Wall Street Journal
December 13, 2006

BRUSSELS — The European Court of Justice overturned a European Union decision to freeze the assets of Mujahedin-e Khalq, an exiled Iranian resistance movement that is on the bloc’s terrorism blacklist.

The court’s ruling annuls a 2002 decision to freeze all European assets of the Paris-based group, also known by the acronym MEK. It was the first time an appeal to the EU’s terrorism list was successful at the Luxembourg-based court.

EU legal officials stressed that EU governments wouldn’t immediately remove the exile group from their terrorism list, arguing they had to study the full ruling of the court before any decisions will be made.

“For the time being they are on the list,” said Jean-Claude Piris, legal counsel to the 25 EU governments. “But we have to examine it as soon as possible.”

EU governments said in a statement that the court’s ruling didn’t call into question the EU’s antiterrorism list, which includes top terrorist groups and suspects like Osama bin Laden, Palestinian group Hamas, and al Qaeda. It added that the judgment also didn’t call into question a decision by EU governments that MEK is a terrorist organization.

The U.S. also lists the group as a terrorist organization. The group, founded by students at Tehran University in the 1960s, insists it advocates the overthrow of Iran’s hard-line clerical regime in Tehran by peaceful means.

International Herald Tribune
By Craig S. Smith
December 13, 2006

PARIS – Europe’s second-highest court on Tuesday annulled a European Union decision that had frozen the funds of an Iranian exile group and called into question the group’s label as a terrorist organization.

The ruling by the European Court of First Instance was more than a financial victory for the group, the Mujahedeen Khalq, which has long argued that its terrorist label was unfair.

“All restrictions resulting from the terror tag should be removed from the Iranian resistance immediately,” the group’s leader, Maryam Rajavi, said at the European Parliament in Strasbourg. She said that the ruling proved that her organization was a legitimate resistance movement rather than a terrorist group.

The Mujahedeen Khalq was formed by leftist students in Iran in 1965 and quickly became one of the most active groups opposing Shah Mohammad Reza Pahlavi. But the Islamic government of Ayatollah Ruhollah Khomeini turned against the group after the shah’s overthrow in 1979. It moved its headquarters to France and then to Iraq in 1986, where it set up a well-financed military based under the protection of Saddam Hussein. The U.S. military disarmed the militia in May 2003 and has since kept its members confined to a camp north of Baghdad since then.

Rajavi remained in Paris, in charge of the group’s political activities as head of the National Council of Resistance of Iran. She has been lobbying for the group to be taken seriously as a viable opposition movement to topple the Islamic theocracy in Iran.

She says the organization has been unfairly labeled a terrorist organization out of the West’s misguided efforts to engage the Iranian government, and that the only real hope to effect change in Iran short of war is to support her organization and give it free rein.

Those hopes are not without some foundation: The fact that the group’s Iraqi military base is, in effect, under U.S. protection, suggests that Washington may yet envision a role for the group if relations with Iran deteriorate further.

The European court ruled Tuesday that the EU had not provided adequate reasons or a fair hearing in deciding to freeze the organization’s assets in 2002 and that the decision “must be annulled.” The EU issued a statement in response to the ruling saying that the organization would remain on the terrorist list and that it would consider appealing to the higher European Court of Justice.

Wall Street Journal
December 12, 2006

The article “Iranian Imbroglio Gives New Boost to Odd Exile Group” (page one, Nov. 29) asserted that most American officials dispute claims of the People’s Mojahedin Organization of Iran, the main Iranian resistance movement, of “having a mass following in Iran, stressing that many Iranians despise the organization.” Believing this would lead one to wonder why a “terrorist” labeling of such an “isolated” organization should be such a big deal for the clerical regime, as has been underscored by Martin Indyk, the assistant secretary of state for Near East Affairs at the time, who stated in the article that the Khatami government “considered it a pretty big deal.”

The Washington-based Iran Policy Committee, in a study of the regime’s official media, established in 2006 that Tehran paid five times more attention to the PMOI than to all other internal and external opposition groups combined. The Associated Press reported from Tehran on Dec. 5 that the Iranian regime has blocked access to YouTube.com mainly because videos from the PMOI have been posted on this site.

In reference to the assertion that the organization received help from the former Iraqi government, the article leaves unanswered one simple question: Four years into the downfall of the former Iraqi government, who finances the expenses of this elaborate resistance that operates inside and outside of Iran so extensively? Answer: The very same Iranian people who have been the sole source of support for the past 27 years.

Shahin Gobadi
Press Spokesman
National Council of Resistance of Iran
London

Reuters
December 12, 2006
By Michele Sinner

LUXEMBOURG, Dec 12 (Reuters) – Europe’s second-highest court on Tuesday annulled an EU decision freezing the funds of an exiled Iranian opposition group that argues it was wrongly placed on the European Union’s list of terrorist organizations.

The Court of First Instance ruling faulted the EU for not giving adequate reasons or a fair hearing. It is likely to infuriate Tehran and may have wider implications for EU policy of banning alleged terrorist groups and freezing their assets.

EU member states ordered the freezing of funds of the People’s Mujahideen (OMPI) in 2002. The armed wing of the France-based National Council of Resistance of Iran (NCRI) stated that it has renounced military activity since 2001.

The NCRI called the court decision “a great victory”, but the head of the EU Council’s legal service, Jean-Claude Piris, said he did not know if the group would get its assets back.

The court ruling said: “The court finds that the decision ordering the freezing of the OMPI’s funds does not contain a sufficient statement of reason and that it was adopted in the course of a procedure during which the right of the party concerned to a fair hearing was not observed.”

“Accordingly that decision must be annulled in so far as it concerns the OMPI.”

The EU Council’s Secretariat, representing the 25 member states, said it would consider appealing on points of law to the higher European Court of Justice.

A Council statement played down the implications, saying the court had not annulled the regulation establishing the terrorism list, or other persons or entities named on it.

It also said the EU intended to implement procedures sought by the court to provide those targeted with a statement of reasons and a possibility to challenge the listing.

Piris said EU states would look at the case again and added: “When a decision in Council (is annulled) because you have not respected the procedures, it does not mean you have not the right to take the same decision based on the right procedures.”

“REMOVE TERROR TAG”
NCRI leader Maryam Rajavi called the ruling “proof of the resistance’s legitimacy over religious fascism in Iran”.

“All restrictions resulting from the terror tag should be removed from the Iranian resistance immediately, and unfair treatment that culminates from it should stop at once,” she said during a visit to the European Parliament in Strasbourg.

Saad Djebbar, a British human rights lawyer who has appealed to the European courts to overturn a U.N.-mandated assets freeze on Saudi businessman Yassin Kadi, welcomed the ruling but said it should also cover EU action implementing U.N. asset freezes.

“The good news is that they accepted the principle that when there is a lack of due process, it contradicts the EU judicial and legal culture,” Djebbar told Reuters. “But this should be applied across the board.”

The NCRI said the Iranian government had used the EU decision to justify repression of OMPI sympathizers in Iran and to try to restrict its activities abroad.

The OMPI, labeled a terrorist group in the EU and the United States, has devoted followers on both continents and was the first body to expose Iran’s covert nuclear program.

But diplomats and Iran analysts say it has little support within Iran, where few can forgive it for siding with Saddam Hussein in the 1980-88 Iran-Iraq war.

The NCRI complained that the group was added to the EU terrorist list under pressure from Tehran at a time when Western countries were trying to improve relations with Iran.

(Additional reporting by David Brunnstrom and Paul Taylor in Brussels)
REUTERS

Bloomberg News
By Patrick Donahue
December 12, 2006

Dec. 12 (Bloomberg) — The European Union must reverse a funding freeze on an Iranian opposition organization because the EU didn’t give sufficient reason for accusing the group of supporting terrorism, Europe’s second-highest court ruled.

The People’s Mujahedeen of Iran was unfairly denied a chance to review the legal basis of the EU’s decision, the Luxembourg- based European Court of First Instance said in a statement today.

EU governments in May 2002 included the group, which was formed in 1965 to push for the overthrow of the Iranian Shah, on a list of suspected terrorist groups. The list, established in the aftermath of the Sept. 11 attacks in New York and Washington, designated organizations whose funding should be frozen as part of the fight against terrorism, according to the court’s ruling.

The court said the EU had kept the Mujahedeen on the list through numerous negotiated updates, even though the group had “renounced all military activity” in June 2001. The group had maintained an armed branch within Iran, the court said. The U.S. and the United Nations both consider it a terrorist organization.

The European Council is examining the decision, spokesman Jesus Carmona said after the ruling. The court’s decision could be appealed to the European Court of Justice, the EU’s highest court.

The Mujahedeen, which describes Iran’s current leadership as “religious fascism,” called on the EU to reimburse its members for damages.

“Today, one of the highest judicial authorities in Europe confirmed the Iranian Resistance’s claim that the terrorist label from the beginning was a political issue which was meant to appease the mullahs,” Mujahedeen’s president-elect Maryam Rajavi said in an e-mailed statement.

The case is T-228/02, Organisation des Modjahedines du peuple d’Iran v Council of the European Union.

Agence France Presse
December 12, 2006

LUXEMBOURG – A European court annulled Tuesday a decision to freeze the assets of the main Iranian opposition group abroad, a move that could result in its removal from the EU terror list.

The Court of First Instance, Europe’s second-highest, ordered the EU to cancel a decision from May 2002 to freeze the funds of the People’s Mujahedeen of Iran (OMPI), which claims it should not be on the terror blacklist.

“It could imply the withdrawal from the list,” a court spokeswoman said.

The Luxembourg-based tribunal found that “the decision ordering the freezing of the OMPI’s funds does not contain a sufficient statement of reasons and that it was adopted in the course of a procedure during which the right of the party concerned to a fair hearing was not observed, and that it is not in a position to review the lawfulness of that position.”

“Accordingly that decision must be annulled in so far as it concerns the OMPI,” it said in a statement.

Founded in 1965 with the stated aim of replacing first the Shah’s and then the clerical regime in Iran with a democratically elected government, OMPI has in the past operated an army inside Iran.

It was the armed wing the France-based National Council of Resistance of Iran (NCRI) but it announced in June 2001 that it had renounced violence.

Exiled Iran opposition leader Maryam Rajavi — who has residency in France, regularly visits Brussels and despite the ban has been tolerated by the European authorities — welcomed the court’s decision.

“Today one of the highest judicial authorities in Europe confirmed the Iranian resistance’s claim that the terrorist label from the beginning was a political issue which was meant to appease the mullahs,” she said.

“All restrictions resulting from the terror tag should be removed from the Iranian resistance immediately,” she said in a statement, read to AFP by a Brussels-based spokesman.

The group said the decision was “proof of the resistance’s legitimacy over the religious fascism in Iran and a victory of justice over economic interests.”

The EU blacklist was drawn up late in 2001, following the September 11 attacks that year in New York and Washington and is revised regularly.

The radical Palestinian group Hamas and the former Basque separatist party Batasuna are among those on it.

The bloc began freezing the funds of groups on it that December.

It did so to implement a UN Security Council resolution calling on all states to fight terror funding, which was adopted in the wake of the suicide hijackings.

Associated Press
December 12, 2006
By CONSTANT BRAND

BRUSSELS, Belgium – The European Court of Justice on Tuesday overturned an EU decision to freeze the assets of the People’s Mujahadeen of Iran, an exiled Iranian resistance movement which is on the bloc’s terror blacklist.

The court’s ruling annuls a 2002 decision to freeze all European assets of the Paris-based group, also known by the acronym MEK. It was the first time an appeal to the EU’s terror list was successful at the Luxembourg-based EU court.

EU legal officials stressed that EU governments would not immediately remove the exile group from their terror list, arguing they had to study the full 45-page ruling of the court before any decisions will be made.

“For the time being they are on the list,” said Jean-Claude Piris, legal counsel to the 25 EU governments. “But we have to examine it as soon as possible.”

EU governments said in a statement that the court’s ruling did not call into question the EU’s anti-terror list, which includes top terror groups and suspects like Osama bin Laden, Palestinian group Hamas, and al-Qaida. It added that the judgment also did not call into question a decision by EU governments that the Mujahadeen is a terrorist organization.

“This case was annulled because of procedure,” said Piris.

The U.S. also lists the group as a terrorist organization. But the group, founded by students at Tehran University in the 1960s, insists it advocates the overthrow of Iran’s hard-line clerical regime in Tehran by peaceful means.

In its ruling, the court said the group was not given a fair hearing to defend itself against the move to blacklist it.

“Certain fundamental rights and safeguards, including the right to a fair hearing, the obligation to state reasons and the right to effective judicial protection are, as a matter of principle, fully applicable,” the court said in a statement.

The court ruling said there was “a distinction” between Mujahadeen’s appeal to the EU court and previous cases filed with the Luxembourg-based court to have names removed from the list.

The EU court last July dismissed requests by two terror suspects to annul the bloc’s moves to freeze their assets under a U.N. anti-terror order. The court said the exiled Iranian group was added to the list under EU law, and not under a U.N. order, as with the others, so EU governments are “bound to observe” fundamental rights under EU law.

Piris said the ruling would likely force a change in how EU governments add groups or persons to the list, suggesting that rules include informing those suspects after they have been added to the list, so they can exercise their right to appeal the decision at the EU’s high court.

The list, set up after the terror attacks on Sept. 11, 2001 and which was last updated in May, is done in secret by a special committee of security representatives from each member state.

The blacklist currently contains 45 people and 48 groups or entities believed to be involved in terrorist activities.

Reacting to the court’s decision, Iranian resistance leader Maryam Rajavi called for the immediate lifting of all restrictions on the organization and described the ruling as “proof of the resistance’s legitimacy over the religious fascism in Iran and victory of justice over economic interests.”

“Today, one of the highest judicial authorities in Europe confirmed the Iranian resistance’s claim that the terrorist label, from the beginning, was a political issue which was meant to appease the mullahs,” she said in a statement issued in Paris.

Agence France Presse
December 12, 2006
by Lorne Cook

A European court has annulled an EU decision to freeze the assets of the main Iranian opposition in exile, a move that will force the bloc to rethink the way it compiles its terror blacklist.

The Court of First Instance, Europe’s second-highest tribunal, ruled that the EU had not respected the right to a fair hearing of the People’s Mujahedeen of Iran (OMPI), when it ordered the asset freeze in May 2002.

The EU’s decision was based on measures implemented to respect a UN Security Council resolution drawn up in the wake of the September 11, 2001 attacks which demanded that countries crack down on terror funding.

The immediate effects of the 45-page ruling were unclear but legal experts acknowledged that it could incite others on the terror list, which includes the Palestinian governing party Hamas, to contest such action against them.

OMPI welcomed it Tuesday as “a victory of justice” but the EU’s top legal counsel said it was merely a “judicial victory of principle” based on a procedural problem and in no way exonerated the Iranian opposition group.

“This organisation was not put on the list because of some flight of fancy of an isolated EU member. It was decided unanimously by all 25 countries. It was based on facts. We have facts,” said legal counsel Jean-Claude Piris.

The Luxembourg-based court found that “the decision ordering the freezing of the OMPI’s funds does not contain a sufficient statement of reasons and that it was adopted in the course of a procedure during which the right of the party concerned to a fair hearing was not observed, and that it is not in a position to review the lawfulness of that position.”

“Accordingly that decision must be annulled in so far as it concerns the OMPI,” it said in a statement.

Founded in 1965 with the aim of replacing first the Shah and then the clerical regime in Iran, OMPI has in the past operated an army inside Iran.

It was the armed wing the France-based National Council of Resistance of Iran (NCRI) but it renounced violence in June 2001.

Exiled Iran opposition leader Maryam Rajavi — who has residency in France, regularly visits Brussels and despite the ban has been tolerated by the European authorities — welcomed the court’s decision.

“Today one of the highest judicial authorities in Europe confirmed the Iranian resistance’s claim that the terrorist label from the beginning was a political issue which was meant to appease the mullahs,” she said.

“All restrictions resulting from the terror tag should be removed from the Iranian resistance immediately,” she said in a statement read to AFP by a Brussels-based spokesman.

The group said the decision was “proof of the resistance’s legitimacy over the religious fascism in Iran and a victory of justice over economic interests.”

The court’s decision refers to a black list in force when the Iranian group launched its legal challenge in 2005, and which is now outdated.

The terror register, of more than 50 organisations and individuals, including the armed Basque separatist group ETA and the Tamil Tigers, is revised every six months.

Therefore despite the ruling the OMPI formally remains on the EU’s terror list.

In a fact sheet sent to journalists, the European Council — representing the 25 member countries — acknowledged the court’s decision, although it did not rule out an appeal.

It also said that it had begun to improve the way the list is compiled.

“We are going to try and find a way to give the people who are involved the opportunity to give their arguments in some way or another,” Piris said.

“I’m not exactly sure how,” he added.

German Press Agency (dpa)
December 12, 2006

Luxembourg- A European court on Tuesday annulled an EU decision to freeze the funds of the militant opposition group People’s Mujahedin of Iran, which says it was wrongly placed on an EU terror list.

The EU’s order to freeze the Mujahedin’s assets infringed the right to a fair hearing, the obligation to state reasons for the decision and the right to effective judicial protection, ruled the Court of First Instance.

The Luxembourg-based tribunal is the EU’s second-highest court.

While the ruling does not comment on the wider issue of the classification of the group as a terrorist organisation, it may have consequences for the EU’s policy of banning alleged terrorist groups and having their bank accounts in the EU blocked.

The EU in 2002 decided to put the People’s Mujahedin of Iran on a list of suspected terrorists whose funds are to be frozen.

The move followed an earlier United Nations Security Council resolution which called on states to freeze the funds of all those who had committed or were planning to commit terrorist acts.

However, unlike a UN resolution dealing with al-Qaeda and the Taliban, the Security Council did not specify a list of persons but left it up to its member states to decide who should go on the list.

The court said that the EU had not given the People’s Mujahedin the right to make their views known about its inclusion on the bloc’s list of terror organizations.

It also argued that the EU had failed to inform the movement of the reasons for ordering the freezing of funds.

The People’s Mujahedin of Iran was founded in 1965 with the stated aim of replacing first the Shah’s and then the Mullah’s regime in Iran with a democratically elected government.

In the past the group has operated an army inside Iran. The group now states that it has ceased all military action since June 2001.

The United States, Canada and Iran also classify the rebel group as a terrorist organization.

Iranian Imbroglio Gives New Boost To Odd Exile Group
Called a Terror Cult by Many, MEK Wins Friends in U.S. Because It Opposes Tehran
A Rally Near the White House
By ANDREW HIGGINS and JAY SOLOMON
Wall Street Journal
November 29, 2006; Page A1

Early this summer, as Washington fretted about Iran’s nuclear program, supporters of Mujahedin-e Khalq, an Iranian opposition group, held a rally in an auditorium two blocks from the White House. Prominent members of Congress addressed the crowd, as did the State Department’s recently retired ambassador-at-large for war crimes.

Maryam Rajavi, the dissident outfit’s leader, beamed in a stirring speech via satellite from France. Denouncing Iran’s clerical rulers and their nuclear ambitions, she proclaimed democracy “the answer to Islamic fundamentalism.”

Mujahedin-e Khalq, known as MEK, is Iran’s largest exile opposition group and, say its supporters, the best hope of bringing democracy to Iran. It reaches into Iran through its own satellite TV channel and claims an underground network of activists inside the Islamic republic. It also has a big presence in neighboring Iraq, where U.S. soldiers watch over more than 3,000 MEK members gathered in a sprawling camp north of Baghdad.

The MEK, however, has a big handicap: The U.S. government says it’s a terrorist organization. Officials cite its role in the murder of Americans in the 1970s and subsequent terror attacks that killed hundreds of Iranians. Another big blemish is the group’s long collaboration with Saddam Hussein. On top of all that, former members describe the MEK as a personality cult obsessed with celibacy and martyrdom.

So how does an outlaw organization with a bloodstained past, a history of intimacy with Iraq’s toppled despot and a reputation for oddness generate thunderous applause almost within earshot of the Oval Office?

Part of the answer lies in subterfuge: Mujahedin-e Khalq, which means People’s Holy Warriors, has a raft of support groups with innocuous names, such as the National Convention for a Democratic, Secular Republic in Iran, the host of the Washington event. These haven’t been banned and disavow violence.

More important in blurring the MEK’s status, however, is the muddle surrounding U.S. policy toward Iran. With the U.S. armed forces bogged down in Iraq and America’s military options against neighboring Iran severely limited, the MEK and its fans are lobbying hard to present the group as an ally that can help curb Tehran’s growing influence. These supporters, who include lawmakers and conservative foreign-policy analysts, insist the MEK has no links to terrorism.

Most U.S. officials scoff at forming any alliance with the MEK and dispute its claims of having a mass following in Iran, stressing that many Iranians despise the organization. A senior White House official says the Bush administration continues to view the MEK as a terrorist organization and “not an advocate for democracy or human rights” in Iran.

But some Iran analysts say the MEK’s thinly disguised presence in the U.S. makes a mockery of the administration’s antiterrorism campaign. The White House accuses Iran of supporting terrorist groups, they say, yet turns a blind eye toward the MEK. “It gives the impression that some terrorist organizations are better than others,” says Trita Parsi, president of the National Iranian American Council, an Iranian-American civic organization.

Charm Offensive

Leading the push to get the MEK’s “terrorist” tag removed, with help from some members of Congress, is an outfit called the Iran Policy Committee. The committee’s president, Raymond Tanter, a former National Security Council official under President Reagan, says the MEK’s designation is “restraining” the organization’s ability to promote democratic change in Iran. His group recently published a glossy book that challenges the terrorism charges made against the MEK, and this month helped host an event on Capitol Hill arguing the same point.

The charm offensive has taken the MEK far from its origins. First set up in 1965 by vaguely Islamic left-wing intellectuals in Tehran, Mujahedin-e Khalq used to curse American “imperialism” and murdered a string of U.S. military personnel and defense contractors in the 1970s, says the State Department. The group blames the attacks on rogue Marxist factions and says they were not endorsed by MEK’s leaders, who were in jail at the time or had been executed.

Shortly before Iran’s 1979 Islamic revolution, the Shah’s crumbling America-backed regime released jailed MEK activists. One of them, Massoud Rajavi, a former law student at Tehran University, became the group’s paramount leader and allied with Islamist forces to topple the Shah. But the group quickly split with Iran’s new clerical rulers led by Ayatollah Khomeini, who executed thousands of MEK supporters. The MEK retaliated with a wave of terror of its own.

Mr. Rajavi fled to France, where his brother, a doctor, has a house in Auvers-sur-Oise, a sleepy town outside Paris. To rally Iranians to his cause, Mr. Rajavi sent Massoud Khodabandeh, a British-educated electrical engineer, to Iran’s Kurdish region to set up a radio transmitter. He began to broadcast taped tirades against Ayatollah Khomeini.

In France, the group swiftly fell prey to political and romantic bickering. Mr. Rajavi, who had just divorced his second wife, shocked supporters by taking up with the wife of a close friend and fellow MEK activist. They married and she took the name Maryam Rajavi.

Another contentious liaison followed. Mr. Rajavi moved to Iraq in 1986 with his new wife and forged an alliance with Saddam Hussein, then at war with Iran. Former MEK members say the Iraq dictator provided a six-story office building in Baghdad and military bases, including Camp Ashraf, named in honor of Mr. Rajavi’s first wife, who had been killed in Iran by Ayatollah Khomeini’s regime.

After a disastrous lunge into Iran in 1988, the MEK embarked on a more successful military venture. It helped Saddam Hussein crush an uprising by Kurds after Iraq’s defeat by U.S. forces during the 1991 Gulf War, according to U.S. diplomats and the State Department’s 2005 Country Reports on Terrorism.

Increasingly seen in the West as an Iraqi stooge, Mr. Rajavi sent Ms. Rajavi back to France to drum up support. Her campaign made some headway but foundered when the U.S. and Europe began looking for ways to reach out to Iran’s newly elected reformist president, Mohammad Khatami.

Senior diplomats in the Clinton administration say the MEK figured prominently as a bargaining chip in a bridge-building effort with Tehran. Washington hoped it could get Iran to back a Middle East peace initiative, stop funding terrorist groups and forswear nuclear weapons. Iran, for its part, wanted the U.S. to take a hard line against the MEK.

In 1997, the State Department added the MEK to a list of global terrorist organizations as “a signal” of the U.S.’s desire for rapprochement with Tehran’s reformists, says Martin Indyk, who at the time was assistant secretary of state for Near East Affairs. President Khatami’s government “considered it a pretty big deal,” Mr. Indyk says.

The MEK also got hit by a string of defections. Among those to quit was Mr. Khodabandeh, the electrical engineer. He married another defector, Anne Singleton, an English woman who had visited Camp Ashraf, where she says she was taught an anti-imperialist song that vowed “death to America.” Ms. Singleton wrote a book denouncing the MEK as a crazed cult of enforced celibacy and brutal discipline.

Other former members describe a good cause warped by methods reminiscent of Mao Tse-tung’s Cultural Revolution — a constant hunt for internal enemies, ideological “cleansing” sessions and harsh punishment of real or imagined dissent. Mohsen Abbasloo, a 28-year-old former MEK activist, says he was jailed and beaten at Camp Ashraf for over a month after he voiced mild doubts. “I went there full of hope but it was not even 1% of what I expected,” says Mr. Abbasloo, who says he spent four years at the huge desert complex of barracks, office buildings and military training grounds between Baghdad and Iraq’s border with Iran.

Mohammad Mohaddessin, a veteran MEK member and chief foreign-affairs official of its political arm, denies accusations of brutality and describes defectors as “tools of the Iranian regime.”

Throughout the 1990s, the MEK continued to operate in Washington and elsewhere through various front organizations, the most prominent of which was the Paris-based National Council of Resistance of Iran. In 1999, the State Department banned the NCRI on the grounds that it is the MEK’s official political arm. The NCRI describes itself as an Iranian parliament-in-exile comprising 530 members and not just representing the MEK.

Its former U.S.-based spokesman, Alireza Jafarzadeh, remained a regular on the Washington lobbying and policy circuits. In recent years he appeared routinely on Fox News as a foreign-affairs analyst. In 2002, he held a Washington news conference to reveal a secret uranium enrichment facility in the Iranian city of Natanz. The International Atomic Energy Agency in Vienna later confirmed the claim. President Bush and other senior U.S. officials publicly praised what they called an Iranian “dissident group” for unearthing the information.

Former MEK members and some U.S. officials say they believe the Natanz information was fed to the MEK by Israel, which wanted to make it public. The MEK derides this as nonsense.

John Moody, a Fox News senior vice president, says Mr. Jafarzadeh’s contract as a foreign-affairs analyst lapsed, but doesn’t rule out further employment. “He consistently provides accurate and sometimes exclusive information,” he says.

In 2002, 150 members of the House of Representatives signed a petition seeking the MEK’s removal from the U.S. government’s terrorist list.

As America geared up for war with Iraq in early 2003, the MEK muted its adulation of Saddam Hussein, say people who were in Ashraf at the time. Top leaders, including the Rajavi couple, quietly bailed from Camp Ashraf.

“We suddenly noticed that a lot of senior people were missing,” says Behzad Alishahi, an Iranian who spent more than 15 years at the camp working as an MEK TV presenter. Just before the U.S. invaded in March, he says, hundreds of MEK fighters rushed toward the Iraq-Iran border for an attack on Iran. They turned back, he says, after U.S. planes bombed their convoy and Camp Ashraf.

Ms. Rajavi fled to the group’s compound in Auvers-sur-Oise, France. Her husband vanished, along with his hairdresser and bodyguards. This stirred rumors that he had been picked up by the U.S. military and was providing intelligence about Saddam Hussein and also Iran.

A State Department official says Mr. Rajavi was last seen in Baghdad in March 2003 and is now either dead or in hiding. The MEK says he’s alive and evading Iranian assassins.

When American troops pulled up outside Camp Ashraf shortly after the fall of Baghdad in April 2003, the MEK offered no resistance and later agreed to disarm. Mr. Alishahi says he and colleagues at the TV station were ordered by MEK commanders to destroy film and other evidence of close ties to Saddam Hussein.

U.S. officials launched a review of camp residents to decide if they should be prosecuted for terrorism. At the same time, the Central Intelligence Agency warned French authorities to watch out for the MEK. The French dispatched hundreds of police to storm the MEK’s Auvers-sur-Oise compound. They arrested Maryam Rajavi and carted away $9 million in cash and documents detailing bank accounts in France, the U.S. and elsewhere holding tens of millions of dollars.

Also confiscated, says a senior French security official, were videos of Mr. Rajavi meeting Saddam Hussein and 99 satellite-positioning devices programmed with coordinates for Iran. The French also found what they say were signs that the Iraqi dictator had bankrolled the organization, something the MEK has always denied. These included stacks of dollar bills wrapped in Iraqi newspapers and documents relating to a gift of Iraqi oil, say French officials who were involved.

Drawing Criticism

The raid drew criticism from lawmakers and others in France and also the U.S. About 10 MEK members set themselves on fire in Europe and Canada in protest. Two died from their burns. French police released Ms. Rajavi but launched a formal terrorism-conspiracy investigation of her and 16 others.

Mr. Mohaddessin, the group’s foreign-affairs spokesman, who was also detained and later released, ridicules the raid as a publicity stunt to win favor with Iran. There were enough police, he says, “for a coup in an African country.”

The U.S. review of Camp Ashraf, which began around the same time as the French raid and finished in summer 2004, partially vindicated the MEK. Only one person has faced any U.S. charges, a naturalized U.S. citizen from Iran who was arrested in September in New York for allegedly providing support to a terrorist group. The roughly 3,300 now still in Ashraf were given the status of “protected persons” under the Geneva Convention, which promises humane treatment for nonnationals in a country at war. The U.S. military, as the occupying power, took on the role of protector. A White House official says this “protected” status applies only to individuals, not to the MEK as an organization.

Former Ashraf residents say MEK commanders, most of whom are women, have worked hard to woo the American soldiers who are now nominally in charge, inviting them to use a big swimming pool and serving them pizza. American forces have, under an agreement with the MEK, confiscated the group’s roughly 300 tanks, 250 armored personnel carriers, 250 artillery pieces and 10,000 small arms. They also blew up most of the MEK’s ammunition. But Camp Ashraf still functions as a bastion of opposition to Iran, shielded from the turmoil elsewhere in Iraq by American soldiers.

In June, the MEK camp hosted a mass rally of Iranian dissidents and thousands of Iraqis. Ms. Rajavi sent a message from France urging them to “cut off the tentacles of the Iranian regime.” The MEK’s satellite TV station, meanwhile, pumps out adulatory propaganda for Ms. Rajavi and her missing husband, Massoud.

Both the Pentagon and the U.S. Central Command declined to comment on the military’s dealings with the MEK in Iraq. But individual officers have expressed support for the MEK. In May 2003, Maj. Gen. Raymond Odierno, then-commander of America’s 4th Infantry Division, commended MEK members at Camp Ashraf for their cooperation and told reporters that “this should lead to a review of whether they are still a terrorist organization.”

In 2005, following a report by Human Rights Watch detailing torture and other abuses at MEK camps in Iraq before the U.S. invasion, the commander of a U.S. military police unit that had been stationed at Camp Ashraf wrote to the U.S.-based human-rights group to defend the MEK. He said U.S. forces had not found “any credible evidence” of any such abuses and said he would “like my own daughter to someday visit these units for the cultural exchange.”

In Washington, debate raged during this time over how to deal with the MEK, say current and former U.S. officials. Amid the screening of Ashraf residents, some in the Pentagon pushed to use the MEK as a tool against Iran and Iranian-backed militants operating inside Iraq, say current and former State Department officials involved in Iraq policy.

Colin Powell, who was then secretary of state, pushed back against the idea of cooperating with the MEK, say current and former officials. Mr. Powell and his underlings argued that any flirtation with the MEK would undermine Washington’s stand against terrorism. The State Department then designated the group’s previously tolerated U.S. affiliate, NCRI-U.S., as a terrorist front for the MEK. In August 2003, the Federal Bureau of Investigation shut down its offices at the National Press Club in Washington.

“There was this kind of language [being offered by Pentagon officials] that one man’s terrorist was another man’s freedom fighter,” says Lawrence Wilkerson, who served as Mr. Powell’s chief of staff at the time. He says the State Department pushed through 2003 and 2004 for the MEK’s disarmament.

Douglas Feith, who served as the Pentagon’s No. 3 civilian official until last year, denies any desire by the Pentagon to cozy up to the MEK. “The idea that we would use them against Iran is fantasy,” he says.

MEK leaders sheltering in the West are now ramping up a campaign, along with their American and European fans, to present Maryam Rajavi and her missing husband as the only way to stop Iran from developing a nuclear bomb. This summer, thousands of their supporters gathered in a Paris convention hall. Ms. Rajavi arrived in a chauffeured Bentley, stepping onto a red carpet to the sound of trumpets. Rose petals were strewn at her feet. A former French prime minister and other VIPs applauded.

Among the MEK’s Washington supporters are a significant mix of lawmakers on both sides of the aisle. Rep. Ileana Ros-Lehtinen, a Florida Republican who chairs the International Relations Subcommittee on the Middle East and Central Asia, drafted legislation this year that would require the White House to provide funding to Iran’s largest opposition groups, although the bill doesn’t explicitly name the MEK.

Mr. Abbasloo, the former Camp Ashraf resident, who is now in Europe, says he doesn’t like Iran’s current regime but mocks the MEK as an alternative. “This would only replace a snake with a crocodile,” he says. “I hope America is not going to be that stupid.”