[News] Covert Crusade: Washington's $600m digital war on Iran

[Anti-Imperialist News]

  Covert Crusade: Washington's $600m digital war on Iran

For over a decade, the US State Department’s NERD fund has covertly 
funneled hundreds of millions into regime-change efforts in Iran, 
disguising digital warfare and opposition funding as ‘democracy 
promotion’ – but a sudden funding freeze has thrown these operations 
into chaos.

Kit Klarenberg <https://thecradle.co/authors/kit-klarenberg>

FEB 21, 2025 
-https://thecradle.co/articles/covert-crusade-washingtons-600m-digital-war-on-iran

Photo Credit: The Cradle

Earlier this month, /The Cradle /exposed how 
<https://thecradle.co/articles/leaked-documents-expose-us-interference-projects-in-iran>in 
2023, the US State Department’s shadowy Near East Regional Democracy 
(NERD) fund earmarked $55 million to stoke unrest in Iran during the 
following year’s elections.

This was part of a wider US campaign of interference designed to disrupt 
and destabilize the Islamic Republic. As that investigation noted, 
details on where this money goes – and who benefits – are strictly 
confidential as a matter of policy. Still, there are clues in the public 
domain pointing to at least some recipients.

*Regime change by another name *

As a US Congressional Research Service report records 
<https://sgp.fas.org/crs/mideast/R46344.pdf>, due to hostile US–Iran 
relations, and Tehran’s well-founded view of NERD “as a means of 
financing regime change,” its programs rely on “third-country training” 
as well as “online training and media content.”

The report further confirms that despite NERD being Washington’s primary 
“foreign assistance channel” for projects targeting Iran, “activities, 
grantees, [and] beneficiaries” are not advertised “due to the security 
risks posed by the Iranian government.” It continues:

    “NERD was created in 2009 as a ‘line item for Iran democracy’ but
    was not (and is still not) technically Iran-specific … For 2024, the
    Biden Administration requested $65 million for NERD … to ‘foster a
    vibrant civil society, increase the free flow of information, and
    promote the exercise of human rights,’ including at least $16.75
    million for internet freedom.”

What was unstated in the report is that NERD represents a simple 
rebranding of the Iran Democracy Fund, created 
<https://www.washingtoninstitute.org/policy-analysis/after-crackdown-iran-democracy-fund>by 
former president George W. Bush in 2006 with the explicit goal of 
toppling the Islamic Republic.

The initiative was ostensibly shut down under Barack Obama three years 
later, eliciting bitter condemnation 
<https://www.wsj.com/articles/SB10001424052748704500604574481341183751038>from 
much of the western media, neoconservative pundits, and lawmakers. 
However, as the BBC acknowledged 
<http://news.bbc.co.uk/2/hi/middle_east/8315120.stm>at the time, the 
move was in fact “welcomed by Iranian human rights and pro-democracy 
activists”:

“These US funds are going to people who have very little to do with the 
real struggle for democracy in Iran and our civil society activists 
never received such funds,” a Tehran-based human rights lawyer told the 
British state broadcaster. “The end to this program will have no impact 
on our activities whatsoever.”

*Internet interference *

In reality, the program never ended – it was merely repackaged. White 
House officials maintained the fiction that NERD was focused on 
democratization rather than regime change, a claim undermined by a June 
2011 <http://www.nytimes.com/2011/06/12/world/12internet.html>/New York 
Times/exposé.

That investigation revealed the Obama administration’s so-called 
“Internet Freedom 
<https://2009-2017.state.gov/j/drl/rls/rm/2011/168475.htm>” initiative 
aimed to “deploy ‘shadow’ internet and mobile phone systems dissidents 
can use to communicate outside the reach of governments in countries 
like Iran, Syria, and Libya.”

In other words, Washington sought to build a covert legion of regime 
change operatives in Tehran, and provide them with the technology to 
coordinate in secret. It is clear from the Congressional report’s marked 
reference to “internet freedom” that these machinations continue today.

Moreover, as a 2020 report 
<https://mideastdc.org/wp-content/uploads/2020/06/POMED_FY21BudgetReport.pdf>by 
the DC-based <https://mideastdc.org/>Project on Middle East Democracy 
noted, organizations genuinely committed to advancing Iranian rights 
still steer well clear of NERD. An anonymous NGO worker described its 
“style” as “aggressive.” Another implied NERD is engaged in deeply dirty 
work:

    “We choose not to apply for NERD grants because we do not want to
    get pulled into [anything] crazy.”

*‘Non-Iranian’*

The same year, the /Financial Times /(FT)//reported how 
<https://www.ft.com/content/740a385a-3924-11ea-a6d3-9a26f8c3cba4>NERD 
efforts had become turbocharged under US President Donald Trump's 
administration, explicitly to facilitate and encourage “anti-Tehran 
protests.”

This included “providing apps, servers, and other technology to help 
people communicate, visit banned websites, install anti-tracking 
software,” and more in the Islamic Republic, in order to offer “Iranians 
more options on how they communicate with each other and the outside 
world.”

Curiously, while portraying Iran as a digital prison, the FT admitted 
that major western social networks remain accessible in the country, and 
Iranians can easily view western media. As usual, recipients of NERD 
funds remained unnamed – except for Psiphon 
<https://www.kitklarenberg.com/p/beware-psiphon-cia-tool-fueling-global>, 
a VPN provider long-associated with discredited exiled Iranian 
<https://www.theverge.com/2018/2/12/16995882/asl-19-ali-karimzadeh-bangi-alleged-assault>opposition 
figures and, by then, controlled by the Open Technology Fund (OTF). The 
FT estimated that just three million Iranians used Psiphon, less than 
four percent of the population.

OTF was an “Internet Freedom” product <https://www.opentech.fund/>– one 
of its board members has openly admitted 
<http://jilliancyork.com/2015/02/06/there-are-other-funding-options-than-the-usg/>the 
Fund’s agenda is “regime change.”

Fast forward to September 2024; as former US president Joe Biden's 
administration was seeking increased funds for NERD – mere months after 
the $55 million invested the previous year failed to produce desired 
mass unrest and upheaval around that year’s elections in Iran – a White 
House meeting was convened 
<https://www.reuters.com/technology/us-calls-big-tech-help-evade-online-censors-russia-iran-2024-09-05/>with 
major tech giants, encouraging them to offer more “digital bandwidth” 
for OTF-bankrolled apps and tools.

As fund chief Laura Cunningham explained, a “sizeable chunk” of OTF’s 
budget was taken up by the cost of hosting all the network traffic 
generated by its vast array of digital destabilization apps, which 
included Signal 
<https://www.kitklarenberg.com/p/signal-facing-collapse-after-cia>and 
Tor 
<https://libguides.pratt.edu/internet-data-privacy/building-privacy-toolkit>. 


While OTF sought to support “additional users” of these products, it 
lacked resources to keep up with “surging demand.” What came of this 
meeting, which was attended by representatives of Amazon, Cloudflare, 
Google, and Microsoft, is not clear.

Yet, if further “digital bandwidth” was granted to OTF, it is clear the 
Trump administration’s “pause” in overseas aid funding has thrown all 
NERD’s meddling efforts in Iran into total – and potentially permanent 
– disarray.

A 27 January report <https://www.iranintl.com/en/202501271390>in the 
Saudi-funded, anti-Islamic Republic/Iran International /quoted numerous 
anonymous beneficiaries of US financing bemoaning how grantees, 
including foreign-run Persian-language media outlets and organizations 
documenting purported “abuses” to keep the Islamic Republic 
“accountable,” had been abruptly shuttered.

An anonymous “human rights activist” told the outlet Washington’s freeze 
on aid spending “(will) impose restrictions on projects that address 
human rights violations or investigate governmental and military 
corruption which have impacted Iran's economy and social conditions in 
favor of foreign terrorist activities and money laundering.”

They said “several /non-Iranian American institutions /[emphasis added] 
have been using these funds to investigate corruption and money 
laundering.” Now though, “these organizations will be forced to halt 
their activities.”

*‘Severe implications’*

US-supplied Virtual Private Network (VPN) services also loomed large 
among the malign resources impacted by the aid “pause.” A nameless 
“activist” told /Iran International/that 20 million Iranians used such 
tools “to bypass Tehran’s internet curbs.”

The outlet further quoted an article published 
<https://www.peace-mark.org/en/articles/165-11-2/>by Human Rights 
Activists in Iran, a US-funded NGO 
<https://www.hra-iran.org/contact/>/not /based in the Islamic Republic, 
but Virginia, near the CIA’s Langley headquarters: “In today’s Iran, the 
internet has no meaning without VPNs.”

Such dire warnings were echoed by Ahmad Ahmadian, head of 
California-based tech firm Holistic Resilience 
<https://holisticresilience.us/>, which “aims to advance internet 
freedom and privacy by developing and researching censorship 
circumvention.”

An Iranian expat and alumni 
<https://www.linkedin.com/in/aahmadiyan/details/education/>of Tehran 
University, Ahmadian warned major US tech firms “may not be willing or 
able to continue their support for providing anti-censorship tools” 
without government support. Such remarks highlight how these supposedly 
popular resources lack grassroots backing or financing, being wholly 
dependent on Washington’s sponsorship to operate:

    “The leadership of the US government has been crucial in urging big
    tech companies to provide public services. Without the encouragement
    of the US government, these companies wouldn't take the initiative
    on their own.”

Other unnamed activists further warned /Iran International/, “the 
consequences of Trump’s executive order will not remain limited to 
internet censorship circumvention tools.” They believe that if NERD’s 
activities “do not receive an exemption within the next month” – by the 
end of February – “they will either collapse entirely or be deeply 
curtailed.”

One declared, “the impact of this freeze might not be immediately 
noticeable, but its severe implications will become evident over time.”

Meanwhile, “internet experts” cautioned that “even if US aid starts 
again” after the 90-day pause, “the damage is irreversible since many 
people … might never fully return to using US-backed secure services.”

As /The Cradle /noted on 11 February, Washington’s forced withdrawal 
from meddling in Iran could create fresh opportunities for genuine 
diplomatic engagement 
<https://apnews.com/article/iran-trump-usaid-nuclear-deal-talks-986793e2e21e2b338546767bba5f2df0>between 
the two long-time adversaries. But another possibility looms: after 
spending $600 million over a decade with little success, the US may 
simply be preparing to test out new, potentially more malign 
regime-change strategies.

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