Probe of support to Iran exile group said to seek Rendell records

Financial records of former Gov. Ed Rendell reportedly have been subpoenaed by the Treasury Department in a probe of support by prominent Americans of an Iranian exile group that the federal government calls a terrorist organization.

Rendell, along with former Democratic National Chairman and presidential candidate Howard Dean, former Homeland Security Director and Pennsylvania Gov. Tom Ridge, and former FBI Director Louis Freeh, has been an outspoken advocate of lifting the U.S. terrorism designation from the Mujaheddin Khalq, or MEK. The MEK for the last 30 years has been a fierce opponent of the fundamentalist-led Iran government, itself designated by the U.S. government a state sponsor of terrorism.

The Treasury Department's Office of Foreign Asset Control subpoenaed records of payments to Rendell for speeches he gave in support of the MEK, according to a report made public Friday by the Washington Times. Rendell reportedly confirmed that he had received speaking fees and that his agent had received a subpoena, but asserted that he had done nothing wrong.

Treasury Department spokesman John Sullivan said late Saturday that the department "does not comment on possible investigations."

The MEK has a checkered relationship with the United States. It was designated a foreign terrorist organization in 1977 by the State Department, which alleged that the group had been implicated in the killings of several Americans in Iran in the late 1970s and that it had supported the takeover of the U.S. Embassy in Tehran by Iranian militants.

The group has been described as a cultlike organization that blends Marxist political philosophy and Islamist theology and over time has carried out a campaign of assassination and sabotage against the Iran regime.

It reportedly has renounced violence, though, and has in recent years gathered support from a bipartisan group of prominent Americans.

Freeh wrote recently that he concluded as FBI director during the Clinton administration that the MEK did not pose a threat to U.S. interests and that President Bill Clinton and the State Department had moved to designate it a terrorist organization as a means to improve relations with Iran, not because it would improve national security.

"I concluded that this was part of a fruitless political ploy to encourage dialogue with Tehran," Freeh wrote in a newspaper opinion piece in October. "There was no credible evidence then, nor has there been since, that the group posed any threat to the United States."

Rendell spoke at a rally of hundreds of people in front of the State Department on Aug. 26 in which participants demanded the MEK be removed from the terrorist list.

Weeks later, on Sept. 18, he joined former Attorney General Michael Mukasey, Freeh, and others on a panel calling for the MEK to be delisted.

"Not one of the sources has listed any act of violence by the MEK against the United States or any of its allies since 2001 for more than a 10-year period," Rendell said. "It's overwhelmingly not guilty; delist the MEK now."

The group has its origins in Iranian opposition in the 1970s to the shah of Iran, who was overthrown by Islamic fundamentalists. After a falling-out with the regime, MEK supporters fled to Iraq and for years had Saddam Hussein's protection.

They were disarmed by American forces after the Iraq invasion in 2003 and have been largely contained to a camp in Ashraf, about 40 miles north of Baghdad. Earlier this year, Iraqi military forces stormed the camp, killing dozens of inhabitants, triggering accusations that the Iraq regime plans to wipe out the remaining inhabitants if they are not delisted and afforded American protection.

"Without forceful American and United Nations intervention to protect the camp's residents and a decision by the U.S. State Department to remove Mujaheddin Khalq's official designation as a terrorist group, an even larger attack on the camp or a massacre of its residents elsewhere in Iraq is likely," Freeh wrote.

But Edward A. Turzanski, senior fellow at the Philadelphia-based Foreign Policy Research Institute, said such endorsements of the MEK were inherently risky.

"You can't clearly establish what the structure of the organization is, what their policy direction is, at least consistently over time, and they have moved in so many directions and done so many things that are problematic, that the State Department has designated them a terrorist organization," he said. "For anyone to step in and say, We have given them the Good Housekeeping Seal of Approval, you have to be very careful."

The Washington Times reported that the Treasury Department subpoenaed records of payments for Rendell's speaking engagements from his Los Angeles-based agent, William Morris Endeavor Entertainment. The newspaper said that Rendell apparently was the only prominent American MEK advocate whose records had been subpoenaed.

"We're absolutely cooperating 100 percent," Rendell was quoted as saying. "I've instructed my agent not to hold back on any e-mails or any documents. There's nothing to hide."

He added, "I've been in politics 34 years, and I can tell you right now that I would not jeopardize my reputation for any amount of money. I did my research extensively on this issue before I ever agreed to speak on it, and I am 100 percent convinced that the MEK shouldn't be on the Foreign Terrorist Organization list."

Rendell did not respond to calls for further comment.

The newspaper quoted Ridge as saying he had received fees in exchange for speeches and media appearances in which he called on the government to delist the MEK. Ridge could not be reached for comment.

It was unclear whether William Morris received any money on behalf of Rendell directly from the MEK, or whether the funds had come from individual Iranians without official MEK ties.

The MEK has sued the U.S. government seeking to be removed from the list of terror organizations.

Both the State Department and Treasury maintain lists of terrorist organizations. Under U.S. law, it is illegal to conduct transactions with such groups.

Since leaving office as governor last year, Rendell has forged a high-profile speaking career, appearing on television as a football commentator and as a guest on news shows. He came forward for a time as the leader of a group seeking to purchase The Inquirer, Philadelphia Daily News, and Philly.com but has since turned over that role to local philanthropist H.F. "Gerry" Lenfest.

at 215-854-5957 or cmondics@phillynews.com.