As tensions between the U.S. and Iran continue to mount, an Iranian exile group viewed here as a terrorist organization is lobbying to play a greater role in the struggle against Tehran. And it is winning some support in Congress.

The Mujahedeen-e Khalq, or People’s Mujahedeen of Iran, was formally listed as a terrorist group by the State Department because of its attacks on American military personnel and Iranian officials. It fiercely opposed the Shah and his supporters during the 1970s and allied with former Iraqi dictator Saddam Hussein in his 1980-88 war against Iran.

But today, the MEK and its supporters say the organization should be supported by the Bush administration as part of a broader effort to promote regime change in Tehran. They say the group has developed among the most-sophisticated intelligence operations covering Iran’s leadership and nuclear operations, and it has networks inside Iran that can spread propaganda on democracy and on the need to remove the mullahs. The MEK also has 4,000 fighters that can target Iran from Iraq, though they have been demobilized by U.S. military commanders and held in a kind of house arrest.

As the White House deploys $85 million this year to promote pro-democracy groups in Iran, the MEK says it can support this campaign without receiving a penny. "We seek neither money nor weapons from the U.S. We just want our legitimate right to resist tyranny in our country," says Mohammad Mohaddessin, a Paris-based member of the MEK who serves as foreign-affairs chairman of its affiliated organization, the National Council of Resistance of Iran. "Let the Iranian people deal with the mullahs."

Mr. Mohaddessin and other MEK leaders say they want the U.S. to remove their organization from the terrorism list so that they can more easily raise money and support globally. They also want their fighters released in Iraq.

For more than a decade, the MEK has been employed as a political football in the diplomatic games played between Washington and Tehran, say current and former U.S. officials. The Clinton administration placed the MEK on the State Department’s terrorism list in 1997, as Washington sought to appeal to moderate leaders inside the theocratic government in Tehran. A blacklisting of the MEK was among the actions the Iranians sought in exchange for better relations, these officials say.

The State Department’s 2006 terrorism report says the MEK has been launching attacks on Western and Iranian targets since the 1970s. In the last years of the Shah’s rule, elements of the MEK assassinated U.S. security advisers and military contractors, and assisted in the takeover of the American Embassy in Tehran. It subsequently turned on Iran’s new theocratic government due to ideological differences and launched bombing campaigns against senior Iranian officials.

Under pressure inside Iran, MEK fighters shifted their base to Iraq, conducting operations from there against Iran’s Islamic government throughout the 1980s and ’90s. Most of their activities were concentrated on Iranian military installations and commanders. But the U.S. also accuses the MEK of conducting terrorist strikes outside of the Middle East, including simultaneous attacks in 1992 on Iranian embassies and installations in 13 countries.

Some U.S. diplomats say that to delist the MEK now would make Washington appear inconsistent on terrorism and could further incite Iranian President Mahmoud Ahmadinejad. They also believe Iran’s leadership could use U.S. support of the MEK to further strengthen Mr. Ahmadinejad’s position, due to what is perceived as widespread antipathy toward the MEK inside Iran. "It could be incredibly provocative in Iran’s eyes," a U.S. official said.

In 2003, the Bush administration also placed the National Council of Resistance of Iran on the terrorist list, as U.S. military planners sought assistance from Iran in stabilizing post-Saddam Iraq. Among the issues the Iranians and Americans discussed that year, said officials involved in the talks, was a plan to swap MEK members it was detaining in Iraq for al Qaeda leaders hiding inside Iran. But the talks ultimately bogged down, as American commanders grew increasingly convinced Tehran was working to destabilize Iraq.

"Iran wanted the MEK first" before they would hand over al Qaeda leaders, says Michael Rubin, an Iran specialist who served in the Pentagon’s Office of Special Plans in the first Bush term. "We made it clear to Iran, that if al Qaeda planned an attack, they’d be held responsible."

The MEK, however, has used the Iraq invasion to try to build bridges to the Bush administration. U.S. officials say the MEK has largely cooperated with U.S. military commanders in agreeing to disarm their troops based in Camp Ashraf, which sits about 100 kilometers north of Baghdad. The fighters are being held as protected combatants under a United Nations charter, though some groups in Iraq have sought to try the MEK for atrocities it allegedly committed in league with Mr. Hussein.

Leaders of the MEK and National Council of Resistance, meanwhile, have aggressively moved to highlight the threats posed by Iran’s nuclear programs. In a string of news conferences tracing back more than a decade, first the MEK and then the resistance council have accused Tehran of flouting its international treaty obligations by clandestinely seeking to produce nuclear-weapons fuel.

In an August 2002 news conference, council leaders in Washington specifically charged Iran with running a stable of centrifuges to enrich uranium in the central Iranian city of Natanz. International Atomic Energy Agency inspectors would confirm the accusations a few months later. U.S. officials, including President Bush, have cited the role played by Iranian exile groups in exposing Iran’s nuclear programs.

Still, the MEK remains a deeply divisive issue inside Washington. In 2002, 150 members of Congress signed a letter seeking the MEK’s removal from the terrorism list. Lawmakers also have quizzed the State Department on the MEK’s status in recent weeks, after it was again named to the U.S. list of global terrorist groups.

"It’s the only group on the terrorist list that’s been more helpful to the U.S. and more harmful to our enemies," said Rep. Brad Sherman (D., Calif.), who is among those representatives questioning the MEK’s designation. "It played a very important role in telling us what happened in Natanz. We should be clear on what we expect of them to get off the list."

Despite this support in Congress, however, many current and former U.S. officials say the Bush administration should stay clear of any dealings with the MEK. They describe the group as operating like a cult under the control of its founder, Massoud Rajavi, and his France-based wife, Maryam. They say the two have very little support in Iran and face deep hostility from the populations of Iran and Iraq, due to the MEK’s alleged complicity in Mr. Hussein’s atrocities.

"An enemy of my enemy is not my friend" in this case, said Mr. Rubin, the former Pentagon official. "From a policy standpoint, the problem with the war on terrorism is the propensity for moral relativism. But we shouldn’t accept certain terrorists and not others."

The Wall Street Journal  – Jay Solomon –  22 May 2006