This week brought unusual news from Russia, which until now has been a major supplier of Iran’s nuclear programs.
The Russians said they were pulling engineers and technicians out of Busheir, the Persian Gulf site where since 1995 they have been building a nuclear power plant for Iran. They cited as pretext Iran’s failure to make timely payments on the $800 million contract.
Should this turn out to be more than just a tactical maneuver, Russia’s pullback from Iran signals a real success for U.S. diplomacy.
But the U.S. has had less success in other areas. And the administration must show results soon if it doesn’t want Congress to pass new legislation that will impose mandatory sanctions on foreign companies trading with Iran.
Sen. Chris Dodd (D, Conn) berated administration witnesses during a hearing of the Senate Banking committee on Wednesday for their failure to cut off foreign investment in Iran’s oil and gas industry.
He displayed a chart showing 14 recent investment deals worth potentially $126 billion, which companies in Britain, France, Italy, Holland, China, Malaysia have signed with Iran.
Despite laws on the books passed initially during the Clinton administration that require the administration to impose sanctions on foreign companies that invest more than $20 million in Iran’s oil and gas sector, “not one foreign energy concern has been sanctioned,” Dodd said.
Undersecretary of State Nicholas Burns replied that top U.S. officials have been “jawboning” foreign oil companies to get them to back off from those contracts, and that he expected many of the deals on Dodd’s chart would never materialize. “We’ve gone to their CEOs and said, ‘this is a bad idea.’” Burns said.
Then he warned that stronger action would destroy two years of patient U.S. diplomatic efforts to build a coalition that has gradually ratcheted up the pressure on Iran. With no results yet to show, he was essentially saying, trust me.
Undersecretary of Treasury Stuart Levey described the type of financial steps the U.S. has been taking with our allies behind the scenes. These have had a real impact, and have made it more difficult for Iran to use the international financial system to send money to terrorist groups and to purchase equipment for their WMD programs.
Just one example: In January 2006, the U.S. imposed $70 million in fines on ABN Amro Bank NV of Holland for violating sanctions on Iran and laundering payments for Iranian entities. The fines were an effective measure that sent a clear message to the international banking community. They also led Amro and other banks to announce in the ensuing months that they would take no new business in Iran.
I travel the United States speaking to various groups about the threat from the Islamic Republic of Iran. Except for pro-Tehran groups, or hard Leftists who would like the United States to become an Islamic Republic, no one really disputes Iran’s nuclear weapons intentions or their support for international terrorism.
But no one really knows what to do about it. They see what the U.S. government claims to be doing, and then they look at Sen. Dodd’s chart: $126 billion in fresh investment in Iran is no chump change.
American corporations continue to do business with Iran despite the total U.S. trade embargo imposed by Executive Order in 1995. They do it by flowing their Iran contracts through foreign subsidiaries. This is perfectly legal, but it is wrong.
So what can ordinary citizens do about it? Here are a few suggestions.
In Maryland, where I live, Delegate Ron George has introduced a bill into the state legislature that would require the State Pension funds to disinvest from companies that continue to do business with Iran. He needs your support.
Maryland is a relatively small state of just over five million citizens. And yet, the state pension funds have nearly $2 billion invested in companies that invest in terrorist-sponsoring states.
The pitch is very simple: Do you want your pension fund invested in companies who prop up Iran? There are lots of other places you can invest. Why choose companies helping countries such as Iran whose leaders state publicly they want to destroy America?
A similar bill has been introduced in California, whose state pension fund, Calpers, controls a hefty $338 billion dollars of investments along with the California State Teacher’s Retirement System. Joel Anderson, the Republican legislator who introduced the bill, said it would impact $24 billion worth of investments. Pennsylvania is contemplating a similar measure.
The “Divest Terror” bandwagon, spearheaded by my friend Frank Gaffney, has begun to roll. It worked with South Africa. It can work with Iran.
Gaffney has a very simple idea. Identify a “dirty dozen” group of international companies who supply capital or technology or know-how to terrorist states, and encourage U.S. state pension funds to pull funding from them.
Even State Department Undersecretary Nick Burns acknowledged in a back-handed way that such legislation helps, since it provides State Department diplomats with a bogeyman they can trot out in front of reluctant coalition partners: if you don’t play ball, it gets much worse.
There are other measures ordinary Americans can take on a more personal level.
How many of us buy gasoline from Shell stations, or own vehicles produced by DaimlerChrysler? These are just two examples of international corporations heavily invested in Iran. Boycotting their products, and letting the companies know it, can have an impact.
DaimlerChrysler has been expanding its operations in Iran in recent years, and recently opened an assembly line to build E-class vehicles in Iran. It also owns a factory that builds Mercedes-Benz diesel engines for trucks and buses under license.
In 2004, DaimlerChyrsler sold through a Saudi affiliate 270 Mercedes Benz commercial vehicles to Iran in a $22 million contract. Those vehicles have since been used by law enforcement authorities in Iran for riot control. A German prosecutor in Stuttgart opened an investigation into the sale.
DaimlerChrysler AG is the parent corporation of what used to be Chrysler corporation here in the United States. The U.S. company has no legal or corporate responsibility for the sales of its parent to Iran. Those sales are perfectly legal. But they are wrong.
Shell has signed pre-contractual agreements to invest billions of dollars in Iran’s oil and gas sector. Without help from Shell and other major oil companies, the International Energy Agency projects that Iranian oil exports will grind to a halt by 2015.
There are dozens of U.S. and international corporations in a similar situations as DaimlerChrysler or Shell. And most of them do business here in the United States.
Want to have a personal impact? Start there.