Australia/Israel & Jewish Affairs Council

Pressuring Iran: The Iranian Revolutionary Guard

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Update from AIJAC

August 21, 2007
Number 08/07 #07

As readers may be aware, it was reported last week that the US government was considering listing the Iranian Revolutionary Guards as a designated terrorist organisation, which will lead to legal targeting of the organisation's members, and likely curtail the Revolutionary Guards' extensive economic activities.

First up, commenting on who the Iranian Revolutionary Guards Corps (IRGC) are, their role in the regime, and the likely effects of such sanctions is Iranian-American academic Rasool Nafisi. He debunks claims that the IRGC can simply be seen as a branch of the military, and points out that it has both political and economic roles, as well as military ones, and also details its role in supporting terrorism, especially through the al-Quds force. For detailed discussion of this organisation, CLICK HERE.

Next up, Washington Institute for Near East Policy experts Patrick Clawson and Michael Jacobson look at the politics of the move to designate the IRGC, both in the US and internationally. They argue it is a reasonably smart way to sanction the regime, look at the legal framework for such efforts, and urge a strong US attempt to get other international partners to assist with any sanctions regime. For all the details about what such an effort would entail and imply, CLICK HERE.

Finally, Princeton University academic Roger Stern argues that the Europeans have the capacity to vastly increase the pressure on Iran's nuclear program by halting credit and investment in the energy sectors, but have failed to do so. In a message to French President Sarkozy, who recently visited the US, he points out that some European firms are acting almost like spokespersons for Teheran, but the regime in Teheran is economically vulnerable if only Europe will put its money where its mouth is. For Stern's take on the key means of changing Iranian behaviour, CLICK HERE.



Iran: Mideast Expert Talks About Possible U.S. Blacklisting Of Revolutionary Guards

Radio Free Europe/ Radio Liberty -- August 16, 2007

Reports in Western media suggest that the Bush administration is considering declaring Iran's Islamic Revolutionary Guards Corps (IRGC) a foreign terrorist organization. The IRGC, founded after the 1979 revolution, is an increasingly influential player inside -- and outside -- Iran. The list of IRGC veterans includes President Mahmud Ahmadinejad and a number of his cabinet members and senior aides. RFE/RL correspondent Golnaz Esfandiari discussed the Revolutionary Guards with Rasool Nafisi, a Washington-based expert on the Middle East and Iran who has researched the IRGC and its activities.


RFE/RL: The IRGC was founded following the 1979 revolution as a force to protect the newly founded Islamic establishment and prevent a military coup. Since then the IRGC has gone through changes and it has expanded it's operation and involvement. Could you first talk a bit about its creation?

Rasool Nafisi: The creation of the IRGC was probably the most significant action or policy of the Islamic republic. In terms of who is ruling the IRGC, it was created by a schoolteacher -- his nickname was Abu Sharif -- and Ayatollah Lahuti and Ayatollah Ali Akbar Hashemi-Rafsanjani were the representatives of Ayatollah [Ruhollah] Khomeni (the father of Iran's Islamic revolution) who controlled the creation of IRGC. The IRGC was originally formed by a number of terrorist and non-terrorist groups that were involved in actions against the Shah. And also it found tremendous growth during the war against Iraq, when numerous agencies came under its control and also created the militia or the Basij, [which] was fundamental to the expansion of power of the IRGC. And eventually various foundations came under its control; now it's a major actor in the economic sector as well. So in essence it is a very different organization from the Iranian military. The military still carries out the same old mission -- meaning being a nonpolitical entity -- while the IRGC is a military-political force. And this force, with the mission of protecting the revolution, is a guardian of the leaders of the Islamic republic; and it carries out military as well as political missions of the Islamic republic, inside and outside the country.

RFE/RL: Let's talk about the IRGC's role on the Iranian political scene and also its reported involvement in a number of countries, including Iraq. What role is it playing in Iran?
"Although it has been a dominant force in the past...[now] it's almost in charge of the entire country."


Nafisi: The IRGC is in charge of protecting the revolution -- in other words, it is in charge of protecting the Iranian regime. So it has tentacles across [state] organizations from the Information Ministry all the way to the judiciary. Of course, [there is also] the famous Quds Force, which is infamous for its role and activities outside the country. The Quds Force -- which is supposed to be only a thousand-member organization -- is reportedly a force that is involved in supporting the Hizballah in Lebanon, supporting even Hamas, supporting militias in Iraq.

Quds Activities

RFE/RL: What kind of support are we talking about here? Financial aid or training?

Nafisi: It is reportedly in charge of training and financing both. So if you think of the role that the Quds Force plays in the Middle East, then you can understand the significance of the Revolutionary Guards in the region. The IRGC is emerging in the region as a very important factor in terms of enforcing the ideology and the will of the Islamic republic's leaders across the region.

RFE/RL: You said that the Quds Force is supporting groups like Hamas, which have terrorist links or are involved in terrorist activities. Is the Quds Force, which is said to be secret brigade of the IRGC, also directly involved in terrorism?

Nafisi: Iranians are too smart to get involved directly in any kind of terrorism. From the early days, they have been able to employ other forces. We have seen that in the assassination against the U.S. military force in Lebanon, [and] against targets around the world -- they never use their own members. They routinely use other forces and, to my understanding, they have slowed down since the invasion of Iraq. And the reason [for the slowdown] is quite understandable, because they don't want to endanger the Iranian regime. But, according to the American forces, they are very active in Iraq.

RFE/RL: You said that inside Iran, the IRGC is in charge of protecting state values. What does that mean in practice?

Nafisi: If you think of the proclamation by 24 IRGC commanders when [reformist former President Mohammad] Khatami was in power -- they warned him that they would take matters into their own hands if the [student] demonstration and irregularities continued -- then you can appreciate the role they play in politics. Also, when Imam Khomeini Airport was inaugurated under Khatami, the [construction] contract was given to a Turkish company -- not to the IRGC; the IRGC essentially blocked flights into the airport by sending in fighter jets and not allowing landings of civilian planes at the airport. So you can imagine how active they are in the internal politics of Iran. Or if you look at the present Ahmadinejad administration, it is almost entirely formed of former members of the IRGC, and his cabinet and all the people he's been appointing to different organizations and national institutions are basically former IRGC members. So you might think that, at this point, the IRGC is a dominant force -- although it has been a dominant force in the past, as well -- but [now] it's almost in charge of the entire country.

Economic Might

RFE/RL: The Revolutionary Guards is also an important economic force, reportedly with huge assets and companies. How extensive are its economic activities?

Nafisi: The IRGC is involved largely in construction. If you travel across Iran, you see how many construction projects are being built by the IRGC -- it is involved in dam and port building in Iran, the IRGC is heavily involved in the oil industry in Iran [and] even in the manufacture of automobiles. So it's taking a large chunk of the economy out of the private sector. And if you think about it, that is one reason why the private sector is unable to function well -- because the juiciest part, the most important part, of the economy was in fact swallowed up by the IRGC.

RFE/RL: What, in your view, would be the impact on the group if the United States designates the IRGC as a terrorist organization?

Nafisi: Many analysts have dismissed [the blacklisting] as symbolic. But I think it is very important, because from now on, if the policy is carried out, the movement of IRGC members abroad would become very, very hard -- especially in neighboring countries. They could easily be detained as terrorists. So I think that's a major blow to the status and movement of the IRGC. Secondly, because it is a large conglomerate with a tremendous amount of assets and is involved in business, it would not be able to do business with Afghanistan, with Iraq, with neighboring countries; and that's going to be another major issue. Thirdly, if you look at the fact that a large organization like that is put on the [U.S.] list of terrorist organizations and if the Interpol accept that, then it's going to be a major issue for the IRGC, as a legitimate Iranian institution. I think that's basically a very major blow to the status, prestige, and economic activities and the movement of the organization.

Rasool Nafisi teaches the sociology of development at Strayer University in Virginia.

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The Smarter Way to Target Iran

By Patrick Clawson and Michael Jacobson

PolicyWatch #1274
August 17, 2007

On August 15, the New York Times and Washington Post reported that the Bush administration was considering sanctioning Iran's Islamic Revolutionary Guard Corps (IRGC) for its terrorist-related activities. This designation could have a significant impact, as Iranian leaders are vulnerable to the types of "smart sanctions" that would result. Finding others to join in this designation, however, would make it far more effective.

Ratcheting up the Pressure

A terrorist designation for the Revolutionary Guards would mark the culmination of the administration's recent campaign to highlight the IRGC's dangerous activities. Speaking in Dubai in March 2007, U.S. under secretary of the treasury Stuart Levey warned, "When corporations do business with IRGC companies, they are doing business with organizations that are providing direct support to terrorism." In a July 2007 speech, Secretary of the Treasury Henry Paulson focused on the Revolutionary Guards, arguing, "The IRGC is so deeply entrenched in Iran's economy and commercial enterprises, it is increasingly likely that if you are doing business with Iran, you are somehow doing business with the IRGC."

Despite the growing rhetoric, this would be the United States's first such enforcement action against the IRGC or its officials. In fact, the United States -- unlike Europe -- still has not designated the IRGC entities and officials named in UN Security Council Resolutions 1737 and 1747. (It is ironic that the U.S. government has yet to fully comply with the Security Council resolutions it so strongly advocated.) Designating the IRGC also likely indicates resistance at the UN to American proposals to target the IRGC. After the passage of Resolution 1737 in December 2006, in which IRGC commander Yahya Rahim Safavi was listed, Levey argued that "the resolution also requires that the assets be frozen of all the entities [Safavi] owns or controls. So if it is fully implemented, that applies to the entire IRGC."

Basis for Sanctions

The New York Times and Washington Post articles differed on what the administration proposes to do. The Washington Post stated that the IRGC would be sanctioned under Executive Order (EO) 13224 -- issued on September 23, 2001 by President Bush under the International Emergency Economic Powers Act (IEEPA) -- the most commonly used of the administration's tools in this area. Almost five hundred individuals and entities are now on this list. The New York Times, on the other hand, reported that the IRGC would be listed as a Foreign Terrorist Organization (FTO), joining about forty other groups on that list.

These distinctions carry different legal ramifications. First, an FTO listing applies only to accounts at financial institutions, not to other types of property. By contrast, an EO 13224 designation means all assets of the designated entity within U.S. jurisdiction are frozen, including not only bank accounts but all other property as well. Second, the ban on material support to an FTO is so sweeping that, in the words of former Department of Justice assistant attorney general Christopher Wray, "it has allowed us to strike earlier and earlier."

Designation as either an FTO or under EO 13224 would be a departure from the approach to date. The focus of the Treasury Department's recent unilateral sanctions has been on Iran's weapons of mass destruction (WMD) program, not its terrorist activity. The Treasury has blacklisted more than twenty Iranian entities for WMD proliferation under EO 13382, which was signed by President Bush in June 2005. This includes Bank Sepah, which was involved in supporting the regime's ballistic missile program (the bank was subsequently listed by the UN). Bank Saderat was an exception to this rule, as it was targeted by the Treasury for its role in financing terrorist organizations

Smart Sanctions

After the extensive use of sanctions in the early 1990s -- from Iraq to Burma, Haiti, Yugoslavia, and many cases in Africa -- governments and scholars focused on drawing lessons learned. One point of broad consensus was that targeted sanctions were more effective than broad-brush measures. Indeed, there was general agreement that "smart sanctions" should target the leaders of the regime one wishes to influence, while every effort should be made to protect the modern, globally connected middle classes who are most vulnerable to a cutoff of international ties.

The West and the UN Security Council applied these lessons in many of the sanctions regimes of the late 1990s. Suring the war in Bosnia, the United States and the EU barred travel to the West by about six hundred members of the Serbian elite and imposed restrictions on many Serbian firms linked to that elite; more recently, Western nations taken similar actions against the Zimbabwean elite. The Security Council ordered restrictions on travel by diplomats and other officials -- often citing individuals by name -- from Angola, Ivory Coast, Liberia, Libya, Sierra Leone, and Sudan. In most cases, the assets of particular leaders were also frozen. Other examples of targeted sanctions included the Security Council's ban on Yugoslavian participation in international sporting events and a ban on the export of key commodities financing conflicts from Angola, Cambodia, Liberia, and Sierra Leone.

Iran's Corrupt Leaders: Susceptible to Economic Pressure

Applying the sanctions lessons of the last twenty years to Iran, the clear implication is that Western interests are best served by measures that target the regime's leaders. But how vulnerable to economic pressure are Iran's leaders?

Contrary to their image as ideological fanatics, Iran's leaders in fact devote much of their efforts to lining their own pockets -- fighting more often and viciously to protect their incomes than their ideas.

Mahmoud Ahmadinezhad won the 2005 presidential elections by campaigning against the infamous corruption of the ruling elite, epitomized by his opponent Ali Akbar Hashemi Rafsanjani. Once in power, Ahmadinezhad and his followers have proved as corrupt as their predecessors. Ahmadinezhad's family has parachuted into top positions; for instance, the head of the presidential office is his brother, the cabinet executive secretary is one brother-in-law, and the national police commander is another brother-in-law. On August 12, the Industries Minister, one of the more technically competent members of the cabinet, was replaced by Ahmadinezhad's nephew. The foreign minister, Manouchehr Mottaki, also appointed as his director-general for human rights his wife, a pharmacologist with no experience in foreign affairs.

Meanwhile, the master of corruption, Rafsanjani, continues to be a key actor as both head of the Expediency Council (empowered to settle disputes between the president and parliament) and, at least temporarily, the Assembly of Experts (which chooses and has the power to dismiss the supreme leader). Throughout his long career, Rafsanjani has placed high priority on advancing the economic interests of his family -- such as his son, who is now the manager of the Tehran Metro.

And, as Mehdi Khalaji showed in PolicyWatch no. 1273, "Iran's Revolutionary Guards Corps, Inc." the IRGC is both the central prop for the Islamic Republic and also a center for corruption, lining its pockets through shady deals and brute force.

Next Steps

Before taking unilateral action against the IRGC, the United States should strongly press other countries to join in the designation -- or even to take the lead, if possible. According to Treasury Secretary Paulson, the United States unsuccessfully attempted to persuade other governments to act against Bank Sepah prior to the UN Security Council doing so. The problem, in part, Paulson noted, was that other countries lacked the domestic legal authorities to target WMD proliferators. A terrorist-related designation would be another story, as far more countries have the domestic legal systems to freeze terrorists' assets.

Britain would be a logical candidate to join in this action. The U.K. has a well developed system for proscribing terrorist organizations, and its naval forces recently were directly targeted by the IRGC. Other countries that might join in a designation would be those that have blacklisted Hizballah -- the IRGC's primary beneficiary. While the U.K. has designated Hizballah's external security organization, the Netherlands, Australia, and Canada have all listed the entire organization. Although action by the UN or Iran's main trading partners would be ideal, from a symbolic perspective, having any partners at all for the designation would be far preferable to going it alone.

Patrick Clawson is deputy director for research at The Washington Institute. Michael Jacobson is a Senior Fellow in the Washington Institute's Stein Program on Terrorism, Intelligence and Policy, and previously served as a senior advisor in the Treasury Department's Office of Terrorism and Financial Intelligence.

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Why Europe Has Leverage With Iran

By ROGER STERN

Wall Street Journal, August 14, 2007

European resistance to American triumphalism has its uses. But with respect to Iran, Europe's behavior is downright dangerous. Our welcome guest, French President Nicolas Sarkozy -- who just visited President Bush in Maine after vacationing in New Hampshire -- could change this.

Here's the problem: The U.S. stopped investing in Iran's energy industry in the 1990s thanks to sanctions imposed during Bill Clinton's presidency. Unfortunately, Europe stepped in to fill the void, with state-owned oil firms providing capital and energy technology. Today 80% of the Iranian government's revenue comes from oil exports and sales. Without Europe's support, the theocracy's fiscal lifeline would be a very thin thread.

That provides a little context to the lament common from the European Union that Iranian nuclear weapons are "inevitable," as if they were unrelated to energy investments from their member governments.

Europe has sacrificed regional stability for profit before. In 1983, as a global recession wracked France, then-President François Mitterrand pondered "the banker's dilemma" -- whether to extend credit to a troubled debtor in hope of rescuing prior loans. The debtor was Saddam Hussein, who had invaded Iran. Iraq had become France's best arms customer.

Mitterrand ultimately thought he had little choice. His treasury had become so dependent on Iraqi trade that, as a French businessman put it to Le Monde at the time, "Iraqi defeat would be a disaster for France." So France offered Saddam a spectacular new loan of five Super Entenard fighters (advanced warplanes).

But it wasn't enough and the Iran-Iraq war dragged on for nearly eight years, threatening to engulf other Gulf States, such as Saudi Arabia. As a result, the U.S. also supplied Iraq with weapons. Yet despite U.S. support for Saddam and many billions in new credit from EU states, Iran would not be defeated. Tragically, 750,000 soldiers would die on the battlefield following France's 1983 arms deal.

Today, EU credit underwrites what could become a greater disaster. One might think that Europe, ostensibly committed to a peaceful resolution of the Iranian crisis, would seize any opportunity to force conciliation upon Tehran. As in 1983, however, Europe has put short-term profit before long-term security.

European nations disguise this choice from themselves by looking to the United Nations Security Council to impose investment sanctions on Iran. This is a ruse, because Europeans always defer to whatever watered-down measures Russia or China agree to, only to watch as Iran rejects even these.

The exercise allows Europeans to believe they are behaving responsibly. In reality, as talks lead nowhere, credit and technology flow to Iran from the state-owned or -controlled oil firms of France (Total), Norway (Statoil), Italy (ENI) and Spain (Repsol). Clearly, standalone European sanctions could do a lot.

Unfortunately, Europe's oil firms are not merely investors in the terror state. France's Total has reached even lower. Hostage to its recent investments, Total has developed a foreign policy all its own: outright pro-Iranian advocacy. "The Iran Daily" reported recently that a Total executive "called on foreign entrepreneurs to avoid black propaganda and incorrect conceptions about the country."

Total seems to be complaining about verbatim repetition in the Western media of Iranian President Mahmoud Ahmadinejad's own utterances. The executive went on to boast of Total's investment leadership in Iran. While this astonishing behavior preceded Mr. Sarkozy's election, the president has neither rebuked the firm nor stood against further investment in Iran.

The good news is that Iran's regime is vulnerable economically. Government spending has outstripped revenue increases from rising oil prices, while oil exports are stagnant or declining. Gasoline rationing, once politically unthinkable, was implemented nationwide last month. Emblematic of its isolation is Iran's refusal to pay off a tiny debt owed to Russia for the Bushehr nuclear reactor. Iran's fear is that Russia will abandon it once the debt is retired. All of this, of course, makes it questionable whether Iranian nuclear weapons are really "inevitable."

However lamentable and confrontational President Bush's rhetoric may be, the U.S. has at least tried to constrain Iran peacefully using sanctions. Similar European pressure is desperately needed now. It's the one thing short of U.N. sanctions that might force Tehran to be conciliatory.

But that's up to Mr. Sarkozy. He could take the lead by pushing a prohibition on new French energy investment in Iran until that country verifiably rejects and abandons nuclear weapons development. He could also demand that fellow-EU leaders do the same. Oh, and Mr. Sarkozy, please come again.

Mr. Stern is a research associate in the department of Near Eastern Studies at Princeton University.

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