**IN THE UNITED STATES DISTRICT COURT**

**FOR THE DISTRICT OF COLUMBIA**

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**JOSEPH J. CICIPPIO, [et al.]{.underline},**

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Plaintiffs,

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v.  } Civil Action No.: 96-1805 (TPJ)

> Hon. Thomas Penfield Jackson

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**THE ISLAMIC REPUBLIC OF IRAN** }

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Defendants

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[DECLARATION OF DAVID CARPENTER]{.underline}

DAVID CARPENTER, pursuant to 28 U.S.C. § 1746, declares the following
under penalty of perjury:

1\. I am the Assistant Secretary of State for Diplomatic Security and
the Director of the Office of Foreign Missions (OFM) of the Department
of State. I have held these positions since August 1998.

2\. I make this declaration based upon information within my personal
knowledge or known to me through my official responsibilities in the
Department of State.

3\. The Office of Foreign Missions was established under the Foreign
Missions Act in 1982 pursuant to the Secretary of State's authority. 22
U.S.C. § 4303. Among its authorities and responsibilities, OFM is
responsible for the custody and protection of properties owned by
certain foreign missions in the United States, including the Government
of Iran. See 22 U.S.C. § 4305(c). In my position as Director of the
Office of Foreign Missions, I and my staff have been responsible for the
protection and maintenance of the diplomatic and consular properties of
the Government of Iran. OFM has had this responsibility since its
creation in 1982.

4\. On November 14, 1979, pursuant to the International Emergency
Economic Powers Act (IEEPA), 50 U.S.C. § 1701 [et]{.underline}
[seq]{.underline}., and other authorities, the President issued
Executive Order 12170 blocking Iranian assets in the United States. The
United States permitted Iran to continue to occupy its Embassy,
Consulates, and diplomatic residences, consistent with the United
States' obligations under the Vienna Conventions on Diplomatic and
Consular Relations.

5\. Subsequently, on April 7, 1980, President Carter, pursuant to his
constitutional authority to conduct foreign affairs, severed diplomatic
relations with Iran and ordered all Iranian diplomatic and consular
officials to leave the United States. The President stated that the
Secretary of State had informed the Government of Iran that its Embassy
and consulates in the United States were to cease their activities
immediately, and that all Iranian diplomatic and consular officials had
been declared *persona non grata* and must leave the United States by
midnight of the following day. By diplomatic note dated April 7, 1980,
the Secretary of State informed the Embassy of Iran that on April 8,
1980, the Embassy and consulates would be closed and sealed, except to
the extent that the Department may authorize any particular use of such
premises by a protecting power. Diplomatic Relations and Recognition,
1980 Digest § 3, at 40-41; Diplomatic Missions and Embassy Property,
1980 Digest § 1, at 333-34 (Attached as Exhibit 1).

6\. Further to his decision to sever diplomatic relations with Iran,
President Carter on April 7, 1980 issued a Memorandum for the Secretary
of the Treasury. That Memorandum provides in full that "In connection
with my decision today to close Iranian diplomatic facilities in the
United States, I am directing that the Uniformed Division of the Secret
Service provide any assistance necessary to the Secretary of State and
the Attorney General in order to make my decision effective, including
control of movement of persons and property into and out of Iranian
diplomatic facilities in the District of Columbia." 1 Pub. Papers
1980-81, at 612 (April 7, 1980) (Attached as Exhibit 2).

7\. On April 8, 1980, the United States assumed protection
responsibilities for all of Iran's diplomatic and consular property,
including its diplomatic and consular real property and bank accounts.

8\. On April 14, 1980, the Department of State approved Algeria as the
protecting power for Iranian interests in the United States. In an
Aide-Memoire dated April 18, 1980, which reflected the arrangements
agreed upon by the United States and Iran for the acceptance of Algeria
as Iran's protecting power, the Department informed Algeria that the
United States would retain custody of the Iranian premises in the United
States until the United States or a protecting power on its behalf
regained its premises in Iran. In response to the Algerian Embassy's
request that the United States ensure the safety and protection of
Algerian diplomatic premises and those formerly occupied by the Iranian
Embassy and consulates, by diplomatic note dated April 29, 1980, the
Department of State assured the Embassy of Algeria that it would take
all appropriate measures for the safety and protection of such
diplomatic and consular premises in the United States. Diplomatic
Missions and Embassy Property, 1980 Digest § 1, at 337-38 (Attached as
Exhibit 3).

9\. Under the Vienna Conventions on Diplomatic and Consular Relations,
the United States is obligated to respect and protect Iran\'s diplomatic
and consular property. See Vienna Convention on Diplomatic Relations,
Art. 45 (a); Vienna Convention on Consular Relations, Art. 27(1)(a). In
order to fulfill these obligations, OFM began to look at ways to
maintain the property, examining both short-term and long-term
alternatives. OFM determined that the real properties, if vacant, could
not adequately be maintained over any significant period of time.
Moreover, continued repair and maintenance needs required a source of
funding. The Department of State determined that it would rent out the
properties to generate a source of funds to pay for repair and
maintenance of the properties over the long term. However, in order to
obtain funding for the initial renovations, the Department requested
that the Department of Treasury license the use of funds from existing
diplomatic, consular, and other blocked official Iranian bank accounts.

10\. The Office of Foreign Assets Control of the United States
Department of Treasury (OFAC) is responsible for implementing and
enforcing President Carter's Order regarding the blocking of Iranian
assets. On February 16, 1984, the Department of State obtained License
No. IR-1586-a (revised) from OFAC, pursuant to the International
Emergency Economic Powers Act, which states that wire transfers from
various bank accounts in the United States in the name of Iran had been
licensed for transfer into Account No. 20-863-55-542 at American
Security Bank, State Department branch, held in the name of "Iranian
Diplomatic and Consular Properties Renovation Account: U.S. Department
of State, Office of Foreign Missions, Custodian-Trustee." (License
attached as Exhibit 4).

11\. License No. IR-1586-a (revised) further requires that the
above-transferred funds and any additional funds authorized to be
transferred into Account No. 20-863-55-542 be "used solely to pay
appropriate charges and expenses associated with the preservation,
renovation, and operation of the properties owned by the Government of
Iran . . . and located in the United States." License No. IR-1586-a
(revised) also provides that arrangements were to be made by the
Department of State with OFAC for the eventual payback of funds
transferred into Account No. 20-863-55-542 from any funds generated by
lease or other appropriate use of the properties. The License requires
all income generated by lease or other appropriate use of the properties
to be deposited into Account No. 22-863-55-542 and states that such
income constitutes blocked Iranian property under the Iranian Assets
Control Regulations.

12\. Pursuant to the authority of the Foreign Missions Act, 22 U.S.C. §
4305(c)(1), the Office of Foreign Missions maintained, and where
necessary, renovated all Iranian custodial property (except for the
building on the Upton Street property in the District of Columbia, which
was demolished) using funds from Account No. 20-863-55-542. (A list of
these properties is attached as Exhibit 5.)

13\. In October 1983 the Office of Foreign Missions began leasing the
properties. By December 1985 all Iranian custodial properties (with the
exception of the Upton Street property) had been rented. These
properties have been leased since that time with interruptions for new
tenants. The Office of Foreign Missions deposits all lease proceeds into
Account No. 20-863-55-542.

14\. As required by License No. IR-1586-a (revised) and pursuant to the
payback arrangements between the Treasury Department, Office of Foreign
Assets Control and the Office of Foreign Missions, the Office of Foreign
Missions transfers, on a yearly basis, funds from rental proceeds that
exceed the anticipated maintenance costs for the custodial properties
held in Account No. 20-863-55-542 to Account No. 39910000120887 entitled
"Blocked Iranian Diplomatic and Consular Property Renovation Account."

15\. American Security Bank was subsequently acquired by NationsBank,
which was in turn acquired by Bank of America. The accounts were
transferred to each successive bank, and the funds remain held in
Account No. 20-863-55-542 and Account No. 39910000120887 at Bank of
America.

16\. As a reciprocal action taken in response to Iran's breach of its
obligations under agreed protecting power arrangements, and its
obligations under the Vienna Conventions on Diplomatic and Consular
Relations to respect and protect the diplomatic and consular properties
of the United States, and specifically Iran's unwillingness to permit
Switzerland, the United States' protecting power in Iran, to assume
custody of United States diplomatic and consular property (including
bank accounts) in Iran, the United States has not made available Iranian
diplomatic and consular properties, including the funds in the above
accounts, to Iran\'s protecting power in the United States. A portion of
the funds in the accounts are derived from certain official accounts
held in the name of Iran prior to the severing of diplomatic relations.
Other funds are derived from the lease of Iran\'s diplomatic and
consular properties, and as such, are considered an integral part of
Iran\'s diplomatic and consular property in the United States and are
therefore equally subject to our obligation to respect and protect
diplomatic and consular assets.

17\. These funds are among the diplomatic and consular properties
claimed by Iran before the Iran-United States Claims Tribunal in The
Hague, The Netherlands, established pursuant to the "Algiers Accords",
which entered into force on January 19, 1981 ([Iran v. United States of
America]{.underline}, Case Nos. A/4, A/7, A/15(I:F&III). Continued
United States protection of Iran's diplomatic and consular property,
including the accounts, is important to preserving the United States'
position in those cases with regard to the diplomatic and consular
properties of the two governments. Moreover, the United States' failure
to protect from attachment diplomatic and consular properties and funds
of countries with which we do not have diplomatic relations would make
more difficult efforts to protect similarly situated diplomatic and
consular property, including funds, of the United States abroad.

18\. Renovation and rental of custodial property has produced benefits
for the United States. In the case of Vietnam and Cambodia, income
produced by rental of the custodial diplomatic properties was used to
repay renovation expenses which had been withdrawn under license from
blocked government accounts. When relations with Vietnam were
reestablished, for example, the excellent condition in which the United
States had maintained its properties provided considerable leverage for
obtaining from Vietnam return of our former diplomatic properties and
obtaining valuable properties in place of some properties which could
not be returned. Blocked government funds provide a source from which
Vietnam paid the United States Government 18 million dollars in
compensation for property that Vietnam was unable to return.

I declare under penalty of perjury that the foregoing is true and
correct.

Executed on this \_\_\_\_day of August, 2000.

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David Carpenter