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Iranian group's big-money push to get off US terrorist list

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But the delisting of the MEK, Iran experts say, could benefit Iran's hard-line rulers by giving them more reason to brutally clamp down on Iran's internal, nonviolent opposition. The Green Movement – which led street protests in 2009 – steadfastly rejects the MEK as an anti-democratic and violent force.

"The people who are saying [the MEK] are no longer terrorists are also saying they are democratic," says John Limbert, a former US hostage in Iran from 1979-1981, who was US Deputy Assistant Secretary of State for Iran until last year.

"The issue is, have [the MEK] changed their terrorist nature?" asks Ambassador Limbert. "If they say, 'We renounce terrorism,' I have no confidence in that. What is it in their past – or in their present – that leads you to have confidence in such a statement?"

The State Dept. will be weighing many ramifications, from how this will play out in the streets of Tehran to how it will affect US strategic credibility.

"The MEK, with its violent history, is exactly what the Iranian regime needs to legitimate its violence against the peaceful opposition," says Maziar Bahari, a journalist who was incarcerated in Iran during the 2009 protests. He spoke Aug. 4 in Washington at a panel organized to warn of the risks of delisting the MEK.

Reformist cleric Mohsen Kadivar and US-based academic Ahmad Sadri warn of broader dangers. Taking the MEK off the terrorist list, they have written, would "trigger a huge loss of US soft power in Iran, damage Iran's democratic progress, and help Iranian hardliners cement a long-term dictatorship."

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