“We don’t know of a single ‘Western scholar’ or ‘policy wonk’ … who thinks that access to the Iranian regime is going to make them powerful, rich, or both,” Flynt Leverett and his wife, Hillary Mann Leverett, recently wrote on their website, raceforiran.com. The two Iran lobbyists were responding to my profile of them in Tablet Magazine two weeks ago, in which I wrote that contacts in a closed society have real value for policy types. “[A]ccess to the regime is a form of currency that can make you powerful, or rich, or both,” I wrote.It is true, of course, that access alone does not make anyone rich or powerful, but it is a prerequisite if you wish to act an intermediary between closed societies and Western companies, which is exactly what the Leveretts are up to in Washington. I obtained several emails sent by the Leveretts and pertaining to their business, one of which is a November 2007 message inviting Trita Parsi to one of their “background dinners.” These dinners, which the Leveretts present as a kind of salon, help to generate business for an energy and consulting firm called Stratega, whose CEO happens to be Hillary Mann Leverett. The guests that night included representatives from Norway’s Statoil company, including Ali Ghezelbash, an owner of Atieh Bahar, which is an Iranian consulting firm that in the past facilitated business with Iranian industries, especially in the energy sector, controlled at one time by Akbar Hashemi Rafsanjani. In 2006, Statoil was fined $21 million for a 2002 bribe securing “development of a critical Iranian petroleum project.”In Leveretts’ response to my article, they also claimed to have been quite offended when I suggested while interviewing them that their prospective trip to Iran “was facilitated via Muhammad Marandi on behalf of the IRGC,” or the Revolutionary Guards Corps. They charge that this information was made up, either by my sources or by me.In fact, every Iranian-American, Iranian émigré, and Iran analyst I spoke with during the course of my reporting concurred that a visa for guests like the Leveretts could only be secured with the approval of the Revolutionary Guards. As even the most casual Iran-watcher understands, over the last decade the government and its institutions have come increasingly under the control of the Revolutionary Guards. This holds for any institution responsible for granting visas to foreign analysts and journalists. Without the approval of the Guards, the Leveretts would not have gotten into Iran.The Leveretts’ sensitivity to suggestions they are in touch with Revolutionary Guards representatives is especially curious given that that Flynt Leverett has in the past boasted of his contacts with the Guards. As a Leverett email details, Flynt Leverett met with Mohsen Rezai, former head of the Revolutionary Guards, in Athens in 2003. In 2006, an international arrest warrant was issued for Rezai by Argentina, for his involvement in the 1992 bombing of the Israeli Embassy in Buenos Aires and the 1994 bombing of a Jewish community center there. Twenty-nine people died in the embassy bombing; 85 were killed at the community center, where another 300 were injured.The issue of course is not that Leverett should have apprehended a man also believed to have been involved in the 1983 U.S. Marine barracks bombing in Beirut, but that former government officials carry the dignity of their office with them even when they no longer serve. Of course, the fact that Leverett had been employed by the CIA is precisely what would have made him most appealing to the former chief of a powerful outfit that ran clandestine operations.The Leveretts also write that by explaining Mohammad Marandi’s father is Supreme Leader Ali Khamenei’s “personal physician,” I am implying that “Mohammad’s integrity must be suspect.”Mohammad Marandi, the Iranian regime’s most visible English-language spokesman, whom the Leveretts say they “count … among their Iranian friends,” compromises his own integrity every time he steps forward to defend a government that murders, tortures, and rapes its own people. The purpose in identifying Marandi’s father as Khamenei’s physician was to establish that the Leveretts’ coauthor enjoys a close relationship to the regime, which the Leveretts themselves like to underline when they point out that Marandi’s father was previously Iran’s minister of health.This brings us to the fax that laid out the Grand Bargain that the Leveretts allege was on offer from Iran.The Leveretts complain that I am saying they lied that the document came from the Iranians and that the Swiss ambassador may have concocted the offer. But Richard Armitage, a former deputy secretary of State and once Flynt Leverett’s boss, said as much in 2007: “we came to have some questions about where the Iranian message ended and the Swiss message may begin.” The Iranians themselves have expressed similar reservations. “We are even a bit suspicious that the Swiss ambassador wrote that fax himself,” said the editor of Kayhan, an Iranian newspaper under the supervision of the Supreme Leader’s office.Finally, the Leveretts contend it is not true that the Iranian document was shot down by Secretary of State Colin Powell and Armitage. However, Armitage himself has said otherwise: “Nothing that we were seeing in this fax was in consonance with what we were hearing face to face [from the Iranians],” Armitage told Frontline for a 2007 broadcast. “So we didn’t give it much weight.”So why has the legend of the Grand Bargain not faded, like the reputation of the Leveretts, into shabby obscurity? Because the legend has a life of its own, sustained by the Washington policy-making establishment.“Where you come down on the fax has to do not with where you come down on the fax,” says Danielle Pletka of the American Enterprise Institute. “It has to do with where you come down on Iran policy. Either you wanted to believe the Iranians wanted a Grand Bargain, or you thought they were just playing a game.”The Grand Bargain fax is a Washington Rorschach test. What U.S. officials, policymakers, and analysts make of it is determined by whether they believe a Grand Bargain with Iran was possible.Those on the right, for instance, who think that there is no accommodation to be had with the revolutionary regime in Iran, were likely to dismiss the very premise of a Grand Bargain out of hand. The prospect of the Islamic Republic ceasing its support of terrorist organizations, recognizing an Israeli enemy it has waged war against through Hezbollah, and bringing a halt to a nuclear weapons program that even many Iranian democrats approve of is simply inconceivable. Hence, they were not able to imagine that such an offer could be on the table.The New York Times op-ed page and other news media sympathetic to Flynt Leverett’s heroic narrative of principled opposition to the Bush administration were also predisposed to see the issue in a particular framework. For them, the reason we had no deal with the Iranians was because of Washington and not Tehran. The fax was further proof that the Bush administration preferred bloodshed to diplomacy.And yet there were also members of the mainstream policy establishment, who while fully aware that every U.S. president since Jimmy Carter had sought rapprochement with Tehran and been rebuffed by the revolutionary regime, still held out hope that there might be an opening to Iran. Perhaps it was President George W. Bush’s fault we didn’t have a deal with the Iranians after they proved helpful over Afghanistan. Maybe the regime couldn’t make a deal because of the split between Khamenei’s faction and Rafsanjani’s. But that doesn’t mean they couldn’t at some point make a deal. Anything is better than open conflict in the Persian Gulf, especially with American troops and resources already committed to Iraq and Afghanistan.There were plenty of sober policymakers who believed in the possibility of a Grand Bargain with Iran, whether or not the Leverett’s famous fax was a hoax. This describes the temperament of virtually every policymaker who was tapped to serve in the Obama administration, from the secretary of State on down to Iran specialists like Vali Nasr and Ray Takeyh, who recently left the State Department. If there was a Grand Bargain to be had, the young president who represented America at its most optimistic and diverse would surely bring it home.But now a year into the administration, President Barack Obama’s policy of engagement with Iran has gone nowhere, and true believers are dropping by the wayside. Richard Haass, president of the Council on Foreign Relations, is calling for regime change, while Secretary of State Hillary Clinton is reviving a promise from her own presidential campaign to extend a nuclear umbrella to protect Washington’s allies in the Persian Gulf. If Israel has learned to keep its concerns quiet, the Saudis have picked up the bullhorn. In Doha this week, Clinton promised more sanctions against Tehran and the Saudi foreign minister explained that more urgent action was needed. While Clinton’s aides were unable to explain to reporters what Saud al-Faisal could have possibly meant—surely, he wasn’t opposing sanctions—the Saudis couldn’t have spelled it out any more clearly. What he was saying was that the situation was too urgent for sanctions. The United States must stop the Iranians by any means necessary, and it must do so now.While one half of Washington argues that the administration’s Iran policy is in disarray, the other half makes the case for containment. If Washington was able to deter and contain the Soviet Union for close to half a century, they argue, we can certainly contain Iran. However, it should be noted that our security architecture in the Persian Gulf has been designed precisely to prevent the sort of break-out that an Iranian nuclear program represents. An Iranian bomb is the end of what we have built and the start of an era of regional proliferation. Even one of the administration’s former Iran hands, Ray Takeyh, wondered in a recent Washington Post article if the administration understands that containment requires the willingness to use force. So why wait for Iran to have the bomb before issuing credible threats of military action?“Because their version of containment is an extension of the Grand Bargain theory,” says Steve Rosen, director of the Middle East Forum’s Washington Program, and formerly the policy director at AIPAC. “Containment is engagement after Iran gets the bomb. The working assumption is the same as with the Grand Bargain: Iran is a normal state and over time they will become more moderate, and we can deal with them. We can still make a Grand Bargain with them after they become nuclear.”The question at the heart of the debate over the Grand Bargain is whether the Iranian regime is ultimately rational, or really means it when its leaders pronounce death to America, death to Israel. History is nothing but the record of nations that have squandered their resources in the hope of evading hard choices, and it appears that is what the United States is doing now.Lee Smith is the author of The Consequences of Syria.