The French and Russians Certainly ‘Don’t Get It’ on Iran — The Question Is: Does the Clinton-Gore Team?

(Washington, D.C.): Just fourteen
months after President Clinton signed
into law the historic Iran-Libya
Sanctions Act (ILSA) — an act that
established as a matter of law
America’s opposition to state-sponsors of
terrorism and provided new tools to make
that opposition effective — his
Administration seems poised to undermine
the law, and with it, any semblance of
credibility still attached to the stated
policy of “dual containment”
toward Iran and Iraq.

What ‘Containment’?

In recent days, official Washington
has been rocked by fresh revelations of
steps taken by “friendly
nations” that are making a mockery
of Clinton efforts to contain Iran.
First, the Washington Times has
revealed that U.S. and Israeli
intelligence have hard evidence that
Russian and Chinese entities are
providing technology that will help Iran
build long-range ballistic missiles
— weapons that could, within three years
or less, be capable of delivering
nuclear, chemical, biological or
radiological weapons against cities
throughout Europe, including ironically
Moscow. Incredibly, according to the New
York Times’ Pulitzer Prize-winning
syndicated columnist, William Safire, the
United States has been sitting on this
information for a full year.

Then, a consortium lead by
France’s Total and the state-owned
Russian gas monopoly, Gazprom, announced
a $2 billion energy deal to develop new
offshore Iranian natural gas deposits.
To add insult to injury, the European
Union immediately expressed solidarity
with France and contemptuously dismissed
any concern about American unhappiness
over this, the largest single foreign
investment in Iran since the U.S. Embassy
in Tehran was sacked in 1979.

The stakes involved in the Clinton
Administration’s response extend far
beyond the possibilities of frictions
with key allies and upset in trade
relations with friendly states. If the
United States decides to
look-the-other-way it will accelerate the
evisceration of economic sanctions as a
U.S. foreign policy tool.

Economic Sanctions: An
Effective Weapon That Must Not Be
Abandoned

Foreign governments and business
interests — and, indeed, a growing
number of American multinational
companies — have made no secret of their
desire to achieve just such an
evisceration. Their most immediate
targets are ILSA, which was championed by
Senators Alfonse
D’Amato (R-NY) and Edward
Kennedy (D-MA) and the so-called
LIBERTAD Act, better known by the names
of its principal sponsors, Sen.
Jesse Helms (R-NC) and Rep.
Dan Burton (R-IN). The former
authorizes the President to impose
sanctions — up to and including denial
of access to the U.S. market — against
companies that make investments of $20
million in Iran and $40 million in Libya.
The latter would penalize foreign
companies trafficking in U.S. property
confiscated by the Castro regime.

On 1 October, Senator D’Amato and the
Chairman of the House International
Relations Committee, Representative Benjamin
Gilman (R-NY), wrote President
Clinton, warning of the serious
consequences of inaction:

“If we do not sanction Total
as an ILSA violator it is likely
that foreign investment will pour
into Iran’s oil and gas
fields….According to testimony
from several State Department
officials who have appeared
before our respective Committees,
this investment will help
finance Iran’s continuing effort
to develop long-range ballistic
missiles and nuclear weapons. Our
vital national interests are at
stake as well as those of our
European, Asian, and Persian Gulf
allies.” (Emphasis
added.)

Not surprisingly, those pushing this sale
would rather not talk about these
repercussions. Instead, they tend to
complain about the perceived U.S.
application of its laws
extraterritorially and, more generally,
about the ineffectiveness of economic
sanctions. As the European Commission’s
Ambassador to the U.S. Hubo
Paemen recently said, “We
don’t think that economic sanctions have
a good historic record.”

The Reagan Legacy

Contrary to the Ambassador’s assertion,
history shows that while multilateral
sanctions are certainly preferable in
stifling a nation’s economy (e.g., South
Africa), when properly employed, even
unilateral U.S. economic sanctions
can take a toll on the hard currency
revenue base of a targeted country. A
case in point was the American use of
such sanctions in 1981-82 in response to
the Soviet Union’s intention to construct
a massive two-strand Siberian gas
pipeline project as Moscow was
simultaneously massing troops on Poland’s
borders and sponsoring martial law in
that country. In that particular case, a
determined stand by President Reagan
resulted in a costly two-year delay in
the construction of the first strand of
the planned two-strand 3,600 mile
Siberian gas pipeline project. More
importantly, the second strand of
that vast project was effectively killed
by U.S. unilateral sanctions,
resulting in an estimated annual hard
currency cost to the Soviet economy of
some $10-12 billion (at a time when the
USSR’s total hard-currency income was
only around $32 billion annually).

This
debilitating blow to Moscow’s hard
currency cash flow — coupled
with implemented alliance agreements
forced on Europe by the Reagan
administration in the areas of: enhanced
European energy security (i.e., capping
Soviet gas deliveries to Western Europe
via the May 1983 International Energy
Agency Agreement); strengthened export
controls (i.e., achieved at the
high-level meeting of COCOM in April
1983); and the elimination of officially
subsidized credit arrangements (i.e., via
the OECD agreement in early 1983) — combined
to constrict substantially Western life
support to the anemic Soviet economy and
ultimately to hasten the demise of the
Soviet empire. In the absence of
this determined unilateral American
economic sanctions policy (which was
vehemently opposed by the Europeans),
there is little doubt the Soviet Union
would still be menacing Western interests
today, despite the rigidities of its
flawed command economy.

Is the ‘Fix’ In?

Unfortunately, the Clinton
Administration, which appears
approximately as anxious as its foreign
counterparts to end economic sanctions
that interfere with American business
opportunities, seems determined to ignore
this important historical precedent. On
30 September, State Department spokesman James
Rubin signaled the
Administration’s willingness to exercise
its right to waive sanctions against the
consortium:

“…It is important to bear
in mind what — the reasons why
we supported this legislation in
the first place, and that is
because we share the view of
Congress that we need to get
other countries in the world to
agree to ratchet up the pressure
on a government that has so
blatantly supported international
terrorism, that is determined to
develop weapons of mass
destruction and is such a
determined opponent of the peace
process.

“So the objective of the
legislation is not to
impose sanctions. The
objective of the legislation is
to get other countries, in Europe
in particular, to work with us on
the subject of tightening up
pressure on Iran. And what we
have been doing in that regard is
we have had an intensified
dialogue with the European Union
and Canada aimed at seeking
greater convergence in our
policies towards Iran….In this
coming month, we’re going to be
talking with our allies about
ways to ratchet up the pressure.
That is a factor that will go
into any decision-making because the
law itself specifies that the
option of waiving a sanction in
the event that the governments
themselves have agreed to tighten
the pressure up.”

Then Rubin took the following summary
question: “As far as what France or
the Europeans might be willing to do,
what you’re saying is that, if you’re
satisfied with a set of new conditions or
steps or whatever, then you may
reconsider — or you will consider
favorably the possibility of waiving the
sanctions?” Rubin responded,
“I’m — you can draw that
conclusion.“

Interestingly,
Rubin’s soft-pedaling was in stark
contrast to his boss’ vaunted trademark
“tough” talk in New York the
same day. Secretary Albright
said, “It is also a grave
concern to us that our friends and allies
don’t get it. They seem to think
that there is some way we can deal with
[Iran] without in some way supporting
[Iran’s sponsorship of terrorism].”

‘Moscow Rules’

Congressional sources tell the Casey
Institute that, even if the
Clinton Administration wanted to give the
French a bye on ILSA, they would have a
hard time doing so for the Russians.
After all, Russia has been so blatant in
its determination to aid Iran’s nuclear
and ballistic missile programs that even
a Clinton team determined to see-no-evil
when it comes to proliferation⁽¹⁾
would be subject to ridicule if
it tried to argue that Russia’s good
behavior on other scores entitles it to
an ILSA waiver on the Total-Gazprom gas
deal. Consider just some of the
evidence to the contrary:

• Vice President Gore
  was firmly rebuffed by his
  Russian counterpart,
  Prime Minister Victor
  Chernomyrdin when, in
  the course of their latest
  meeting in Moscow,⁽²⁾
  Mr. Gore expressed his concerns
  over Russian cooperation with
  Iranian efforts to build a nuclear
  power complex in Bushehr.
  (Incredible as it may seem, a
  recent General Accounting Office
  report suggests that the U.S.
  taxpayer is contributing to this
  malevolent undertaking via its
  support of the International
  Atomic Energy Agency’s [IAEA]
  technical training program, of
  which the U.S. funds some 30
  cents of every dollar. According
  to the GAO, the Iranians have
  already received U.S. aid for
  their Bushehr facility from this
  international agency.)
• On the same trip, Mr. Gore cited
  intelligence reports which
  unequivocally declare that
  “a vigorous effort by Iran
  to obtain the technologies it
  needs to build a ballistic
  missile and to build nuclear
  weapons.” As noted by 33
  Senators and 63 Representatives
  in a letter sent to President
  Clinton yesterday, “Missile
  technology and technical advice
  have been provided to Iran from
  the Russian Federation in
  violation of the Missile
  Technology Control Regime
  (MTCR).” Russian assistance
  has “includ[ed] the transfer
  of wind tunnel and rocket engine
  testing equipment.” Worse
  yet, intelligence reports
  indicate that the Russian Space
  Agency and its head, Yuri Koptev
  — beneficiaries of American
  taxpayer largesse under
  U.S.-Russian space cooperation
  and the Nunn-Lugar program — are
  directly linked to the
  Russian missile technology
  transfer to Iran.
• The Center has learned that
  Iranian and Russian intelligence
  agents and special forces have
  stepped up their efforts to
  penetrate Azerbaijan
  over the past several months
  (principally via Armenia) in a
  joint effort to destabilize the
  pro-Western leadership in Baku.
  These actions represent a direct
  threat to vital future U.S.
  energy security interests, and
  are indicative of Russo-Iranian
  strategic cooperation in the
  area.⁽³⁾

The Bottom Line

Acts of appeasement and treachery by
nominally friendly states are,
unfortunately, just one manifestation of an
all-too-familiar pattern: The cycle of
behavior that typically precedes — and
gives rise to — war. As
General Binford Peay noted on the
occasion of his 26 September retirement
as Commander-in-Chief of the U.S. Central
Command, the regional command responsible
for contingencies in the Persian Gulf:

“I am convinced that
we are living in the ‘inter-war
years’ — a period akin in so
many ways to that of the 1920s
and ’30s, when Americans
failed to recognize the war
clouds gathering in Europe and
Asia, embraced isolationism and
refused to maintain a properly
equipped, trained and ready
military.”⁽⁴⁾

Several actions are clearly in order if
this cycle is to be broken — or at least
attenuated. ⁽⁵⁾
These include the following:

• Deny Total, Gazprom and
  their Malaysian partner,
  Petronas, access to the U.S.
  market, including
  America’s equities and bond
  markets.
• Deny access to
  Export-Import Bank
  guarantees and funding and Overseas
  Private Investment Corporation
  credits and insurance coverage to
  American companies doing business
  with these firms.
• Suspend all U.S. taxpayer
  assistance flows — including
  space-related funding — to
  Russia unless and until
  it verifiably quits all aspects
  of its strategic cooperation with
  Iran (nuclear, military,
  intelligence, supplier credits,
  etc.) and severely penalizes the
  Russian enterprises and
  individuals involved in the
  missile and nuclear technology
  transfers.
• Withdraw all U.S. funding related
  to IAEA for programs in Iran and
  Cuba.
• Provide the resources immediately
  to initiate broadcasts of Radio
  Free Iran and to
  intensify those of Radio
  Liberty’s Russian Service
  in order, among other things, to
  illuminate the dangerous
  activities of their audiences’
  respective governments.
• Defer Senate action on the
  nomination of Martin Indyk
  to be Assistant Secretary of
  State for Near East Affairs until
  the Clinton Administration has
  taken satisfactory steps to
  ensure that the policy of
  “dual containment” is
  enforced, and not
  undermined.

– 30 –

1. For example,
see the Casey Institute’s Perspective
entitled Lying for Dollars:
Expected Clinton Certification on P.R.C.
Proliferation Would Demean U.S., Disserve
Its Interests ( href=”index.jsp?section=papers&code=97-C_140″>No. 97-C 140, 18
September 1997).

2. See the
Center’s Decision Briefs
entitled Talbott’s ‘Vision
Thing’: Renewing Mission on Mir Just
Latest Manifestation of Clinton’s
‘Integration’ Policy Toward Russia
(No. 97-D 143,
25 September 1997) and Clinton
Watch # 6: Crises Involving U.S.-Russian
Space ‘Cooperation’ Shows Clinton-Gore
Errors, Need For Changes ( href=”index.jsp?section=papers&code=97-D_139″>No. 97-D 139, 18
September 1997).

3. See the Center’s
Decision Brief entitled Caspian
Watch #7: President Aliyev’s Visit Should
Translate into the ‘Beginning of a
Beautiful Friendship’ ( href=”index.jsp?section=papers&code=97-D_107″>No. 97-D 107, 29
July 1997).

4. The Center for
Security Policy has reached a similar
conclusion. See its Decision
Brief entitled Clinton
Legacy Watch # 5: Welcome To The New
Inter-War Era ( href=”index.jsp?section=papers&code=97-D_129″>No. 97-D 129, 8
September 1997).

5. Unlike the
measure of merit in evaluating
“engagement” policies
(appeasement by another name), a
containment policy cannot be said to have
failed simply because it has not resulted
in the near-term transformation of the
targeted state. The correct test of the
latter type of policy is, rather, whether
the nation in question would have become
even more dangerous if not contained.