure it is not used as a decoy to get around American export restrictions, she explained, its efforts are limited.

"It's not our embargo," she said, "and it's not our job to enforce a U.S. embargo."

The Middleman: From Army Doctor To Refugee

There are many unanswered questions about Akrami: Precisely on whose behalf was he shopping for parts? What did the Iranian Government knew about his activities?

And while American agents were luring him into their sting, Canadian intelligence agents were using him as their informant.

Akrami said in an interview before his arrest that he was merely a purchasing agent for Iran. "I cannot stop them to fax me what they want," he said, "but it doesn't mean I can do something or I want to do something."

Akrami's lawyer, Irvine E. Epstein, said his client had exaggerated the importance of his contacts in Iran and expected Dr. Afshar to arrange the export permits if the deals went through.

"He's absolutely adamant that he has not committed any crimes in Canada or the United States," Epstein said of his client. "If anything, what we have is perhaps some overzealous undercover agents trying to make something out of nothing."

Before coming to Canada, Akrami said, he was a colonel in the Iranian Army and a cardiac surgeon in contact with many of Iran's most powerful people. He boasted to friends that he had once treated the Ayatollah Khomeini.

Akrami said he had received his medical degrees in Germany and returned to Iran just a year before the 1979 revolution. His foreign training made him suspect in the turmoil of fundamentalist, post-revolution Iran. He was imprisoned but was allowed to see patients, he said.

Soon after being freed from prison, Akrami married an Iranian woman with family in Vancouver. In 1991 he emigrated to Canada, where he quickly fit into Vancouver's substantial Iranian refugee community.

"I'm connected to everybody," he said during the interview at his office.

He does not practice medicine in Canada but gained notoreity when his mother-in-law won a divorce settlement that was the equivalent of $12 million, one of the largest in Canadian history. He helped her invest the money in various ventures, and made no secret of his intention to do business with Iran.

In the interviews, he said he helped arrange for the delivery of two shiploads of American chemicals to Iran about four years ago, which he believed did not violate terms of the embargo. He also said he regularly received faxed messages from Iran requesting help in purchasing everything from Braille typewriters and spare parts for jumbo jets to a fleet of used civilian aircraft.

People close to the investigation said he once told undercover agents, "Canada is Iran's free-trade zone."

The United States first imposed economic sanctions on Iran after the hostage crisis in 1979. In 1995, after Iran was linked to terrorist attacks, a total ban was imposed on all American trade with the country. Before then, certain items, including some chemicals, could be exported from the United States.

The Introductions: Linking Heroin To Fighter Jets

Akrami might not have come to the attention of American authorities if not for another Iranian immigrant to Canada who was arrested by drug agents in San Francisco in 1994 and charged with a conspiracy to distribute large amounts of heroin.

Prosecutors in San Francisco had substantial evidence against the man, Abrahim Hamidi. But after he developed medical problems they let him return to his home in Langley, a Vancouver suburb where he lived in a modest house and grew Iranian sour plums in the backyard.

Shortly after his return to Canada, Hamidi held a dinner at his home and invited a young Iranian friend, Mohsen Lessan, and Akrami, who said he was looking for new business opportunities.

But this was apparently more than a social engagement. According to officials familiar with the investigation, Hamidi was cooperating with American agents who wanted to broaden their investigation into the Iranian heroin connection. The charges against Hamidi in California were dismissed in April 1996, but within a few days he was arrested on a similar drug charge in Canada. In an unusual move, the records in that case were sealed, and it is not possible to learn its outcome.

Lessan, now a 30-year-old real estate salesman in Vancouver, said in an interview that he and Akrami had flown to San Francisco and met the man they knew as Dr. Afshar. They lunched in grand style on a yacht they believed was his. They discussed the purchase of up to 30 used jets for Iran, as well as parts and other items.

Lessan said he felt he was in over his head. While Akrami returned to San Francisco at least twice, Lessan never again met Dr. Afshar. He was arrested this week along with Akrami and is being held pending extradition to San Francisco, where a United States Attorney, Michael J. Yamaguchi, plans to prosecute him and Akrami on the conspiracy charges.

Lessan's lawyer, Jamie Paez, has refused to comment.

The End of the Deal: A Disputed Fax, An Angry Ex-Wife

In his first interview with The New York Times and CBS, Akrami denied knowing Hamidi. But at a subsequent talk in his high-rise apartment, he admitted that he had gone to Hamidi's house, but only because his wife liked the sour plums that Hamidi grew.

Hamidi did not respond to several phone calls or visits to his home.

Akrami eventually admitted he had discussed several deals with "Dr. Afshar," adding, "Ninety-nine percent of the discussion was about planes."

But he said one fax he received from his contact in Iran -- a man known as Sultanapur who has been linked to the Iranian Government -- requested sophisticated military parts, including the American-made klystron tubes used for missile guidance systems.

At the meetings in San Francisco, which were monitored by United States agents, Akrami openly discussed military parts and displayed a detailed knowledge of how they worked. Once, he even commented that the suitcase-sized klystron tube the agents had brought was a slightly different color than those he had seen before.

During this period, officials said, Akrami also met regularly with the Canadian Security Intelligence Service, Canada's spy agency, which sometimes uses recent immigrants to gather information. He insists he never told them about the San Francisco meetings.

Akrami acknowledged there were other faxes as well, including one that mentioned paying for the parts with a "shipload of heroin." But he insisted that although he presented the faxed letter to Dr. Afshar, he never had any intention of actually going through with the deal.

"This was nonsense," said Akrami. "How can I have drugs to offer to someone for something like that?"

After repeated contact and telephone conversations with the undercover agents, Akrami abruptly backed away from the deal last summer. He said things had changed because of the tightened American embargo and because of the more moderate Government that had come to power in Iran's elections. But there appeared to be another reason: his recently divorced wife, who had some of the faxes from Iran, was threatening to expose him.

He said his former wife had shown the faxes to authorities in an attempt to discredit him. People close to the investigation confirmed that the Canadian Security Intelligence Service, a local prosecutor and a member of Parliament had talked to the woman.

The Loophole: An 'Exception' For a Neighbor

Although Akrami is not charged with actually shipping any embargoed parts to Iran, recent incidents indicate that plenty of American military goods leave Canada's shores, largely because of "the Canada exemption."

For decades it has been policy of both Canada and the United States that Canada would purchase major arms systems from the United States instead of developing its own military industry. For this reason, such goods being shipped to Canada are exempt from the licensing requirements that apply to every other country.

"Since we don't issue a license here, there's no trail to follow," said John Hensley, former head of enforcement for the United States Customs Service. "Therefore we can't tell how much is leaving Canada en route to other countries."

Canada does $1 billion a year in legitimate trade with Iran. While Canada has regulations to keep Canada from being used to hide shipments to Iran, officials here make it clear that the embargo is America's fight, not Canada's.

"We feel that we are taking very responsible and strong steps to deal with this," said Ms. Watson, the Canadian customs official, "but we're not 100 percent effective."

Thursday, May 14, 1998 <A HREF="aol://4344:104.nytcopy.6445375.574106743">Copyright 1998 The New York Times</A>

Montazeri Denounced by Isfahan Marchers

Focus-Iran Marchers Condemn Dissident Cleric

Reuters 15-MAY-98

TEHRAN, May 15 (Reuters) - Large crowds marched in the central Iranian city of Isfahan on Friday to denounce a dissident senior Moslem cleric and support Iran's supreme leader Ayatollah Ali Khamenei.

The march came after Khamenei on Thursday denounced a planned rally in Isfahan on Friday by backers of dissident Ayatollah Hossein Ali Montazeri as a plot ``by the U.S. arrogant system and their Zionist elements'' and urged people to ``neutralise'' it.

Iranian state television showed large groups of marchers, led by rows of Shi'ite Moslem clerics, carrying pictures of Khamenei and banners condemning Montazeri's backers as ``dupes and seditious elements'' and ``internal agents of Zionism and world arrogance (the West).''

The demonstrators later packed Isfahan's historic central square for a Friday prayers service, raising their fists to chants of ``Death to America'' and ``Death to Israel'' and vowing to support Khamenei against his detractors.

Ahmad Montazeri, the eldest son of the dissident cleric, said his father's supporters called off their rally, due to be held at the prayers, to avoid potential clashes.

``I talked to a few people in Isfahan and they said Ayatollah Montazeri's followers decided not to chant slogans or carry banners at the prayers today,'' said Montazeri, who lives in the holy city of Qom, 120 km (75 miles) south of Tehran.

``They were among the worshippers but did not react because they did not want to cause unrest,'' said Montazeri, adding that he had not heard of any clashes or arrests.

Residents in Isfahan said there were limited clashes between hardline backers of Khamenei and some Montazeri supporters.

Pro-Khamenei marchers chanted ``Death to Montazeri'' and called him a ``foreign agent,'' the residents told Reuters in Dubai by telephone.

The dissidents had called on supporters to chant slogans demanding freedom of speech and thought, and backing the right of Montazeri and other clerics to express their views. They had urged people to avoid violence and cooperate with police.

Isfahan province, and particularly Montazeri's hometown of Najafabad, has been a hotbed of protests since the dissident was placed under house arrest and prevented from teaching after he questioned Khamenei's authority in a speech in November.

Montazeri's rare public challenge to Khamenei's paramount power prompted violent demonstrations by hardliners who attacked Montazeri's home and offices in the holy city of Qom.

Montazeri's treatment by the authorities has sparked repeated strikes by shopkeepers in Najafabad in recent months.

Montazeri's son, a middle-level clergyman, said the decision to cancel the rally showed that the dissidents did not want to jeopardise Iran's national security.

``They do not take orders from me or anyone else and, as they have clearly said in their leaflet (calling for the rally), they are not against Iran's government,'' Montazeri said.

He was reacting to charges by Khamenei who blasted the dissidents as ``remnants'' of exiled armed rebels and of a group convicted of political crimes, and said they posed a threat to national security.

Montazeri, 76, has been Iran's most prominent dissident since the country's late spiritual leader Ayatollah Ruhollah Khomeini dismissed him as his designated successor shortly before his death in 1989. Montazeri had criticised government policies including the treatment of political prisoners.

``My father is denied visits by anyone except his immediate family and doctors. This is what his followers are peacefully protesting,'' Ahmad Montazeri told Reuters in Dubai.

Iranian President Mohammad Khatami, a relative moderate who has advocated granting greater liberties, has not spoken out about Montazeri's case but some pro-Khatami newspapers have criticised the measures against the dissident.

Copyright 1998 Reuters Limited.All rights reserved.

End of DNI-NEWS Digest - 14 May 1998 to 15 May 1998 ***************************************************