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@@ America's anti-Iran actions falters amid futile sanctions, propaganda, and terrorism @@

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Arash

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Nov 7, 2005, 6:23:58 PM11/7/05

Bloomberg
November 7, 2005

Bush's Iran Policy Falters Amid Futile Sanctions, Diplomacy

Janine Zacharia: jzacharia[AT]bloomberg.net
Jeff St.Onge: jstonge[AT]bloomberg.net

Washington D.C. -- In mid-September, U.S. Senator Gordon Smith
(http://en.wikipedia.org/wiki/Gordon_Smith / Email: senator[AT]smith.senate.gov),
wrote a letter to Hiroshi Okuda, chairman of Toyota Motor Corp., chastising him for
what he called the company's "immoral'' decision to expand its business in Iran.

"Seeking business advantages at the expense of America's security is antithetical to
the values for which our country stands'', the Oregon Republican wrote to the head of
Japan's largest automaker.

Senator Smith's colleagues in Congress, Democrats and Republicans alike, share his
anger. They've concluded that unilateral U.S. sanctions for most of the past 25 years
on OPEC's second-largest oil producer have done little more than keep U.S. businesses
out of a growing market; they're now pressing legislation that would penalize foreign
companies making new investments in Iran's oil sector. Companies with existing
investments include Royal Dutch Shell PLC and Total SA.

The legislation stands a good chance of passage; it has 31 co-sponsors in the Senate
and 326 in the House.

At the same time, officials in President George W. Bush's administration have
expressed concern about some provisions. There is no sentiment in either Congress or
the administration for relaxing the sanctions.

The lawmakers' frustration reflects a central dilemma: U.S. policy on Iran contains
few good options. With economic pressure largely ineffective and no credible military
option because U.S. troops are tied down in an unpopular war in Iraq, the Bush
administration has little direct leverage over Iran. Instead, it's relying on
European-managed diplomacy to curb Iran's pursuit of nuclear technology and support
for terrorism.

No Winner

Kenneth Pollack (http://www.brook.edu/scholars/kpollack.htm), who directed Iran
policy in the White House under President Bill Clinton, says the administration
"recognized that neither the military option nor regime change is a winner''.

Ted Galen Carpenter (http://www.cato.org/people/carpenter.html) of the Cato
Institute, a Washington- based policy research group, says it's widely known the U.S.
"can't invade and occupy the country'', undermining any threat of military action on
the part of administration policy makers.

"They have become so beleaguered and so besieged and so confronted with challenges
that they've made a conscious decision that diplomacy will now be the most turned-to
tool of power'', Colonel Larry Wilkerson
(http://www.newamerica.net/index.cfm?pg=event&EveID=520), chief of staff to former
Secretary of State Colin Powell, says of the Bush team's approach to Iran.

The diplomatic route has proven bumpy. The Europeans offered economic incentives and
security guarantees if Iran abandoned its nuclear program, only to have Iran reject
the offer and resume work on uranium conversion. That's a possible prelude to uranium
enrichment, which in turn could lead to production of nuclear weapons.

Guarantee Sought

Some analysts say negotiations will prove futile because Iran has no interest in
abandoning its nuclear program. Others say the European offers have not been enticing
enough and that Iran needs a U.S. guarantee that it will not attack Iran as part of a
nuclear deal.

Kenneth Pollack says there won't be any diplomatic progress "unless there's some form
of engagement'' between the U.S. and Iran.

Senator Chuck Hagel (http://en.wikipedia.org/wiki/Chuck_Hagel / Email:
senator[AT]hagel.senate.gov), a Nebraska Republican, agrees, saying the
administration must open direct talks with Iran if it's to achieve "any lasting
solution to Iran's nuclear program''.

"The United States is capable of engaging Iran in direct dialogue without sacrificing
any of its interests or objectives'', Senator Hagel said in a speech October 30 at
Iowa State University in Ames.
http://hagel.senate.gov/index.cfm?FuseAction=Speeches.Detail&Speech_id=20&Month=10&Year=2005

The Bush administration says it's seeking ways to do that. Secretary of State
Condoleezza Rice (http://www.rense.com/general68/cond.htm), testifying before the
Senate Foreign Relations Committee on October 19, said the U.S. is making "new
efforts'' to communicate with the Iranians.

Sanctions Sought

At the same time, the U.S. is hoping for United Nations sanctions against Iran if it
remains recalcitrant. Opposition is likely from two veto-wielding Security Council
members, Russia and China. Russia is helping Iran build its nuclear power plant at
Bushehr, and China gets 14% of its energy from Iran.

While the diplomatic maneuvering continues, Congress is moving forward with the
legislation that may penalize companies based in countries that are U.S. diplomatic
partners. The House version of "The Iran Freedom Support Act" H.R. 282
(http://www.govtrack.us/congress/billtext.xpd?bill=h109-282), whose Senate companion
S. 333 (http://www.govtrack.us/congress/billtext.xpd?bill=s109-333) would force the
president to rule within 90 days on whether a foreign company has invested more than
$20 million in Iran's energy sector, a violation of existing sanctions law.

The current law doesn't force the president to cite violators. Numerous companies,
including Paris-based Total, Rome-based ENI SpA and The Hague-based Royal Dutch
Shell, have invested more than $20 million without being penalized, according to an
April 19 report by the Congressional Research Service.

New Investments

The proposed legislation -- sponsored by Senator Rick Santorum
(http://en.wikipedia.org/wiki/Rick_Santorum / Email: senator[AT]santorum.senate.gov),
a Pennsylvania Republican, and Representative Ileana Ros-Lehtinen
(http://en.wikipedia.org/wiki/Ileana_Ros-Lehtinen / Email:
Ileana.Ros-Lehtinen[AT]mail.house.gov), a Florida Republican -- would not affect
existing investments.

Both the House and Senate versions would make it harder for the president to waive
sanctions against new investments. Potential sanctions include denial of loans,
credits, or licenses for exports to sanctioned companies. The House version would
also ask U.S. government and private-sector fund managers to divest voluntarily
investments in entities that invest in Iran's energy sector.

Nicholas Burns (http://en.wikipedia.org/wiki/R._Nicholas_Burns), the undersecretary
of state for policy, wrote to Senator Santorum October 13, saying the administration
worried the new rules "would impair our ability to continue working closely and
successfully with our allies'' on the Iranian issue.

Toyota wouldn't be affected by the sanctions legislation because its investment isn't
energy-related. Toyota spokeswoman Martha Voss denied Smith's charge that the company
was expanding its business in Iran, while acknowledging that its 70 dealerships in
the country had sold 4000 vehicles during the first nine months of this year compared
with 327 during all of 2004.

'Fundamentalist' in Charge

Tensions between the U.S. and Iran have intensified with the election in June of
President Mahmoud Ahmadinejad, a self- proclaimed "fundamentalist'' and a founder of
the group that stormed the U.S. embassy in Tehran in 1979. The U.S. suspects he
participated in the hostage seizure that led the U.S. to break off relations and
impose sanctions.

Ahmadinejad in September offered to share nuclear technology with Arab nations and on
October 26 suggested violence against Israel was justified, telling an audience in
Tehran there was "no doubt the new wave in Palestine will soon wipe off this
disgraceful blot from the face of the Islamic world''.

"Anybody who recognizes Israel will burn in the fire of the Islamic nation's fury'',
he said.

Designs on Iraq

Ahmadinejad's vision of an Islamic nation includes its neighbor, Iraq. Iran's
population is 89% Shia Muslim, and the Iraqi government that emerged after the
overthrow of Saddam is dominated by Shias. The U.S. hopes that government will
include Sunnis and Kurds as well as Shias, and will preserve religious freedom and
the rights of women.

"Iran wants a friendly government in Iraq, one that is amenable to Iran's desire to
be the No. 1 power in the whole Persian Gulf region'', Ted Galen Carpenter said.
"Iran sees itself as a model for other Islamic states''.
http://www.bloomberg.com/apps/news?pid=10000103&sid=asJbQ36UVlm0&refer=us