Last week should have seen the latest hearing in the UK courts on a debt owed to Iran by a British government company long in the shadows, International Military Services (IMS). The dispute over this debt has lasted more than 40 years. Again, the hearing was postponed.
This week, my wife, Nazanin Zaghari-Ratcliffe, was given a new prison sentence in Iran. That debt is the reason she has been held there since 2016.
IMS was set up in the 1960s by a UK body, the Crown Agents, and has been wholly owned by the Ministry of Defence since 1979. IMS sought to promote UK arms sales as Britain looked to project its influence post-Empire, and it was particularly successful in Iran before the Islamic revolution of 1979 overthrew the Shah.
The debt owed by Britain to Iran relates to a large sale of tanks to the country from the UK during the Shah’s time. The Shah paid in advance for the tanks, but following the revolution they were not delivered, and the UK kept the money.
The money withheld by the British government is the reason Nazanin has been detained in Iran since her arrest in 2016 while on a family holiday with our then 22-month old daughter, Gabriella.
A few weeks after she was arrested, Nazanin was told by her interrogators from the Islamic Revolutionary Guard Corps (IRGC) that while there was “nothing in her case”, she was going to be held for leverage with the UK. Gradually they revealed she was being held to recover a debt.
In 2016 she was given a five-year sentence in a secret hearing, which ended last month, ahead of this month’s UK-Iran debt arbitration. When the debt case was postponed again, this week she was given another two years in Iran, a year in prison and a further year’s travel ban.
There is a particular cruelty in recycling the same “evidence” for a second time. These past few weeks we had been thinking she was almost home. But now our horizons have to reset to 2023.
It was a shock, but not altogether a surprise. Nazanin’s fate has long been in the shadow of the vagaries of this court case in London, and in the hands of powerful, unaccountable old men still arguing over their money.
When Nazanin was first taken, the IMS debt court was still secret. We would only be alerted by its consequences for us, notably in autumn 2017 when Nazanin had a second case suddenly opened against her.
At the time this was blamed on then foreign secretary Boris Johnson’s careless mistake in parliament, which immediately put us at the centre of a political storm, with calls for his resignation in London and a torrent of propaganda in Iran.
Less reported at the time was that Iran’s elaborate response to the mistake also followed a secret hearing on the debt at the High Court in London.
When Mr Johnson subsequently promised to “leave no stone unturned” and signalled publicly that the debt would be paid, and then travelled to Tehran that December, that second case against Nazanin was dropped suddenly and she was classified by the Iranian judiciary as ready for release.
Except the UK did not actually release the money, nor has it since.
We remain haunted by the consequences of a promise unkept. Four years on, last month Nazanin completed her sentence. Instead of being allowed to come home, she finally faced that second case. When the debt was postponed again, she was awarded a new conviction.
The secrecy of the London court was successfully challenged in 2019, and in January 2020 I attended an opaque, technical hearing alongside another of the hostage families.
Mid-hearing there was an incandescent outburst from one of the other families, outraged at the games being played with people’s lives. He was ejected, and there hasn’t been a single hearing since.
The latest adjournment to the debt case paradoxically came at the request of Iran. Yet it is a coherent strategy on the part of Iran: pushing for an out of court settlement, and then squeezing some innocent people in the meantime.
The UK’s response is also coherent, looking to minimise Iran’s leverage, and to manage any blame for the standoff being directed at them. But for the families of those held hostage, this is a tough game to watch.
The debt story is at first glance simple. After years of negotiations during the Iran-Iraq war in the 1980s when Iran had wanted the tanks and other arms, it eventually went to court to reclaim its money.
After a series of court cases that began in 1990, Iran won a final award in 2009, with £380-million paid by the UK into the court in London.
However, this money has still not reached Iran, ostensibly because of sanctions coincidentally imposed in 2008.
But it is also more complex. In the 1970s, under the Shah, who was a British ally, there was a scramble for contracts in the oil boom, which led to a series of largely forgotten deals between London and Tehran.
Iran lent to the UK when it had turned to the IMF for financial support, ended up owning part of the new North Sea oil fields, and played a vital role in the UK’s efforts to defeat an insurgency in Oman. Numerous military industrial projects were discussed through oil-for-weapons barter deals. There developed a whole class of political brokers and special commissions.
Central to this was IMS, and the hundreds of contracts it brokered. There was a revolving door of foreign advisers reaching into Iran’s public purse for military toys, playing on the Shah’s fears and vanities, with a variety of access payments. But all this had consequences and fed into an angry revolution.
Following the 1979 upheaval there was reluctance to shut down this trade. There was never such a clean break. Too many careers depended on it. The UK did not let the Shah flee to his homes in London. It did not protest too strongly when British hostages were taken by the revolutionaries, unlike the Americans.
The IMS office in Iran stayed open until 1988. Until the late 1980s, Iran’s Defence Procurement Office for international arms purchases was hosted on Victoria Street in central London.
In the early 1980s the UK helped the new Iranian government suppress communists in the country. In 1984, the UK’s rules on arms trading with Iran and Iraq were quietly relaxed, with the British parliament informed sometime later, around the time the US started getting itself into trouble with the Iran-Contra affair — when it secretly facilitated the sale of arms to Iran.
And a few years later we ended up with the Scott inquiry into the British government’s scandals over arms sales to Iraq and the failures of accountability.
Meanwhile, IMS diversified into other countries, with contracts in every continent. With some creative accounting, IMS kept Iran’s monies, investing them in part in local government bonds, resulting in the British local taxpayer paying them interest for the use of these funds, now classed as commercial income.
It allowed for a kind of alchemy, turning Iran’s public monies into a private income stream of interest paid by UK taxpayers and others, which could be used to pay “special commissions” to private individuals in return for public contracts with other states.
Vitally, the façade of an independent company, even if entirely government controlled, kept it an income stream away from parliamentary scrutiny, effectively a form of government “off balance sheet”, where it could avoid answering questions.
Many of the deals brokered by IMS were also guaranteed by the UK taxpayer. When the deals didn’t work out, the government’s Export Credit Guarantees Department picked up the tab with the private suppliers, and then chased Iran to repay to the UK the bills it had guaranteed.
Effectively, the alchemy reversed in the bad times with the costs nationalised for both the UK and Iran, often for many years. The government’s UK Export Finance is still chasing some IMS-related sovereign debt from Iran even now.
Legally, some of this should not have been hidden away. In 1984, when the public arms-manufacturing company Royal Ordnance was being privatised, a clause was added to the Royal Ordnance and Military Services Act, promising that if IMS needed any more money from the government beyond a certain amount, it would come back to parliament to ask.
In 2002, IMS did indeed have to come and ask the taxpayer for almost £400-million, yet parliament was not notified. In 2010 the then defence secretary was paid a £5-million dividend by IMS, but this was, illegally, not returned to the Consolidated Fund, the government’s general bank account under the control of parliament.
IMS’s accounts became subject to parliamentary scrutiny only under the current defence secretary, Ben Wallace. Last year our MP was able to ask the National Audit Office, which monitors public spending, to check why there had been no parliamentary approval for the £400-million court payment.
The NAO reported that it had been told that the Ministry of Defence had at the time obtained a legal opinion that it did not need to involve parliament, but unfortunately had now lost this opinion.
For the dividend, no one would say what the government did with the money, just that the audit records were now long gone. The first set of IMS accounts subject to parliament (for 2019-20) were only released earlier this month. They had in fact been signed off last August, just weeks before IMS changed all of its directors.
Since 2013, the IMS court case with Iran has been adjourned 10 times. It has often felt like a façade for a political standoff, and a vehicle for avoiding questions, as once again this week the government line to the media was that it would not be appropriate to comment on ongoing legal proceedings.
We have requested numerous times to meet the IMS directors, unsuccessfully. Last weekend we pleaded with them to meet and discuss the impact of their decisions on British citizens held in Iran, worrying what bad things might be lying in wait. Again they did not agree to meet.
It has been sobering to discover we cannot get anyone to take responsibility for what is actually going on. It makes for a big gap where accountability should be.
Following Nazanin’s new conviction, there was an urgent question debated in parliament. Nazanin watched it online at her parents’ home in Tehran, stuck waiting for her new summons to prison, increasingly boiling at the complacency of the British government.
It was the seventh urgent question on her case (to have two is a lot), but accountability was still left to the junior foreign minister, rather than the foreign secretary, to respond for the British government. We were both struck by the lack of contrition, or acknowledgement of what the government has got wrong.
The minister emphasised the UK’s achievements, which served to delude parliament, and the government itself, given that it has not even managed to get Iran to uphold the minimum of Iranian law. There was a reluctance to see any fault but Iran’s.
The government was quick to emphasise that the imprisonment of Nazanin and the others was the fault of Iran. But it was less quick to acknowledge this as hostage taking, or the need to do anything different after five years to challenge the practice.
Gap in protection
Yet for Nazanin’s family, the essential issue is not this accountability gap, but the failure to provide her with adequate protection. This week Britain’s foreign minister told parliament: “The UK does not and will never accept dual nationals being used for political leverage.” Yet that is precisely what is happening.
Being caught as a bargaining chip between two states creates real challenges for what either is willing to see. The UK has an incentive to downplay the human cost. There is a de facto acceptance of cruelty happening faraway.
Early on, we often used to complain of the Foreign Office’s reluctance to see the abuse endured by Nazanin. Ministers implied to parliament that perhaps it was not as bad as we claimed. The UK still advises families like ours to stay quiet.
For the postponement of last week’s debt hearing, the Foreign Office emphasised to us that the delay was at Iran’s request. It declined to explain why it had agreed, or to acknowledge whether it had done any risk assessment of the impact a delay would have for those Brits held by Iran, or that it had received any assurances that they would be safe – though it suggested such assurances would anyway have limited worth.
After the previous postponement in October, Nazanin was taken to court for a second case, and after this one, she was convicted. UK officials did not attend Nazanin’s new trial, so as not to escalate relations with Iran.
In parallel, in October, another British citizen was picked up by the IRGC and put into solitary confinement in Iran. Following the latest postponement, he was taken to the Revolutionary Court this week on secret security charges. The UK again decided not to attend and said it had not been asked.
The Germans had one of their citizens held for leverage also taken to court that day. By contrast, their officials attempted to attend. Unlike British law, German law requires it.
Even when faced with torture, the protection the UK offers its citizens detained abroad is discretionary. Forty days ago we submitted a lengthy medical report setting out the forms of torture Nazanin has endured these past five years.
The UK’s policy is not to assess such allegations, but to raise them with the detaining country and ask them to check. Thus far the UK has not done this with Iran. The power of discretion means that in the majority of cases where British citizens are allegedly subject to torture overseas the UK does not raise them with the other government.
The UK government insists it has no safeguarding obligations to protect its citizens, even when they are held over a debt owed by the government.
The subtler arts of deflecting responsibility can slide into victim-blaming, using “dual nationality” as a rationale for why our cases are problematic and hard to solve.
Early on in Nazanin’s case, a British minister told us he had many “consular” cases on his desk. “They have a British passport,” he confided, “but they are not really British.”
For the first few years Nazanin was held, the government insisted it needed to respect Iran’s judicial processes. We were told we had to understand that Nazanin was a criminal under Iranian law. Even this week, it still refuses to acknowledge Nazanin as a hostage.
A minister once even told us we had made up Nazanin’s link to the debt ourselves.
Oftentimes it feels like we live in a new era of “Gatsby government”, with the politics of a gilded era. There is a line in the Great Gatsby novel when the lead character Gatsby is abandoned to deal with someone else’s car crash. It encapsulates the erosion of accountability in the gilded age:
“They were careless people, Tom and Daisy — they smashed up things and creatures and then retreated back into their money or their vast carelessness or whatever it was that kept them together, and let other people clean up the mess they had made.”
For me, this has resonance for politics these days. The most obvious carelessness in Nazanin’s story is well documented when in autumn 2017 we became part of the politics of court intrigue, and the collateral damage of its careless promises – when Boris Johnson made his mistake in parliament. We had our Icarus moment on the front pages, with all the cameras flashing.
It is still what most people know about Nazanin’s case. And it means those cameras flash still. The British government’s failure to bring her home has household resonance. It is still used as a marker of ministers’ frailties.
It means that, unlike many other cases of those detained overseas whose families may have more foreign-sounding names, we are often seen on the news. These days we are “really British”. This keeps Nazanin safe. Many others are not so lucky.
But for me Gatsby government is not about personal frailties. It is about a deeper kind of carelessness. The problem is not a few ill-chosen words. It is rather the erosion of accountability, the gap between what makes the shiny spectacle, and what is repeatedly hidden away.
Nazanin’s story shows a kind of alchemy: a public policy pretending that IMS is a private operation in order to avoid scrutiny, and deflecting responsibility when things go wrong.
It also highlights the risks of gaps in governance, for other revolving doors between public and private, and their economics of access and contracts at the public expense, far closer to home.
And it shows the dangers in reverse – of the privatisation of pain, with public sins visited on ordinary individuals. What does it mean when a national debt can be turned into a private tragedy, for which the UK government declares itself to have no safeguarding obligations?
Particularly when all the while the Iranian authorities turn more and more private individuals into national commodities? When hostage diplomacy is growing worldwide?
Moreover, it is an alchemy that invites corrosiveness. The arms trade is a corrupting business with its revolving doors between a small pool of public and private decision-makers, its darker arts of persuasion through private inducements and other exploitations, alongside the public underwriting of long-term deals.
So too is hostage-taking – it is a corrupting business for both sides. As the Iran-Contra affair showed, the personal agendas of leaders often come into play in its secret negotiations far more than they should.
There is something deliberately shameful about alighting on a young mother and baby as collateral and letting that separation endure for five years in a stand-off that denies her a second child.
The UK government wishes to expand arms sales as a way of building Britain’s new place in the world. The first risk is of course for those at the other end of the bombs. But more sales also make for more collateral damage.
The UK also needs to better protect its citizens detained abroad. Otherwise, while some people will continue to make their private fortunes from the arms trade in the name of national interests, other British citizens will pay the price when there is blowback, and still be asked to keep quiet while they sit in prison.
Our story is a window on a world often hidden away, on things that could do with some sunlight. But the lesson in our story is not of the past, what happened under the Shah or more clandestinely in the Islamic Republic’s early days.
It’s not even about the present – for us a continuing life in the waiting room. Our daughter Gabriella made an advent calendar to count down the end of Nazanin’s sentence, with some unanswerable questions when she didn’t come home, wondering what grown-ups’ promises can be relied on.
We have not yet discussed with her what two more years without mummy means. Though again she wants me to sleep in her room at night.
Our story is actually a warning — for the future. As the UK avoids protesting to governments who are potential or actual arms customers, cases like Nazanin’s will become more commonplace.
What obligations does the government have to ensure its sins are not visited on its own citizens? With a government picking and choosing what protections it offers its citizens, it will be a question asked more and more.
Richard Ratcliffe is the husband of Nazanin Zaghari-Ratcliffe, and has been campaigning for her release since 2016.