The Weekly Standard
December 12, 2011
by Lee Smith
The storming of the British embassy in Tehran last week by the Islamic Republic's Basij loyalists is evidence that fevered paranoia is now part of the Iranian regime's decision-making process. In Washington, a confrontation between a Democratic senator and Obama administration officials over Iran sanctions suggests that the White House may have resigned itself to Iran's acquiring a nuclear bomb. Taken together, these two scenes show that the United States and Iran are moving ever closer to an open war that has been more than three decades in the making.
It is an index of what has happened during the last 30 years that few were surprised when sovereign British territory was seized last week in the Iranian capital in protest of strong European sanctions against the Central Bank of Iran. After the mob freed captured British diplomats, London recalled its senior staff and threw Iran's mission out of the British capital. In solidarity, France and Germany withdrew their staff from Iran. Presumably, Paris and Berlin were also fearful of mob attacks on their own envoys. The 1979 takeover of the U.S. embassy in Tehran and subsequent bombings of the American embassy in Beirut and the Israeli embassy in Buenos Aires have long made it clear that customary inter-national law is no part of the revolutionary regime's playbook.
Iranian exceptionalism?—?the fact that Tehran's outrages are tolerated by the international community?—?explains why Western policymakers and deterrence theorists have wasted so much time deliberating whether the clerical regime now marching toward a nuclear weapon is rational. What would constitute abnormal behavior from any other government is considered normal for the Islamic Republic. Had Washington dealt with Tehran like a rational state, the Carter White House would have treated the embassy takeover 30 years ago as an act of war, and responded in kind. (Even veteran diplomat George F. Kennan, a realist's realist, advocated a declaration of war and the interning of Iranian diplomats in this country.)
Instead, the Carter White House embarked on a secret mission to rescue the hostages, thereby establishing one of the enduring pillars of Washington's Iran policy?—?clandestine operations. While the United States and its allies, especially Israel, have enjoyed many successes against Iran in the secret war, Tehran is itself much more comfortable operating in the shadows. This is especially so when Washington provides much of the darkness, obscuring, for instance, Iran's role in killing American troops in Iraq and Afghanistan.
In the last month, there have been two blasts at Iranian facilities that are apparently related to the regime's nuclear weapons program. It's unclear who is responsible for the explosions, whether it is external actors?—?the U.S., Israeli, or some other intelligence service?—?internal opposition forces, or more likely some combination of the above. Whether it was sabotage or an accident in a program that is by most accounts poorly managed, the result is the same. The explosions are driving the regime crazy. The nuclear weapons program is a vital interest to mullahs whose self-image is built on confrontation, and the blasts erode their prestige. In the short term, the secret war sets back the Iranian bomb with every explosion. But in the long run, this is a success only if Washington's larger strategy is to lure Iran into making the first move in an open war that will result in the fall of the regime and the destruction of the nuclear weapons program.
Nobody wants war, of course, but at this point it seems no one is going to stop Iran from getting the bomb either. Diplomacy is the second pillar of Washington's 30-year Iran policy, and after failing to engage the regime, the White House has moved on to a strategy of containment and deterrence that assumes a beefed-up coalition of Gulf Arab states are willing, and able, to push back against Iran. Sanctions were supposed to have been the White House's fallback position after diplomacy, but the administration apparently fears that certain sanctions targeting Iran's energy sector will hurt the president's chances at reelection. A hike in oil prices that might result from going after Iran's main source of income is not going to help an already moribund U.S. economy rebound in time for November.
The more immediate concern is that sanctions driving up oil costs might create a windfall for Iran. The question, says Mark Dubowitz, executive director of the Foundation for Defense of Democracies (FDD), "is how do you design a package that targets the price of oil but leaves the physical supply alone? Otherwise Ali Khamenei will enjoy an astonishing windfall by selling his oil at sharply higher prices." The answer is to wean your allies off of Iranian oil as quickly as possible and leave Tehran with only those customers who will ignore sanctions anyway, namely China. If Beijing is Iran's only buyer, it will have leverage to extract discounts from Tehran, which might cost the regime tens of billions of dollars in revenue.
Significant discounts are also possible even if India keeps buying Iranian oil along with Turkey, South Africa, Pakistan, and Sri Lanka, Iran's other major buyers. FDD's confidential report on the "Oil Market Impact of Sanctions Against the Central Bank of Iran" provided a detailed economic model that informed the Kirk-Menendez sanctions amendment, which won unanimous Senate consent for consideration on the new Defense authorization bill. Senators Mark Kirk (R-Ill.) and Robert Menendez (D-NJ) wrote separate amendments, with Kirk's the more draconian of the two, levying secondary sanctions on anyone who did business with the Central Bank of Iran.
Administration officials feared that Kirk's effort would alarm allies and oil markets and requested that the two draft a compromise. The Kirk-Menendez amendment leaves plenty of room for those accustomed to working with the Central Bank of Iran to take their business elsewhere. It imposes sanctions on "foreign financial institutions, including central banks, engaged in petroleum related transactions with the Central Bank of Iran after 180 days with 180-day special exemptions tied to the availability of non-Iranian oil on the market and a country's significant reduction in purchases of Iranian oil."
The point of sanctions like the Kirk-Menendez amendment, says Dubowitz, "is to bring your allies on board as quickly as possible without spooking oil markets and to give the administration flexibility to manage two of the most sensitive elements of the global financial system?—?oil markets and central banks."
To get the White House to buy in, the amendment provided a number of waivers for the president. For instance, the timeline allows the president to decide "whether the price and supply of petroleum and petroleum products from non-Iranian suppliers is sufficient to allow purchasers to significantly reduce their purchases from Iran."
Nonetheless, the administration came out against the amendment, with Treasury Secretary Timothy Geithner arguing that it would force the international community to choose between doing business with us or with the Islamic Republic. "I think that choice is pretty easy for them," Menendez countered. "We shouldn't be leading from behind, we should be leading forward."
The clock is ticking on the Iranian nuclear weapons program, said Menendez. "The published reports say we have about a year. Now when are we going to start our sanctions regime robustly, six months before the clock has been achieved? Before they get a nuclear weapon?"
Over the last 30 years the price for stopping Iran has risen steadily. What would have come relatively cheaply in November 1979 will likely cost the United States, its allies, and interests, dearly. The Obama administration may not be on board, but at least U.S. lawmakers recognized last week that the international community can't afford an Iranian nuclear weapon.
Lee Smith is a visiting fellow at Hudson Institute and is the author of The Strong Horse: Power, Politics and the Clash of Arab Civilizations (Doubleday, 2010).
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