Carter administration negotiators are attempting to draft a legally binding, international agreement that would set down the terms of the settlement for release of the 52 U.S. hostages and would be signed by either Iran or Algeria on Iran's behalf, informed sources said yesterday.
The sources declined to describe the exact nature of the document, which might take the form of an executive agreement, but said it would be signed by President Carter on behalf of the United States before Jan. 20, and would be binding on his successor. There is precedent for such a binding agreement assumed by a president without the expressed approval of Congress.
The agreement also would represent a public, legal commitment by the Iranian and American governments to abide by terms that are still being negotiated. A major issue still unsettled is the timing for release of the hostages.
Early today, Reuter reported from Tehran that the Iranian parliament met to discuss the hostage negotiations. Before the session was closed to the public, two bills were presented. The first concerned financial and legal problems between the two governments, and Executive Affairs Minister Behzad Nabavi indicated it involved "arbitration." The second bill was described as "related to the nationalization of the wealth of the former shah."
[There was no indication of the bills' exact contents, but it was believed to be related to the intensive U.S.-Iranian negotiations of the last few days.]
In Algiers, Deputy Secretary of State Warren M. Christopher has told Algerian intermediaries that, by Inauguration Day, the United States could transfer to an escrow account under Algerian control less than $5 billion plus 1.6 million ounces of gold, worth roughly $1 billion, out of the Iranian assets frozen by Carter in November 1979.
Christopher reportedly said that the Carter administration could not deliver any of the remainder of Iran's frozen assets before its term in office ended. In the proposed agreement, however, the Carter administration would commit the United States to delivering the balance after dealing with possible legal challenges in U.S. courts by American corporate and individual claimants who have filed suits against Iran.
It is not clear whether the hostages, held for 14 months, would be released under this American plan when the initial funds were transferred to the Algerian escrow account, or whether their freedom would have to await delivery of the additional frozen funds.
Washington sources caution that although serious discussions are continuing, they have no indication that Iran will accept this offer before the Jan. 16 deadline set last week by Carter. They point out, for example, that up to now the Iranians have insisted on the return of all their frozen assets before the release of any of the hostages.
They also warn that the financial transactions being put together are extremely complex and that the deadline was set to permit the proposed agrement to be put in legal order and signed before Carter surrenders the presidency to Ronald Reagan at noon Jan. 20.
The sources said there is no doubt that the Iranians are scrutinizing the U.S. proposal minutely and are weighing it very seriously. That, they said, was underscored by the fact that Iran continued yesterday to send questions to Christopher in Algiers asking for further clarifications of the procedures involved in the American plan. For that reason, Christopher announced that he would remain in Algiers at least through today.
But, despite the upsurge of activity, sources here were divided about the chances of the latest American initiatives of achieving a breakthrough in the short time remaining. Essentially, the sources said, Carter administration officials dealing with the hostage situation, can, with some simplification, be divided into two groups: one at the White House that tends more to optimism and another centered in the State and Treasury departments that is more cautious about the potential pitfalls between now and Friday.
The more optimistic group is understood to believe that, for Iran, the question of getting its assets back has become the critical issue and that, if that problem can be worked out, the other elements in the complex negotiation over the hostages' fate will fall quickly into place.
Of concern to the other group is the fact that release of the assets is only one of the four conditions set by Iran for freeing the hostages. Of these, only one -- a pledge by the United States not to interfere in Iran's internal affairs -- is no longer considered a problem.
But the two sides still have not agreed on Iran's demands that the wealth of the late shah, Mohammad Reza Pahlavi, and his family located in this country be restored to Iran. The United States, in its last set of detailed proposals to Iran, is understood to have emphasized that U.S. law will permit it to do no more than help locate the shah's assets and put a temporary freeze on their removal while Iran pursues its claims through U.S. courts.
According to the sources, that offer, coupled with a U.S. warning that it will under no circumstances guarantee the outcome of any legal action taken by Iran, has been emphasized to Tehran in unmistakable terms. For that reason, the sources said, the more optimistic among administration officials believe that Iran has gotten the point and has decided to settle for some face-saving way of getting around the issue.
However, other administration officials, while conceding that the shah's wealth has not figured in the Algiers talks being conducted by Christopher, are known to feel there is no real evidence that Iran is willing to soft-pedal the subject, and they are fearful that Tehran suddenly will bring it up again at the last minute -- thereby effectively scuttling any agreement that might make a deal on the frozen assets the key to getting the hostages out quickly.
Still, the indications from Iran yesterday appeared positive. One key Iranian official involved in the hostage situation, Ahmad Azizi, indicated in a newspaper interview for the first time that Iran has dropped its demand for the United States to deposit $24 billion with Algeria before the hostages are freed. "The Iranian government has accepted Algerian proposals asking the United States for international guarantees instead of placing a deposit with the Algerian bank," Azizi was quoted as saying.
The less than $5 billion in cash the United States could transfer quickly to Algeria is made up of about $1.5 billion in securities held by the Federal Reserve Bank in New York plus $3.5 billion more in the European branches of American banks. There is also the roughly $1 billion in gold.
Representatives of those banks are now meeting in an attempt to put together a mechanism for restoring their banking relationships with Iran to where they were at the time of the freeze.
The proposed international agreement would commit Iran to the establishment of an international claims procedure and provide that Iran adhere to any cash awards to American claimants. Under the agreement, Iran also would guarantee to place up to $1 billion in escrow with Algeria to be used to pay off any such awards.
Iran already has accepted, in its note delivered to Washington Dec. 19, the ideas of the commission, binding arbitration of claims and the escrow account.
The agreement also would be used by American government lawyers in U.S. courts to support a move to nullify or cancel the roughly 300 legal claims that have been filed against Iran. The government, sources say, would argue that the proposed commission would provide due process for such claimants.