Divest Iran

Decision Brief                                       No. 06-D 28                     2006-05-30

(Washington , D.C.): One of the most important public policy fights in years is taking place within the U.S. government. The debate is over how to deal with the growing danger posed by Islamofascist Iran.

A House Divided

In one corner are those who believe, against all historical experience, that appeasement of despots will work this time. Hence, their support of efforts by the so-called “EU-3” – Britain, France and Germany – to present a sufficiently attractive package of concessions to the Iranian mullahocracy to induce it to give up at least some of its program for developing nuclear weapons. The UN’s Kofi Annan and the International Atomic Energy Agency’s Mohamed ElBaradei champion this approach. So does the State Department bureaucracy, currently led by the Under Secretary for Political Affairs, Nicholas Burns.

Unfortunately, the record of recent efforts to appease Iran has been no more encouraging than were earlier efforts to divert other totalitarians from their chosen paths. To the contrary, Iranian officials have gleefully observed that they are indebted to the Europeans and their supporters for “buying time” for the regime in Tehran, allowing it to bring its so-called “nuclear power” program to fruition. Some are becoming ever-more- brazen in confirming that energy-generation is not the object of the exercise; rather, it is to obtain the Bomb.

Now, Nick Burns and Company are evidently supporting the international appeasers’ demand that the United States “engage” directly with the Iranians. The argument is that, only by so doing, can the Bush Administration demonstrate that it has left no stone unturned in trying to avoid a showdown, including possibly military action against Iran.

Those in the opposing corner, believed to include Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld and President Bush, himself, are under no illusion about the consequences of such a step. It will not buy the United States any credit from its critics. Instead, it will embroil this country in talks whose sole purpose is to hamstring those who are threatened by the Iranian Islamofascists’ support for international terror and pursuit of nuclear weapons – if President Mahmoud Ahmadinejad is to be believed, for apocalyptic purposes.

Speaking of Ahmadinejad, one of the most bizarre aspects of the debate about what to do about Iran is the use being made by the appeasement camp of his recent letter to President Bush. It has been widely portrayed in the press as a diplomatic “breakthrough,” an opening for direct contacts that must not be allowed to slip away. In fact, a close reading of the document makes clear that what the Iranian regime has in mind for the United States is war, not diplomacy. Notably, the closing passage is a direct quote from a message sent by the Prophet Mohammed as he prepared to launch a devastating attack on its recipient.

Use the Reagan Playbook

The alternative to appeasement of Iran should utilize the sorts of techniques Ronald Reagan employed to counter the last horrific totalitarian ideology that threatened our destruction, the Soviet Union. These include using every available means to de-legitimate the regime. It also means helping those oppressed by our enemies, in order to assist them in undermining and, if possible, in bringing down their government – a popular aspiration lately confirmed anew by a spate of tumultuous demonstrations across Iran.

President Reagan placed special emphasis on one other initiative: drying up the funding streams that enabled the USSR to build up its military threat and to pay for anti-Western revolutions all over the globe. The same must be done to Iran.

The most obvious means of doing so – economic sanctions – are not supported by Iran ‘s strategic allies, Russia and China , and its business partners in many energy-hungry European nations and Japan. As a result, there seems little hope of imposing on a multilateral basis sanctions comparable to the long-standing American ones on oil purchases and other trade with Iran.

According to a front-page article in the Washington Post on Monday, a Treasury Department-led task force is trying a variation on the theme: It is seeking the cooperation of allies in eschewing business with “every Iranian official, individual and entity the Bush Administration considers connected not only to nuclear enrichment efforts but to terrorism, government corruption, suppression of religious or democratic freedom and violence” in neighboring states. Not surprisingly, the response has been underwhelming to date. The Post reports that, “So far, four financial institutions have signed on to the U.S. effort.”

Fortunately, America has an opportunity to bring more than moral suasion to bear on those who partner with our enemies and, thereby, help underwrite their threatening behavior: Make them choose whether they wish to do business with us, or with the Iranians.

Last month, the Louisiana Sheriffs public pension fund became the first in the nation to adopt such an approach in the form of a terror-free investment policy. Its portfolio managers, including T. Rowe Price, have agreed that the sheriffs’ retirement money will not be invested in foreign energy, telecommunications, banks and other companies that engage in commercial activities and investment in state-sponsors of terror like Iran.

The Bottom Line

The U.S. government should encourage this model – call it Divest Iran – to be adopted by the scores of millions of other American investors whose decisions to hold or dispose of stocks will probably have a lot more influence with Iranian-connected enterprises than will pleas from our “engagement”-minded officials. Such a privatization of the effort to end the danger posed by the Iranian mullahs may not only make for a more coherent U.S. policy. It may even make it possible to avoid the use of force against Iran that could otherwise become unavoidable.