Saturday, March 13, 2010
see
Having enjoyed a relatively tranquil first year in terms of foreign policy, the Obama Administration has recently run into more stormy conditions. relations with China continue to be tense, with new arguments breaking out on the value of the Chinese Yuan. Our contacts tell us that it is becoming more likely that the US Treasury will name China as a “currency manipulator.” This would be a major step that previous Administrations have resisted. It would provide further evidence that the Administration’s focus on domestic job creation is leading it in the direction of trade protectionism. Recent episodes such as the likely award of a major aerospace contract to Boeing (which has drawn protest from the UK and France) and the fierce Congressional questioning of Toyota executives (which have aroused suspicion in Japan of favoritism to the domestic US manufacturers) all indicate that the US market may become less welcoming to foreign imports. Most serious, however, has been the rapid deterioration of relations with Israel over the issue of Israeli settlement projects. As we have noted for some month, the Middle East peace process has amounted to little more that going through the motions. A public breach with Israel will further complicate the Administration’s policy in the region, notably over Iran. Top US leaders, including Secretary of Defense Gates, have been seeking to gather support for tougher sanctions against Tehran. To date, however, the results have been inconclusive. In particular, Saudi Arabia has remained ambivalent to Administration requests to guarantee additional oil deliveries to China as a substitute for Iranian deliveries. With these complications intensifying, our judgment is that US policy is now fixed on “containing” Iran rather than preventing it militarily from acquiring a nuclear weapon. Finally, it should be noted that, while these foreign policy problems are important in substance, President Obama and his top team are almost exclusively focused on the domestic issues of health care and jobs.
Monday, March 8, 2010
U.S. Enriches Companies Defying Its Policy on Iran
NYTimes
March 6, 2010
By JO BECKER and RON NIXON
The federal government has awarded more than $107 billion in contract payments, grants and other benefits over the past decade to foreign and multinational American companies while they were doing business in Iran, despite Washington’s efforts to discourage investment there, records show.
That includes nearly $15 billion paid to companies that defied American sanctions law by making large investments that helped Iran develop its vast oil and gas reserves.
For years, the United States has been pressing other nations to join its efforts to squeeze the Iranian economy, in hopes of reining in Tehran’s nuclear ambitions. Now, with the nuclear standoff hardening and Iran rebuffing American diplomatic outreach, the Obama administration is trying to win a tough new round of United Nations sanctions.
But a New York Times analysis of federal records, company reports and other documents shows that both the Obama and Bush administrations have sent mixed messages to the corporate world when it comes to doing business in Iran, rewarding companies whose commercial interests conflict with American security goals.
Many of those companies are enmeshed in the most vital elements of Iran’s economy. More than two-thirds of the government money went to companies doing business in Iran’s energy industry — a huge source of revenue for the Iranian government and a stronghold of the increasingly powerful Islamic Revolutionary Guards Corps, a primary focus of the Obama administration’s proposed sanctions because it oversees Iran’s nuclear and missile programs.
Other companies are involved in auto manufacturing and distribution, another important sector of the Iranian economy with links to the Revolutionary Guards. One supplied container ship motors to IRISL, a government-owned shipping line that was subsequently blacklisted by the United States for concealing military cargo.
Beyond $102 billion in United States government contract payments since 2000 — to do everything from building military housing to providing platinum to the United States Mint — the companies and their subsidiaries have reaped a variety of benefits. They include nearly $4.5 billion in loans and loan guarantees from the Export-Import Bank, a federal agency that underwrites the export of American goods and services, and more than $500 million in grants for work that includes cancer research and the turning of agricultural byproducts into fuel.
In addition, oil and gas companies that have done business in Iran have over the years won lucrative drilling leases for close to 14 million acres of offshore and onshore federal land.
In recent months, a number of companies have decided to pull out of Iran, because of a combination of pressure by the United States and other Western governments, “terrorism free” divestment campaigns by shareholders and the difficulty of doing business with Iran’s government. And several oil and gas companies are holding off on new investment, waiting to see what shape new sanctions may assume.
The Obama administration points to that record, saying that it has successfully pressed allied governments and even reached out directly to corporate officials to dissuade investment in Iran, particularly in the energy industry. In addition, an American effort over many years to persuade banks to leave the country has isolated Iran from much of the international financial system, making it more difficult to do deals there.
“We are very aggressive, using a range of tools,” said Denis McDonough, chief of staff to the National Security Council.
The government can, and does, bar American companies from most types of trade with Iran, under a broad embargo that has been in place since the 1990s. But as The Times’s analysis illustrates, multiple administrations have struggled diplomatically, politically and practically to exert American authority over companies outside the embargo’s reach — foreign companies and the foreign subsidiaries of American ones.
Indeed, of the 74 companies The Times identified as doing business with both the United States government and Iran, 49 continue to do business there with no announced plans to leave.
One of the government’s most powerful tools, at least on paper, to influence the behavior of companies beyond the jurisdiction of the embargo is the Iran Sanctions Act, devised to punish foreign companies that invest more than $20 million in a given year to develop Iran’s oil and gas fields. But in the 14 years since the law was passed, the government has never enforced it, in part for fear of angering America’s allies.
That has given rise to situations like the one involving the South Korean engineering giant Daelim Industrial, which in 2007 won a $700 million contract to upgrade an Iranian oil refinery.
According to the Congressional Research Service, the deal appeared to violate the Iran Sanctions Act, meaning Daelim could have faced a range of punishments, including denial of federal contracts. That is because the law covers not only direct investments, such as the purchase of shares and deals that yield royalties, but also contracts similar to Daelim’s to manage oil and gas development projects.
But in 2009 the United States Army awarded the company a $111 million contract to build housing in a military base in South Korea. Just months later, Daelim, which disputes that its contracts violated the letter of the law, announced a new $600 million deal to help develop the South Pars gas field in Iran.
Now, though, frustration over Iran’s intransigence has spawned a growing, if still piecemeal, movement to more effectively use the power of the government purse to turn companies away from investing there.
Nineteen states — including New York, California and Florida — have rules that bar or discourage their pension funds from investing in companies that do certain types of business in Iran. Congress is considering legislation that would have the federal government follow suit, by mandating that companies that invest in Iran’s energy industry be denied federal contracts. The provision is modeled on an existing law dealing with war-torn Sudan.
Obama administration officials, while indicating that they were open to the idea, called it only one variable in a complex equation. Right now, the president’s priority is on breaking down Chinese resistance to the new United Nations sanctions, which apply across borders and are aimed squarely at entities that support Iran’s nuclear program.
But Representative Ron Klein, a Florida Democrat who wrote the contracting provision moving through Congress with the help of a lobbying group called United Against Nuclear Iran, said it offered a way forward with or without international agreement.
“We need to send a strong message to corporations that we’re not going to continue to allow them to economically enable the Iranian government to continue to do what they have been doing,” Mr. Klein said.
An Unused Tool
Sending a strong message was Congress’s intention when it passed the Iran Sanctions Act in 1996.
The law gives the president a menu of possible punishments he can choose to levy against offending companies. Not only do they risk losing federal contracts, but they can also be prevented from receiving Export-Import Bank loans, obtaining American bank loans over $10 million in a given year, exporting their goods to the United States, purchasing licensed American military technology and, in the case of financial firms, serving as a primary dealer in United States government bonds or as a repository for government funds.
Congress is now considering expanding its purview to a broader array of energy-related activities, including selling gasoline to Iran, which despite its vast oil and gas reserves has antiquated refineries that leave it heavily dependent on imports.
From the beginning, though, the law proved difficult to enforce.
European allies howled that it constituted an improper attempt to apply American law in other countries. Exercising an option to waive the law in the name of national security, the Clinton administration in 1998 declined to penalize the first violator — a consortium led by the French oil company TotalFina, now known as Total.
The administration also indicated that it would waive future penalties against European companies, winning in return tougher European export controls on technology that Iran could convert to military use.
Stuart E. Eizenstat, who as the deputy Treasury secretary handled those negotiations, said the law let Iran “exploit divisions between the U.S. and our European allies.”
Waiving it, though, was followed by additional investments in Iran — and more government largesse for the companies making them.
In 1999, for instance, Royal Dutch Shell signed an $800 million deal to develop two Iranian oil fields. Since then, Shell has won federal contract payments and grants totaling more than $11 billion, mostly for providing fuel to the American military, as well as $200 million in Export-Import loan guarantee and drilling rights to federal lands, records show.
Shell has a second Iranian development deal pending, but officials say they are awaiting the results of a feasibility study. In the meantime, the company continues to receive payments from Iran for its 1999 investment and sells gasoline and lubricants there.
Records show Shell is one of seven companies that challenged the Iran Sanctions Act and received federal benefits.
John R. Bolton, who dealt with Iran as an under secretary of state and United Nations ambassador in the Bush administration, said failing to enforce the law by punishing such companies both sent “a signal to the Iranians that we’re not serious” and undercut Washington’s credibility when it did threaten action.
Mr. Bolton recalled what happened in 2004 when he suggested to the Japanese ambassador that Japan’s state-controlled oil exploration company, Inpex, might be penalized for a $2 billion investment in the Azadegan field in Iran. “The Japanese ambassador said, ‘Well, that’s interesting. How come you’ve never sanctioned a European Union company?’ ” Mr. Bolton recounted.
Inpex was never penalized, though several years later it decided to reduce its stake in the Iranian project. And to Mr. Bolton’s chagrin, the Bush administration did not act on reports about other such investments, neither waiving the law nor penalizing violators.
Recently, after 50 lawmakers from both parties complained to President Obama about the lack of enforcement and sent him a list of companies that apparently violated the law, the State Department announced a preliminary investigation. Officials said that they were looking at 27 deals, and that while some appeared to have been “carefully constructed” to get around the letter of the law, they had identified a number of problematic cases and were focusing on companies still active in Iran.
Competing Interests
Among the companies on the list Congress sent to the State Department is the Brazilian state-controlled energy conglomerate Petrobras, which last year received a $2 billion Export-Import Bank loan to develop an oil reserve off the coast of Rio de Janeiro. The loan offers a case study in the competing interests officials must confront when it comes to the Iran Sanctions Act.
Despite repeated American entreaties, Petrobras had previously invested $100 million to explore Iran’s offshore oil prospects in the Persian Gulf.
But the Export-Import Bank loan could help create American jobs, since Petrobras would use the money to buy goods and services from American companies. Perhaps more important, it could help develop a source of oil outside the Middle East.
After The Times inquired about the loan, bank officials said that they asked for and received a letter of assurance from Petrobras that it had finished its work in Iran. A senior White House official, in a Nov. 13 e-mail message, said that while it was the administration’s policy to warn companies against such investments, “Brazil is an important U.S. trading partner and our discussions with them are ongoing.”
But if the administration hoped that the loan would bring Brazil in line with its objectives in Iran, it would soon prove mistaken.
On Nov. 23, Iran’s president, Mahmoud Ahmadinejad, visited Brazil, and the two countries agreed to share technical expertise on energy projects. Iranian officials said they might offer Petrobras additional incentives for further investment.
The visit infuriated American officials, who felt it undercut efforts to press Iran on its nuclear program while lending international legitimacy to the Iranian president. Brazil’s relationship with Iran has also complicated American maneuvering at the United Nations, where Brazil holds a rotating seat on the Security Council. Just last week, Brazil’s president, Luiz Inácio Lula da Silva, restated his opposition to the administration’s sanctions proposal, warning, “It is not prudent to push Iran against a wall.”
Carter Lawson, the Export-Import Bank’s deputy general counsel, acknowledged that Mr. Ahmadinejad’s visit was “problematic for us, and it raised our antenna.” He said that since December the bank had been operating under a new budget rule requiring borrowers to certify that they had no continuing operations in Iran’s energy industry, and was carefully monitoring Petrobras’s activities.
In the meantime, Petrobras’s Tehran office remains open. And Diogo Almeida, the acting economic attaché at the Brazilian Embassy in Iran, said that while Petrobras was currently assessing how much it could invest in Iran, given the huge discovery off Rio de Janeiro, company officials were in active discussions with the Iranian government and were interested in pursuing new business.
Opportunities for Profit
For all the American rules and focus, there is still plenty of room for companies to profit in crucial areas of Iran’s economy without fear of reprisal or loss of United States government business.
Auto companies doing business in Iran, for instance, received $7.3 billion in federal contracts over the past 10 years. Among them was Mazda, whose cars in Iran are assembled by a company called the Bahman Group. A 45 percent share in Bahman is held by the Sepah Cooperative Foundation, a large investment fund linked to the Revolutionary Guards, according to Iranian news accounts and a 2009 RAND Corporation report prepared for the Defense Department.
A Mazda spokesman declined to comment, saying the company was unaware of the links.
Even companies based in the United States, including some of the biggest federal contractors, can invest in Iran through foreign subsidiaries run independently by non-Americans.
Honeywell, the aviation and aerospace company, has received nearly $13 billion in federal contracts since 2005. That year it acquired Universal Oil Products, whose British subsidiary is working on a project to expand gasoline production at the Arak refinery in Iran. Universal recently received a $25 million federal grant for a clean-energy project in Hawaii.
In a statement, Honeywell said it had told the State Department in January that while it was fulfilling its Arak contract, it would not undertake new projects in Iran.
Ingersoll Rand, another American company with foreign subsidiaries, says it is evaluating its “minor” business in Iran in light of the political climate. But for now, according to a spokesman, Paul Dickard, it continues to sell air-compression systems with a “wide variety of applications,” including in the oil and gas industries and in nuclear power plants.
Senator Byron L. Dorgan, a North Dakota Democrat, tried to close the foreign subsidiary loophole after a furor erupted in 2004 over Halliburton, former Vice President Dick Cheney’s old company, which had used a Cayman Islands subsidiary to sell oil-field services to Iran. But he said he was unable to overcome business opposition.
William A. Reinsch, president of the National Foreign Trade Council, lobbied against Mr. Dorgan’s bill and has opposed other unilateral sanctions. He argues that their futility can be seen in the intransigence of the Iranian government and the way American oil companies have simply been replaced by foreign competitors. Moreover, many foreign companies with business interests in Iran are also large American employers; deny them federal contracts and other benefits, Mr. Reinsch said, “and it’s those workers who will pay the price.”
But Hans Sandberg, senior vice president of Atlas Copco, which is based in Sweden, offered a different perspective. Atlas Copco’s sales of mining and construction equipment to Iran are dwarfed by its American business, including military contracts. If forced to choose, he said: “It would be no problem. We wouldn’t trade with Iran.”
March 6, 2010
By JO BECKER and RON NIXON
The federal government has awarded more than $107 billion in contract payments, grants and other benefits over the past decade to foreign and multinational American companies while they were doing business in Iran, despite Washington’s efforts to discourage investment there, records show.
That includes nearly $15 billion paid to companies that defied American sanctions law by making large investments that helped Iran develop its vast oil and gas reserves.
For years, the United States has been pressing other nations to join its efforts to squeeze the Iranian economy, in hopes of reining in Tehran’s nuclear ambitions. Now, with the nuclear standoff hardening and Iran rebuffing American diplomatic outreach, the Obama administration is trying to win a tough new round of United Nations sanctions.
But a New York Times analysis of federal records, company reports and other documents shows that both the Obama and Bush administrations have sent mixed messages to the corporate world when it comes to doing business in Iran, rewarding companies whose commercial interests conflict with American security goals.
Many of those companies are enmeshed in the most vital elements of Iran’s economy. More than two-thirds of the government money went to companies doing business in Iran’s energy industry — a huge source of revenue for the Iranian government and a stronghold of the increasingly powerful Islamic Revolutionary Guards Corps, a primary focus of the Obama administration’s proposed sanctions because it oversees Iran’s nuclear and missile programs.
Other companies are involved in auto manufacturing and distribution, another important sector of the Iranian economy with links to the Revolutionary Guards. One supplied container ship motors to IRISL, a government-owned shipping line that was subsequently blacklisted by the United States for concealing military cargo.
Beyond $102 billion in United States government contract payments since 2000 — to do everything from building military housing to providing platinum to the United States Mint — the companies and their subsidiaries have reaped a variety of benefits. They include nearly $4.5 billion in loans and loan guarantees from the Export-Import Bank, a federal agency that underwrites the export of American goods and services, and more than $500 million in grants for work that includes cancer research and the turning of agricultural byproducts into fuel.
In addition, oil and gas companies that have done business in Iran have over the years won lucrative drilling leases for close to 14 million acres of offshore and onshore federal land.
In recent months, a number of companies have decided to pull out of Iran, because of a combination of pressure by the United States and other Western governments, “terrorism free” divestment campaigns by shareholders and the difficulty of doing business with Iran’s government. And several oil and gas companies are holding off on new investment, waiting to see what shape new sanctions may assume.
The Obama administration points to that record, saying that it has successfully pressed allied governments and even reached out directly to corporate officials to dissuade investment in Iran, particularly in the energy industry. In addition, an American effort over many years to persuade banks to leave the country has isolated Iran from much of the international financial system, making it more difficult to do deals there.
“We are very aggressive, using a range of tools,” said Denis McDonough, chief of staff to the National Security Council.
The government can, and does, bar American companies from most types of trade with Iran, under a broad embargo that has been in place since the 1990s. But as The Times’s analysis illustrates, multiple administrations have struggled diplomatically, politically and practically to exert American authority over companies outside the embargo’s reach — foreign companies and the foreign subsidiaries of American ones.
Indeed, of the 74 companies The Times identified as doing business with both the United States government and Iran, 49 continue to do business there with no announced plans to leave.
One of the government’s most powerful tools, at least on paper, to influence the behavior of companies beyond the jurisdiction of the embargo is the Iran Sanctions Act, devised to punish foreign companies that invest more than $20 million in a given year to develop Iran’s oil and gas fields. But in the 14 years since the law was passed, the government has never enforced it, in part for fear of angering America’s allies.
That has given rise to situations like the one involving the South Korean engineering giant Daelim Industrial, which in 2007 won a $700 million contract to upgrade an Iranian oil refinery.
According to the Congressional Research Service, the deal appeared to violate the Iran Sanctions Act, meaning Daelim could have faced a range of punishments, including denial of federal contracts. That is because the law covers not only direct investments, such as the purchase of shares and deals that yield royalties, but also contracts similar to Daelim’s to manage oil and gas development projects.
But in 2009 the United States Army awarded the company a $111 million contract to build housing in a military base in South Korea. Just months later, Daelim, which disputes that its contracts violated the letter of the law, announced a new $600 million deal to help develop the South Pars gas field in Iran.
Now, though, frustration over Iran’s intransigence has spawned a growing, if still piecemeal, movement to more effectively use the power of the government purse to turn companies away from investing there.
Nineteen states — including New York, California and Florida — have rules that bar or discourage their pension funds from investing in companies that do certain types of business in Iran. Congress is considering legislation that would have the federal government follow suit, by mandating that companies that invest in Iran’s energy industry be denied federal contracts. The provision is modeled on an existing law dealing with war-torn Sudan.
Obama administration officials, while indicating that they were open to the idea, called it only one variable in a complex equation. Right now, the president’s priority is on breaking down Chinese resistance to the new United Nations sanctions, which apply across borders and are aimed squarely at entities that support Iran’s nuclear program.
But Representative Ron Klein, a Florida Democrat who wrote the contracting provision moving through Congress with the help of a lobbying group called United Against Nuclear Iran, said it offered a way forward with or without international agreement.
“We need to send a strong message to corporations that we’re not going to continue to allow them to economically enable the Iranian government to continue to do what they have been doing,” Mr. Klein said.
An Unused Tool
Sending a strong message was Congress’s intention when it passed the Iran Sanctions Act in 1996.
The law gives the president a menu of possible punishments he can choose to levy against offending companies. Not only do they risk losing federal contracts, but they can also be prevented from receiving Export-Import Bank loans, obtaining American bank loans over $10 million in a given year, exporting their goods to the United States, purchasing licensed American military technology and, in the case of financial firms, serving as a primary dealer in United States government bonds or as a repository for government funds.
Congress is now considering expanding its purview to a broader array of energy-related activities, including selling gasoline to Iran, which despite its vast oil and gas reserves has antiquated refineries that leave it heavily dependent on imports.
From the beginning, though, the law proved difficult to enforce.
European allies howled that it constituted an improper attempt to apply American law in other countries. Exercising an option to waive the law in the name of national security, the Clinton administration in 1998 declined to penalize the first violator — a consortium led by the French oil company TotalFina, now known as Total.
The administration also indicated that it would waive future penalties against European companies, winning in return tougher European export controls on technology that Iran could convert to military use.
Stuart E. Eizenstat, who as the deputy Treasury secretary handled those negotiations, said the law let Iran “exploit divisions between the U.S. and our European allies.”
Waiving it, though, was followed by additional investments in Iran — and more government largesse for the companies making them.
In 1999, for instance, Royal Dutch Shell signed an $800 million deal to develop two Iranian oil fields. Since then, Shell has won federal contract payments and grants totaling more than $11 billion, mostly for providing fuel to the American military, as well as $200 million in Export-Import loan guarantee and drilling rights to federal lands, records show.
Shell has a second Iranian development deal pending, but officials say they are awaiting the results of a feasibility study. In the meantime, the company continues to receive payments from Iran for its 1999 investment and sells gasoline and lubricants there.
Records show Shell is one of seven companies that challenged the Iran Sanctions Act and received federal benefits.
John R. Bolton, who dealt with Iran as an under secretary of state and United Nations ambassador in the Bush administration, said failing to enforce the law by punishing such companies both sent “a signal to the Iranians that we’re not serious” and undercut Washington’s credibility when it did threaten action.
Mr. Bolton recalled what happened in 2004 when he suggested to the Japanese ambassador that Japan’s state-controlled oil exploration company, Inpex, might be penalized for a $2 billion investment in the Azadegan field in Iran. “The Japanese ambassador said, ‘Well, that’s interesting. How come you’ve never sanctioned a European Union company?’ ” Mr. Bolton recounted.
Inpex was never penalized, though several years later it decided to reduce its stake in the Iranian project. And to Mr. Bolton’s chagrin, the Bush administration did not act on reports about other such investments, neither waiving the law nor penalizing violators.
Recently, after 50 lawmakers from both parties complained to President Obama about the lack of enforcement and sent him a list of companies that apparently violated the law, the State Department announced a preliminary investigation. Officials said that they were looking at 27 deals, and that while some appeared to have been “carefully constructed” to get around the letter of the law, they had identified a number of problematic cases and were focusing on companies still active in Iran.
Competing Interests
Among the companies on the list Congress sent to the State Department is the Brazilian state-controlled energy conglomerate Petrobras, which last year received a $2 billion Export-Import Bank loan to develop an oil reserve off the coast of Rio de Janeiro. The loan offers a case study in the competing interests officials must confront when it comes to the Iran Sanctions Act.
Despite repeated American entreaties, Petrobras had previously invested $100 million to explore Iran’s offshore oil prospects in the Persian Gulf.
But the Export-Import Bank loan could help create American jobs, since Petrobras would use the money to buy goods and services from American companies. Perhaps more important, it could help develop a source of oil outside the Middle East.
After The Times inquired about the loan, bank officials said that they asked for and received a letter of assurance from Petrobras that it had finished its work in Iran. A senior White House official, in a Nov. 13 e-mail message, said that while it was the administration’s policy to warn companies against such investments, “Brazil is an important U.S. trading partner and our discussions with them are ongoing.”
But if the administration hoped that the loan would bring Brazil in line with its objectives in Iran, it would soon prove mistaken.
On Nov. 23, Iran’s president, Mahmoud Ahmadinejad, visited Brazil, and the two countries agreed to share technical expertise on energy projects. Iranian officials said they might offer Petrobras additional incentives for further investment.
The visit infuriated American officials, who felt it undercut efforts to press Iran on its nuclear program while lending international legitimacy to the Iranian president. Brazil’s relationship with Iran has also complicated American maneuvering at the United Nations, where Brazil holds a rotating seat on the Security Council. Just last week, Brazil’s president, Luiz Inácio Lula da Silva, restated his opposition to the administration’s sanctions proposal, warning, “It is not prudent to push Iran against a wall.”
Carter Lawson, the Export-Import Bank’s deputy general counsel, acknowledged that Mr. Ahmadinejad’s visit was “problematic for us, and it raised our antenna.” He said that since December the bank had been operating under a new budget rule requiring borrowers to certify that they had no continuing operations in Iran’s energy industry, and was carefully monitoring Petrobras’s activities.
In the meantime, Petrobras’s Tehran office remains open. And Diogo Almeida, the acting economic attaché at the Brazilian Embassy in Iran, said that while Petrobras was currently assessing how much it could invest in Iran, given the huge discovery off Rio de Janeiro, company officials were in active discussions with the Iranian government and were interested in pursuing new business.
Opportunities for Profit
For all the American rules and focus, there is still plenty of room for companies to profit in crucial areas of Iran’s economy without fear of reprisal or loss of United States government business.
Auto companies doing business in Iran, for instance, received $7.3 billion in federal contracts over the past 10 years. Among them was Mazda, whose cars in Iran are assembled by a company called the Bahman Group. A 45 percent share in Bahman is held by the Sepah Cooperative Foundation, a large investment fund linked to the Revolutionary Guards, according to Iranian news accounts and a 2009 RAND Corporation report prepared for the Defense Department.
A Mazda spokesman declined to comment, saying the company was unaware of the links.
Even companies based in the United States, including some of the biggest federal contractors, can invest in Iran through foreign subsidiaries run independently by non-Americans.
Honeywell, the aviation and aerospace company, has received nearly $13 billion in federal contracts since 2005. That year it acquired Universal Oil Products, whose British subsidiary is working on a project to expand gasoline production at the Arak refinery in Iran. Universal recently received a $25 million federal grant for a clean-energy project in Hawaii.
In a statement, Honeywell said it had told the State Department in January that while it was fulfilling its Arak contract, it would not undertake new projects in Iran.
Ingersoll Rand, another American company with foreign subsidiaries, says it is evaluating its “minor” business in Iran in light of the political climate. But for now, according to a spokesman, Paul Dickard, it continues to sell air-compression systems with a “wide variety of applications,” including in the oil and gas industries and in nuclear power plants.
Senator Byron L. Dorgan, a North Dakota Democrat, tried to close the foreign subsidiary loophole after a furor erupted in 2004 over Halliburton, former Vice President Dick Cheney’s old company, which had used a Cayman Islands subsidiary to sell oil-field services to Iran. But he said he was unable to overcome business opposition.
William A. Reinsch, president of the National Foreign Trade Council, lobbied against Mr. Dorgan’s bill and has opposed other unilateral sanctions. He argues that their futility can be seen in the intransigence of the Iranian government and the way American oil companies have simply been replaced by foreign competitors. Moreover, many foreign companies with business interests in Iran are also large American employers; deny them federal contracts and other benefits, Mr. Reinsch said, “and it’s those workers who will pay the price.”
But Hans Sandberg, senior vice president of Atlas Copco, which is based in Sweden, offered a different perspective. Atlas Copco’s sales of mining and construction equipment to Iran are dwarfed by its American business, including military contracts. If forced to choose, he said: “It would be no problem. We wouldn’t trade with Iran.”
A sober approach to sanctioning Iran
By David Ignatius
Washington Post
Sunday, March 7, 2010; A17
The cynical (and usually correct) critique of economic sanctions was summed up this way by a retired U.S. diplomat named Douglas Paal: "Sanctions always accomplish their principal objective, which is to make those who impose them feel good." The Obama administration is struggling to craft a new round of U.N. sanctions against Iran that achieves more than this feel-good impact. The ambitious goal is "to cut off the revenues that fund Iran's nuclear and missile programs," says a senior administration official.
"We are going to put as tight a squeeze on Iran as we possibly can," adds a diplomat from one of the members of the U.S.-led coalition that is beginning to discuss a new sanctions resolution at the U.N Security Council. The resolution will target the Iranian Revolutionary Guard Corps (IRGC) and its vast network of companies, which the United States estimates may include up to one-third of Iran's total economy.
One focus of the proposed sanctions may be the Islamic Republic of Iran Shipping Lines, a 115-vessel fleet that analysts believe has carried cargo for the country's nuclear program. Another target might be the IRGC-owned construction company Khatam al-Anbiya, and its network of subsidiaries, which are said to build some of Iran's strategic infrastructure.
To provide economic muscle for the push against Iran, the Obama administration is working closely with Gulf oil exporters, such as Saudi Arabia and the United Arab Emirates. Secretary of State Hillary Clinton visited Saudi Arabia last month to enlist its help in the sanctions campaign -- and, in particular, to lobby China to back the U.N. sanctions resolution.
China is vulnerable to Iranian oil pressure because it imports about 540,000 barrels per day from Iran. So the Saudis and Emiratis have been assuring Beijing that they would be prepared to offset any shortfall in Iranian crude shipments.
The UAE has already boosted its oil exports to China as part of this pressure campaign. Shipments have increased from about 50,000 barrels per day last year to 120,000 now, with a goal by year-end of up to 200,000 barrels. Over the next few years, the UAE is offering to increase that export volume to China to about 500,000 barrels per day, which would nearly equal the current Iranian total.
Prince Saud al-Faisal, the Saudi foreign minister, traveled to China late last week to enlist its support against Iran. The Saudi message to Beijing, according to one U.S. official, is: "If you don't help us against Iran, you will see a less stable and dependable Middle East." Meanwhile, a high-level Israeli group also visited China last weekend, according to the Financial Times. The delegation included Stanley Fischer, the governor of Israel's central bank. Fischer, an eminent economist who is respected by Chinese officials, would be able to explain the impact of the planned sanctions regime.
The Israeli visit led one prominent energy expert to speculate privately that if sanctions fail to alter Iranian behavior, the Israelis might use military means to halt Iran's oil exports.
The campaign against Iran was the central topic during a recent visit to Washington by the UAE's foreign minister, Sheik Abdullah bin Zayed al-Nahyan. He urged administration officials to include Iran's vulnerable neighbors in the Gulf Cooperation Council -- Saudi Arabia, Qatar, Oman and others -- in their planning for dealing with Iran. "We will find ways to do more with them," said the senior administration official.
The trick for the Obama administration is to craft a sanctions plan that hurts the Iranian government without causing too much pain for the Iranian people. That's one reason the administration is wary of a congressional proposal for sanctions against Iran's imports of refined petroleum products -- a step that would probably harm the public more than the regime.
Officials talk about "targeted" sanctions that focus on the Revolutionary Guard Corps and its military-industrial complex of companies. But this effort is the diplomatic equivalent of "precision bombing" -- in practice, some collateral damage is inevitable, which could help President Mahmoud Ahmadinejad rally support for his hard-line government.
What's certain is that the Iranian nuclear issue is heading into a more intense phase of confrontation -- starting with the push for tougher U.N. sanctions. The Gulf countries have been asking what the administration plans to do if the sanctions don't work: That's the big foreign policy question of 2010, and Washington is beginning now to think about the answer.
Washington Post
Sunday, March 7, 2010; A17
The cynical (and usually correct) critique of economic sanctions was summed up this way by a retired U.S. diplomat named Douglas Paal: "Sanctions always accomplish their principal objective, which is to make those who impose them feel good." The Obama administration is struggling to craft a new round of U.N. sanctions against Iran that achieves more than this feel-good impact. The ambitious goal is "to cut off the revenues that fund Iran's nuclear and missile programs," says a senior administration official.
"We are going to put as tight a squeeze on Iran as we possibly can," adds a diplomat from one of the members of the U.S.-led coalition that is beginning to discuss a new sanctions resolution at the U.N Security Council. The resolution will target the Iranian Revolutionary Guard Corps (IRGC) and its vast network of companies, which the United States estimates may include up to one-third of Iran's total economy.
One focus of the proposed sanctions may be the Islamic Republic of Iran Shipping Lines, a 115-vessel fleet that analysts believe has carried cargo for the country's nuclear program. Another target might be the IRGC-owned construction company Khatam al-Anbiya, and its network of subsidiaries, which are said to build some of Iran's strategic infrastructure.
To provide economic muscle for the push against Iran, the Obama administration is working closely with Gulf oil exporters, such as Saudi Arabia and the United Arab Emirates. Secretary of State Hillary Clinton visited Saudi Arabia last month to enlist its help in the sanctions campaign -- and, in particular, to lobby China to back the U.N. sanctions resolution.
China is vulnerable to Iranian oil pressure because it imports about 540,000 barrels per day from Iran. So the Saudis and Emiratis have been assuring Beijing that they would be prepared to offset any shortfall in Iranian crude shipments.
The UAE has already boosted its oil exports to China as part of this pressure campaign. Shipments have increased from about 50,000 barrels per day last year to 120,000 now, with a goal by year-end of up to 200,000 barrels. Over the next few years, the UAE is offering to increase that export volume to China to about 500,000 barrels per day, which would nearly equal the current Iranian total.
Prince Saud al-Faisal, the Saudi foreign minister, traveled to China late last week to enlist its support against Iran. The Saudi message to Beijing, according to one U.S. official, is: "If you don't help us against Iran, you will see a less stable and dependable Middle East." Meanwhile, a high-level Israeli group also visited China last weekend, according to the Financial Times. The delegation included Stanley Fischer, the governor of Israel's central bank. Fischer, an eminent economist who is respected by Chinese officials, would be able to explain the impact of the planned sanctions regime.
The Israeli visit led one prominent energy expert to speculate privately that if sanctions fail to alter Iranian behavior, the Israelis might use military means to halt Iran's oil exports.
The campaign against Iran was the central topic during a recent visit to Washington by the UAE's foreign minister, Sheik Abdullah bin Zayed al-Nahyan. He urged administration officials to include Iran's vulnerable neighbors in the Gulf Cooperation Council -- Saudi Arabia, Qatar, Oman and others -- in their planning for dealing with Iran. "We will find ways to do more with them," said the senior administration official.
The trick for the Obama administration is to craft a sanctions plan that hurts the Iranian government without causing too much pain for the Iranian people. That's one reason the administration is wary of a congressional proposal for sanctions against Iran's imports of refined petroleum products -- a step that would probably harm the public more than the regime.
Officials talk about "targeted" sanctions that focus on the Revolutionary Guard Corps and its military-industrial complex of companies. But this effort is the diplomatic equivalent of "precision bombing" -- in practice, some collateral damage is inevitable, which could help President Mahmoud Ahmadinejad rally support for his hard-line government.
What's certain is that the Iranian nuclear issue is heading into a more intense phase of confrontation -- starting with the push for tougher U.N. sanctions. The Gulf countries have been asking what the administration plans to do if the sanctions don't work: That's the big foreign policy question of 2010, and Washington is beginning now to think about the answer.
Interview with Gen. David Petraeus
Interview with Gen. David Petraeus
By Fareed Zakaria GPS
ZAKARIA: And now, the head of the United States Central Command, General David Petraeus. General Petraeus, honor to have you on.
PETRAEUS: Great to be with you, Fareed.
Receive news alerts
Sign Up
Fareed Zakaria GPS RealClearPolitics
representative head
General United States Central Command
Middle East oil
David Petraeus United States
Iraq
[+] More
ZAKARIA: What do you hope to see come out of the Iraqi elections?
PETRAEUS: Well, I'd like to see a government that continues to do what this one does, which is to be generally representative of the people, responsive to all the people, and to continue the progress that has been achieved over the course of the last couple of years, again, in the economic, social and political realms. You know, in keeping all of the Iraqis together as well. Hugely important.
ZAKARIA: But -- but that part is the crucial part. When I go travel in the Middle East or talk to people from the region, what I'm struck by is that the whole hope that Iraq as a functioning democracy or a quasi-democracy would be a kind of inspiration or have some kind of a opening (ph) effect in the -- in the Middle East, has not quite happened largely because in the Middle East, 90 percent of which is Sunni.
They see the fact that the Sunnis of Iraq remain somewhat marginalized as being a proof positive that this is -- this is -- that either democracy is a terrible thing or this is not real democracy. They don't know which -- which option to choose. And the fact that in this election you had the situation where Sunni candidates have been essentially -- some early disbarred from -- from being able to participate, including fairly senior politicians.
Doesn't that lack of inclusion hurt the central message that we were trying to send out of Iraq?
PETRAEUS: Iraq does have many, many different tensions. There are still lots of strains on the fabric of society, a fabric that indeed was torn by the sectarian violence in 2006 and into early 2007, and, really, so far has only got a few stitches back into it. And that's another aspect of the way forward, that again, we hope that Sunni and Shia, Arab and Kurd, Yazidi, Christian, Turkmen -- all of these different groups, (INAUDIBLE) and others, can indeed make accommodations and really continue to make accommodations.
Because all progress that has been made to date, all of the legislation that's been passed and so forth, has all required cross sectarian, cross ethnic coalitions, and I think that actually will continue to be the case, because when you do the math, there's no way that a prime minister will be elected without a cross sectarian and indeed cross ethnic coalition developing to elect that individual and the other key members that will be part of the package.
ZAKARIA: American troop withdrawals are slated to continue and to be down to zero combat troops at the end of 2011. Is that a pledge you think you will be able to fulfill?
PETRAEUS: Well, first, let's focus initially on where we're headed right now. First, we're about 96,000 or so right now, down from 165,000 or so at the height of the surge and other periods and headed down to 50,000 by the end of August.
Then, of course, with the new government in place, there will be the dialogue about what is it that the sovereign Iraq, with its newly elected government that will be in place for four years, will want in terms of a security relationship with the United States.
There's some sense that they may want to continue a security assistance relationship at the -- at least, something we have with virtually all the other countries in the Central Command region, especially given that they are, of course, they've got a lot of American hardware, a lot of American tactics, techniques and procedures. There's some very good intelligence-sharing arrangements and so forth. But that's up to that government.
ZAKARIA: But you could foresee --
PETRAEUS: And it will be a sovereign government.
ZAKARIA: But you could foresee a situation where a new status of forces agreement is negotiated and the United States maintains some 10,000, 20,000 troops in a kind of supporting role if the Iraqi government wants it?
PETRAEUS: I'm not sure I would -- I would see something anywhere near that large, candidly. I think it would be much more along the lines of the traditional security assistance arrangement, a relationship that may include other countries as well. Indeed, there's still a NATO training mission in Iraq. There's -- there's a British element still helping with the Iraqi navy that was a separate bilateral agreement.
ZAKARIA: Would it be legitimate for the American taxpayer to look at what's happening in Iraq, particularly economically and say what was in it for us? Because you watch Iraq signing oil deals, and the Chinese are doing pretty well, the Brits are doing pretty well. We're doing all right, but there's no --
You know, for all those who thought this was a conspiracy for oil, you notice that the United States does not seem to have any privileged position in terms of its access. What did -- did we -- do we have any influence economically in Iraq?
PETRAEUS: Well, I think we are literally having to compete along with everyone else. There are occasionally some degrees of access that might be provided. But, by and large, this is -- it's capitalism at work.
And, in fact, we used to offer to our Iraqi counterparts who occasionally would toss around the conspiracy theory, that this is all about sewing up Iraq's oil for the next few decades and say that, gosh, for what we spent in a single year in Iraq, we could have bought all of your oil for the next decade without having to invade you.
So, look, it is legitimate for the American taxpayer to ask that question. And, again, only history can judge at the end of the day whether this was, frankly, a wise investment in -- in the enormous amount of -- of gold treasure and, indeed, most importantly the lives of our young men and women in uniform and our civilian counterparts and Iraqi civilians and coalition members.
ZAKARIA: Let me ask you about one of Iraq's neighbors, Iran. When you were up in the north, one of the things you had to deal with, and even during the surge, was Iranian forces, Quds forces, in many ways fermenting the violence in Iraq by supplying weapons or arms, militias, all kinds of things.
Apparently, these security services are now -- the Quds forces, now spending a lot more of its time worrying about what's going on in Iran, trying to create, put down the opposition movements there.
Has that changed the political dynamic in Iraq? Are you finding that the Iranians have in a sense packed up and gone home?
PETRAEUS: Well, first, I think you're absolutely right to say that the security elements in Iran, particularly the Revolutionary Guard's corps, the -- the Quds force and the Basij, the militia, have had to focus a great deal more on internal security challenges than they did in the past. And, indeed, I think you've heard it said by pundits that Iran has gone from being a theocracy to a thugocracy, that it has frankly become much more of a police state than it ever was in -- in the past since the Revolution.
And that is, again, because of the emergence of this reform movement of the -- the citizens who are outraged of the hijacking of the election that took place back last summer.
ZAKARIA: Do you think Ahmed Chalabi is an agent of Iran or influenced by Iran or carrying out an Iranian agenda in Iraq?
PETRAEUS: Well, it -- I think -- again, this is less about what we think. This is about what Iraqi leaders think, and Iraqi leaders have obviously not been overly pleased with some of the political high drama that has been fomented by the Accountability and Justice Committee, which has been orchestrated indeed by Dr. Chalabi. And, again --
ZAKARIA: Again, that he was -- that committee was behind this renewed de-Baathification and this attempt to --
PETRAEUS: Yes, sure.
ZAKARIA: -- to disbar a whole set of people from running.
PETRAEUS: Yes. I mean, indeed, they announced the list. They determined who -- who was on it. They had a -- a key role in the adjudication of it, later as appeals were issues and so forth. So -- and that did indeed, in the -- you know, and especially coming so close to the actual elect (INAUDIBLE) quite a bit of political turmoil.
They've worked through it. The fact is there are tens of thousands of candidates, of which several hundred now in the end will have been disqualified. They -- as with everything in Iraq, there's -- again, with "Iraqracy", as we have termed it at times, there's often a considerable degree of emotion. There is, again, drama. But, at the end of the day or perhaps sometimes a little after the end of the day, they managed to work through it.
And, as always, it has required, again, what I talked about earlier, these cross-sectarian, cross-ethnic coalitions and -- and deals, which is OK. That's a good development for Iraq, frankly.
We used to say when I was there, you -- you can shout, but please don't shoot. And shouting is, I think, a -- a very acceptable alternative to shooting.
ZAKARIA: Do you think that the Iranian regime has made a decision that they are going to try to get a nuclear weapon, or do you think it is still unclear whether they want a robust nuclear civilian capacity and a robust missile capacity, but -- but they haven't yet decided whether they will join the two?
PETRAEUS: I think it's something slightly different, actually. I think, first of all, that there can be a debate about whether or not the final decision has been made. I think in fact probably that final decision has not been made by the Supreme Leader, and that will be his decision to take.
But that's a little bit immaterial at this point in time because all of the components of a program to produce nuclear weapons, to produce the delivery means and -- and all the rest of that, all of these components have been proceeding as if they want to be in a position where he can make that decision, having reached the so-called threshold capability. And that is, of course, what is so worrisome to the countries in the region, and, of course, above all, to -- to Israel and obviously to the United States and the countries of the west.
They are now transitioning, of course, from what was the diplomacy track for about a year, where everyone made every good faith effort, extended the open hand, and it was not met with an open hand. It was met with intransigence and obfuscation and evasion, and now the result is the transition by not just the United States, but -- but with France, with the U.K., even Russia now, all seeing the need to transition to the so-called pressure track which would include much different sanctions and so forth.
ZAKARIA: Don't you have the beginning of a very robust containment strategy, though, and you would be the one actually who would probably be principally charged with the military operationalization of this. You have the moderate -- the Gulf states, the Sunni states, Egypt, Israel, the major European countries, perhaps even Russia, all arrayed, you know, along this common interest that Iran not -- not become a nuclear power.
Wouldn't it be possible to contain it?
PETRAEUS: Well, I think, first of all, you have to ask a country that is most directly concerned about this, and that would be Israel. And, at the end of the day, what we might want with a slightly detached perspective than the other western countries. What the Gulf states and others might be willing to accept --
And by -- by the way, there is no uniform or universal acceptance of what you had just laid out. In fact, it's quite the contrary in many of the countries, and there's quite a --
ZAKARIA: Meaning what? They -- they want the United States to strike?
PETRAEUS: Well, there are some that are very, very, very, very concerned about the developments in Iran and they find that very --
(CROSS TALK).
PETRAEUS: -- difficult.
ZAKARIA: What does that mean? They want -- they want the United States to strike?
PETRAEUS: Well, it's interesting. I think there -- there is almost a slight degree of bipolarity there at times. On the one hand, there are countries that would like to see a strike, us or perhaps Israel, even. And then there's the worry that someone will strike, and then there's also the worry that someone will not strike. And, again, reconciling that is -- is one of the challenges of operating in the region right now.
Our job right now is to ensure that we're prepared for any contingencies, that we can support indeed, with the diplomatic efforts, to transition now to the pressure track and so forth. And that's indeed what we're endeavoring to do with our partners who, by the way, find that President Ahmadinejad is often our best recruiting officer, because his actions, his rhetoric and his other -- the other activities of Iran, in many cases, are causing much more embrace of CENTCOM and -- and other activities than otherwise would be the case. (END VIDEOTAPE)
ZAKARIA: We will be back with General Petraeus in just a moment. We haven't even touched on Afghanistan or Pakistan yet.
(BEGIN VIDEO CLIP)
PETRAEUS: -- and then we have gone forward.
ZAKARIA: Did he at least (ph) publicly endorse the operation?
PETRAEUS: He has. Oh, he has acknowledged it. He is --
ZAKARIA: When? I have -- I have followed --
PETRAEUS: He has said that he is the commander in chief of this operation, and indeed there have been articles about that. So he has --
ZAKARIA: You're satisfied with --
PETRAEUS: -- taken this forward.
ZAKARIA: Karzai's --
PETRAEUS: Well, look --
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(BEGIN VIDEOTAPE)
ZAKARIA: And we are back with David Petraeus, the commanding general of CENTCOM. Thank you so much for joining us.
PETRAEUS: Great to be here.
ZAKARIA: Afghanistan. The larger offensive seems to have gone well, certainly from a military point of view. But there is some question as to whether the Taliban melted away to come back to fight another day.
There are some reports that there is another area in Afghanistan, Nawa in Helmand, where you -- the United States had an operation like this. The Taliban seemed to melt away. It seemed like a victory. But they are now coming back.
Do you worry that these fighters have melted away to -- and, you know, and that once the United States tries to itself withdraw the large footprint it has -- it has put, you will find a resurgence of Taliban in places like Marjah?
PETRAEUS: Well, that's always a concern with this kind of approach, and -- and you should know that explicitly we went into Marjah having announced what we were going to do there. General McChrystal was very clear about this. And that was so that we didn't end up in a massive slug fest that destroys Marjah to save it.
So those that wanted to melt away and don't want to fight, all well and good, because the objective is -- is secure the population. We'll kill or capture bad guys that stand up to us, but the key is, again, to get that city as intact as is possible with as little loss of innocent civilian life, and then to erect the security apparatus and so forth, keeping in mind that a lot of this depends again on -- on who the civilians side with.
You know, there is a shura held there yesterday. General McChrystal, in fact, observed it. A number of Afghan leaders attended it from -- from Kabul. And we freely acknowledged that there are individuals in there who tacitly or perhaps even actively may have supported the Taliban in the past when they held sway.
The key is now is of course to turn them into part of the solution.
ZAKARIA: General McChrystal used a phrase to describe how he -- part of the process, which is effectively a clearer hold, and then he said and then we'll have government in a box --
PETRAEUS: Yes.
ZAKARIA: -- ready to bring out. I -- I was struck by the expression because if only Afghanistan had government in a box. I mean, you -- here you have -- the big problem in Afghanistan is that the government is weak, indecisive, corrupt, often of the wrong ethnicity, and the idea that you could just bring a pre-packaged gift item from Amazon and put it in the middle of Marjah and it was going to work.
So isn't this the central challenge, which is you clear the area --
PETRAEUS: Absolutely.
ZAKARIA: American troops will do it.
PETRAEUS: It absolutely is. Sure.
ZAKARIA: But then what you get in -- in place there -- I mean, look at this last shura you were mentioning. The second vice president of Afghanistan who was brought in there to speak there spoke in a language nobody there could understand.
PETRAEUS: He did. Yes.
ZAKARIA: He was speaking in Dari, those people speak Pashto.
PETRAEUS: That's exactly right.
ZAKARIA: He's a Hazara, which is a-
PETRAEUS: You've got a good research assistant.
ZAKARIA: I don't. This is all me, believe it or not. And, you know, isn't that part of the problem, the political problem?
PETRAEUS: It is. There's no question about it. Again -- and it's -- let's be real clear, this is clear hold, build or rebuild, depending on the damage done, and transition. And the key in the hold, build and, above all, transition phases of this activity are indeed Afghan governance, and that governance, to be successful, has to be seen as serving the people, as providing a better future for them, not being predatory or corrupt as has been the case in a number of instances in past years, without question.
ZAKARIA: So I look at our Afghan partner, in talking about governance, Hamid Karzai. You have taken great pains to give him some say, inclusion, include him in the process, in the -- in the operation. And yet, he has never publicly supported it. He has never publicly endorsed it, and he has twice criticized your forces for reckless civilian casualties, never pointing out that the Taliban is, of course, using human shields to -- to make it very difficult to not have collateral damage.
Is this -- this does not strike me as an improvement in governance in Afghanistan. In other words, this is a pretty big political problem.
PETRAEUS: Well, actually I met with President Karzai last week, in fact. And for what it's worth, he has --
ZAKARIA: Did you tell him what I just said?
PETRAEUS: Not -- not quite exactly, but -- look, we have candid conversations, both directions, by the way. And I think they're very, very constructive and very good, and I've been doing this now, obviously, for a year and a half or so with him. And, frankly, there have been developments this time that are unique to this time.
First of all, he was actually consulted and asked that ultimately to give the order to carry out the operation. And indeed he provided guidance and he -- he held some things up until he was back briefed on how his concepts were going to be operationalized. He has, rightly, I think, actually, when there have been incidents of innocent loss of life, called into question what was done in those cases, and then we have gone forward.
ZAKARIA: Did he at least (ph) publicly endorse the operation?
PETRAEUS: He has. Oh, he has acknowledged it. He has --
ZAKARIA: When? I have -- I have followed --
PETRAEUS: He has said that he is the commander in chief of this operation, and indeed there have been articles about that. So he has --
ZAKARIA: You're satisfied with --
PETRAEUS: -- taken this forward.
ZAKARIA: Karzai's --
PETRAEUS: Well, look, I don't think in a relationship, even in a friendship, that anyone is ever, you know, 100 percent satisfied with everything that takes place, and indeed, that's why you have good constructive dialogue. And, again, he's not completely satisfied with everything that we're doing either --
ZAKARIA: You're very good at this because you --
PETRAEUS: -- so that's OK.
ZAKARIA: You're very good at this because you have to live with him. All right.
Let me ask you about Pakistan. Do you see what is going on right now in Pakistan? They're -- they're -- having helped us capture some senior Taliban figures and ones that appear to have been fairly central, is this the sign of a fundamental reorientation of the Pakistani military or is it too early to say that and this is just -- you know, this is -- this is encouraging news, but we still have a long way to go?
PETRAEUS: The more important development, actually, is the one that has taken place internal to Pakistan. And this is the decision, as you know, that was reached some 10 months or so ago after the Pakistani people, all of the Pakistani leaders, including the major opposition figure and Sharif and others, and the clerics all recognized that the threat of the internal extremists to the Pakistani state was reaching existential proportions, that -- that the Pakistani Taliban and Swat districts, Swat valley in particular, in the Malakand division of the northwest frontier province were threatening the very writ of governance.
By the way, I was in both lower and upper Swat this past week, and I have to say that that has been a very impressive counterinsurgency operation.
ZAKARIA: They are taking on very ferociously those elements, those militants who attack Pakistanis by and large. They have been reluctant to take on those militants who attack in Afghanistan.
PETRAEUS: Well, as I said, this is very much a work in progress. This is the beginning of a campaign there, and the important development is that this is the Pakistanis fighting their war against internal extremists that threaten them.
Now, the development that I found interesting on this latest trip, and I've been in there almost every two months now and -- or meet with General Kayani or the other leaders somewhere else, on quite a frequent basis. I think the development most recently is that there is emerging a recognition of what Secretary Gates has called the symbiotic relationship between all of the extremist elements in the Fatah, not just --
ZAKARIA: Do you think they get that? Do you think the Pakistanis (INAUDIBLE)? PETRAEUS: This is increasingly -- increasingly, I think, obvious to -- to those who are watching this.
The challenge, though -- and, first of all, look, we have to recognize, number one, the enormous loss of life that the Pakistani military has sustained, and even more, Pakistani civilians. Because of course, as always, when a force takes away a sanctuary or a safe haven from an enemy, that enemy will fight back, and it will go in other areas where you are more vulnerable, perhaps, than in the areas where the actual fighting is taking place. And, in fact, that's why it's significant that indeed some of these Taliban leaders were picked up down in Karachi and other settled areas, as they -- as they're termed, of Pakistan.
But we also have to recognize that the Pakistani army, the frontier corps, the security forces, have put a lot of short sticks into a lot of hornets' nests over the course of that last 10 months. There's a limit to how much you can do that without consolidating the gains in some areas and then, over time, as I mentioned, thinning out to enable you to go into other areas, but leaving behind a sustainable security, a sustainable economic, social, political situation, so that you wouldn't have to go back there in the future, but it's something that can -- can be sustained just by the forces that have been left behind.
(END VIDEOTAPE)
ZAKARIA: We will be back with General Petraeus in a moment.
(BEGIN VIDEO CLIP)
PETRAEUS: -- served with some CIA officer, actually, who were known to be gay and one who's known to be a lesbian, and, you know, after the 10 seconds of awareness wore off, the focus was on the professional attributes of these individuals.
(COMMERCIAL BREAK)
ZAKARIA: Finally, General Petraeus, let me ask you, you said recently in an interview that you didn't mind serving alongside many women who happen to be gay. Does that mean that you would be comfortable with the repeal of Don't Ask, Don't Tell?
PETRAEUS: I would like to clarify what I did say. What I said is I served with CIA officers actually who were known to be gay and one who was known to be lesbian. After the ten seconds of awareness wore off, the focus was on the professional attributes of these individuals. So given, again, standards of personal conduct, focus on human behavior, a focus on proper implementation, you know, I think that this is something that can be worked through, frankly.
I'll lay this out to Congress. My thinking on this matter, I've been wrestling with this. A lot of us have. We've done a lot of personal soundings. We've looked at the 25 or so countries, including Australia, U.K., Canada, Israel. Some pretty good militaries that have all integrated, if you will, gays and lesbians into their militaries, but had very sensible and pragmatic policies. I think that has been the key to the success of their efforts.
But again, when I talk to the -- probably the Senate armed services committee, if asked, I'll lay out a pretty comprehensive view, my personal view at least on this particular issue.
ZAKARIA: It sounds to me, though, if these -- if the review process of scouting out the opinions of soldiers, if they were to go to this soldier, that is, you, it sounds like what you would tell them is that under -- as long as it was carefully implemented, you would be comfortable?
PETRAEUS: I'll lay that out, again, to the Senate Armed Services Committee.
ZAKARIA: What, you don't want to tell it to a TV show first?
PETRAEUS: I know you'd love to have that. I think we'll allow the scoop to go to our members of Congress.
ZAKARIA: General Petraeus, honor to have you on. Thank you so much.
PETRAEUS: It's really been good to be with you, Fareed. Thanks a lot.
By Fareed Zakaria GPS
ZAKARIA: And now, the head of the United States Central Command, General David Petraeus. General Petraeus, honor to have you on.
PETRAEUS: Great to be with you, Fareed.
Receive news alerts
Sign Up
Fareed Zakaria GPS RealClearPolitics
representative head
General United States Central Command
Middle East oil
David Petraeus United States
Iraq
[+] More
ZAKARIA: What do you hope to see come out of the Iraqi elections?
PETRAEUS: Well, I'd like to see a government that continues to do what this one does, which is to be generally representative of the people, responsive to all the people, and to continue the progress that has been achieved over the course of the last couple of years, again, in the economic, social and political realms. You know, in keeping all of the Iraqis together as well. Hugely important.
ZAKARIA: But -- but that part is the crucial part. When I go travel in the Middle East or talk to people from the region, what I'm struck by is that the whole hope that Iraq as a functioning democracy or a quasi-democracy would be a kind of inspiration or have some kind of a opening (ph) effect in the -- in the Middle East, has not quite happened largely because in the Middle East, 90 percent of which is Sunni.
They see the fact that the Sunnis of Iraq remain somewhat marginalized as being a proof positive that this is -- this is -- that either democracy is a terrible thing or this is not real democracy. They don't know which -- which option to choose. And the fact that in this election you had the situation where Sunni candidates have been essentially -- some early disbarred from -- from being able to participate, including fairly senior politicians.
Doesn't that lack of inclusion hurt the central message that we were trying to send out of Iraq?
PETRAEUS: Iraq does have many, many different tensions. There are still lots of strains on the fabric of society, a fabric that indeed was torn by the sectarian violence in 2006 and into early 2007, and, really, so far has only got a few stitches back into it. And that's another aspect of the way forward, that again, we hope that Sunni and Shia, Arab and Kurd, Yazidi, Christian, Turkmen -- all of these different groups, (INAUDIBLE) and others, can indeed make accommodations and really continue to make accommodations.
Because all progress that has been made to date, all of the legislation that's been passed and so forth, has all required cross sectarian, cross ethnic coalitions, and I think that actually will continue to be the case, because when you do the math, there's no way that a prime minister will be elected without a cross sectarian and indeed cross ethnic coalition developing to elect that individual and the other key members that will be part of the package.
ZAKARIA: American troop withdrawals are slated to continue and to be down to zero combat troops at the end of 2011. Is that a pledge you think you will be able to fulfill?
PETRAEUS: Well, first, let's focus initially on where we're headed right now. First, we're about 96,000 or so right now, down from 165,000 or so at the height of the surge and other periods and headed down to 50,000 by the end of August.
Then, of course, with the new government in place, there will be the dialogue about what is it that the sovereign Iraq, with its newly elected government that will be in place for four years, will want in terms of a security relationship with the United States.
There's some sense that they may want to continue a security assistance relationship at the -- at least, something we have with virtually all the other countries in the Central Command region, especially given that they are, of course, they've got a lot of American hardware, a lot of American tactics, techniques and procedures. There's some very good intelligence-sharing arrangements and so forth. But that's up to that government.
ZAKARIA: But you could foresee --
PETRAEUS: And it will be a sovereign government.
ZAKARIA: But you could foresee a situation where a new status of forces agreement is negotiated and the United States maintains some 10,000, 20,000 troops in a kind of supporting role if the Iraqi government wants it?
PETRAEUS: I'm not sure I would -- I would see something anywhere near that large, candidly. I think it would be much more along the lines of the traditional security assistance arrangement, a relationship that may include other countries as well. Indeed, there's still a NATO training mission in Iraq. There's -- there's a British element still helping with the Iraqi navy that was a separate bilateral agreement.
ZAKARIA: Would it be legitimate for the American taxpayer to look at what's happening in Iraq, particularly economically and say what was in it for us? Because you watch Iraq signing oil deals, and the Chinese are doing pretty well, the Brits are doing pretty well. We're doing all right, but there's no --
You know, for all those who thought this was a conspiracy for oil, you notice that the United States does not seem to have any privileged position in terms of its access. What did -- did we -- do we have any influence economically in Iraq?
PETRAEUS: Well, I think we are literally having to compete along with everyone else. There are occasionally some degrees of access that might be provided. But, by and large, this is -- it's capitalism at work.
And, in fact, we used to offer to our Iraqi counterparts who occasionally would toss around the conspiracy theory, that this is all about sewing up Iraq's oil for the next few decades and say that, gosh, for what we spent in a single year in Iraq, we could have bought all of your oil for the next decade without having to invade you.
So, look, it is legitimate for the American taxpayer to ask that question. And, again, only history can judge at the end of the day whether this was, frankly, a wise investment in -- in the enormous amount of -- of gold treasure and, indeed, most importantly the lives of our young men and women in uniform and our civilian counterparts and Iraqi civilians and coalition members.
ZAKARIA: Let me ask you about one of Iraq's neighbors, Iran. When you were up in the north, one of the things you had to deal with, and even during the surge, was Iranian forces, Quds forces, in many ways fermenting the violence in Iraq by supplying weapons or arms, militias, all kinds of things.
Apparently, these security services are now -- the Quds forces, now spending a lot more of its time worrying about what's going on in Iran, trying to create, put down the opposition movements there.
Has that changed the political dynamic in Iraq? Are you finding that the Iranians have in a sense packed up and gone home?
PETRAEUS: Well, first, I think you're absolutely right to say that the security elements in Iran, particularly the Revolutionary Guard's corps, the -- the Quds force and the Basij, the militia, have had to focus a great deal more on internal security challenges than they did in the past. And, indeed, I think you've heard it said by pundits that Iran has gone from being a theocracy to a thugocracy, that it has frankly become much more of a police state than it ever was in -- in the past since the Revolution.
And that is, again, because of the emergence of this reform movement of the -- the citizens who are outraged of the hijacking of the election that took place back last summer.
ZAKARIA: Do you think Ahmed Chalabi is an agent of Iran or influenced by Iran or carrying out an Iranian agenda in Iraq?
PETRAEUS: Well, it -- I think -- again, this is less about what we think. This is about what Iraqi leaders think, and Iraqi leaders have obviously not been overly pleased with some of the political high drama that has been fomented by the Accountability and Justice Committee, which has been orchestrated indeed by Dr. Chalabi. And, again --
ZAKARIA: Again, that he was -- that committee was behind this renewed de-Baathification and this attempt to --
PETRAEUS: Yes, sure.
ZAKARIA: -- to disbar a whole set of people from running.
PETRAEUS: Yes. I mean, indeed, they announced the list. They determined who -- who was on it. They had a -- a key role in the adjudication of it, later as appeals were issues and so forth. So -- and that did indeed, in the -- you know, and especially coming so close to the actual elect (INAUDIBLE) quite a bit of political turmoil.
They've worked through it. The fact is there are tens of thousands of candidates, of which several hundred now in the end will have been disqualified. They -- as with everything in Iraq, there's -- again, with "Iraqracy", as we have termed it at times, there's often a considerable degree of emotion. There is, again, drama. But, at the end of the day or perhaps sometimes a little after the end of the day, they managed to work through it.
And, as always, it has required, again, what I talked about earlier, these cross-sectarian, cross-ethnic coalitions and -- and deals, which is OK. That's a good development for Iraq, frankly.
We used to say when I was there, you -- you can shout, but please don't shoot. And shouting is, I think, a -- a very acceptable alternative to shooting.
ZAKARIA: Do you think that the Iranian regime has made a decision that they are going to try to get a nuclear weapon, or do you think it is still unclear whether they want a robust nuclear civilian capacity and a robust missile capacity, but -- but they haven't yet decided whether they will join the two?
PETRAEUS: I think it's something slightly different, actually. I think, first of all, that there can be a debate about whether or not the final decision has been made. I think in fact probably that final decision has not been made by the Supreme Leader, and that will be his decision to take.
But that's a little bit immaterial at this point in time because all of the components of a program to produce nuclear weapons, to produce the delivery means and -- and all the rest of that, all of these components have been proceeding as if they want to be in a position where he can make that decision, having reached the so-called threshold capability. And that is, of course, what is so worrisome to the countries in the region, and, of course, above all, to -- to Israel and obviously to the United States and the countries of the west.
They are now transitioning, of course, from what was the diplomacy track for about a year, where everyone made every good faith effort, extended the open hand, and it was not met with an open hand. It was met with intransigence and obfuscation and evasion, and now the result is the transition by not just the United States, but -- but with France, with the U.K., even Russia now, all seeing the need to transition to the so-called pressure track which would include much different sanctions and so forth.
ZAKARIA: Don't you have the beginning of a very robust containment strategy, though, and you would be the one actually who would probably be principally charged with the military operationalization of this. You have the moderate -- the Gulf states, the Sunni states, Egypt, Israel, the major European countries, perhaps even Russia, all arrayed, you know, along this common interest that Iran not -- not become a nuclear power.
Wouldn't it be possible to contain it?
PETRAEUS: Well, I think, first of all, you have to ask a country that is most directly concerned about this, and that would be Israel. And, at the end of the day, what we might want with a slightly detached perspective than the other western countries. What the Gulf states and others might be willing to accept --
And by -- by the way, there is no uniform or universal acceptance of what you had just laid out. In fact, it's quite the contrary in many of the countries, and there's quite a --
ZAKARIA: Meaning what? They -- they want the United States to strike?
PETRAEUS: Well, there are some that are very, very, very, very concerned about the developments in Iran and they find that very --
(CROSS TALK).
PETRAEUS: -- difficult.
ZAKARIA: What does that mean? They want -- they want the United States to strike?
PETRAEUS: Well, it's interesting. I think there -- there is almost a slight degree of bipolarity there at times. On the one hand, there are countries that would like to see a strike, us or perhaps Israel, even. And then there's the worry that someone will strike, and then there's also the worry that someone will not strike. And, again, reconciling that is -- is one of the challenges of operating in the region right now.
Our job right now is to ensure that we're prepared for any contingencies, that we can support indeed, with the diplomatic efforts, to transition now to the pressure track and so forth. And that's indeed what we're endeavoring to do with our partners who, by the way, find that President Ahmadinejad is often our best recruiting officer, because his actions, his rhetoric and his other -- the other activities of Iran, in many cases, are causing much more embrace of CENTCOM and -- and other activities than otherwise would be the case. (END VIDEOTAPE)
ZAKARIA: We will be back with General Petraeus in just a moment. We haven't even touched on Afghanistan or Pakistan yet.
(BEGIN VIDEO CLIP)
PETRAEUS: -- and then we have gone forward.
ZAKARIA: Did he at least (ph) publicly endorse the operation?
PETRAEUS: He has. Oh, he has acknowledged it. He is --
ZAKARIA: When? I have -- I have followed --
PETRAEUS: He has said that he is the commander in chief of this operation, and indeed there have been articles about that. So he has --
ZAKARIA: You're satisfied with --
PETRAEUS: -- taken this forward.
ZAKARIA: Karzai's --
PETRAEUS: Well, look --
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(BEGIN VIDEOTAPE)
ZAKARIA: And we are back with David Petraeus, the commanding general of CENTCOM. Thank you so much for joining us.
PETRAEUS: Great to be here.
ZAKARIA: Afghanistan. The larger offensive seems to have gone well, certainly from a military point of view. But there is some question as to whether the Taliban melted away to come back to fight another day.
There are some reports that there is another area in Afghanistan, Nawa in Helmand, where you -- the United States had an operation like this. The Taliban seemed to melt away. It seemed like a victory. But they are now coming back.
Do you worry that these fighters have melted away to -- and, you know, and that once the United States tries to itself withdraw the large footprint it has -- it has put, you will find a resurgence of Taliban in places like Marjah?
PETRAEUS: Well, that's always a concern with this kind of approach, and -- and you should know that explicitly we went into Marjah having announced what we were going to do there. General McChrystal was very clear about this. And that was so that we didn't end up in a massive slug fest that destroys Marjah to save it.
So those that wanted to melt away and don't want to fight, all well and good, because the objective is -- is secure the population. We'll kill or capture bad guys that stand up to us, but the key is, again, to get that city as intact as is possible with as little loss of innocent civilian life, and then to erect the security apparatus and so forth, keeping in mind that a lot of this depends again on -- on who the civilians side with.
You know, there is a shura held there yesterday. General McChrystal, in fact, observed it. A number of Afghan leaders attended it from -- from Kabul. And we freely acknowledged that there are individuals in there who tacitly or perhaps even actively may have supported the Taliban in the past when they held sway.
The key is now is of course to turn them into part of the solution.
ZAKARIA: General McChrystal used a phrase to describe how he -- part of the process, which is effectively a clearer hold, and then he said and then we'll have government in a box --
PETRAEUS: Yes.
ZAKARIA: -- ready to bring out. I -- I was struck by the expression because if only Afghanistan had government in a box. I mean, you -- here you have -- the big problem in Afghanistan is that the government is weak, indecisive, corrupt, often of the wrong ethnicity, and the idea that you could just bring a pre-packaged gift item from Amazon and put it in the middle of Marjah and it was going to work.
So isn't this the central challenge, which is you clear the area --
PETRAEUS: Absolutely.
ZAKARIA: American troops will do it.
PETRAEUS: It absolutely is. Sure.
ZAKARIA: But then what you get in -- in place there -- I mean, look at this last shura you were mentioning. The second vice president of Afghanistan who was brought in there to speak there spoke in a language nobody there could understand.
PETRAEUS: He did. Yes.
ZAKARIA: He was speaking in Dari, those people speak Pashto.
PETRAEUS: That's exactly right.
ZAKARIA: He's a Hazara, which is a-
PETRAEUS: You've got a good research assistant.
ZAKARIA: I don't. This is all me, believe it or not. And, you know, isn't that part of the problem, the political problem?
PETRAEUS: It is. There's no question about it. Again -- and it's -- let's be real clear, this is clear hold, build or rebuild, depending on the damage done, and transition. And the key in the hold, build and, above all, transition phases of this activity are indeed Afghan governance, and that governance, to be successful, has to be seen as serving the people, as providing a better future for them, not being predatory or corrupt as has been the case in a number of instances in past years, without question.
ZAKARIA: So I look at our Afghan partner, in talking about governance, Hamid Karzai. You have taken great pains to give him some say, inclusion, include him in the process, in the -- in the operation. And yet, he has never publicly supported it. He has never publicly endorsed it, and he has twice criticized your forces for reckless civilian casualties, never pointing out that the Taliban is, of course, using human shields to -- to make it very difficult to not have collateral damage.
Is this -- this does not strike me as an improvement in governance in Afghanistan. In other words, this is a pretty big political problem.
PETRAEUS: Well, actually I met with President Karzai last week, in fact. And for what it's worth, he has --
ZAKARIA: Did you tell him what I just said?
PETRAEUS: Not -- not quite exactly, but -- look, we have candid conversations, both directions, by the way. And I think they're very, very constructive and very good, and I've been doing this now, obviously, for a year and a half or so with him. And, frankly, there have been developments this time that are unique to this time.
First of all, he was actually consulted and asked that ultimately to give the order to carry out the operation. And indeed he provided guidance and he -- he held some things up until he was back briefed on how his concepts were going to be operationalized. He has, rightly, I think, actually, when there have been incidents of innocent loss of life, called into question what was done in those cases, and then we have gone forward.
ZAKARIA: Did he at least (ph) publicly endorse the operation?
PETRAEUS: He has. Oh, he has acknowledged it. He has --
ZAKARIA: When? I have -- I have followed --
PETRAEUS: He has said that he is the commander in chief of this operation, and indeed there have been articles about that. So he has --
ZAKARIA: You're satisfied with --
PETRAEUS: -- taken this forward.
ZAKARIA: Karzai's --
PETRAEUS: Well, look, I don't think in a relationship, even in a friendship, that anyone is ever, you know, 100 percent satisfied with everything that takes place, and indeed, that's why you have good constructive dialogue. And, again, he's not completely satisfied with everything that we're doing either --
ZAKARIA: You're very good at this because you --
PETRAEUS: -- so that's OK.
ZAKARIA: You're very good at this because you have to live with him. All right.
Let me ask you about Pakistan. Do you see what is going on right now in Pakistan? They're -- they're -- having helped us capture some senior Taliban figures and ones that appear to have been fairly central, is this the sign of a fundamental reorientation of the Pakistani military or is it too early to say that and this is just -- you know, this is -- this is encouraging news, but we still have a long way to go?
PETRAEUS: The more important development, actually, is the one that has taken place internal to Pakistan. And this is the decision, as you know, that was reached some 10 months or so ago after the Pakistani people, all of the Pakistani leaders, including the major opposition figure and Sharif and others, and the clerics all recognized that the threat of the internal extremists to the Pakistani state was reaching existential proportions, that -- that the Pakistani Taliban and Swat districts, Swat valley in particular, in the Malakand division of the northwest frontier province were threatening the very writ of governance.
By the way, I was in both lower and upper Swat this past week, and I have to say that that has been a very impressive counterinsurgency operation.
ZAKARIA: They are taking on very ferociously those elements, those militants who attack Pakistanis by and large. They have been reluctant to take on those militants who attack in Afghanistan.
PETRAEUS: Well, as I said, this is very much a work in progress. This is the beginning of a campaign there, and the important development is that this is the Pakistanis fighting their war against internal extremists that threaten them.
Now, the development that I found interesting on this latest trip, and I've been in there almost every two months now and -- or meet with General Kayani or the other leaders somewhere else, on quite a frequent basis. I think the development most recently is that there is emerging a recognition of what Secretary Gates has called the symbiotic relationship between all of the extremist elements in the Fatah, not just --
ZAKARIA: Do you think they get that? Do you think the Pakistanis (INAUDIBLE)? PETRAEUS: This is increasingly -- increasingly, I think, obvious to -- to those who are watching this.
The challenge, though -- and, first of all, look, we have to recognize, number one, the enormous loss of life that the Pakistani military has sustained, and even more, Pakistani civilians. Because of course, as always, when a force takes away a sanctuary or a safe haven from an enemy, that enemy will fight back, and it will go in other areas where you are more vulnerable, perhaps, than in the areas where the actual fighting is taking place. And, in fact, that's why it's significant that indeed some of these Taliban leaders were picked up down in Karachi and other settled areas, as they -- as they're termed, of Pakistan.
But we also have to recognize that the Pakistani army, the frontier corps, the security forces, have put a lot of short sticks into a lot of hornets' nests over the course of that last 10 months. There's a limit to how much you can do that without consolidating the gains in some areas and then, over time, as I mentioned, thinning out to enable you to go into other areas, but leaving behind a sustainable security, a sustainable economic, social, political situation, so that you wouldn't have to go back there in the future, but it's something that can -- can be sustained just by the forces that have been left behind.
(END VIDEOTAPE)
ZAKARIA: We will be back with General Petraeus in a moment.
(BEGIN VIDEO CLIP)
PETRAEUS: -- served with some CIA officer, actually, who were known to be gay and one who's known to be a lesbian, and, you know, after the 10 seconds of awareness wore off, the focus was on the professional attributes of these individuals.
(COMMERCIAL BREAK)
ZAKARIA: Finally, General Petraeus, let me ask you, you said recently in an interview that you didn't mind serving alongside many women who happen to be gay. Does that mean that you would be comfortable with the repeal of Don't Ask, Don't Tell?
PETRAEUS: I would like to clarify what I did say. What I said is I served with CIA officers actually who were known to be gay and one who was known to be lesbian. After the ten seconds of awareness wore off, the focus was on the professional attributes of these individuals. So given, again, standards of personal conduct, focus on human behavior, a focus on proper implementation, you know, I think that this is something that can be worked through, frankly.
I'll lay this out to Congress. My thinking on this matter, I've been wrestling with this. A lot of us have. We've done a lot of personal soundings. We've looked at the 25 or so countries, including Australia, U.K., Canada, Israel. Some pretty good militaries that have all integrated, if you will, gays and lesbians into their militaries, but had very sensible and pragmatic policies. I think that has been the key to the success of their efforts.
But again, when I talk to the -- probably the Senate armed services committee, if asked, I'll lay out a pretty comprehensive view, my personal view at least on this particular issue.
ZAKARIA: It sounds to me, though, if these -- if the review process of scouting out the opinions of soldiers, if they were to go to this soldier, that is, you, it sounds like what you would tell them is that under -- as long as it was carefully implemented, you would be comfortable?
PETRAEUS: I'll lay that out, again, to the Senate Armed Services Committee.
ZAKARIA: What, you don't want to tell it to a TV show first?
PETRAEUS: I know you'd love to have that. I think we'll allow the scoop to go to our members of Congress.
ZAKARIA: General Petraeus, honor to have you on. Thank you so much.
PETRAEUS: It's really been good to be with you, Fareed. Thanks a lot.
An Expert's Long View on Iran
By GERALD F. SEIB
WSJ, March 5, 2010
Iran is both today's paramount foreign-policy challenge, and a quandary of the first order. Its nuclear program keeps expanding, its concern about international opprobrium seems limited, and nobody can be sure the United Nations Security Council will find the courage to impose more economic sanctions.
So where do we go from here? Few have thought about that challenge longer or harder than Zbigniew Brzezinski, the provocative foreign-policy icon who was White House national security adviser when the Iranian revolution erupted three decades ago and has followed the case ever since.
In an interview, Mr. Brzezinski lays out his formula. Try to stop Iran's nuclear program, and make Tehran pay a price if it keeps pursuing it, but don't count too much on sanctions; offer a robust American defense umbrella to protect friends in the region if Iran crosses the nuclear threshold; give rhetorical support to Iran's opposition while accepting America's limited ability to help it; eschew thought of a pre-emptive attack on Iran's nuclear facilities; and keep talking to Tehran.
Above all: Play the long game, because time, demographics and generational change aren't on the side of the current regime.
"This is a country with a growing urban middle class, a country with fairly high access to higher education, a country where women play a great role in the professions," he says. "So it is a country which I think, basically, objectively is capable of moving the way Turkey has moved." That is, it can evolve into a country where Islam and modernity co-exist, even if somewhat uncomfortably.
Mr. Brzezinski's views are noteworthy because he touches so many bases in the Iran debate. He hails from the hawkish wing of the Democratic party, and has a record of working comfortably with Republican administrations.
He was President Jimmy Carter's national security adviser when the Iranian Islamic revolution exploded in 1979. More recently, he teamed up with current Defense Secretary Robert Gates on a milestone 2004 Council on Foreign Relations report that advocated that the U.S. begin to "engage selectively with Iran." Shortly thereafter, former President George W. Bush summoned Mr. Gates to be defense secretary, a job he retains under President Barack Obama.
Today, Mr. Brzezinski sees two American goals in Iran: "One is to prevent Iran from acquiring a nuclear weapon, assuming that is its objective, and to neutralize its strategic political significance if it does. The second goal is to facilitate, carefully and cautiously, the political evolution in Iran toward a more acceptable regional role." As he notes, those two goals—stopping Iran's nuclear program while coaxing it into more responsible behavior—can conflict.
On the nuclear-weapons front: There's a chance, he thinks, that Iran isn't seeking to possess actual nuclear weapons, but trying to become "more like Japan, a proto-nuclear power" with a demonstrated ability to make nuclear arms without actually crossing that line.
But it's impossible to know. And if a halt to Iran's nuclear program can't be negotiated, "then I think we have no choice but to impose sanctions on Iran, isolate it." But sanctions alone, he says, won't "determine the outcome."
So if Iran crosses the line, the U.S. should "make commitments to any country nearby that America would see itself engaged if Iran threatened to use nuclear weapons against that country, or worse, if it used them."
What does being "engaged" mean, exactly? "That means if [the Iranians] attack somebody, we have to strike at them," Mr. Brzezinski says bluntly. "I don't think every country in the region would want to have a formal agreement with the U.S. Some would want an understanding."
This American defense umbrella "should be sufficient to deter Iran," Mr. Brzezinski says. He thinks it significant that Ehud Barak, the defense minister of Israel, the nation most threatened by Iran's nuclear program, said in a Washington speech last week that Iranian leaders were "sophisticated" enough to "fully understand what might follow" the actual use of nuclear arms, and likely would use them for intimidation.
Meantime, on changing Iran's character: The U.S. should adopt "a kind of posture of support and endorsement" of the forces inside Iran now openly opposing Iranian President Mahmoud Ahmadinejad, Mr. Brzezinski says, without deluding itself into thinking it has the ability to propel a regime change.
Crucially, Mr. Brzezinski instead thinks forces at work within Iran will undermine the regime over time, so long as the U.S. and the West don't take actions that actually interfere with that process.
Thus, it's important to craft sanctions in a way that "doesn't stimulate more anti-Westernism, or a fusion of Islamic extremism and nationalism." He'd keep talking to Iran too: "Most major issues internationally that have been resolved by negotiation have involved negotiations over a long period of time."
And he would avoid at all costs a military strike at Iran's nuclear facilities. Iran, he said, would make no distinction between an Israeli or an American strike. "The Iranians would strike out at us, in Afghanistan, in Iraq, in the Strait of Hormuz." If energy prices then soar, "we will suffer, the Chinese will suffer, the Russians will be the beneficiaries. The Europeans will have to go to the Russians for energy." In effect, he argues, America, more than Iran, would be isolated.
WSJ, March 5, 2010
Iran is both today's paramount foreign-policy challenge, and a quandary of the first order. Its nuclear program keeps expanding, its concern about international opprobrium seems limited, and nobody can be sure the United Nations Security Council will find the courage to impose more economic sanctions.
So where do we go from here? Few have thought about that challenge longer or harder than Zbigniew Brzezinski, the provocative foreign-policy icon who was White House national security adviser when the Iranian revolution erupted three decades ago and has followed the case ever since.
In an interview, Mr. Brzezinski lays out his formula. Try to stop Iran's nuclear program, and make Tehran pay a price if it keeps pursuing it, but don't count too much on sanctions; offer a robust American defense umbrella to protect friends in the region if Iran crosses the nuclear threshold; give rhetorical support to Iran's opposition while accepting America's limited ability to help it; eschew thought of a pre-emptive attack on Iran's nuclear facilities; and keep talking to Tehran.
Above all: Play the long game, because time, demographics and generational change aren't on the side of the current regime.
"This is a country with a growing urban middle class, a country with fairly high access to higher education, a country where women play a great role in the professions," he says. "So it is a country which I think, basically, objectively is capable of moving the way Turkey has moved." That is, it can evolve into a country where Islam and modernity co-exist, even if somewhat uncomfortably.
Mr. Brzezinski's views are noteworthy because he touches so many bases in the Iran debate. He hails from the hawkish wing of the Democratic party, and has a record of working comfortably with Republican administrations.
He was President Jimmy Carter's national security adviser when the Iranian Islamic revolution exploded in 1979. More recently, he teamed up with current Defense Secretary Robert Gates on a milestone 2004 Council on Foreign Relations report that advocated that the U.S. begin to "engage selectively with Iran." Shortly thereafter, former President George W. Bush summoned Mr. Gates to be defense secretary, a job he retains under President Barack Obama.
Today, Mr. Brzezinski sees two American goals in Iran: "One is to prevent Iran from acquiring a nuclear weapon, assuming that is its objective, and to neutralize its strategic political significance if it does. The second goal is to facilitate, carefully and cautiously, the political evolution in Iran toward a more acceptable regional role." As he notes, those two goals—stopping Iran's nuclear program while coaxing it into more responsible behavior—can conflict.
On the nuclear-weapons front: There's a chance, he thinks, that Iran isn't seeking to possess actual nuclear weapons, but trying to become "more like Japan, a proto-nuclear power" with a demonstrated ability to make nuclear arms without actually crossing that line.
But it's impossible to know. And if a halt to Iran's nuclear program can't be negotiated, "then I think we have no choice but to impose sanctions on Iran, isolate it." But sanctions alone, he says, won't "determine the outcome."
So if Iran crosses the line, the U.S. should "make commitments to any country nearby that America would see itself engaged if Iran threatened to use nuclear weapons against that country, or worse, if it used them."
What does being "engaged" mean, exactly? "That means if [the Iranians] attack somebody, we have to strike at them," Mr. Brzezinski says bluntly. "I don't think every country in the region would want to have a formal agreement with the U.S. Some would want an understanding."
This American defense umbrella "should be sufficient to deter Iran," Mr. Brzezinski says. He thinks it significant that Ehud Barak, the defense minister of Israel, the nation most threatened by Iran's nuclear program, said in a Washington speech last week that Iranian leaders were "sophisticated" enough to "fully understand what might follow" the actual use of nuclear arms, and likely would use them for intimidation.
Meantime, on changing Iran's character: The U.S. should adopt "a kind of posture of support and endorsement" of the forces inside Iran now openly opposing Iranian President Mahmoud Ahmadinejad, Mr. Brzezinski says, without deluding itself into thinking it has the ability to propel a regime change.
Crucially, Mr. Brzezinski instead thinks forces at work within Iran will undermine the regime over time, so long as the U.S. and the West don't take actions that actually interfere with that process.
Thus, it's important to craft sanctions in a way that "doesn't stimulate more anti-Westernism, or a fusion of Islamic extremism and nationalism." He'd keep talking to Iran too: "Most major issues internationally that have been resolved by negotiation have involved negotiations over a long period of time."
And he would avoid at all costs a military strike at Iran's nuclear facilities. Iran, he said, would make no distinction between an Israeli or an American strike. "The Iranians would strike out at us, in Afghanistan, in Iraq, in the Strait of Hormuz." If energy prices then soar, "we will suffer, the Chinese will suffer, the Russians will be the beneficiaries. The Europeans will have to go to the Russians for energy." In effect, he argues, America, more than Iran, would be isolated.
Saturday, March 6, 2010
White House Is Rethinking Nuclear Policy
NYtimes
By DAVID E. SANGER and THOM SHANKER
WASHINGTON — As President Obama begins making final decisions on a broad new nuclear strategy for the United States, senior aides say he will permanently reduce America’s arsenal by thousands of weapons. But the administration has rejected proposals that the United States declare it would never be the first to use nuclear weapons, aides said.
Mr. Obama’s new strategy — which would annul or reverse several initiatives by the Bush administration — will be contained in a nearly completed document called the Nuclear Posture Review, which all presidents undertake. Aides said Secretary of Defense Robert M. Gates will present Mr. Obama with several options on Monday to address unresolved issues in that document, which have been hotly debated within the administration.
First among them is the question of whether, and how, to narrow the circumstances under which the United States will declare it might use nuclear weapons — a key element of nuclear deterrence since the cold war.
Mr. Obama’s decisions on nuclear weapons come as conflicting pressures in his defense policy are intensifying. His critics argue that his embrace of a new movement to eliminate nuclear weapons around the world is naïve and dangerous, especially at a time of new nuclear threats, particularly from Iran and North Korea. But many of his supporters fear that over the past year he has moved too cautiously, and worry that he will retain the existing American policy by leaving open the possibility that the United States might use nuclear weapons in response to a biological or chemical attack, perhaps against a nation that does not possess a nuclear arsenal.
That is one of the central debates Mr. Obama must resolve in the next few weeks, his aides say.
Many elements of the new strategy have already been completed, according to senior administration and military officials who have been involved in more than a half-dozen Situation Room debates about it, and outside strategists consulted by the White House.
As described by those officials, the new strategy commits the United States to developing no new nuclear weapons, including the nuclear bunker-busters advocated by the Bush administration. But Mr. Obama has already announced that he will spend billions of dollars more on updating America’s weapons laboratories to assure the reliability of what he intends to be a much smaller arsenal. Increased confidence in the reliability of American weapons, Vice President Joseph R. Biden Jr. said in a speech in February, would make elimination of “redundant” nuclear weapons possible.
“It will be clear in the document that there will be very dramatic reductions — in the thousands — as relates to the stockpile,” according to one senior administration official whom the White House authorized to discuss the issue this weekend. Much of that would come from the retirement of large numbers of weapons now kept in storage.
Other officials, not officially allowed to speak on the issue, say that in back-channel discussions with allies, the administration has also been quietly broaching the question of whether to withdraw American tactical nuclear weapons from Europe, where they provide more political reassurance than actual defense. Those weapons are now believed to be in Germany, Italy, Belgium, Turkey and the Netherlands.
At the same time, the new document will steer the United States toward more non-nuclear defenses. It relies more heavily on missile defense, much of it arrayed within striking distance of the Persian Gulf, focused on the emerging threat from Iran. Mr. Obama’s recently published Quadrennial Defense Review also includes support for a new class of non-nuclear weapons, called “Prompt Global Strike,” that could be fired from the United States and hit a target anywhere in less than an hour.
The idea, officials say, would be to give the president a non-nuclear option for, say, a large strike on the leadership of Al Qaeda in the mountains of Pakistan, or a pre-emptive attack on an impending missile launch from North Korea. But under Mr. Obama’s strategy, the missiles would be based at new sites around the United States that might even be open to inspection, so that Russia and China would know that a missile launched from those sites was not nuclear — to avoid having them place their own nuclear forces on high alert.
But the big question confronting Mr. Obama is how he will describe the purpose of America’s nuclear arsenal. It is far more than just an academic debate.
Some leading Democrats, led by Senator Dianne Feinstein of California, chairwoman of the Senate Intelligence Committee, have asked Mr. Obama to declare that the “sole purpose” of the country’s nuclear arsenal is to deter nuclear attack. “We’re under considerable pressure on this one within our own party,” one of Mr. Obama’s national security advisers said recently.
But inside the Pentagon and among many officials in the White House, Mr. Obama has been urged to retain more ambiguous wording — declaring that deterring nuclear attack is the primary purpose of the American arsenal, not the only one. That would leave open the option of using nuclear weapons against foes that might threaten the United States with biological or chemical weapons or transfer nuclear material to terrorists.
Any compromise wording that leaves in place elements of the Bush-era pre-emption policy, or suggests the United States could use nuclear weapons against a non-nuclear adversary, would disappoint many on the left wing of his party, and some arms control advocates.
“Any declaration that deterring a nuclear attack is a ‘primary purpose’ of our arsenal leaves open the possibility that there are other purposes, and it would not reflect any reduced reliance on nuclear weapons,” said Daryl G. Kimball, the executive director of the Arms Control Association. “It wouldn’t be consistent with what the president said in his speech in Prague” a year ago, when he laid out an ambitious vision for moving toward the elimination of nuclear weapons.
Mr. Obama’s base has already complained in recent months that he has failed to break from Bush era national security policy in some fundamental ways. They cite, for example, his stepped-up use of drones to strike suspected terrorists in Pakistan and his failure to close the Guantánamo Bay detention facility by January as Mr. Obama had promised.
While Mr. Obama ended financing last year for a new nuclear warhead sought by the Bush administration, the new strategy goes further. It commits Mr. Obama to developing no new nuclear weapons, including a low-yield, deeply-burrowing nuclear warhead that the Pentagon sought to strike buried targets, like the nuclear facilities in North Korea and Iran. Mr. Obama, officials said, has determined he could not stop other countries from seeking new weapons if the United States was doing the same.
Still, some of Mr. Obama’s critics in his own party say the change is symbolic because he is spending more to improve old weapons.
At the center of the new strategy is a renewed focus on arms control and nonproliferation agreements, which were largely dismissed by the Bush administration. That includes an effort to win passage of the Comprehensive Test Ban Treaty, which was defeated during the Clinton administration and faces huge hurdles in the Senate, and revisions of the Nuclear Nonproliferation Treaty to close loopholes that critics say have been exploited by Iran and North Korea.
Mr. Obama’s reliance on new, non-nuclear Prompt Global Strike weapons is bound to be contentious. As described by advocates within the Pentagon and in the military, the new weapons could achieve the effects of a nuclear weapon, without turning a conventional war into a nuclear one. As a result, the administration believes it could create a new form of deterrence — a way to contain countries that possess or hope to develop nuclear, biological or chemical weapons, without resorting to a nuclear option.
By DAVID E. SANGER and THOM SHANKER
WASHINGTON — As President Obama begins making final decisions on a broad new nuclear strategy for the United States, senior aides say he will permanently reduce America’s arsenal by thousands of weapons. But the administration has rejected proposals that the United States declare it would never be the first to use nuclear weapons, aides said.
Mr. Obama’s new strategy — which would annul or reverse several initiatives by the Bush administration — will be contained in a nearly completed document called the Nuclear Posture Review, which all presidents undertake. Aides said Secretary of Defense Robert M. Gates will present Mr. Obama with several options on Monday to address unresolved issues in that document, which have been hotly debated within the administration.
First among them is the question of whether, and how, to narrow the circumstances under which the United States will declare it might use nuclear weapons — a key element of nuclear deterrence since the cold war.
Mr. Obama’s decisions on nuclear weapons come as conflicting pressures in his defense policy are intensifying. His critics argue that his embrace of a new movement to eliminate nuclear weapons around the world is naïve and dangerous, especially at a time of new nuclear threats, particularly from Iran and North Korea. But many of his supporters fear that over the past year he has moved too cautiously, and worry that he will retain the existing American policy by leaving open the possibility that the United States might use nuclear weapons in response to a biological or chemical attack, perhaps against a nation that does not possess a nuclear arsenal.
That is one of the central debates Mr. Obama must resolve in the next few weeks, his aides say.
Many elements of the new strategy have already been completed, according to senior administration and military officials who have been involved in more than a half-dozen Situation Room debates about it, and outside strategists consulted by the White House.
As described by those officials, the new strategy commits the United States to developing no new nuclear weapons, including the nuclear bunker-busters advocated by the Bush administration. But Mr. Obama has already announced that he will spend billions of dollars more on updating America’s weapons laboratories to assure the reliability of what he intends to be a much smaller arsenal. Increased confidence in the reliability of American weapons, Vice President Joseph R. Biden Jr. said in a speech in February, would make elimination of “redundant” nuclear weapons possible.
“It will be clear in the document that there will be very dramatic reductions — in the thousands — as relates to the stockpile,” according to one senior administration official whom the White House authorized to discuss the issue this weekend. Much of that would come from the retirement of large numbers of weapons now kept in storage.
Other officials, not officially allowed to speak on the issue, say that in back-channel discussions with allies, the administration has also been quietly broaching the question of whether to withdraw American tactical nuclear weapons from Europe, where they provide more political reassurance than actual defense. Those weapons are now believed to be in Germany, Italy, Belgium, Turkey and the Netherlands.
At the same time, the new document will steer the United States toward more non-nuclear defenses. It relies more heavily on missile defense, much of it arrayed within striking distance of the Persian Gulf, focused on the emerging threat from Iran. Mr. Obama’s recently published Quadrennial Defense Review also includes support for a new class of non-nuclear weapons, called “Prompt Global Strike,” that could be fired from the United States and hit a target anywhere in less than an hour.
The idea, officials say, would be to give the president a non-nuclear option for, say, a large strike on the leadership of Al Qaeda in the mountains of Pakistan, or a pre-emptive attack on an impending missile launch from North Korea. But under Mr. Obama’s strategy, the missiles would be based at new sites around the United States that might even be open to inspection, so that Russia and China would know that a missile launched from those sites was not nuclear — to avoid having them place their own nuclear forces on high alert.
But the big question confronting Mr. Obama is how he will describe the purpose of America’s nuclear arsenal. It is far more than just an academic debate.
Some leading Democrats, led by Senator Dianne Feinstein of California, chairwoman of the Senate Intelligence Committee, have asked Mr. Obama to declare that the “sole purpose” of the country’s nuclear arsenal is to deter nuclear attack. “We’re under considerable pressure on this one within our own party,” one of Mr. Obama’s national security advisers said recently.
But inside the Pentagon and among many officials in the White House, Mr. Obama has been urged to retain more ambiguous wording — declaring that deterring nuclear attack is the primary purpose of the American arsenal, not the only one. That would leave open the option of using nuclear weapons against foes that might threaten the United States with biological or chemical weapons or transfer nuclear material to terrorists.
Any compromise wording that leaves in place elements of the Bush-era pre-emption policy, or suggests the United States could use nuclear weapons against a non-nuclear adversary, would disappoint many on the left wing of his party, and some arms control advocates.
“Any declaration that deterring a nuclear attack is a ‘primary purpose’ of our arsenal leaves open the possibility that there are other purposes, and it would not reflect any reduced reliance on nuclear weapons,” said Daryl G. Kimball, the executive director of the Arms Control Association. “It wouldn’t be consistent with what the president said in his speech in Prague” a year ago, when he laid out an ambitious vision for moving toward the elimination of nuclear weapons.
Mr. Obama’s base has already complained in recent months that he has failed to break from Bush era national security policy in some fundamental ways. They cite, for example, his stepped-up use of drones to strike suspected terrorists in Pakistan and his failure to close the Guantánamo Bay detention facility by January as Mr. Obama had promised.
While Mr. Obama ended financing last year for a new nuclear warhead sought by the Bush administration, the new strategy goes further. It commits Mr. Obama to developing no new nuclear weapons, including a low-yield, deeply-burrowing nuclear warhead that the Pentagon sought to strike buried targets, like the nuclear facilities in North Korea and Iran. Mr. Obama, officials said, has determined he could not stop other countries from seeking new weapons if the United States was doing the same.
Still, some of Mr. Obama’s critics in his own party say the change is symbolic because he is spending more to improve old weapons.
At the center of the new strategy is a renewed focus on arms control and nonproliferation agreements, which were largely dismissed by the Bush administration. That includes an effort to win passage of the Comprehensive Test Ban Treaty, which was defeated during the Clinton administration and faces huge hurdles in the Senate, and revisions of the Nuclear Nonproliferation Treaty to close loopholes that critics say have been exploited by Iran and North Korea.
Mr. Obama’s reliance on new, non-nuclear Prompt Global Strike weapons is bound to be contentious. As described by advocates within the Pentagon and in the military, the new weapons could achieve the effects of a nuclear weapon, without turning a conventional war into a nuclear one. As a result, the administration believes it could create a new form of deterrence — a way to contain countries that possess or hope to develop nuclear, biological or chemical weapons, without resorting to a nuclear option.
Iran in Its Intricacy
March 5, 2010
By ROGER COHEN
PARIS — A year has passed since President Obama’s groundbreaking Nowruz offer to Iran of engagement based on mutual respect. Iran is now a different country, its divided regime weaker and confronted by the Green movement, the strongest expression of people power in the Middle East and a beacon for the region.
Obama’s outreach has achieved this: the unsettling of Iran’s revolutionary power structure. That alone was worth the gambit. But the 31-year gridlock in Iranian-American relations endures. Sarah Palin, no less, is now urging Obama to “declare war on Iran” to save his presidency. She’s not alone. Daniel Pipes, the conservative commentator, called a recent National Review column: “How to save the Obama Presidency: Bomb Iran.”
There’s nothing new in U.S. hawks reducing Iran to a nuclear abstraction, its 70 million citizens subsumed into a putative warhead, its civilization ignored and its historical grievances against the United States glossed over — all in the name of making Persia a U.S. electoral pawn and a threat that demands bombs.
But the war option remains unthinkable, a potential disaster for the United States and Israel. It’s therefore worth outlining, before the drumbeat intensifies in the run-up to the mid-term U.S. elections, 10 truths about Iran.
1.Iran’s hardliners thrive on isolation. The game-changing pursuit of dialogue with Iran is not incompatible with support of the Green movement; rather it complements that backing.
Obama must denounce the rape-and-repress post-election crackdown and speak out for Iranians’ right to peaceful protest even as he seeks to overcome through negotiation the poisonous U.S.-Iranian psychosis. Engagement brought us further in one year than axis-of-evil U.S. grandstanding did in seven.
As Andrew Parasiliti of the International Institute for Strategic Studies has said, “Engagement with Iran is a piece of the process for change in Iran — not a detriment to it.”
2. The Iranian response to Obama has been erratic, not least in the aborted Geneva deal of Oct. 1, 2009, that would have seen Iran’s low enriched uranium (L.E.U.) shipped out the country and the eventual return of uranium enriched to 20 percent (well below weapons grade) for use in a Tehran medical research reactor.
The crumbling of this accord, victim of Iran’s political divisions, left Obama and his top Iran aides bitterly frustrated. They are to this day. It would have created breathing space for broader talks.
But Iran says the idea is alive: “We think all parties have shown their political will to fulfill this exchange” (Foreign Minister Manouchehr Mottaki, Feb. 5). Or: “We are ready for a fuel exchange within a fair framework. We are still ready for an exchange, even with America” (President Mahmoud Ahmadinejad, Feb. 16).
Skepticism is in order given Iran’s track record, but if the aim is to get the L.E.U. out of Iranian hands and into safe hands — Japan’s perhaps, or that of the International Atomic Energy Agency (I.A.E.A.) — maximum flexibility should be deployed. This deal is still a door opener. Sanctions are a cul-de-sac.
3. Deterrence is powerful. The United States should, as Hillary Clinton has suggested, be building a “defense umbrella” for friendly gulf states alarmed by Iran’s nuclear program. The cleverest remark of Defense Secretary Robert Gates on Iran was: “The only way you end up not having a nuclear-capable Iran is for the Iranian government to decide that their security is diminished by having those weapons.”
No better way to ensure that exists than beefing up military assistance to Iran’s neighbors. Remember, Ali Khamenei, the supreme leader, is the “Guardian of the Revolution.” Job No. 1 for him is preservation. Iran will not build a bomb — forbidden by his own fatwa — if convinced its price is the revolutionary regime itself.
4.Sanctions will not alter Iran’s policy, and will further enrich the Revolutionary Guards who control sanction-circumventing channels from Dubai, but they will buy some time for further probing of engagement.
I’m told that’s how Obama, who remains intellectually committed to the idea of an Iran breakthrough, views them: a necessity in the light of Congressional and Israeli pressure, but not a likely means to get sanctions-inured Iran to change course.
It’s interesting that Clinton is now talking of sanctions in the “next several months” rather than 30 to 60 days. That’s encouraging. New sanctions, to which China will pay no more than lip service, equal old failure.
5.Attacking Iran has known consequences. Saddam Hussein did so in 1980 — and thereby cemented Ayatollah Khomeini’s theocratic revolution by uniting diverse factions (socialist, liberal and others) in national defense.
Because the United States and Europe armed Iraq in that war, and Saddam then gassed the Iranians, resentment runs deep: I’ve often been shown war wounds in Tehran on arms and legs as a single word is uttered, “America.” The generation of young officers in that war, like Ahmadinejad, now runs Iran and constitutes the New Right. (Blowback is not limited to Afghanistan.) But most Iranians are under 35 and drawn to the United States.
The one sure way to defeat the Green movement, frustrate Iranian youth, unite Iranians in patriotic defiance, reinforce the New Right, put Iran on a crash course to a bomb, and buttress the regime — as in 1980 — is to attack Iran’s nuclear facilities. As Gates has said, “There is no military option that does anything more than buy time” — and not much, at that.
6.Iran’s defiance of U.N. resolutions to cease enrichment and its pattern of concealment have, as the International Atomic Energy Agency recently noted, raised concerns about possible “past or current undisclosed activities related to the development of a nuclear payload for a missile.”
Still, I.A.E.A. inspectors are in Iran, inspections are vigorous at the Natanz plant, everything there is tagged, Iran is a signatory to the nonproliferation treaty and U.S. intelligence still holds that Iran has not made the decision to build a weapon.
It remains unclear whether Iran is in the nuclear ambiguity or much riskier nuclear weapons game. But it is clear that there is still time — at least a couple of years — for a bargain that would persuade Iran to do what Brazil, Argentina and South Africa did before it.
7. The shifts since the June 12 elections are seismic. A vicious clampdown has estranged millions of Iranians from the regime, creating a situation not unlike Poland’s in the 1980s. This does not mean change is imminent. It does mean the theocracy faces a people who have seen through it. As the Iranian-Canadian philosopher Ramin Jahanbegloo of the University of Toronto told me, “Violence equals moral and political weakness.”
If restiveness spreads to the Labor movement, as in 1979, or the anger of the religious establishment in Qom escalates, all bets are off. Iran is far more volatile than a year ago. I doubt that it could manage a peaceful transition were Khamenei, 70, to die.
The West, with its historical debt to Iran, owes it to the Iranian people not to surrender to feel-good punitive impulses that will only undermine a centennial struggle for some form of representative government.
A post-zealous Iran that has no illusion about Islamism — been there, done that — is one of the most hopeful societies in the Middle East precisely because the struggle between God’s authority and the people’s is being played out daily. Most Iranians want normal relations with the world, above all.
8.Israel and Iran are not neighbors. Both are strangers — one Jewish, the other Shiite — in the Sunni Arab sea that is the Middle East. They have never fought a war. They enjoyed everything short of diplomatic relations under the shah and productive relations for a decade after the revolution, when Israel sided with Iran against Iraq. Their enmity is fierce but not inevitable.
For Israel, already at war with Arabs, opening a new war front against Persia would be disastrous: Muslim anger would overflow. Hezbollah and Hamas would do their worst. Nobody in the Islamic world would distinguish between Israel and the United States, straining Israel’s most important alliance and leaving Obama’s outreach to Muslims in shreds. Israeli security would not be advanced; it would be undermined.
U.S. security and the American quest for stability in Iraq and Afghanistan would be compromised. Israel can prevent an Iranian bomb through working with America on measures short of war. Its own large nuclear arsenal and second strike capacity gives it the assurances it needs to pursue that course.
9.A peaceful Iraq, a quieter Afghanistan and any Israeli-Palestinian rapprochement demand Iranian involvement. Outside the tent Iran is a disruptive force. Inside the tent it can help America on multiple fronts and outgrow its violent revolutionary impetuosity. That’s still a game-changing proposition, as radical as the U.S.-China breakthrough of 1972 that changed the world. Obama must shut out the baying crowds and focus on the prize.
10.Iran is the original Heartbreak Hotel. It crushes people with its tragedy. Since at least the 1930s it has veered between forced westernization (“westoxification” to its critics) and theocratic imposition, banning the hijab and then making it compulsory, reaching for pluralism and then crushing it, opening its society and then slamming it shut.
Now, in 2010, a reformist movement, often led by brave women, trying to chart a middle course — true to Iran’s Shiite faith but also to its republican instincts — has been bloodied before our eyes. Classical Shiism envisages secular governance on earth not the now bankrupted rule of a purported representative of the Prophet.
It is time. It is time for Iran to find the balance between faith and pluralism that has eluded it for a century. It is time for the United States to help Iran’s emergence from isolation — not with Palin’s jingoism, nor empty punishments, nor bombs — but through firmness allied to creative diplomacy and sustained involvement.
By ROGER COHEN
PARIS — A year has passed since President Obama’s groundbreaking Nowruz offer to Iran of engagement based on mutual respect. Iran is now a different country, its divided regime weaker and confronted by the Green movement, the strongest expression of people power in the Middle East and a beacon for the region.
Obama’s outreach has achieved this: the unsettling of Iran’s revolutionary power structure. That alone was worth the gambit. But the 31-year gridlock in Iranian-American relations endures. Sarah Palin, no less, is now urging Obama to “declare war on Iran” to save his presidency. She’s not alone. Daniel Pipes, the conservative commentator, called a recent National Review column: “How to save the Obama Presidency: Bomb Iran.”
There’s nothing new in U.S. hawks reducing Iran to a nuclear abstraction, its 70 million citizens subsumed into a putative warhead, its civilization ignored and its historical grievances against the United States glossed over — all in the name of making Persia a U.S. electoral pawn and a threat that demands bombs.
But the war option remains unthinkable, a potential disaster for the United States and Israel. It’s therefore worth outlining, before the drumbeat intensifies in the run-up to the mid-term U.S. elections, 10 truths about Iran.
1.Iran’s hardliners thrive on isolation. The game-changing pursuit of dialogue with Iran is not incompatible with support of the Green movement; rather it complements that backing.
Obama must denounce the rape-and-repress post-election crackdown and speak out for Iranians’ right to peaceful protest even as he seeks to overcome through negotiation the poisonous U.S.-Iranian psychosis. Engagement brought us further in one year than axis-of-evil U.S. grandstanding did in seven.
As Andrew Parasiliti of the International Institute for Strategic Studies has said, “Engagement with Iran is a piece of the process for change in Iran — not a detriment to it.”
2. The Iranian response to Obama has been erratic, not least in the aborted Geneva deal of Oct. 1, 2009, that would have seen Iran’s low enriched uranium (L.E.U.) shipped out the country and the eventual return of uranium enriched to 20 percent (well below weapons grade) for use in a Tehran medical research reactor.
The crumbling of this accord, victim of Iran’s political divisions, left Obama and his top Iran aides bitterly frustrated. They are to this day. It would have created breathing space for broader talks.
But Iran says the idea is alive: “We think all parties have shown their political will to fulfill this exchange” (Foreign Minister Manouchehr Mottaki, Feb. 5). Or: “We are ready for a fuel exchange within a fair framework. We are still ready for an exchange, even with America” (President Mahmoud Ahmadinejad, Feb. 16).
Skepticism is in order given Iran’s track record, but if the aim is to get the L.E.U. out of Iranian hands and into safe hands — Japan’s perhaps, or that of the International Atomic Energy Agency (I.A.E.A.) — maximum flexibility should be deployed. This deal is still a door opener. Sanctions are a cul-de-sac.
3. Deterrence is powerful. The United States should, as Hillary Clinton has suggested, be building a “defense umbrella” for friendly gulf states alarmed by Iran’s nuclear program. The cleverest remark of Defense Secretary Robert Gates on Iran was: “The only way you end up not having a nuclear-capable Iran is for the Iranian government to decide that their security is diminished by having those weapons.”
No better way to ensure that exists than beefing up military assistance to Iran’s neighbors. Remember, Ali Khamenei, the supreme leader, is the “Guardian of the Revolution.” Job No. 1 for him is preservation. Iran will not build a bomb — forbidden by his own fatwa — if convinced its price is the revolutionary regime itself.
4.Sanctions will not alter Iran’s policy, and will further enrich the Revolutionary Guards who control sanction-circumventing channels from Dubai, but they will buy some time for further probing of engagement.
I’m told that’s how Obama, who remains intellectually committed to the idea of an Iran breakthrough, views them: a necessity in the light of Congressional and Israeli pressure, but not a likely means to get sanctions-inured Iran to change course.
It’s interesting that Clinton is now talking of sanctions in the “next several months” rather than 30 to 60 days. That’s encouraging. New sanctions, to which China will pay no more than lip service, equal old failure.
5.Attacking Iran has known consequences. Saddam Hussein did so in 1980 — and thereby cemented Ayatollah Khomeini’s theocratic revolution by uniting diverse factions (socialist, liberal and others) in national defense.
Because the United States and Europe armed Iraq in that war, and Saddam then gassed the Iranians, resentment runs deep: I’ve often been shown war wounds in Tehran on arms and legs as a single word is uttered, “America.” The generation of young officers in that war, like Ahmadinejad, now runs Iran and constitutes the New Right. (Blowback is not limited to Afghanistan.) But most Iranians are under 35 and drawn to the United States.
The one sure way to defeat the Green movement, frustrate Iranian youth, unite Iranians in patriotic defiance, reinforce the New Right, put Iran on a crash course to a bomb, and buttress the regime — as in 1980 — is to attack Iran’s nuclear facilities. As Gates has said, “There is no military option that does anything more than buy time” — and not much, at that.
6.Iran’s defiance of U.N. resolutions to cease enrichment and its pattern of concealment have, as the International Atomic Energy Agency recently noted, raised concerns about possible “past or current undisclosed activities related to the development of a nuclear payload for a missile.”
Still, I.A.E.A. inspectors are in Iran, inspections are vigorous at the Natanz plant, everything there is tagged, Iran is a signatory to the nonproliferation treaty and U.S. intelligence still holds that Iran has not made the decision to build a weapon.
It remains unclear whether Iran is in the nuclear ambiguity or much riskier nuclear weapons game. But it is clear that there is still time — at least a couple of years — for a bargain that would persuade Iran to do what Brazil, Argentina and South Africa did before it.
7. The shifts since the June 12 elections are seismic. A vicious clampdown has estranged millions of Iranians from the regime, creating a situation not unlike Poland’s in the 1980s. This does not mean change is imminent. It does mean the theocracy faces a people who have seen through it. As the Iranian-Canadian philosopher Ramin Jahanbegloo of the University of Toronto told me, “Violence equals moral and political weakness.”
If restiveness spreads to the Labor movement, as in 1979, or the anger of the religious establishment in Qom escalates, all bets are off. Iran is far more volatile than a year ago. I doubt that it could manage a peaceful transition were Khamenei, 70, to die.
The West, with its historical debt to Iran, owes it to the Iranian people not to surrender to feel-good punitive impulses that will only undermine a centennial struggle for some form of representative government.
A post-zealous Iran that has no illusion about Islamism — been there, done that — is one of the most hopeful societies in the Middle East precisely because the struggle between God’s authority and the people’s is being played out daily. Most Iranians want normal relations with the world, above all.
8.Israel and Iran are not neighbors. Both are strangers — one Jewish, the other Shiite — in the Sunni Arab sea that is the Middle East. They have never fought a war. They enjoyed everything short of diplomatic relations under the shah and productive relations for a decade after the revolution, when Israel sided with Iran against Iraq. Their enmity is fierce but not inevitable.
For Israel, already at war with Arabs, opening a new war front against Persia would be disastrous: Muslim anger would overflow. Hezbollah and Hamas would do their worst. Nobody in the Islamic world would distinguish between Israel and the United States, straining Israel’s most important alliance and leaving Obama’s outreach to Muslims in shreds. Israeli security would not be advanced; it would be undermined.
U.S. security and the American quest for stability in Iraq and Afghanistan would be compromised. Israel can prevent an Iranian bomb through working with America on measures short of war. Its own large nuclear arsenal and second strike capacity gives it the assurances it needs to pursue that course.
9.A peaceful Iraq, a quieter Afghanistan and any Israeli-Palestinian rapprochement demand Iranian involvement. Outside the tent Iran is a disruptive force. Inside the tent it can help America on multiple fronts and outgrow its violent revolutionary impetuosity. That’s still a game-changing proposition, as radical as the U.S.-China breakthrough of 1972 that changed the world. Obama must shut out the baying crowds and focus on the prize.
10.Iran is the original Heartbreak Hotel. It crushes people with its tragedy. Since at least the 1930s it has veered between forced westernization (“westoxification” to its critics) and theocratic imposition, banning the hijab and then making it compulsory, reaching for pluralism and then crushing it, opening its society and then slamming it shut.
Now, in 2010, a reformist movement, often led by brave women, trying to chart a middle course — true to Iran’s Shiite faith but also to its republican instincts — has been bloodied before our eyes. Classical Shiism envisages secular governance on earth not the now bankrupted rule of a purported representative of the Prophet.
It is time. It is time for Iran to find the balance between faith and pluralism that has eluded it for a century. It is time for the United States to help Iran’s emergence from isolation — not with Palin’s jingoism, nor empty punishments, nor bombs — but through firmness allied to creative diplomacy and sustained involvement.
U.S. Enriches Companies Defying Its Policy on Iran
NYtimes
March 6, 2010
By JO BECKER and RON NIXON
The federal government has awarded more than $107 billion in contract payments, grants and other benefits over the past decade to foreign and multinational American companies while they were doing business in Iran, despite Washington’s efforts to discourage investment there, records show.
That includes nearly $15 billion paid to companies that defied American sanctions law by making large investments that helped Iran develop its vast oil and gas reserves.
For years, the United States has been pressing other nations to join its efforts to squeeze the Iranian economy, in hopes of reining in Tehran’s nuclear ambitions. Now, with the nuclear standoff hardening and Iran rebuffing American diplomatic outreach, the Obama administration is trying to win a tough new round of United Nations sanctions.
But a New York Times analysis of federal records, company reports and other documents shows that both the Obama and Bush administrations have sent mixed messages to the corporate world when it comes to doing business in Iran, rewarding companies whose commercial interests conflict with American security goals.
Many of those companies are enmeshed in the most vital elements of Iran’s economy. More than two-thirds of the government money went to companies doing business in Iran’s energy industry — a huge source of revenue for the Iranian government and a stronghold of the increasingly powerful Islamic Revolutionary Guards Corps, a primary focus of the Obama administration’s proposed sanctions because it oversees Iran’s nuclear and missile programs.
Other companies are involved in auto manufacturing and distribution, another important sector of the Iranian economy with links to the Revolutionary Guards. One supplied container ship motors to IRISL, a government-owned shipping line that was subsequently blacklisted by the United States for concealing military cargo.
Beyond $102 billion in United States government contract payments since 2000 — to do everything from building military housing to providing platinum to the United States Mint — the companies and their subsidiaries have reaped a variety of benefits. They include nearly $4.5 billion in loans and loan guarantees from the Export-Import Bank, a federal agency that underwrites the export of American goods and services, and more than $500 million in grants for work that includes cancer research and the turning of agricultural byproducts into fuel.
In addition, oil and gas companies that have done business in Iran have over the years won lucrative drilling leases for close to 14 million acres of offshore and onshore federal land.
In recent months, a number of companies have decided to pull out of Iran, because of a combination of pressure by the United States and other Western governments, “terrorism free” divestment campaigns by shareholders and the difficulty of doing business with Iran’s government. And several oil and gas companies are holding off on new investment, waiting to see what shape new sanctions may assume.
The Obama administration points to that record, saying that it has successfully pressed allied governments and even reached out directly to corporate officials to dissuade investment in Iran, particularly in the energy industry. In addition, an American effort over many years to persuade banks to leave the country has isolated Iran from much of the international financial system, making it more difficult to do deals there.
“We are very aggressive, using a range of tools,” said Denis McDonough, chief of staff to the National Security Council.
The government can, and does, bar American companies from most types of trade with Iran, under a broad embargo that has been in place since the 1990s. But as The Times’s analysis illustrates, multiple administrations have struggled diplomatically, politically and practically to exert American authority over companies outside the embargo’s reach — foreign companies and the foreign subsidiaries of American ones.
Indeed, of the 74 companies The Times identified as doing business with both the United States government and Iran, 49 continue to do business there with no announced plans to leave.
One of the government’s most powerful tools, at least on paper, to influence the behavior of companies beyond the jurisdiction of the embargo is the Iran Sanctions Act, devised to punish foreign companies that invest more than $20 million in a given year to develop Iran’s oil and gas fields. But in the 14 years since the law was passed, the government has never enforced it, in part for fear of angering America’s allies.
That has given rise to situations like the one involving the South Korean engineering giant Daelim Industrial, which in 2007 won a $700 million contract to upgrade an Iranian oil refinery.
According to the Congressional Research Service, the deal appeared to violate the Iran Sanctions Act, meaning Daelim could have faced a range of punishments, including denial of federal contracts. That is because the law covers not only direct investments, such as the purchase of shares and deals that yield royalties, but also contracts similar to Daelim’s to manage oil and gas development projects.
But in 2009 the United States Army awarded the company a $111 million contract to build housing in a military base in South Korea. Just months later, Daelim, which disputes that its contracts violated the letter of the law, announced a new $600 million deal to help develop the South Pars gas field in Iran.
Now, though, frustration over Iran’s intransigence has spawned a growing, if still piecemeal, movement to more effectively use the power of the government purse to turn companies away from investing there.
Nineteen states — including New York, California and Florida — have rules that bar or discourage their pension funds from investing in companies that do certain types of business in Iran. Congress is considering legislation that would have the federal government follow suit, by mandating that companies that invest in Iran’s energy industry be denied federal contracts. The provision is modeled on an existing law dealing with war-torn Sudan.
Obama administration officials, while indicating that they were open to the idea, called it only one variable in a complex equation. Right now, the president’s priority is on breaking down Chinese resistance to the new United Nations sanctions, which apply across borders and are aimed squarely at entities that support Iran’s nuclear program.
But Representative Ron Klein, a Florida Democrat who wrote the contracting provision moving through Congress with the help of a lobbying group called United Against Nuclear Iran, said it offered a way forward with or without international agreement.
“We need to send a strong message to corporations that we’re not going to continue to allow them to economically enable the Iranian government to continue to do what they have been doing,” Mr. Klein said.
An Unused Tool
Sending a strong message was Congress’s intention when it passed the Iran Sanctions Act in 1996.
The law gives the president a menu of possible punishments he can choose to levy against offending companies. Not only do they risk losing federal contracts, but they can also be prevented from receiving Export-Import Bank loans, obtaining American bank loans over $10 million in a given year, exporting their goods to the United States, purchasing licensed American military technology and, in the case of financial firms, serving as a primary dealer in United States government bonds or as a repository for government funds.
Congress is now considering expanding its purview to a broader array of energy-related activities, including selling gasoline to Iran, which despite its vast oil and gas reserves has antiquated refineries that leave it heavily dependent on imports.
From the beginning, though, the law proved difficult to enforce.
European allies howled that it constituted an improper attempt to apply American law in other countries. Exercising an option to waive the law in the name of national security, the Clinton administration in 1998 declined to penalize the first violator — a consortium led by the French oil company TotalFina, now known as Total.
The administration also indicated that it would waive future penalties against European companies, winning in return tougher European export controls on technology that Iran could convert to military use.
Stuart E. Eizenstat, who as the deputy Treasury secretary handled those negotiations, said the law let Iran “exploit divisions between the U.S. and our European allies.”
Waiving it, though, was followed by additional investments in Iran — and more government largesse for the companies making them.
In 1999, for instance, Royal Dutch Shell signed an $800 million deal to develop two Iranian oil fields. Since then, Shell has won federal contract payments and grants totaling more than $11 billion, mostly for providing fuel to the American military, as well as $200 million in Export-Import loan guarantee and drilling rights to federal lands, records show.
Shell has a second Iranian development deal pending, but officials say they are awaiting the results of a feasibility study. In the meantime, the company continues to receive payments from Iran for its 1999 investment and sells gasoline and lubricants there.
Records show Shell is one of seven companies that challenged the Iran Sanctions Act and received federal benefits.
John R. Bolton, who dealt with Iran as an under secretary of state and United Nations ambassador in the Bush administration, said failing to enforce the law by punishing such companies both sent “a signal to the Iranians that we’re not serious” and undercut Washington’s credibility when it did threaten action.
Mr. Bolton recalled what happened in 2004 when he suggested to the Japanese ambassador that Japan’s state-controlled oil exploration company, Inpex, might be penalized for a $2 billion investment in the Azadegan field in Iran. “The Japanese ambassador said, ‘Well, that’s interesting. How come you’ve never sanctioned a European Union company?’ ” Mr. Bolton recounted.
Inpex was never penalized, though several years later it decided to reduce its stake in the Iranian project. And to Mr. Bolton’s chagrin, the Bush administration did not act on reports about other such investments, neither waiving the law nor penalizing violators.
Recently, after 50 lawmakers from both parties complained to President Obama about the lack of enforcement and sent him a list of companies that apparently violated the law, the State Department announced a preliminary investigation. Officials said that they were looking at 27 deals, and that while some appeared to have been “carefully constructed” to get around the letter of the law, they had identified a number of problematic cases and were focusing on companies still active in Iran.
Competing Interests
Among the companies on the list Congress sent to the State Department is the Brazilian state-controlled energy conglomerate Petrobras, which last year received a $2 billion Export-Import Bank loan to develop an oil reserve off the coast of Rio de Janeiro. The loan offers a case study in the competing interests officials must confront when it comes to the Iran Sanctions Act.
Despite repeated American entreaties, Petrobras had previously invested $100 million to explore Iran’s offshore oil prospects in the Persian Gulf.
But the Export-Import Bank loan could help create American jobs, since Petrobras would use the money to buy goods and services from American companies. Perhaps more important, it could help develop a source of oil outside the Middle East.
After The Times inquired about the loan, bank officials said that they asked for and received a letter of assurance from Petrobras that it had finished its work in Iran. A senior White House official, in a Nov. 13 e-mail message, said that while it was the administration’s policy to warn companies against such investments, “Brazil is an important U.S. trading partner and our discussions with them are ongoing.”
But if the administration hoped that the loan would bring Brazil in line with its objectives in Iran, it would soon prove mistaken.
On Nov. 23, Iran’s president, Mahmoud Ahmadinejad, visited Brazil, and the two countries agreed to share technical expertise on energy projects. Iranian officials said they might offer Petrobras additional incentives for further investment.
The visit infuriated American officials, who felt it undercut efforts to press Iran on its nuclear program while lending international legitimacy to the Iranian president. Brazil’s relationship with Iran has also complicated American maneuvering at the United Nations, where Brazil holds a rotating seat on the Security Council. Just last week, Brazil’s president, Luiz Inácio Lula da Silva, restated his opposition to the administration’s sanctions proposal, warning, “It is not prudent to push Iran against a wall.”
Carter Lawson, the Export-Import Bank’s deputy general counsel, acknowledged that Mr. Ahmadinejad’s visit was “problematic for us, and it raised our antenna.” He said that since December the bank had been operating under a new budget rule requiring borrowers to certify that they had no continuing operations in Iran’s energy industry, and was carefully monitoring Petrobras’s activities.
In the meantime, Petrobras’s Tehran office remains open. And Diogo Almeida, the acting economic attaché at the Brazilian Embassy in Iran, said that while Petrobras was currently assessing how much it could invest in Iran, given the huge discovery off Rio de Janeiro, company officials were in active discussions with the Iranian government and were interested in pursuing new business.
Opportunities for Profit
For all the American rules and focus, there is still plenty of room for companies to profit in crucial areas of Iran’s economy without fear of reprisal or loss of United States government business.
Auto companies doing business in Iran, for instance, received $7.3 billion in federal contracts over the past 10 years. Among them was Mazda, whose cars in Iran are assembled by a company called the Bahman Group. A 45 percent share in Bahman is held by the Sepah Cooperative Foundation, a large investment fund linked to the Revolutionary Guards, according to Iranian news accounts and a 2009 RAND Corporation report prepared for the Defense Department.
A Mazda spokesman declined to comment, saying the company was unaware of the links.
Even companies based in the United States, including some of the biggest federal contractors, can invest in Iran through foreign subsidiaries run independently by non-Americans.
Honeywell, the aviation and aerospace company, has received nearly $13 billion in federal contracts since 2005. That year it acquired Universal Oil Products, whose British subsidiary is working on a project to expand gasoline production at the Arak refinery in Iran. Universal recently received a $25 million federal grant for a clean-energy project in Hawaii.
In a statement, Honeywell said it had told the State Department in January that while it was fulfilling its Arak contract, it would not undertake new projects in Iran.
Ingersoll Rand, another American company with foreign subsidiaries, says it is evaluating its “minor” business in Iran in light of the political climate. But for now, according to a spokesman, Paul Dickard, it continues to sell air-compression systems with a “wide variety of applications,” including in the oil and gas industries and in nuclear power plants.
Senator Byron L. Dorgan, a North Dakota Democrat, tried to close the foreign subsidiary loophole after a furor erupted in 2004 over Halliburton, former Vice President Dick Cheney’s old company, which had used a Cayman Islands subsidiary to sell oil-field services to Iran. But he said he was unable to overcome business opposition.
William A. Reinsch, president of the National Foreign Trade Council, lobbied against Mr. Dorgan’s bill and has opposed other unilateral sanctions. He argues that their futility can be seen in the intransigence of the Iranian government and the way American oil companies have simply been replaced by foreign competitors. Moreover, many foreign companies with business interests in Iran are also large American employers; deny them federal contracts and other benefits, Mr. Reinsch said, “and it’s those workers who will pay the price.”
But Hans Sandberg, senior vice president of Atlas Copco, which is based in Sweden, offered a different perspective. Atlas Copco’s sales of mining and construction equipment to Iran are dwarfed by its American business, including military contracts. If forced to choose, he said: “It would be no problem. We wouldn’t trade with Iran.”
March 6, 2010
By JO BECKER and RON NIXON
The federal government has awarded more than $107 billion in contract payments, grants and other benefits over the past decade to foreign and multinational American companies while they were doing business in Iran, despite Washington’s efforts to discourage investment there, records show.
That includes nearly $15 billion paid to companies that defied American sanctions law by making large investments that helped Iran develop its vast oil and gas reserves.
For years, the United States has been pressing other nations to join its efforts to squeeze the Iranian economy, in hopes of reining in Tehran’s nuclear ambitions. Now, with the nuclear standoff hardening and Iran rebuffing American diplomatic outreach, the Obama administration is trying to win a tough new round of United Nations sanctions.
But a New York Times analysis of federal records, company reports and other documents shows that both the Obama and Bush administrations have sent mixed messages to the corporate world when it comes to doing business in Iran, rewarding companies whose commercial interests conflict with American security goals.
Many of those companies are enmeshed in the most vital elements of Iran’s economy. More than two-thirds of the government money went to companies doing business in Iran’s energy industry — a huge source of revenue for the Iranian government and a stronghold of the increasingly powerful Islamic Revolutionary Guards Corps, a primary focus of the Obama administration’s proposed sanctions because it oversees Iran’s nuclear and missile programs.
Other companies are involved in auto manufacturing and distribution, another important sector of the Iranian economy with links to the Revolutionary Guards. One supplied container ship motors to IRISL, a government-owned shipping line that was subsequently blacklisted by the United States for concealing military cargo.
Beyond $102 billion in United States government contract payments since 2000 — to do everything from building military housing to providing platinum to the United States Mint — the companies and their subsidiaries have reaped a variety of benefits. They include nearly $4.5 billion in loans and loan guarantees from the Export-Import Bank, a federal agency that underwrites the export of American goods and services, and more than $500 million in grants for work that includes cancer research and the turning of agricultural byproducts into fuel.
In addition, oil and gas companies that have done business in Iran have over the years won lucrative drilling leases for close to 14 million acres of offshore and onshore federal land.
In recent months, a number of companies have decided to pull out of Iran, because of a combination of pressure by the United States and other Western governments, “terrorism free” divestment campaigns by shareholders and the difficulty of doing business with Iran’s government. And several oil and gas companies are holding off on new investment, waiting to see what shape new sanctions may assume.
The Obama administration points to that record, saying that it has successfully pressed allied governments and even reached out directly to corporate officials to dissuade investment in Iran, particularly in the energy industry. In addition, an American effort over many years to persuade banks to leave the country has isolated Iran from much of the international financial system, making it more difficult to do deals there.
“We are very aggressive, using a range of tools,” said Denis McDonough, chief of staff to the National Security Council.
The government can, and does, bar American companies from most types of trade with Iran, under a broad embargo that has been in place since the 1990s. But as The Times’s analysis illustrates, multiple administrations have struggled diplomatically, politically and practically to exert American authority over companies outside the embargo’s reach — foreign companies and the foreign subsidiaries of American ones.
Indeed, of the 74 companies The Times identified as doing business with both the United States government and Iran, 49 continue to do business there with no announced plans to leave.
One of the government’s most powerful tools, at least on paper, to influence the behavior of companies beyond the jurisdiction of the embargo is the Iran Sanctions Act, devised to punish foreign companies that invest more than $20 million in a given year to develop Iran’s oil and gas fields. But in the 14 years since the law was passed, the government has never enforced it, in part for fear of angering America’s allies.
That has given rise to situations like the one involving the South Korean engineering giant Daelim Industrial, which in 2007 won a $700 million contract to upgrade an Iranian oil refinery.
According to the Congressional Research Service, the deal appeared to violate the Iran Sanctions Act, meaning Daelim could have faced a range of punishments, including denial of federal contracts. That is because the law covers not only direct investments, such as the purchase of shares and deals that yield royalties, but also contracts similar to Daelim’s to manage oil and gas development projects.
But in 2009 the United States Army awarded the company a $111 million contract to build housing in a military base in South Korea. Just months later, Daelim, which disputes that its contracts violated the letter of the law, announced a new $600 million deal to help develop the South Pars gas field in Iran.
Now, though, frustration over Iran’s intransigence has spawned a growing, if still piecemeal, movement to more effectively use the power of the government purse to turn companies away from investing there.
Nineteen states — including New York, California and Florida — have rules that bar or discourage their pension funds from investing in companies that do certain types of business in Iran. Congress is considering legislation that would have the federal government follow suit, by mandating that companies that invest in Iran’s energy industry be denied federal contracts. The provision is modeled on an existing law dealing with war-torn Sudan.
Obama administration officials, while indicating that they were open to the idea, called it only one variable in a complex equation. Right now, the president’s priority is on breaking down Chinese resistance to the new United Nations sanctions, which apply across borders and are aimed squarely at entities that support Iran’s nuclear program.
But Representative Ron Klein, a Florida Democrat who wrote the contracting provision moving through Congress with the help of a lobbying group called United Against Nuclear Iran, said it offered a way forward with or without international agreement.
“We need to send a strong message to corporations that we’re not going to continue to allow them to economically enable the Iranian government to continue to do what they have been doing,” Mr. Klein said.
An Unused Tool
Sending a strong message was Congress’s intention when it passed the Iran Sanctions Act in 1996.
The law gives the president a menu of possible punishments he can choose to levy against offending companies. Not only do they risk losing federal contracts, but they can also be prevented from receiving Export-Import Bank loans, obtaining American bank loans over $10 million in a given year, exporting their goods to the United States, purchasing licensed American military technology and, in the case of financial firms, serving as a primary dealer in United States government bonds or as a repository for government funds.
Congress is now considering expanding its purview to a broader array of energy-related activities, including selling gasoline to Iran, which despite its vast oil and gas reserves has antiquated refineries that leave it heavily dependent on imports.
From the beginning, though, the law proved difficult to enforce.
European allies howled that it constituted an improper attempt to apply American law in other countries. Exercising an option to waive the law in the name of national security, the Clinton administration in 1998 declined to penalize the first violator — a consortium led by the French oil company TotalFina, now known as Total.
The administration also indicated that it would waive future penalties against European companies, winning in return tougher European export controls on technology that Iran could convert to military use.
Stuart E. Eizenstat, who as the deputy Treasury secretary handled those negotiations, said the law let Iran “exploit divisions between the U.S. and our European allies.”
Waiving it, though, was followed by additional investments in Iran — and more government largesse for the companies making them.
In 1999, for instance, Royal Dutch Shell signed an $800 million deal to develop two Iranian oil fields. Since then, Shell has won federal contract payments and grants totaling more than $11 billion, mostly for providing fuel to the American military, as well as $200 million in Export-Import loan guarantee and drilling rights to federal lands, records show.
Shell has a second Iranian development deal pending, but officials say they are awaiting the results of a feasibility study. In the meantime, the company continues to receive payments from Iran for its 1999 investment and sells gasoline and lubricants there.
Records show Shell is one of seven companies that challenged the Iran Sanctions Act and received federal benefits.
John R. Bolton, who dealt with Iran as an under secretary of state and United Nations ambassador in the Bush administration, said failing to enforce the law by punishing such companies both sent “a signal to the Iranians that we’re not serious” and undercut Washington’s credibility when it did threaten action.
Mr. Bolton recalled what happened in 2004 when he suggested to the Japanese ambassador that Japan’s state-controlled oil exploration company, Inpex, might be penalized for a $2 billion investment in the Azadegan field in Iran. “The Japanese ambassador said, ‘Well, that’s interesting. How come you’ve never sanctioned a European Union company?’ ” Mr. Bolton recounted.
Inpex was never penalized, though several years later it decided to reduce its stake in the Iranian project. And to Mr. Bolton’s chagrin, the Bush administration did not act on reports about other such investments, neither waiving the law nor penalizing violators.
Recently, after 50 lawmakers from both parties complained to President Obama about the lack of enforcement and sent him a list of companies that apparently violated the law, the State Department announced a preliminary investigation. Officials said that they were looking at 27 deals, and that while some appeared to have been “carefully constructed” to get around the letter of the law, they had identified a number of problematic cases and were focusing on companies still active in Iran.
Competing Interests
Among the companies on the list Congress sent to the State Department is the Brazilian state-controlled energy conglomerate Petrobras, which last year received a $2 billion Export-Import Bank loan to develop an oil reserve off the coast of Rio de Janeiro. The loan offers a case study in the competing interests officials must confront when it comes to the Iran Sanctions Act.
Despite repeated American entreaties, Petrobras had previously invested $100 million to explore Iran’s offshore oil prospects in the Persian Gulf.
But the Export-Import Bank loan could help create American jobs, since Petrobras would use the money to buy goods and services from American companies. Perhaps more important, it could help develop a source of oil outside the Middle East.
After The Times inquired about the loan, bank officials said that they asked for and received a letter of assurance from Petrobras that it had finished its work in Iran. A senior White House official, in a Nov. 13 e-mail message, said that while it was the administration’s policy to warn companies against such investments, “Brazil is an important U.S. trading partner and our discussions with them are ongoing.”
But if the administration hoped that the loan would bring Brazil in line with its objectives in Iran, it would soon prove mistaken.
On Nov. 23, Iran’s president, Mahmoud Ahmadinejad, visited Brazil, and the two countries agreed to share technical expertise on energy projects. Iranian officials said they might offer Petrobras additional incentives for further investment.
The visit infuriated American officials, who felt it undercut efforts to press Iran on its nuclear program while lending international legitimacy to the Iranian president. Brazil’s relationship with Iran has also complicated American maneuvering at the United Nations, where Brazil holds a rotating seat on the Security Council. Just last week, Brazil’s president, Luiz Inácio Lula da Silva, restated his opposition to the administration’s sanctions proposal, warning, “It is not prudent to push Iran against a wall.”
Carter Lawson, the Export-Import Bank’s deputy general counsel, acknowledged that Mr. Ahmadinejad’s visit was “problematic for us, and it raised our antenna.” He said that since December the bank had been operating under a new budget rule requiring borrowers to certify that they had no continuing operations in Iran’s energy industry, and was carefully monitoring Petrobras’s activities.
In the meantime, Petrobras’s Tehran office remains open. And Diogo Almeida, the acting economic attaché at the Brazilian Embassy in Iran, said that while Petrobras was currently assessing how much it could invest in Iran, given the huge discovery off Rio de Janeiro, company officials were in active discussions with the Iranian government and were interested in pursuing new business.
Opportunities for Profit
For all the American rules and focus, there is still plenty of room for companies to profit in crucial areas of Iran’s economy without fear of reprisal or loss of United States government business.
Auto companies doing business in Iran, for instance, received $7.3 billion in federal contracts over the past 10 years. Among them was Mazda, whose cars in Iran are assembled by a company called the Bahman Group. A 45 percent share in Bahman is held by the Sepah Cooperative Foundation, a large investment fund linked to the Revolutionary Guards, according to Iranian news accounts and a 2009 RAND Corporation report prepared for the Defense Department.
A Mazda spokesman declined to comment, saying the company was unaware of the links.
Even companies based in the United States, including some of the biggest federal contractors, can invest in Iran through foreign subsidiaries run independently by non-Americans.
Honeywell, the aviation and aerospace company, has received nearly $13 billion in federal contracts since 2005. That year it acquired Universal Oil Products, whose British subsidiary is working on a project to expand gasoline production at the Arak refinery in Iran. Universal recently received a $25 million federal grant for a clean-energy project in Hawaii.
In a statement, Honeywell said it had told the State Department in January that while it was fulfilling its Arak contract, it would not undertake new projects in Iran.
Ingersoll Rand, another American company with foreign subsidiaries, says it is evaluating its “minor” business in Iran in light of the political climate. But for now, according to a spokesman, Paul Dickard, it continues to sell air-compression systems with a “wide variety of applications,” including in the oil and gas industries and in nuclear power plants.
Senator Byron L. Dorgan, a North Dakota Democrat, tried to close the foreign subsidiary loophole after a furor erupted in 2004 over Halliburton, former Vice President Dick Cheney’s old company, which had used a Cayman Islands subsidiary to sell oil-field services to Iran. But he said he was unable to overcome business opposition.
William A. Reinsch, president of the National Foreign Trade Council, lobbied against Mr. Dorgan’s bill and has opposed other unilateral sanctions. He argues that their futility can be seen in the intransigence of the Iranian government and the way American oil companies have simply been replaced by foreign competitors. Moreover, many foreign companies with business interests in Iran are also large American employers; deny them federal contracts and other benefits, Mr. Reinsch said, “and it’s those workers who will pay the price.”
But Hans Sandberg, senior vice president of Atlas Copco, which is based in Sweden, offered a different perspective. Atlas Copco’s sales of mining and construction equipment to Iran are dwarfed by its American business, including military contracts. If forced to choose, he said: “It would be no problem. We wouldn’t trade with Iran.”
U.S.-Russia treaty stalls over Obama missile defense plan
Jonathan S. Landay | McClatchy Newspapers
last updated: March 02, 2010 07:52:41 AM
WASHINGTON — Negotiations to complete a new U.S.-Russia nuclear arms treaty have stalled over a Russian demand for the option to withdraw unilaterally if Moscow determines that U.S. missile defenses would threaten its intercontinental nuclear missile force, a senior U.S. official said Monday.
Similar "unilateral statements" have been included in previous arms control treaties, and the former Bush administration used one in 2002 to abrogate the 1972 Anti-Ballistic Missile Treaty with the former Soviet Union.
The Obama administration, however, has rejected the Russian demand, fearing that it could make it harder to win the Republican votes needed for Senate ratification of the new nuclear arms pact.
"The issue here is what do the Russians feel they need, but also keeping an eye on not trying to complicate the ratification process," said a senior U.S. official, who requested anonymity because of the delicacy of the negotiations.
Sixty-seven votes are required to ratify the treaty in the Senate, but President Barack Obama's Democratic Party now controls 59 seats. The treaty is expected to limit deployed U.S. and Russian nuclear arsenals to 1,500-to-1,600 warheads each, a reduction from a limit of 2,200 due to take effect on Dec. 31, 2012.
Obama tried unsuccessfully to resolve the U.S. missile defense issue last week by telephone with his Russian counterpart, Dmitri Medvedev, the senior U.S. official told McClatchy. Secretary of State Hillary Clinton also failed to find a solution in a call with her Russian counterpart, Foreign Secretary Sergei Lavrov.
The U.S. negotiating team, led by Assistant Secretary of State Rose Gottemoeller, returned to Washington from Geneva Monday for consultations with top officials aimed at finding a formula to break the impasse, the senior U.S. official said.
"We don't think that these problems are insurmountable," he said. "We are trying to find a way to manage Russian concerns."
Russian and U.S. negotiators aimed to finish the drafting a successor accord to the 1991 Strategic Arms Reduction Treaty, C-START, before it expired on Dec. 5, but a number of issues have hampered completion of the talks.
The latest complication centers on Obama's decision to deploy U.S. anti-missile interceptors in Romania as part of a plan to defend Europe against medium-range missile attacks from Iran.
Iran has missiles capable of reaching parts of Europe, and U.S. and European officials charge that it's developing nuclear weapons, an allegation that Iranian officials deny.
Obama's decision replaced a Bush administration plan to place a tracking radar in Poland and 20 interceptors in the Czech Republic to shield the U.S. from a limited Iranian intercontinental ballistic missile strike. Iran currently doesn't have such missiles.
Russia hailed Obama for canceling the Bush plan, but Moscow has raised the same objection to Obama's plan, contending that the medium-range interceptors that would be deployed in Romania could threaten Russia's long-range nuclear missile force.
"Russia has serious questions regarding the true purpose of the U.S. missile defense in Romania," Russian Foreign Ministry spokesman Andrei Nesterenko said in a statement Friday. "That is why we will consistently oppose any dubious unilateral actions in the missile defense field."
Experts said that the initial deployment of 20 SM-3 interceptors in Romania wouldn't threaten Russian intercontinental ballistic missiles because the U.S. projectiles have a 900-kilometer (560 mile) range and are too slow to catch the long-range Russian missiles.
"The Standard Three Missile has a configuration that gives it a range of 900 kilometers. That doesn't get it to Russia," said Steven Pifer, a former U.S. ambassador to Ukraine and arms control expert who's with of The Brookings Institution, a center-left research group in Washington. "They will not endanger Russia's ability to have a strong robust deterrent."
Moscow, however, worries that the next generation of the missile will be fast enough to knock out its long-range weapons, a concern fueled by the absence of a treaty limiting the number of interceptors that the U.S. can deploy in Romania, Pifer and other experts said.
State Department spokesman P.J. Crowley said that the U.S. would "continue to work these issues with our Russian counterparts, and we will continue to try to assuage their concerns that our plans for a missile defense in Europe are in no way directed at Russia."
MORE FROM MCCLATCHY
U.S., Russia near treaty to reduce nuclear arsenals
War game shows how attacking Iran could backfire
Iran may be seeking nuclear warhead, U.N. watchdog says
Hand of diplomacy not working, Obama may get tough on Iran
last updated: March 02, 2010 07:52:41 AM
WASHINGTON — Negotiations to complete a new U.S.-Russia nuclear arms treaty have stalled over a Russian demand for the option to withdraw unilaterally if Moscow determines that U.S. missile defenses would threaten its intercontinental nuclear missile force, a senior U.S. official said Monday.
Similar "unilateral statements" have been included in previous arms control treaties, and the former Bush administration used one in 2002 to abrogate the 1972 Anti-Ballistic Missile Treaty with the former Soviet Union.
The Obama administration, however, has rejected the Russian demand, fearing that it could make it harder to win the Republican votes needed for Senate ratification of the new nuclear arms pact.
"The issue here is what do the Russians feel they need, but also keeping an eye on not trying to complicate the ratification process," said a senior U.S. official, who requested anonymity because of the delicacy of the negotiations.
Sixty-seven votes are required to ratify the treaty in the Senate, but President Barack Obama's Democratic Party now controls 59 seats. The treaty is expected to limit deployed U.S. and Russian nuclear arsenals to 1,500-to-1,600 warheads each, a reduction from a limit of 2,200 due to take effect on Dec. 31, 2012.
Obama tried unsuccessfully to resolve the U.S. missile defense issue last week by telephone with his Russian counterpart, Dmitri Medvedev, the senior U.S. official told McClatchy. Secretary of State Hillary Clinton also failed to find a solution in a call with her Russian counterpart, Foreign Secretary Sergei Lavrov.
The U.S. negotiating team, led by Assistant Secretary of State Rose Gottemoeller, returned to Washington from Geneva Monday for consultations with top officials aimed at finding a formula to break the impasse, the senior U.S. official said.
"We don't think that these problems are insurmountable," he said. "We are trying to find a way to manage Russian concerns."
Russian and U.S. negotiators aimed to finish the drafting a successor accord to the 1991 Strategic Arms Reduction Treaty, C-START, before it expired on Dec. 5, but a number of issues have hampered completion of the talks.
The latest complication centers on Obama's decision to deploy U.S. anti-missile interceptors in Romania as part of a plan to defend Europe against medium-range missile attacks from Iran.
Iran has missiles capable of reaching parts of Europe, and U.S. and European officials charge that it's developing nuclear weapons, an allegation that Iranian officials deny.
Obama's decision replaced a Bush administration plan to place a tracking radar in Poland and 20 interceptors in the Czech Republic to shield the U.S. from a limited Iranian intercontinental ballistic missile strike. Iran currently doesn't have such missiles.
Russia hailed Obama for canceling the Bush plan, but Moscow has raised the same objection to Obama's plan, contending that the medium-range interceptors that would be deployed in Romania could threaten Russia's long-range nuclear missile force.
"Russia has serious questions regarding the true purpose of the U.S. missile defense in Romania," Russian Foreign Ministry spokesman Andrei Nesterenko said in a statement Friday. "That is why we will consistently oppose any dubious unilateral actions in the missile defense field."
Experts said that the initial deployment of 20 SM-3 interceptors in Romania wouldn't threaten Russian intercontinental ballistic missiles because the U.S. projectiles have a 900-kilometer (560 mile) range and are too slow to catch the long-range Russian missiles.
"The Standard Three Missile has a configuration that gives it a range of 900 kilometers. That doesn't get it to Russia," said Steven Pifer, a former U.S. ambassador to Ukraine and arms control expert who's with of The Brookings Institution, a center-left research group in Washington. "They will not endanger Russia's ability to have a strong robust deterrent."
Moscow, however, worries that the next generation of the missile will be fast enough to knock out its long-range weapons, a concern fueled by the absence of a treaty limiting the number of interceptors that the U.S. can deploy in Romania, Pifer and other experts said.
State Department spokesman P.J. Crowley said that the U.S. would "continue to work these issues with our Russian counterparts, and we will continue to try to assuage their concerns that our plans for a missile defense in Europe are in no way directed at Russia."
MORE FROM MCCLATCHY
U.S., Russia near treaty to reduce nuclear arsenals
War game shows how attacking Iran could backfire
Iran may be seeking nuclear warhead, U.N. watchdog says
Hand of diplomacy not working, Obama may get tough on Iran
Encouraging Signs in Afghanistan
WSJ
By IAIN MARTIN
What if the West's war in Afghanistan is in the process of being won? It has become standard practice to presume that this isn't possible and that immersion in a quagmire followed by ignominious retreat is guaranteed.
Much of the discussion among policy makers and commentators has priced in a debilitating stalemate or defeat. But what if these presumptions turn out to be plain wrong?
View Full Image
Associated Press A U.S. soldier returns fire as others seek cover in a battle in Helmand province.
.
There are some encouraging signs of progress becoming visible on the horizon in Afghanistan. Operation Moshtarak in Helmand province got under way in mid-February, with a combined force in the region of 15,000 taking on the Taliban.
It has had some success with various insurgent strongholds taken. Under the direction of ISAF (the International Security Assistance Force) the force is around 60% Afghan.
In Pakistan, the renewed focus on cooperation and assistance from American drones appears to be producing a dividend. One of the most experienced Pakistani commanders in the frontier war with the Taliban, Major Gen. Tariq Khan, told the Times of London that his force of 45,000 has inflicted significant casualties, killed the Taliban leadership and captured bases. Earlier this week Gen. Khan showed off to journalists the recently captured network of caves on the Afghan border reported to have sheltered Osama bin Laden's deputy Ayman al-Zawahiri.
A British defense official said: "The kill-rate is right up. Pakistan remains a problem as it is profoundly unstable, and we do need to keep improving our support for what its government is doing. But there's much to be positive about."
This is all quite different from the unmitigated gloom of a few years ago.
Of course, there are plenty of respected voices prepared to say that apparent progress on both sides of the Afghan-Pakistan border is a mirage. Adam Holloway, a British MP and former soldier who served in Iraq, Bosnia and Afghanistan, has spent time on his own in the country and thinks the die is already cast.
He fears that previous mistakes mean it is too late to defeat an insurgency with deep roots in hatred of outside influence and any central government. What we think of as the Taliban in Afghanistan, but which is actually hundreds of small interrelated groups fighting in their locality, he claims has just opted to melt back into the population for the duration of Operation Moshtarak.
And there are also those who have had enough of the war, full-stop. Following the collapse of the Netherlands' government last month over its attempt to continue a deployment of 2,000 troops it is likely that the Dutch will withdraw this summer. NATO's secretary general, Anders Fogh Rasmussen, felt compelled earlier this week to try and calm Afghan nerves. It wouldn't trigger a rush for the exits: "I can assure you that the alliance will stay committed."
But there has been such widespread fatalism for so long about the prospects in Afghanistan, that there is a danger any progress goes unrecognized. That electorates continue to believe the dual myths of Western impotence and incompetence and cannot compute any kind of victory.
Gen. Stanley McChrystal has been central in this regard in lifting morale. His appointment as head of ISAF and commander of U.S. forces in Afghanistan signalled a newly ambitious approach. He demanded extra troops but emphasized that winning is a possibility. A realistically optimistic commander can make a big difference in battle and over the course of a war.
In this way, improvements in the Afghan military situation can and have been made, particularly since Iraq is no longer the focus for American forces. When that might is brought to bear and combined with better use of intelligence, improved cooperation with Pakistan and the painstaking work of training the Afghan army it has an impact.
I accept that the prospect of a little success carries dangers, too. There may be progress, but it doesn't mean the Americans or their partners should delude themselves into thinking about leaving any time soon.
Forces will be required for decades to hold territory and create the space for Afghan civil society and institutions to develop (they haven't had much success on that front to date). But it isn't preordained to be a disaster: Victory of a kind is possible.
Sarkozy's intervention
Never let it be said that French President Nicolas Sarkozy lacks ambition. On a visit to a Eurocopter plant near Marseilles on Thursday, he confided in workers that he has had it up to here with currency fluctuations, foreign-exchange imbalances and their impact on competitiveness. Earlier this year he called monetary disorder "unacceptable."
Now, he says he has plans to sort it out, by proposing an overhaul of the international monetary system. Precise details, at the time of writing, are thin on the ground.
"If the U.S. dollar loses 50% of its value to the euro, how can it be possible to make up the loss of competitiveness?" Mr. Sarkozy asked.
"At the G-20 by the end of the year, I will try to organize a new international monetary system. We can't go on like this," he said.
On hearing the phrase "I will try to organize a new international monetary system," it is tempting to think dismissively: very best of luck with that, let's see how far you get.
But his latest intervention is a reminder that Mr. Sarkozy is a politician with imagination, utterly unafraid to express himself with vivid directness. He's restless, mercurial, driven and doesn't see his time in office in managerial terms.
Still, if you are expecting the birth of his new international monetary system any time soon, I suggest that you don't hold your breath.
By IAIN MARTIN
What if the West's war in Afghanistan is in the process of being won? It has become standard practice to presume that this isn't possible and that immersion in a quagmire followed by ignominious retreat is guaranteed.
Much of the discussion among policy makers and commentators has priced in a debilitating stalemate or defeat. But what if these presumptions turn out to be plain wrong?
View Full Image
Associated Press A U.S. soldier returns fire as others seek cover in a battle in Helmand province.
.
There are some encouraging signs of progress becoming visible on the horizon in Afghanistan. Operation Moshtarak in Helmand province got under way in mid-February, with a combined force in the region of 15,000 taking on the Taliban.
It has had some success with various insurgent strongholds taken. Under the direction of ISAF (the International Security Assistance Force) the force is around 60% Afghan.
In Pakistan, the renewed focus on cooperation and assistance from American drones appears to be producing a dividend. One of the most experienced Pakistani commanders in the frontier war with the Taliban, Major Gen. Tariq Khan, told the Times of London that his force of 45,000 has inflicted significant casualties, killed the Taliban leadership and captured bases. Earlier this week Gen. Khan showed off to journalists the recently captured network of caves on the Afghan border reported to have sheltered Osama bin Laden's deputy Ayman al-Zawahiri.
A British defense official said: "The kill-rate is right up. Pakistan remains a problem as it is profoundly unstable, and we do need to keep improving our support for what its government is doing. But there's much to be positive about."
This is all quite different from the unmitigated gloom of a few years ago.
Of course, there are plenty of respected voices prepared to say that apparent progress on both sides of the Afghan-Pakistan border is a mirage. Adam Holloway, a British MP and former soldier who served in Iraq, Bosnia and Afghanistan, has spent time on his own in the country and thinks the die is already cast.
He fears that previous mistakes mean it is too late to defeat an insurgency with deep roots in hatred of outside influence and any central government. What we think of as the Taliban in Afghanistan, but which is actually hundreds of small interrelated groups fighting in their locality, he claims has just opted to melt back into the population for the duration of Operation Moshtarak.
And there are also those who have had enough of the war, full-stop. Following the collapse of the Netherlands' government last month over its attempt to continue a deployment of 2,000 troops it is likely that the Dutch will withdraw this summer. NATO's secretary general, Anders Fogh Rasmussen, felt compelled earlier this week to try and calm Afghan nerves. It wouldn't trigger a rush for the exits: "I can assure you that the alliance will stay committed."
But there has been such widespread fatalism for so long about the prospects in Afghanistan, that there is a danger any progress goes unrecognized. That electorates continue to believe the dual myths of Western impotence and incompetence and cannot compute any kind of victory.
Gen. Stanley McChrystal has been central in this regard in lifting morale. His appointment as head of ISAF and commander of U.S. forces in Afghanistan signalled a newly ambitious approach. He demanded extra troops but emphasized that winning is a possibility. A realistically optimistic commander can make a big difference in battle and over the course of a war.
In this way, improvements in the Afghan military situation can and have been made, particularly since Iraq is no longer the focus for American forces. When that might is brought to bear and combined with better use of intelligence, improved cooperation with Pakistan and the painstaking work of training the Afghan army it has an impact.
I accept that the prospect of a little success carries dangers, too. There may be progress, but it doesn't mean the Americans or their partners should delude themselves into thinking about leaving any time soon.
Forces will be required for decades to hold territory and create the space for Afghan civil society and institutions to develop (they haven't had much success on that front to date). But it isn't preordained to be a disaster: Victory of a kind is possible.
Sarkozy's intervention
Never let it be said that French President Nicolas Sarkozy lacks ambition. On a visit to a Eurocopter plant near Marseilles on Thursday, he confided in workers that he has had it up to here with currency fluctuations, foreign-exchange imbalances and their impact on competitiveness. Earlier this year he called monetary disorder "unacceptable."
Now, he says he has plans to sort it out, by proposing an overhaul of the international monetary system. Precise details, at the time of writing, are thin on the ground.
"If the U.S. dollar loses 50% of its value to the euro, how can it be possible to make up the loss of competitiveness?" Mr. Sarkozy asked.
"At the G-20 by the end of the year, I will try to organize a new international monetary system. We can't go on like this," he said.
On hearing the phrase "I will try to organize a new international monetary system," it is tempting to think dismissively: very best of luck with that, let's see how far you get.
But his latest intervention is a reminder that Mr. Sarkozy is a politician with imagination, utterly unafraid to express himself with vivid directness. He's restless, mercurial, driven and doesn't see his time in office in managerial terms.
Still, if you are expecting the birth of his new international monetary system any time soon, I suggest that you don't hold your breath.
Subscribe to:
Posts (Atom)