Washington DC – “We are five minutes to midnight,” said Orde Kittrie, senior fellow at the Foundation for Defense of Democracies. “The time is now to change Iran’s cost-benefit analysis.” Kittrie’s remarks came as Congress began deliberations on the Iran Sanctions Enabling Act of 2009 in the first hearing held by the House Subcommittee on International Monetary Policy and Trade.
The bill, HR 1327, is spearheaded by finance committee chairman Barney Frank [D-MA-4] and almost identical to HR 2347, which was passed overwhelmingly by the house last year. The bill would authorize state and local laws requiring public investment funds to sell all financial stakes in companies doing business in Iran’s energy sector.
Along with Kittrie, the panel featured state Senator Ted Deutch, champion of Florida’s Iran divestment law, Jason Isaacson, director of government affairs at the American Jewish Committee, and NIAC President Trita Parsi.
Representatives Brad Sherman [D-CA-27] and Keith Ellison [D-MN-5] appeared as guest witnesses, offering opening remarks and questions for the panelists. ”We owe a special debt to the mullahs that run Iran for their mismanagement of the economy that has made it vulnerable to sanctions” said Sherman, a proponent of sanctions and one of the bill’s cosponsors.
The California representative emphasized the measure would focus on Iran’s energy sector. “The oil sector is Iran’s source of wealth, but it is also its Achilles’ heel” because Iran relies on imports for refined oil, Sherman said. Last year, Rep. Sherman cosponsored a bill that called on the President to impose a naval blockade to prevent Iran from importing any refined petroleum products.
Kittrie and Isaacson argued the divestment legislation is needed to increase leverage over Iran. “If President Obama is to negotiate away Iran’s illegal nuclear program he will need more leverage than President Bush left him,” said Kittrie. “In my opinion, strong sanctions on Iran have yet to be tried.”
Parsi disagreed, saying the existing sanctions provide sufficient leverage but additional coercive measures could poison the atmosphere for negotiations before talks can occur. “After a decade-and-a-half of failed sanctions and economic pressure, and three decades of hostility, it is not sanctions or divestment that deserves another chance,” Dr. Parsi said. “It is diplomacy … that should be given the space and time to succeed.”
Parsi argued the people of Iran bear the brunt of economic hardships caused by sanctions. “Sanctions have strengthened the hard-line elements’ hold and control over the economy, which in turn has strengthened their grip on power,” said Parsi.
Representatives Maxine Waters [D-CA-35] and Steve Driehaus [D-OH-1] expressed sympathy for the pain sanctions have imposed on the people of Iran but maintained that they are necessary to increase pressure.
Rep. Erik Paulson [R-MN-3] asked Kittrie and Isaacson if the United States should support Iranian opposition groups, like the MEK (Mujahedin-e Khalq). However, the experts cautioned Rep. Paulson about providing aid to historically violent opposition groups. “Some groups, like the MEK, have been linked to acts of terrorism, so we have to be very careful about the groups we reach out to,” Kittrie warned. The U.S. Department of State has designated the MEK a terrorist organization, a conclusion reiterated by former Secretary of State Condoleezza Rice in January.
Senator Deutch said initial divestment efforts have been successful, citing several international corporations that have shut down operations in Iran’s energy sector.
However, some questioned whether that was really a success. Ellison spoke of the need to focus on results, rather than viewing sanctions as an end in themselves. “We cannot be married to our tools,” he said, adding “the ultimate measure of success is in a change in Iranian behavior.”
Dr. Parsi agreed the sanctions have had a painful effect. “Yet, with all the economic pain the sanctions have imposed on the Iranian economy, there has not been a single instance in which that pain has translated into a desirable change in the Iranian government’s policies.”
While subcommittee chair, Gregory Meeks [D-NY-7], voiced support for a “sticks and carrots approach to foreign policy,” he made clear his support for direct diplomacy with Iran. Meeks adjourned by quoting the late Israeli Prime Minister Yitzhak Rabin: “Peace is not made with our friends; it is made with our enemies.”
“Indeed, we are five minutes to [midnight]” said Parsi, “and if we don’t start seriously engaging in diplomacy – the world is more likely to see a nuclear Iran.”