Australia/Israel & Jewish Affairs Council

An Iranian nuclear "smoking gun"?

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Update from AIJAC

December 17, 2009
Number 12/09 #04


As has been widely reported, the Times (UK) has revealed what appears to be a "smoking gun" on the Iranian nuclear program - documents which appear to reveal work on a neutron initiator, a nuclear component which has no other use than triggering a nuclear weapon. (Some more on how this latest revelation may fit into the big picture of evidence about Iranian nuclear intentions is here.)

This Update opens with a Times editorial commenting on the significance of this revelation. According to the paper, what this latest  document teaches us about Iran's nuclear negotiating tactics is that they consist of "one lie after another" while the West's response is described as "complacency." The paper goes on to offer four reasons why the Iranian nuclear weapons program is so alarming - the likely stepped up support for terror proxies, the unlikelihood of stable deterrence in the Middle East, Iran's open threats against Israel, and the Iranian penchant for deliberately aggravating regional disputes. For this complete editorial diagnosing the Iranian nuclear crisis, CLICK HERE. Expanding on the point above about hopes of establishing deterrence in the Middle East is American foreign policy expert Danielle Pletka, who argues that it would be a mistake to believe that a nuclear Iran can be "contained" Cold War style. 

Next up is a piece on what the US Obama Administration is planning to do next, given Iranian intransigence in the face of engagement attempts and the conclusion reached by President Obama that an "outstretched hand" is not by itself going to work. Principally, the piece from Newsweek reports, the US is preparing to unleash new, tightened sanctions designed by Under Secretary of the Treasury for Terrorism and Financial Intelligence Stuart Levey, who was credited with much sanctions success in the same position under the Bush Administration. These sanctions centre on the firms and individuals associated with the Iranian Revolutionary Guards, and petroleum imports to Iran. For all the important details about what is likely to happen next, CLICK HERE. More on the Obama Administration's challenge as the deadline it set for Iran engagement expires comes from American analyst and columnist Robert Kagan.

Finally, the US House of Representatives passed a bill Tuesday calling for extending existing US sanctions on Iran to imports of petroleum products. Below, Representative Mark Kirk, one of the bill's sponsors, explains the history and logic behind this new sanctions move (which still must pass the Senate). Kirk also urges President Obama to begin to more stringently enforce existing sanctions, which he argues have been largely ignored by past presidents, thus reducing the credibility to Iran of sanctions threats. For all of Kirk's argument,  CLICK HERE. Elsewhere, Ron Kampeas explains how Iran's own reaction to engagement efforts contributed to the passage of the new sanctions bill.

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Explosive Deceit

The exposure of Iran’s programme to test an essential component of a nuclear weapon confirms a pattern of duplicity by a bellicose regime

 

The Times, December 14, 2009

Winston Churchill described the actions of Russia as a riddle wrapped in a mystery inside an enigma. The nuclear diplomacy of Iran is constructed more simply: it is one lie after another. Western diplomacy has proved susceptible to the tactic. A US National Intelligence Estimate (NIE) in December 2007 concluded that Iran was “less determined to develop nuclear weapons than we have been judging since 2005”. Documents obtained by The Times reveal that this assessment was worthless.

The information comes from Iran’s most sensitive nuclear project. It concerns a four-year plan to test a neutron initiator. This is the component of a nuclear weapon that triggers the explosion. The plan was initiated in the very year that the NIE delivered its reassuring message.

The documents outline the use of a material called uranium deuteride. Its destructive potential is huge. Robert Oppenheimer, the pioneering nuclear physicist, once ventured: “I think it really not too improbable that a ten cm cube of uranium deuteride . . . might very well blow itself to hell.” In the view of experts contacted by The Times, Iran’s work in this field has no possible civilian application. It makes sense only for a programme to develop a nuclear weapon.

The discovery is an indictment both of Iran’s duplicity and of the West’s complacency. The Iranian regime has not been a monolithic force in the 30 years since the revolution. Western diplomats have had to make fine judgments as to whether the mullahs seek to spread Islamist revolution throughout the Middle East, or are more concerned to consolidate the country’s status as a leading power in the region. But regardless of divisions within the regime, Iran has sought a nuclear capability. Its efforts have been accelerated in the past decade. The prospect of an Iranian bomb is alarming.

First, a nuclear-armed Iran will feel little constraint in supporting its terrorist proxies, Hamas in Gaza and Hezbollah in Lebanon, with money and materiel. A strengthening of these elements will make more difficult an eventual two-state resolution of the Israeli-Palestinian conflict.

Second, a nuclear stand-off in the Gulf is unlikely to replicate the stable deterrence of the Cold War. In the adversarial relationship of the old superpowers, the threat of massive retaliation deterred the Soviet Union from military expansionism. Communism was brutal, but the Soviet gerontocracy after Stalin was risk-averse. Iran’s leadership is not like that. The regime is, as Tony Blair has remarked, “a major strategic threat to the cohesion of the entire region”.

Third, President Mahmoud Ahmadinejad seeks the annihilation of Israel, a sovereign member of the United Nations. The notion that his noisome anti-Semitic rhetoric is somehow explained by a faulty translation from the Farsi is one of the more bleakly fatuous suggestions of recent diplomatic debate. Israel was founded by a people that had doggedly clung to survival through persecution, pogrom and genocide. Israel’s leaders have not only the right but the historic obligation to take at face value the threats of a religious millenarian who looks forward to a second Holocaust while denying that the first one ever happened.

Fourth, Iran invariably seeks to aggravate regional disputes. It was not the aggressor in the Iran-Iraq War of 1980-88, but its retaliation included mining international waters and attacking Kuwaiti oil tankers. Through its client, Hezbollah, it has sought to destabilise Lebanese democracy as well as threaten Israeli civilians with rocket attacks.

The protests of Iran’s leaders that the country’s nuclear programme is purely for generating electricity ought to have invited caution from the outset. But the serial deceptions that have accompanied Iran’s nuclear developments demand more than scepticism. The regime’s nuclear adventurism is a provocation and a threat.

Iran’s leaders ritually speak of the country’s rights to nuclear energy and a full fuel cycle. No one disputes the first point. The problem with the second is that it is compatible with a nuclear weapons programme, which Iran appears determined to pursue. That is a choice by the regime: it is not a defensive reaction to any supposed Western provocation.

The country’s nuclear effort was given impetus a decade ago when President Clinton was seeking a new relationship with Iran. The US and the EU have consistently been open to a compromise whereby Iran has access to the full fuel cycle provided that uranium enrichment takes place in another country.

Iran has instead elected to cheat. It developed secretly a uranium enrichment facility at Natanz and a heavy-water plant at Arak. Neither was necessary for a civil nuclear programme. Other countries with nuclear reactors simply buy uranium on the open market, and do it more cheaply. These are countries such as Sweden, whose peaceful intentions no one could doubt. Iran has since developed a second enrichment facility and announced plans for another ten.

All the signs of Iran’s progress to a nuclear weapon have been there. The regime’s adherence to the requirements of the International Atomic Energy Agency (IAEA) has been selective. It was not widely noted at the time, but the deeply flawed 2007 NIE explicitly did not take account of Iran’s conversion and enrichment of uranium. Much to his credit, David Miliband, the Foreign Secretary, immediately remarked on this omission. Iran was still pursuing an enrichment programme that had no obvious civilian application but great utility in producing fissile material for nuclear weapons. And it carried on regardless of demands by the IAEA and the United Nations Security Council to stop.

By its own lights, the Iranian regime has acted rationally. It has dissembled, played on divisions within the UN Security Council, and exploited America’s understandable diffidence — since the fiasco of intelligence about Saddam Hussein’s weapons of mass destruction — in stating firm conclusions. Iran suspended work on its nuclear weapons programme in 2003, after its clandestine activities had been exposed; and it resumed those activities when it believed it had the opportunity. By these means, it has edged closer to acquiring a terrifying military capability.

Anticipating the end of America’s brief post-war nuclear monopoly, Churchill also declared: “We ought not to go jogging along improvident, incompetent, waiting for something to turn up, by which I mean waiting for something bad for us to turn up.” Sixty years later, that is precisely what Western diplomacy is doing.


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Obama’s Enforcer

The president's patience with Iran has worn thin. That's where Stuart Levey—rhymes with 'heavy'—comes in.

By Michael Hirsh and Michael Isikoff |

NEWSWEEK, Published Dec 12, 2009
From the magazine issue dated Dec 21, 2009

Stuart Levey is the last person to put you in mind of Tony Soprano. Slight and good-natured, he pooh-poohs the notion that what he does for a living is a kind of genteel arm-twisting—intended to, um, persuade international banks and businesses it would be bad for them to be seen dealing with rogue states like Iran and North Korea. Yet Levey's effectiveness at these backroom tactics—his quiet visits to scores of global banks in recent years, mainly in an effort to choke off Iran's financial air supply—is the biggest reason why he was the most senior Bush administration official, after Defense Secretary Robert Gates, to be retained by Barack Obama. Though he's been mostly silent for the first year of Obama's presidency and his name is hardly known to the American public, Levey is feared and hated in Tehran, where "all the officials know how to pronounce his name right," says a European diplomat who follows Iranian affairs for his government. (It rhymes with "heavy.")

In fact, Levey's reappointment as undersecretary of the Treasury for terrorism and financial intelligence in February provoked bitter protests from Iran, whose finance minister at one point denounced him as "one of the U.S. government's Zionist deputies." Through back channels, Tehran passed word that it viewed the move as inconsistent with Obama's public pledge to pursue a friendlier approach, according to a source directly familiar with the protest who asked not to be identified because of diplomatic sensitivities. Levey himself was surprised to get the call telling him that the pro-engagement president wanted him to stay on—and he hesitated before accepting.

Until now, Obama has kept Levey in his back pocket. But the president has concluded that his offer of an "outstretched hand" to Iran will not, on its own, produce the results he needs. Even as he received the Nobel Peace Prize last week, Obama was fast approaching his informal year-end deadline for seeing "progress" in talks to shut down Iran's nuclear program. Tehran has by all accounts refused to cooperate. After a moment of promise in early October, when Iran pledged to ship much of its uranium abroad, Tehran has reneged on almost every tentative deal. Worse, since Iran admitted to building a secret uranium-enrichment facility near the religious city of Qum, it has brazenly pledged to build 10 more. "There is nothing happening," says one senior European diplomat who would not discuss the talks on the record. "Zero. Zero. Zero."

As a result, barring a last-minute concession by Iran, the president is now firmly committed to imposing tougher sanctions, says a senior administration official who would discuss internal deliberations only on condition of anonymity. "It's important for Obama that the United States do exactly what it says it's going to do," the official told NEWSWEEK. "We said at the end of the year we would turn to sanctions" if diplomacy didn't produce results. That time has come, the official says. "Nobody is going to say to the United States, 'You're just like the Bush administration.' We tried the engagement route."

So Stuart Levey's moment on the world stage has arrived once again. The White House has approved an aggressive plan to squeeze Iran's economy, and Levey will be at the center of it, the senior administration official says. One key target will be the Iranian Revolutionary Guard Corps, the force that has largely taken control of the country and its economy. Since the election in June, the hated IRGC has become notorious for harassing and killing pro-democracy protesters. But the Guards have also bought a controlling interest in the Telecommunication Company of Iran—an $8 billion deal that potentially enables it to tighten its grip over the country's telephone and Internet systems. The IRGC has expanded its reach into Iran's financial and energy industries as well—both the subjects of an intensive investigation by Levey's office. "The IRGC is taking over larger swaths of the Iranian economy, pushing out other businesses and getting preferential treatment in terms of no-bid contracts—thereby being potentially resented by the rest of the population in Iran," Levey said in an interview.

While the Revolutionary Guards pretend to be the incorruptible shield of the Islamic Revolution, individual commanders are believed to be wealthy private investors, especially in neighboring countries like Dubai. "What will cause the Guards their demise is their corruption," an Iranian intelligence official told NEWSWEEK on condition that his name not be used. "For the past 20 years, they've been allowed by the Supreme Leader and consecutive governments to make money in a shadowy world." The West's new approach, Levey indicated, is to focus on the IRGC as "the face of repression," thereby supporting democracy activists in Iran without arousing Iranian national pride over their nuclear program.

The plan is for Levey's office to publicly identify "dozens" of Iranian Revolutionary Guard Corps front companies and then pressure suppliers and trading partners to cut off ties—or risk being sanctioned by the U.S. government, says the senior administration official. "There will be a big effort by Stuart to work with like-minded countries to target IRGC front companies," the official says. "We know which ones [the IRGC] are affiliated with and we know which ones they control." Levey says he wants to make the foreign firms understand that "if they're dealing with Iran it's nearly impossible to protect themselves from being entangled in that country's illicit conduct."

Legal authorities are already in place: U.N. Security Council resolutions currently identify top IRGC commanders as violators of international law; also, in the fall of 2007, the Bush administration designated the IRGC as a weapons proliferator and its super-elite Quds Force as a terrorist group. What's new is that U.S. and European officials have accumulated a lot more intelligence in recent years about the Guards' business activities—including which IRGC officials have investments and where.

Obama will have at least some international support for tougher measures. The European Union, which during the Bush years seemed reluctant to take aggressive steps, has more recently been demanding a shift in tactics. Last week the EU foreign ministers issued a joint statement calling for new sanctions in the U.N. Security Council. And Congress, in a rare display of bipartisanship, is soon expected to approve a Comprehensive Iran Sanctions, Accountability, and Divestment Act. The law will prohibit any foreign companies that help ship sensitive technologies or refined petroleum to Iran from doing business in the United States (though it may allow Obama to waive the sanctions at his discretion).

Foreign companies doing business in Iran are already coming under pressure. Among them is Reliance, the giant Indian energy and petrochemicals firm that for years has been supplying refined gasoline to Iran. In early 2008, under pressure from Levey, two giant French banks—BNP Paribas and Crédit Agricole—cut off letters of credit for Reliance's Iran deals. Then late last year an Arizona State University law professor and former State Department nuclear-nonproliferation official, Orde Kittrie, discovered that Reliance had benefited from two U.S. Export-Import Bank loan guarantees totaling $900 million. Members of Congress—led by Democratic Rep. Brad Sherman of California and Republican Mark Kirk of Illinois—demanded that the Ex-Im Bank cut off U.S. taxpayer assistance. After consulting with its high-priced Washington lobbying firm, BGR, Reliance quietly passed the word to members of Congress: it was halting all sales to Iran and would insist that its trading partners do the same. "We are not selling gasoline to Iran either directly or through third parties," Reliance said in a statement to NEWSWEEK. "To this end, we include a destination-restriction clause in our contracts to prevent sales to Iran."

Another new point of Iranian vulnerability is debt-plagued Dubai. In recent decades, Iranian interests have plowed some $250 billion into Dubai, much of it believed to be from Revolutionary Guard–controlled front companies. Now neighboring Abu Dhabi, which is less friendly to Iranian interests (on the coffee table in his Treasury office, Levey has placed a pictorial promo from Abu Dhabi), may underwrite some of Dubai's defaulting loans, possibly in exchange for more economic control. If so, that could help to squeeze out the IRGC.

Levey's strategy dates back to 2006, when the United States was getting little support for multilateral U.N. sanctions. The Bush administration was scrambling for new ways to get tough with Iran and North Korea. Inspired in part by the way the U.S. government once pressured Swiss and German banks over Holocaust assets—such efforts "laid the groundwork," he says—Levey proposed to then–secretary of state Condi Rice that Washington mobilize the private sector around the world. "He thinks out of the box," says former boss John Cassidy, a white-collar criminal lawyer who hired Levey, a Harvard summa cum laude, straight out of law school.

So Levey began flying around the globe and—as he describes his job—visiting corporate offices to inform executives about "the risks of doing business with Iran" or North Korea. No threats are made; Levey's former deputy assistant secretary, Matthew Levitt, says most banks typically realize on their own they don't want to be tainted by such activities. Still, some foreign firms perceive an implied U.S. threat: if you bank with the Iranians, you may suddenly find it tough opening up that branch or doing mergers and acquisitions in the world's biggest economy. Banks are chronically nervous about the risks to their reputations, and Levey will also remind them they don't want newspapers like The Wall Street Journal or the Financial Times to uncover that they've been doing business with rogues. Whereas traditional sanctions target entire countries, Levey's approach focuses on illicit and deceptive conduct by certain parties and is "more about disabling their ability to do business," he says. "Normal commerce becomes incredibly difficult. Banks won't write letters of credit. Insurance companies won't insure shipments. Shipping companies won't take cargo."

Even advocates of tougher sanctions acknowledge there are huge obstacles to making such an approach work. If global oil firms publicly forswear trading with Iran, for example, they may well continue to do so indirectly—by selling gasoline, for example, to an Arab Gulf firm that acts as a middleman and in turn sells to Tehran. "These guys have decades of doing end runs around sanctions," says Mark Dubowitz, executive director of the Foundation for Defense of Democracies, a conservative advocacy group that is promoting tougher measures. Representative Sherman concedes that none of the tougher sanctions being talked about by the Obama administration is likely to have any immediate impact on the Iranian regime. "We're asking them to give up their firstborn," he says, referring to Iran's nuclear program, "and we're threatening them with the possibility of paying an increase in their ATM fees."

Levey himself acknowledges that there is a debate inside the administration about how pressure tactics will affect Iran; even reformist candidates like defeated presidential contender Mir Hossain Mousavi came out recently against the proposed deal for Iran to ship uranium outside the country for processing. Another key question is whether Russia, China, and other major Iranian trading partners can be persuaded to help squeeze Iran. Moscow has shown more willingness to get tough, while China remains reluctant to disturb its energy trade. Still, Obama's yearlong campaign of engagement with Iran may pay dividends by creating a deeper consensus against Iran than has ever existed.

In the end, Levey's reemergence is further evidence that Obama's differences with his predecessor on national security are not, perhaps, as stark as they seem. Standing by the door of his spacious Treasury Department office—the same one he had under George W. Bush—Levey proudly points to two framed photographs he keeps on a table. In one, he is seen smiling with Bush, then–Treasury secretary Hank Paulson, and then–White House chief of staff Josh Bolten. In the photo propped up next to it, Levey is being introduced to President Obama as Treasury Secretary Tim Geithner and chief economic adviser Larry Summers look on grinning. The only thing the two pictures share in common is Stuart Levey.

With Maziar Bahari in London and Kevin Peraino in Jerusalem


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Iran sanctions are in Obama's hands

MARK KIRK

THE JERUSALEM POST, Dec. 14, 2009

In 2005, Congressman Rob Andrews (D-NJ) and I cofounded the Iran Working Group in the House of Representatives to study the coming threat from Iran and make policy recommendations to Congress and the administration.

Behind closed doors in Washington, two options emerged as endgame scenarios for Iran's nuclear program: pursue ineffective sanctions waiting for an Israeli military strike or defer to the United Nations and an eventual Iranian bomb.

We knew this was a false choice.

Unlike the 1981 strike on Iraq's Osirak nuclear reactor, an Israeli strike against Iran would be complex, unpredictable and not a long-term solution. With many targets scattered around the country (some buried deep underground), an air strike would delay Iran's nuclear activities but would not permanently eliminate the threat.

At the same time, conceding nuclear weapons to the Iranian Revolutionary Guard Corps with only a policy of containment would set off an arms race in the world's most unstable region. After an Iranian bomb comes a Saudi bomb followed by an Egyptian bomb - making the world unsafe for our children.

As a state sponsor of terror with a proven track record of transferring advanced weapons to Hizbullah, a nuclear-armed Iran poses a threat to the future of the US and Europe - not to mention the existential threat to our democratic ally Israel.

TO STOP the emergence of a nuclear Iran and avoid military conflict, Congressman Andrews and I conducted a comprehensive analysis, searching for vulnerabilities in Iran's economy.

With the help of the Congressional Research Service, we discovered a critical Iranian weakness. Despite its status as a leading oil exporter, Iran so mishandled its domestic energy supply that the regime relied on foreign sources of gasoline for 40 percent of its supply. A restriction of gasoline deliveries to Iran administered though multilateral sanctions and enforced by the world's most powerful navies would pit the Western democracy's greatest strength against Iran's greatest weakness - all without a shot being fired.

In 2005 and again in 2006, we introduced congressional resolutions calling for a multilateral restriction of gasoline deliveries to Iran as the most effective economic sanction to bring Iran's leaders into compliance with their commitments under the Nuclear Non-Proliferation Treaty. In 2007, we introduced the Iran Sanctions Enhancement Act to expand existing US sanctions to the provision of gasoline to Iran - including suppliers, brokers, shippers and insurers. This April, Congressman Brad Sherman (D-Calif.) and I reintroduced this bipartisan legislation. Following our bills, Iran imposed an unpopular gasoline rationing scheme, showing it was worried.

Last year, candidates Barack Obama and John McCain both endorsed the gasoline restriction, and this year, House and Senate leaders reintroduced the gasoline sanctions bill as the Iran Refined Petroleum Sanctions Act, now headed by Congressman Berman and our coalition of 343 congressmen and 76 senators behind the bill.

After four years and six months, Congress will finally consider our gasoline restriction legislation this week. While this bill could emerge as the key tool to peacefully end our standoff with Iran, it will prove meaningless if the president keeps gasoline sanctions locked in his diplomatic toolbox.

Our Petroleum Sanctions Act would add a ban on the provision of gasoline to Iran under the old 1996 Iran Sanctions Act, a law that already makes it illegal to invest more than $20 million in Iran's oil and gas sectors.

Under this old law, our president must declare someone in violation before sanctions take effect. Few realize that no American president has ever enforced this provision. According to the Congressional Research Service, at least 20 companies are currently violating the 1996 law.

For the threat of sanctions to change Iran's decision-making, Iranian leaders must believe an effective gasoline sanction is credible. If President Obama, like his predecessor, lacks the will to enforce the 1996 Sanctions Act, we should not expect Iranian leaders to believe a new threat of additional sanctions.

In October, Congressman Ron Klein (D-Fla.) and I authored a bipartisan letter to the president urging him to enforce the Iran Sanctions Act and demonstrate to Iranian leaders the credible potential for a restriction of their gasoline. Fifty Democrats and Republicans signed our bipartisan letter. When asked why the administration failed to enforce the 1996 law, Assistant Secretary of State Jeffrey Feltman promised a 45-day review for the State Department to determine whether it would pursue sanctions against current lawbreakers. Secretary Feltman's clock ran out this weekend.

For the House's new 2009 Iran Refined Petroleum Sanctions Act to succeed, the Iranians must believe the president will enforce it. Otherwise, we will continue down a failed path of diplomacy in the absence of effective sanctions.

As the architect of this legislation, I hope the House and Senate will pass our Iran gasoline sanctions bill into law. As an American, I hope the president will enforce it.

The writer represents Illinois' 10th Congressional District and authored numerous bipartisan sanctions provisions on Iran that won congressional approval.