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IRAN SANCTIONS: OPTIONS, OPPORTUNITIES AND

CONSEQUENCES

HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL SECURITY

AND FOREIGN AFFAIRS

OF THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED ELEVENTH CONGRESS

FIRST SESSION

DECEMBER 15, 2009

Serial No. 111–43

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

EDOLPHUS TOWNS, New York, Chairman

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERRY E. CONNOLLY, Virginia

MIKE QUIGLEY, Illinois

MARCY KAPTUR, Ohio

ELEANOR HOLMES NORTON, District of

Columbia

PATRICK J. KENNEDY, Rhode Island

DANNY K. DAVIS, Illinois

CHRIS VAN HOLLEN, Maryland

HENRY CUELLAR, Texas

PAUL W. HODES, New Hampshire

CHRISTOPHER S. MURPHY, Connecticut

PETER WELCH, Vermont

BILL FOSTER, Illinois

JACKIE SPEIER, California

STEVE DRIEHAUS, Ohio

JUDY CHU, California

DARRELL E. ISSA, California

DAN BURTON, Indiana

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

JOHN J. DUNCAN, JR., Tennessee

MICHAEL R. TURNER, Ohio

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

BRIAN P. BILBRAY, California

JIM JORDAN, Ohio

JEFF FLAKE, Arizona

JEFF FORTENBERRY, Nebraska

JASON CHAFFETZ, Utah

AARON SCHOCK, Illinois

BLAINE LUETKEMEYER, Missouri

ANH ‘‘JOSPEH’’ CAO, Louisiana

RON STROMAN, Staff Director

MICHAEL MCCARTHY, Deputy Staff Director

CARLA HULTBERG, Chief Clerk

LARRY BRADY, Minority Staff Director

SUBCOMMITTEE ON NATIONAL SECURITY AND FOREIGN AFFAIRS

JOHN F. TIERNEY, Massachusetts, Chairman

CAROLYN B. MALONEY, New York

PATRICK J. KENNEDY, Rhode Island

CHRIS VAN HOLLEN, Maryland

PAUL W. HODES, New Hampshire

CHRISTOPHER S. MURPHY, Connecticut

PETER WELCH, Vermont

BILL FOSTER, Illinois

STEVE DRIEHAUS, Ohio

STEPHEN F. LYNCH, Massachusetts

HENRY CUELLAR, Texas

MIKE QUIGLEY, Illinois

JEFF FLAKE, Arizona

DAN BURTON, Indiana

JOHN L. MICA, Florida

JOHN J. DUNCAN, JR., Tennessee

MICHAEL R. TURNER, Ohio

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

JIM JORDAN, Ohio

JEFF FORTENBERRY, Nebraska

BLAINE LUETKEMEYER, Missouri

WILLIAM MILES, Staff Director

(III)

C O N T E N T S

Page

Hearing held on December 15, 2009 ...................................................................... 1

Statement of:

Maloney, Suzanne, senior fellow, the Brookings Institution; George Lopez,

professor of peace studies, University of Notre Dame; Robin Wright,

Jennings Randolph fellow, U.S. Institute of Peace; and Ambassador

James Dobbins, director, Rand International Security and Defense Policy Center ...................................................................................................... 10

Dobbins, Ambassador James .................................................................... 45

Lopez, George ............................................................................................ 22

Maloney, Suzanne ..................................................................................... 10

Wright, Robin ............................................................................................ 32

Letters, statements, etc., submitted for the record by:

Dobbins, Ambassador James, director, Rand International Security and

Defense Policy Center, prepared statement of ........................................... 48

Lopez, George, professor of peace studies, University of Notre Dame,

prepared statement of ................................................................................... 25

Maloney, Suzanne, senior fellow, the Brookings Institution, prepared

statement of ................................................................................................... 14

Tierney, Hon. John F., a Representative in Congress from the State

of Massachusetts:

Letter dated December 11, 2009 .............................................................. 8

Prepared statement of ............................................................................... 4

Wright, Robin, Jennings Randolph fellow, U.S. Institute of Peace, prepared statement of ........................................................................................ 36

(1)

IRAN SANCTIONS: OPTIONS, OPPORTUNITIES

AND CONSEQUENCES

TUESDAY, DECEMBER 15, 2009

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON NATIONAL SECURITY AND FOREIGN

AFFAIRS, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room

2154, Rayburn House Office Building, Hon. John F. Tierney (chairman of the subcommittee) presiding.

Present: Representatives Tierney, Lynch, Quigley, Foster, Duncan, Flake, Jordan, and Leutkemeyer.

Staff present: Mariana Osorio, Daniel Murphy, Matt Ploszek,

Aaron Wasserman, and Robyn Russell, legislative assistants; Andy

Wright, staff director; Elliot Gillerman, clerk; Talia Dubovi, counsel; Adam Fromm, minority chief clerk and Member liaison; Tom

Alexander, minority senior counsel; Christopher Bright, minority

senior professional staff member; and Brien Beattie, minority professional staff member.

Mr. TIERNEY. A quorum being present, the Subcommittee on National Security and Foreign Affairs’ hearing entitled, ‘‘Iran Sanctions: Options, Opportunities and Consequences,’’ will come to

order.

I ask unanimous consent that only the chairman and ranking

member of the subcommittee be allowed to make opening statements. Without objection, so ordered.

I ask unanimous consent that the hearing record be kept open

for 5 business days so that all members of the subcommittee be allowed to submit a written statement for the record. Without objection, it is so ordered.

Good morning, particularly to our witnesses, who were kind

enough to come here and share their testimony with us today.

We are going to examine an important and timely national security issue in the options and effectiveness of sanctions against the

Islamic Republic of Iran.

2009 has been a turbulent year in U.S.-Iran relations. Last January we inaugurated a President ready to pursue diplomatic engagement, and this past April marked the 30th year of the Islamic Republic’s history. In November we remembered the 30th anniversary

of the Iran hostage crisis, and the June 12th Presidential election

and its tumultuous aftermath shook Iran’s government like no

other event in the last 30 years. In September, United States and

Iranian officials held direct bilateral talks at the highest level since

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Iran’s Revolution; yet Iran and its nuclear program still present

significant challenges to the United States and to the international

community.

Nearly a year after President Obama extended a hand to Iran in

his inaugural address, we have yet to see Iran unclench its fist. Instead, Iran continues to develop its nuclear program in the shadows. It claims that its nuclear program is designed for peaceful civilian purposes; yet, it refuses to cooperate fully and transparently

with the International Atomic Energy Agency and its inspectors.

That raises significant concerns about the true nature and intent

of Iran’s nuclear ambitions.

Last September, the United States, along with its allies, disclosed that Iran had long been building a secret nuclear reactor in

Qom. This revelation was followed last month by an official U.N.

resolution condemning Iran’s failure to disclose the site, as required under the Nuclear Non-Proliferation Treaty. The resolution

was approved with strong international support by a 25 to 3 vote,

with both Russia and China voting in favor of condemning Iran.

There are many strong options, both within the United States

and around the world, on how best to manage the many challenges

that Iran presents. I think that many of us support the President’s

strategy of engagement, but if that fails to bear fruit, then a lot of

us are contemplating what must be the next step, and that is what

brings us together here today. We have assembled a distinguished

panel of experts to share with us their thoughts on the vital national security question at hand.

Just on the personal side of this, I just want to make a couple

points. I don’t think that anybody condones the fact that Iran has

nuclear weapons or is moving in that direction, and we think that

Iran with nuclear weapons is a major threat to American interests.

It is a threat to Israel, a threat to peace and stability in the Middle

East. Any program to which they may have a right, as a party to

the Nuclear Non-Proliferation Treaty, must be peaceful, civilian,

open, transparent, and subject to inspection by the International

Atomic Energy Agency.

Disclosure of previously secret nuclear facilities, as we have seen,

and the threat to replicate that 10 times over, and a general unwillingness to reasonably engage with the international community, obviously, all of those behaviors exhibited by Iran cause concern. The United States and the international community has

made, I think, a considerable effort to negotiate and engage, which

has yet to be reciprocated. That was a test for Iran’s leadership.

If it was serious about its claims that only a civilian nuclear program was being pursued, there was no reason it should not have

agreed to export to Russia or elsewhere and allow the IAEA inspections.

So what are our options? Governments and intelligence agencies

and other experts agree, or disagree, I should say, on how close

Iran is to developing a bomb. Also, many of them agree that any

military strike on facilities would likely only delay development by

only 1 or 2 years and cause other repercussions. There is considerable disagreement and debate on the value, effect, nature, impact,

or usefulness of sanctions. Arguably, sanctions should be used to

support, not replace, diplomatic efforts. Should Iran delay negotiaVerDate 11-MAY-2000 15:37 Apr 19, 2010 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 U:\DOCS\55100.TXT KATIE PsN: KATIE
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tions, or if the negotiations should fail, then many feel that strong

multilateral sanctions by the international community would be in

order, if they were targeted and effective in that regard.

Now, with respect to the Iran Refined Petroleum Sanctions Act

of 2009, which the House will be considering this week, personally,

I have considerable concerns. The hardliners are in some disarray

presently. New sanctions could allow them to consolidate their hold

on power and get bolstered support from the Iranian people. Sanctions could heighten support from Mr. Ahmadinejad out of some

nationalistic feeling or resentment for how devastating the effect of

sanctions might be on the civilian population. It is notable that the

two main opposition leaders have spoken against imposition of

sanctions, particularly with regard to refined petroleum products.

The restriction on refined oil products could probably be assumed

to affect the poor and the middle class in Iran, but it is unlikely

that the elites and the Islamic Revolutionary Guard Corps, in particular, would be deprived of the use of any gasoline or other refined products that would come in. And, in fact, they might control

any market that existed in them.

So we have a large question here to answer. I think Jeff and others may have a different opinion on that, but I could only support

the IRPSA if I was assured that its current language—which I read

to mandate the sanctions, as opposed to provide the flexibility of

the President to implement them—would either be delayed to a

more appropriate time on the diplomatic pressure process that the

administration is following or if they will be modified, prior to passage, to provide the President more flexibility. If we get those assurances, then we may get it through the House so that it can go

to the Senate and be modified in conference there, if necessary.

Only with more flexibility in exercising sanction authority might

the President secure greater cooperation from our partners in taking effective action and ultimately facilitate a change in Iranian

policies. Now is a critical stage in the intense diplomatic process,

as we seek to impose significant international pressure on Iran. I

think the legislator ought to take care not to harm those prospects

as they go forward.

So it is with interest that we listen to our experts on the panel

here today. We want to make sure that we move in the proper way

and the most effective way, and we welcome you and thank you for

your testimony.

[The prepared statement of Hon. John F. Tierney follows:]

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Mr. TIERNEY. With that, I defer to Mr. Flake for his opening remarks.

Mr. FLAKE. I thank the chairman. I look forward to today’s hearing.

I, myself, am not a fan of economic sanctions, particularly those

imposed unilaterally, so it has to be a pretty high bar, in my view,

to go this direction. I share the chairman’s concern about the refined petroleum sanctions. I note that there is not a virulently antiAmerican feeling in Iran among the population, and I hope we can

keep it that way; and I am concerned about changing that. I think

that we can all agree—and in reading your testimony I think we

all agree—that these sanctions will only be really effective if they

are multilateral, if we convince our international partners to come

with us. My concern is, and my questions will be surrounding,

whether or not moving ahead on a unilateral basis is more likely

to bring our partners along, or if simply giving the President more

flexibility in this regard would be a better option.

I hear all the time we are simply leading on this, we are simply

expressing our feelings, that this doesn’t tie the hands of the administration. Sometimes you don’t start that way, but within

months or the next year you are tying the hands of the administration, and I would point to Cuba as a perfect example. When you

have the Helms-Burton Act and other legislation, the President’s

hands are tied; there are very severe limits on what the President

can do in response to action on the part of the Cubans or in any

other direction. So while this may not start out as an attempt to

tie the President’s hands, it may quickly evolve into something that

does, and that concerns me as well.

So thank you all for being here and I look forward to the testimony.

Mr. TIERNEY. Thank you very much.

I ask unanimous consent to enter into the record the Deputy Secretary of State’s letter to Senator Kerry, the chairman of the Committee on Foreign Relations in the U.S. Senate, on this issue. Basically, the letter indicates that he is following up on a conversation

that James Steinberg, the Deputy Secretary of State, had with Senator John Kerry, the chairman of the Senate Foreign Relations

Committee, regarding Iran and possible sanctions legislation to be

taken up in the Senate; and that bill, S. 2799, is very close to the

IRPSA bill that we are looking at here.

‘‘The Administration shares Congress’s concerns on Iran and its

nuclear program and the need to take decisive action. One of the

top national security priorities for the Obama Administration is to

deny Iran a nuclear weapons capability. As we discussed, we are

pursuing this objective through a dual track strategy of engagement and pressure; and we are engaged in intensive multilateral

efforts to develop pressure track measures now. It is in the spirit

of these shared objectives that I write to express my concern about

the timing and content of this legislation.’’

‘‘As I testified before the Congress in October, it is our hope that

any legislative initiative would preserve and maximize the President’s flexibility, secure greater cooperation from our partners in

taking effective action, and ultimately facilitate a change in Iranian policies. However, we are entering a critical period of intense

7

diplomacy to impose significant international pressure on Iran.

This requires that we keep the focus on Iran.’’

‘‘At this juncture, I am concerned that this legislation, in its current form, might weaken rather than strengthen international

unity and support for our efforts. In addition to the timing, we

have serious substantive concerns, including the lack of flexibility,

inefficient monetary thresholds and penalty levels, and blacklisting

that could cause unintended foreign policy consequences.’’

‘‘I have asked the Department staff to prepare for and discuss

with your staff revisions that could address these concerns on timing and content. I am hopeful that we can work together to achieve

our common goals.’’

‘‘I hope the consideration of this bill could be delayed to the new

year so as not to undermine the Administration’s diplomacy at this

critical juncture. I look forward to working together to achieve our

common goals, and I will stay in close contact with you as our diplomatic efforts proceed,’’ by James Steinberg, the Deputy Secretary

of State.’’

I ask that it be entered into the record with unanimous consent.

So ordered.

[The information referred to follows:]

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Mr. TIERNEY. Now we will receive our testimony from the panel

before us today. I will just give a brief introduction of our witnesses

as they appear on the panel.

Dr. Suzanne Maloney is a senior fellow with the Brookings Institution’s Saban Center for Middle East Policy. Her work there focuses primarily on Iran and also on other Persian Gulf security and

energy issues. From 2005 to 2007, Dr. Maloney served on the staff

of the State Department’s Office of Policy Planning. She has previously held positions with the Council on Foreign Relations and

the Exxon Mobil Corp. Dr. Maloney holds a Ph.D. from the Fletcher School of Law and Diplomacy at Tufts University.

Dr. George Lopez currently serves as a senior fellow at the U.S.

Institute of Peace, where he focuses on international sanctions and

post-sanctions economies. He is also professor and chair at the Kroc

International Institute for International Peace Studies at the University of Notre Dame, where he has taught since 1986. Dr. Lopez

has published several books on the implementation of international

sanctions, arms embargoes, and other non-military means of countering terrorism. Dr. Lopez holds a Ph.D. from Syracuse University.

Ms. Robin Wright also currently serves as a senior fellow at the

U.S. Institute of Peace, where she focuses on Iran, the Middle East,

and the broader Islamic world. Ms. Wright has reported from more

than 140 countries on six continents for a wide range of publications, including, most recently, the Washington Post. She is also a

regular contributor to Time Magazine on the topic of Iran. Ms.

Wright is the author of several books on Iran and the Middle East,

including, most recently, Dreams and Shadows: The Future of the

Middle East. She holds a B.A. and an M.A. from the University of

Michigan.

Ambassador James Dobbins is the director of International Security and Defense Policy Center at the RAND Corp. He has held a

number of positions in government, including U.S. representative

to the December 2001 Bonn Conference, where he worked directly

with Iran in helping to reestablish a government in Afghanistan

after the fall of the Taliban. Ambassador Dobbins also formerly

served as Assistant Secretary of State for Europe and as Special

Assistant to the President. He holds a B.S. from Georgetown University.

So thank you, to all our distinguished witnesses, for making

yourselves available today. I know at least Dr. Maloney and Ambassador Dobbins have testified before this subcommittee before, so

we welcome you back.

It is the policy of this committee to swear in all witnesses before

we begin our testimony, so I ask that all of you please stand and

raise your right hands.

[Witnesses sworn.]

Mr. TIERNEY. The record will please reflect that all of the witnesses answered in the affirmative.

I tell you what I think you already know, that all of your written

statements will be entered in the record by unanimous consent. We

try to limit the testimony to about 5 minutes, if possible, so that

we will have time for questions and answers after that.

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Dr. Maloney, if you would be kind enough to start with your testimony.

STATEMENTS OF SUZANNE MALONEY, SENIOR FELLOW, THE

BROOKINGS INSTITUTION; GEORGE LOPEZ, PROFESSOR OF

PEACE STUDIES, UNIVERSITY OF NOTRE DAME; ROBIN

WRIGHT, JENNINGS RANDOLPH FELLOW, U.S. INSTITUTE OF

PEACE; AND AMBASSADOR JAMES DOBBINS, DIRECTOR,

RAND INTERNATIONAL SECURITY AND DEFENSE POLICY

CENTER

STATEMENT OF SUZANNE MALONEY

Dr. MALONEY. Thank you very much, Chairman Tierney, Congressman Flake, and members of the committee for this opportunity to discuss the prospects and implications of using sanctions

to influence the behavior of the Islamic Republic of Iran. I will

summarize my testimony, which has been submitted in longer written form.

I find it predictably ironic that, less than a year after the Obama

administration began its efforts to engage the Iranians in a comprehensive diplomatic dialog, the discourse in Washington and

around the world has already shifted toward an enthusiastic embrace of punitive measures. The search for alternative mechanisms

for influencing Iran is completely understandable given the current

context both in terms of the increasing crackdown within Iran, as

well as Iran’s repeated rebuffs of the offers of the Obama administration and the rest of the international community to engage in

a serious dialog.

At the same time, I think it is unfortunate that the track record

for sanctioning Iran is really not an auspicious one, and the key

prerequisites for a successful sanctions-oriented approach—protracted duration and broad adherence—are almost certainly unattainable today with respect to Iran. There are some more promising

indications of a more conducive context, but that is no guarantee

of success.

In my testimony, I will speak briefly about that track record, but

I will conclude by laying out a series of principles that should guide

our consideration of any new coercive measures.

We have had 30 years of U.S. unilateral sanctions on Iran, and

there should be no illusions that the likelihood of a more rigorous

and more broadly-implemented sanctions regime will produce a reversal of Iran’s nuclear calculus quickly or easily. Thirty years of

sanctions have not accomplished their primary objective, which is

the moderation of Iran’s security and foreign policy. This has largely been a function of the lack of international consensus.

Moving forward today, despite tough talk from various European

leaders, and the new cooperation between Washington and Moscow

on Iran, the prospect for expanding the playing field on sanctions

will still prove daunting, largely because of our divergent perspectives. In Washington, we tend to see a direct relationship between

economic pressure and eventual moderation of the target leadership. Many of our allies have exactly the opposite perspective: they

fear that, once isolated from the international community, Tehran

will be further radicalized and may retaliate either by a direct acVerDate 11-MAY-2000 15:37 Apr 19, 2010 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 U:\DOCS\55100.TXT KATIE PsN: KATIE
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tion against governments that have supported sanctions, or by accelerating their nuclear efforts or withdrawing from the NPT.

The irony is that neither the American nor the European perspective on sanctions is actually borne out by Iranian history.

Iran’s response to the repeated use of sanctions by Washington has

neither involved capitulation to demands or radicalization. Instead,

the regime typically seeks refuge in denial, while expanding a great

deal of effort on trying to mitigate the impacts of sanctions through

smuggling, through promotion of substitute industries, and through

economic diplomacy. Specifically with respect to IRPSA, Iran has

been preparing for a possible embargo on imports of gasoline and

other refined petroleum products through a variety of official

schemes to minimize gasoline consumption and to establish strategic stockpiles of gasoline.

More broadly, Iran’s post-Revolutionary experience contradicts

the underlying American argument in support of sanctions. The Islamic Republic has experienced a number of episodes of severe economic pressure, but none has generated the kind of foreign policy

moderation that the sponsors of IRPSA or the other manifold punitive measures against Tehran tend to forecast. Instead, in the past,

when Iran has been under economic pressure, this has facilitated

the coalescence of the regime and the consolidation of public support. Economic constraints have enhanced cooperation among

Iran’s factions. Tight purse strings have in fact forced some moderation of its economic policies, but not of its foreign policy, and I

think that is particularly important to remember today as we move

forward with new pressure.

Obviously, sanctions have to be a component of our overall integrated diplomatic strategy toward Iran and one that has both a

short-term and a long-term perspective. It is one of the few tools

that remains at our disposal and, therefore, I set forth the following five principles that should be uppermost in our minds in assessing new sanctions:

The objectives need to be clear, limited, and achievable, particularly sanctions that have potential for influencing important constituencies that have some say in Iran’s nuclear policies, measures

that target the economic interests of the Revolutionary Guard

Corps and other critical elements of Iran’s hardline power structure. This is a particular uncertainty, I think, with respect to

IRPSA. I am not sure what the scenario that the sponsors of

IRPSA have in mind—that the Iranian public, under great economic constraint, begins to go to the streets and voice its anger and

frustration with its regime, and the regime, somehow capitulates or

moderates its policy toward the international community? It is

really a scenario that doesn’t bear any resemblance to the likely behavior of the Iranian leadership.

It is also suggested we need to be careful about our rhetoric

when we talk about crippling sanctions that will break the back of

the regime. Again, we need to be clear about the intended objective

of our sanctions. We are not trying to bring down the regime; that

is not within the capacity of the United States of America. What

we are trying to do is reverse their position on the nuclear issue,

and that means persuading them that their security is better

served through another approach to the world.

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Second, we need to integrate sanctions within the continuum of

U.S. diplomacy. I am glad that the Obama administration has

dropped the sort of talk about carrots and sticks, but, still, the

rhetoric of dual track seems to suggest that sanctions are an alternative to diplomacy. That is not, in fact, the case. Sanctions need

to be a part of an integrated approach that actually uses sanctions

to persuade Iran to come to the negotiating table, because that is

simply the only way we are going to get the Iranians to understand

that their security interests are better served by cooperation rather

than confrontation.

Third, we need to have that kind of broad international consensus and implementation that has been lacking for most of the past

30 years. Getting and keeping our allies on board with a sustained

sanctions approach is important because so long as there are

outliers—so long as there are hesitators like Russia and China—

historically, that make it easier for others to sit on the fence and

to avoid full implementation of the sanctions. In this respect, reset

of the U.S.-Russian relationship has been a necessary condition for

improving the prospects for sanctions, but it is not going to be sufficient. To generate sufficient international support for sustaining

meaningful economic pressure, we are going to have to make a

credible case to our allies that our measures can actually impact

in a positive fashion the nuclear calculus.

Fourth, we need to focus on those measures that have the best

prospects for direct and immediate cost. This is, of course, the secret of the recent Treasury measures to restrict Iran’s access to the

financial system. They have actually hurt existing business, business that tends to be pursued by regime elites that have some influence over its behavior. Any sorts of sanctions that hit at prospective projects, at pipeline projects that are many years away from

being implemented, are likely not to have much impact on Iran’s

behavior, largely because its regime retains a certain degree of denial about its economic prospects.

Finally, we have to think very carefully about the prospects of

any sanctions to influence Iran’s emerging opposition movement.

There have been varying calls within that opposition. Certainly,

the political leadership of the opposition has suggested that sanctions would not help its position. There are others who have suggested, in fact, that new economic pressure might galvanize Iranians against the regime. I think both of these arguments have a

certain degree of validity, but we have to recognize that measures

that target the burgeoning economic role of the regime’s repressive

capacity that are specifically identified with its human rights

abuses can serve a double purpose in pressing the regime, both in

moderating its nuclear course, and in improving its treatment of its

people at home. And here we should be leveraging the interest in

Europe.

But we have to be careful in assuming that somehow, Iranians,

if the price of gasoline goes up, if they can’t access home heating

oil in the middle of a cold winter, are likely to vent their anger

against the regime rather than at the United States. The regime

is quite skilled at deflecting the impact of sanctions and clearly its

rationing programs and its access to smuggling networks will permit the regime to implement its core constituencies from the imVerDate 11-MAY-2000 15:37 Apr 19, 2010 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 U:\DOCS\55100.TXT KATIE PsN: KATIE
13

pact of reduced supplies. The notions that Iranians would welcome

American efforts to cutoff supplies of heating oil and gasoline to me

sounds like the same kind of logic that suggested that Iraqis would

greet us as liberators after we violently removed their regime.

The reality is that the Iranian domestic climate is complicated

and uncertain. There are no simple solutions. And, frankly, the cost

of failure when it comes to applying sanctions is real and significant. If we move forward with a sanctions approach that does not

work, the alternatives, specifically military options, are far worse

in terms of advancing U.S. diplomatic interests in the region, and

for that reason we need to use sanctions, but use them within a

larger diplomatic framework.

Thank you.

[The prepared statement of Dr. Maloney follows:]

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Mr. TIERNEY. Thank you, Doctor.

Dr. Lopez.

STATEMENT OF GEORGE LOPEZ

Dr. LOPEZ. Thank you, Mr. Chairman. I am honored and grateful

to have the opportunity to share with the committee this morning

some of the findings that I think have emerged from over a decade

of research that my colleagues and I have done and submitted in

much more detail and written testimony about the probability of

success of sanctions under these conditions.

I think the Congress and the committee face a kind of bitter

irony. The sanctions you have before you will no doubt, if implemented, take a big economic bite out of Iran. The dilemma, of

course, is they will not produce the political gain in concessions

that are important for the interests of the United States. In fact,

I would suggest that there are four or five basic principles we have

learned from the history of implementation of sanctions that lead

us to be quite cautious about the legislation that lies before us.

First and foremost, generally, sanctions only have about a onethird track record. If you are a baseball player, this is a good batting average. If you are making economic policy or political policy

at the foreign policy level, you would like a great deal higher percentage. The smart sanctions that we developed over the last decade have a strong success rate. We have been able to use them astutely under certain kinds of conditions, particularly Libya being

one of the best examples. On the other hand, trade sanctions, of

which a major component this package is, really have a worse ratio

over time, and I see nothing in the sponsored legislation that increases the possible success rates as applied to Iran under these

conditions.

Second, if sanctions are to be imposed for the kind of multiple

violations that we know Iran is engaged in—whether it is uranium

enrichment, human rights issues, or support for terrorist groups—

those have been most successful under conditions of multilateral

imposition, particularly with regard to the U.N. framework. So

Congressman Flake’s observations before, I think, are important to

note. We have a group of partners who have been very successfully

committed to what we will do in terms of nuclear regulation over

the last 3 years, in 2006, 2007, and 2008, with strong regulations

and resolutions out of the Security Council. I am not necessarily

sure we should jeopardize that by unilateral action that is likely

to have less and less success.

Third, pure and simple, we cannot punish the Iranians into a nuclear deal. No state, even the United States, has ever been able to

do that before, and I don’t see the conditions for success here. Only

an astute mix of continued engagement, narrowly-conceived sanctions applied at the appropriate time, and versatile incentives will

prompt the Iranians, hopefully, to change their nuclear posture.

This is not the time for adding sanctions to the mix of that engagement diplomacy. If imposed now, as Suzanne has mentioned, Iran

will react with particularly negative consequences for the prospects

of future engagement with the IAEA or with the five critical partners with which they are engaged. The ultimate leverage we have,

over time, is the continued coalition of support that we have built

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in the United States with the P–5 states and with states in Europe

who believe that continued diplomatic engagement, at least for a

while, is the way to proceed.

Fourth, in nations with the kind of internal disarray that we see

currently in Iran, we have seen a rally round-the-flag effect that

creates very, very difficult conditions. In fact, at its worst, sanctions would play into the Ahmadinejad government’s insecurity and

passion for repression of its own political groups. Why we would

cast to them this kind of ‘‘apres vous’’ is strange to me. We need

to build and sustain coalitions in Iran that will see the United

States as its friend, and we must listen very adeptly to the kinds

of reactions we have gotten from Iranians about the sanctions. Remember, we were able to sustain and have successful sanctions in

South Africa over time because the opposition groups were saying

that this was the appropriate strategy, and I think that is important for imposing sanctions.

Now, with a sanctions expert being so negative on the possibility

of imposing sanctions through this legislation, what do I offer you?

I think there are some ways forward in which the United States

can continue the engagement with the Iranians, but I state very

clearly a number of particular postulates. The first is that the

American people and the Iranian people can be brought together

around the notion that no nation in the future should or could seek

its security through nuclear weapons. We should state to the Iranians that they should see the relationship we are building with

Russia and the treaty we are about to submit to the Senate sometime in the next year, which will lead to massive reductions in our

nuclear arsenals. We are trying to lead the way through a particular kind of leadership by example, and we encourage states that

are thinking about the nuclear threshold to pay attention to this.

Aggressive diplomacy of the first order—in which we invite, embarrass, cajole, and incentivize the Iranians to think about the Geneva deal that they have left on the table as being at least a model

for the way forward—is the way to astutely use our leadership,

rather than future sanctions. It seems to me that we can go to the

Security Council in the near term with a package of tightly-conceived, smart and targeted sanctions which look at the entities and

individuals that have violated prior Security Council resolutions.

Then we can call upon our P–5 partners and the rest of the Security Council to add another resolution to the strong mix of the

three we have, and continue the multilateral framework that will

penalize the Iranians for IAEA dismissal of regulations and an unwillingness to come forth transparently with the progress of their

program.

Are there incentives we can offer the Iranians? Yes. I think we

should move forward with a picture of what life may be like in a

post-sanctions environment for them. The first and most important

might be a recharacterization of the existing sanctions from 2006,

that would guarantee a right of the Iranians to enrich uranium up

to a particular level and reaffirm their independence as a particularly strong state dependent on nuclear energy and medical technologies derived from nuclear technologies. This cannot be so in an

environment that is not fully transparent and open to international

inspection.

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We should hold open to them the prospect for membership in

trade and other organizations, which current sanctions now prohibit. The best incentive one can offer a sanctioned country is the

removal of those sanctions. But we haven’t specified exactly how

that will look in a step-by-step reciprocation of Iranian actions.

I have contributed more in my testimony, but my time has come

to an end. I do believe that the administration’s approach to engagement has to be understood as 1 year in a 30-year framework

with the Iranians, in which the turnaround in correspondence we

seek from them may not have yet gone far enough down the road;

but we have the strength, versatility, and energy as a diplomatic

community to continue to exert that pressure in a positive way,

and hold sanctions as keeping the powder dry for at least another

6 to 9 months in case the dilemma continues to manifest that we

will need them.

Thank you.

[The prepared statement of Dr. Lopez follows:]

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Mr. TIERNEY. Thank you, Doctor.

Ms. Wright, I understand that you are going to give us a

PowerPoint presentation, and I understand that it is a good

PowerPoint presentation. I had some reservations I was sharing

with my staff that we went to Afghanistan, and how the military

just loves to do PowerPoint presentations. I asked General

McKiernan to not do that, that we wanted a dialog on that, and

he answered back what if he just had one slide? So we relented and

we thought that was a good compromise, only to find out that he

had put everything that he possibly could for 50 slides onto 1 slide,

so we had our show anyway. But please proceed.

STATEMENT OF ROBIN WRIGHT

Ms. WRIGHT. Thank you, Mr. Chairman. Mine is all pictures.

Mr. TIERNEY. Then we will all be able to understand; that is

good.

Ms. WRIGHT. That is right.

The uprising launched after a disputed Presidential election in

June has evolved into the most vibrant and imaginative civil disobedience campaign in the 57 nations of the Islamic world, and

maybe the world generally. For all the physical force used against

the Green Movement, it has, so far, remained nonviolent in response. The Green Movement is a very broad coalition that includes former presidents and clerics, as well as people who have

never voted at all; and millions of students in one of the youngest

populations in the world; and women in one of the most politically

active female populations in the Islamic world, both young and old.

But these diverse sectors of society also see the core issues

through very different prisms. The new Green Movement has managed to mobilize Iranians for public protests every few weeks since

the election 6 months ago. It exploits anniversaries, commemorations, and holidays, when the public is normally urged to demonstrate for government causes. They communicate in messages

like this one, on the Internet, Facebook, and Twitter, or even in

graffiti spraypainted on public walls, to turn government events

into protests against the regime.

The public demonstrations are when we hear their messages. At

the November 4th commemoration of the U.S. embassy takeover,

Iranians normally are urged to shout ‘‘Death to America’’ and

‘‘Death to Israel.’’ This time many shouted ‘‘Death to No One.’’

More pointed, others shouted ‘‘Obama, you are either with us or

with them.’’ This is a message now heard often.

The demonstration last week on National Students Day was the

largest since the summer. It erupted on several campuses, and additional protests are expected later this month to mark the religious holiday of Ashura, and again during the first 2 months of

next year on various anniversaries of the Revolution—the same period when the United States and its allies will be debating new

international sanctions.

In policy debates on Iran, there is a lot of talk about clocks:

Iran’s clock on its suspected nuclear program; the slow clock of diplomacy and U.N. sanctions; and Israel’s impatient clock. To that

should be added a new one: the opposition clock.

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What the opposition does is more important than anything this

august body will ever consider. After 6 months, the Green Movement has proven that it has reached critical mass and has proven

its durability. Since June, the Green Movement has shifted its

agenda from disputes over the election of President Ahmadinejad

to the role and powers of Iran’s Supreme Leader and the very definition of an Islamic state. ‘‘Death to the Dictator’’ is now a common

chant, with mounting anger over the militarization of the regime

and the growing role of the Revolutionary Guards. This cartoon recently made the rounds, calling for the Supreme Leader to be booted from office.

Yet, the Green Movement does not speak with one voice; it is

united in opposition only. Its many different factions take different

positions and have very different goals. Dozens of factions under

the Green banner can be sorted into at least three general categories. Each represents a different side of a sometimes unlikely alliance.

The first layer is the public campaign of civil disobedience, which

extends well beyond the demonstrations. Iran’s currency has become a medium for the message. Some stamp pictures and slogans

on the Riyal, this one of Ahmadinejad, along with the slogan, ‘‘People’s Enemy.’’ Most lash out angrily at the regime. Others reproduce pictures like this one with the famous picture of the female

student, Neda Sultan, who was shot at a street protest in June.

This picture is from the cell phone video that captured her dying.

The graffiti is usually in green. Some slogans merely appeal to

others who might get that note to write slogans on other bank

notes. The bank notes even carry protests against the regime’s foreign policy, this one against Iran’s ties with Venezuela’s Chavez,

and here, against Russia. The regime reportedly tried to take the

graffiti money out of circulation, but found there was too much to

destroy.

Another civil disobedience campaign calls on the opposition to

boycott all goods, from food to cell phones, advertised on state-controlled television. Civil disobedience includes individual, uncoordinated acts. Mahmoud Vahidnia is a math student who was invited

to a meeting between Iran’s Supreme Leader and the academic

elite. He went to the mic and, instead of asking a question, warned

the Supreme Leader in a 20 minute tirade that he lived in a bubble

and didn’t understand what was happening in Iran. Iranian television, which was broadcasting the program lived, turned it off, but

not before it was taped by the BBC and others and is now a very

popular item on You Tube.

The growing signs of dissent show in many ways: on public buses

and on building walls, public spaces used to give notice about protests when the regime closes down cell phones or slows the Internet. Posters often appear overnight issuing new demands; many

call for the release of political prisoners who are now part of show

trials reminiscent of the Soviet show trials of the 1930’s and the

Chinese cultural revolution of the 1960’s. The slogans are often in

Farsi and English because they want to get their message to the

outside world.

Even sports teams have become involved. Iran’s national team

wore green during a match abroad in June. Inside the country,

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some opposition have dared to attend games wearing green, which

has reportedly led the government to broadcast the games in black

and white.

The Green Movement has generated some lively new art. This is

the famous cell phone video of Neda Sultan, the young woman,

again, shot in June. That gruesome photo has become a popular

posture in the technique used for the Obama campaign. The same

image has been blended into the artwork of the Iranian flag so her

face takes the place of the religious symbol in the middle. The

blood pattern has also been imposed on the Supreme Leader’s face,

an implicit message that he is responsible for her death.

The reaction by the first category, or layer, is the most important

sector when it comes to sanctions. Two key points: Many in the opposition support sanctions against the Revolutionary Guards or

specific members of the regime, but adamantly oppose sanctions

that will hurt the people at a time of serious economic problems

and a time when many in the opposition already face losing their

jobs, students face losing their places in universities and, as a result, their future. Second, Persian nationalism is among the strongest forces in the world. If you know a Texan, add 5,000 years and

you have Persian nationalism.

The Revolution was in trouble in the 1980’s, when Saddam Hussein invaded, but millions of people who didn’t like, trust, or support the Revolution rallied to the regime in the name of Persian

nationalism.

Public sentiment on sanctions is complicated by the nuclear

issue, and, again Persian nationalism plays a role. Reliable polls

indicate that Iranians, almost universally, support nuclear energy

as the key to modern development. Shirin Ebadi, the Iranian Nobel

laureate human rights lawyer, said of the program, ‘‘Aside from

being economically justified, it has become a cause of national pride

for an old nation with a glorious history. No Iranian government,

regardless of its ideology or democratic credentials, would dare to

stop the program.’’

The second layer is the traditional political elite, which has

struggled to develop a viable strategy. There are, as yet, no

Mandelas, Havels, or Walesas in Iran. The opposition has been a

body looking for a head since the beginning. The reform movement

latched on to former President Khatami in 1997 because he talked

about opening up the system. But they also abandoned him when

he failed to do so. This time, the opposition rallied around Mousavi

not because they liked him the best, but because they thought he

was the only one who could stand up to the Supreme Leader, as

he had in the 1980’s when they were in different jobs. But Mousavi

is an accidental leader. He occasionally issues statements and visits families of political detainees, but he has failed to create a plan

of action or even to appear much in public.

Mehdi Karroubi, the former speaker of parliament and another

Presidential candidate in June, is more of a maverick. He first publicized claims of rape and torture of dissidents in jail and has tried

often to join the protests. The traditional political elites in the opposition would also like to see the regime punished under sanctions, but, again, no sanctions that might further hurt the people

and undermine the opposition.

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Mousavi has complicated the situation for both the regime and

the outside world by rejecting the recent Tehran reactor deal. It is

widely believed that this is merely internal politics, objecting to

any initiative that might strengthen Ahmadinejad’s claim to legitimacy. Iran’s nuclear program has basically become a political football at home, with its own internal dynamics that could deeply

complicate diplomacy.

The third layer, very briefly, is the debate among the clerics,

which is least visible, but quite intriguing and very important to

understand. Ayatollah Montazeri is the most outspoken and credible opposition cleric, but there are many, many, many others.

Montazeri was originally selected as Ayatollah Khomeini’s heir, but

was stripped of the title when he began to criticize the regime for

its injustices. Since June, he has been scathing toward the government, at one point warning Iran’s security forces not to take actions that they would someday have to justify before God.

Montazeri issued a fatwa in October against nuclear weapons on

grounds that they are against God’s will and will inevitably kill civilians, as well as the military. He urged Muslims worldwide to

take the lead in campaigning against nuclear arms.

Among themselves, the clerics are now intensely debating what

constitutes good governance, what an Islamic state should do and

be, and even whether an Islamic state is good long-term for Islam.

The clergy I have spoken with over the years—and I have been

going to Iran almost every year since 1973—actually care about the

nuclear energy issue, but, like the public, they feel the regime has

pushed the nuclear issue too far, at great cost to the nation’s standing, its future potential, and with millions of Iranians paying the

price.

As a result of the debate, Iran’s Supreme Leader is increasingly

standing alone among his own. Many clerics have long been wary

of theocratic rule for fear that the human shortcomings of a modern Islamic state would taint Islam. As they hear vast numbers of

protestors challenging Khamenei or see opposition messages on

Iran’s national currency, the debate among them has intensified.

Thank you.

[The prepared statement of Ms. Wright follows:]

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Mr. TIERNEY. Thank you. That was quite good. I appreciate that.

Ambassador Dobbins.

STATEMENT OF AMBASSADOR JAMES DOBBINS

Mr. DOBBINS. Well, that is going to be hard to top. I am afraid,

after the multimedia excursion, we are back to boring Washington

long-talk.

I think all the witnesses, including myself, agree that further

international sanctions will probably not compel a change in Iran’s

nuclear policies. Nevertheless, I think there are good reasons to

pursue additional sanctions. There are, in fact, at least five distinct

rationales for further sanctions. The obvious one is to influence Iranian policy. A second would be to promote positive change in the

nature of the Iranian regime. A third objective is to degrade Iranian military and power projection capabilities. A fourth is to set

a deterrent example for other aspirant proliferators. And, finally,

whatever may be the hoped-for effect of sanctions, such measures

provide an irresistible alternative to the other two options, which

are even less desirable: the options of either doing nothing to respond to Iranian nuclear program, or going to war to prevent it.

Historically, sanctions have seldom forced improved behavior on

the part of targeted regimes. Sanctions did not compel the Soviet

Union to withdraw from Afghanistan, Pakistan to halt its nuclear

weapons program, Saddam to evacuate Kuwait, the Haitian military regime to step aside, Milosovic to halt ethnic cleansing in Bosnia and Kosovo, or the Taliban to expel Osama Bin Laden. Stiff

sanctions were applied in all of these cases, but it took either a foreign military intervention or violent domestic resistance, or both,

to bring about the desired changes.

Now, while none of the above-named regimes altered their behavior in response to sanctions, all but one of them eventually fell.

And sanctions may have contributed to their fall, but more as a

gesture of solidarity with those seeking to change the regime, often

by violent means, than as the prime cause. Universally supported

sanctions in support of human rights in Iran might make a similar

contribution, as they did in South Africa, in Haiti, in Serbia, in

Iraq, and in Afghanistan. However, at the current moment, there

is not much prospect of getting universally supported sanctions

against Iran based on democratization as an objective.

The objective for additional sanctions in Iran is rather under consideration, in order to try to force Iran to abandon its nuclear aspirations. Sanctions so directed are unlikely to encourage, and could

even diminish, domestic resistance to the regime. Most Iranians, as

has been noted, including the democratic supporters, support Iran’s

efforts to master the nuclear fuel cycle. Sanctions that are applied

for this purpose could well increase support for the regime, rather

than the reverse.

Now, sanctions can definitely degrade the economic performance

of the targeted state and thereby limit its military and power projection potential. That was certainly true in Saddam’s Iraq. It was

also true with respect to Haiti, Serbia, and Afghanistan. In each

case, comprehensive and universally enforced sanctions made an

eventual American military intervention even easier than it otherVerDate 11-MAY-2000 15:37 Apr 19, 2010 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 U:\DOCS\55100.TXT KATIE PsN: KATIE
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wise would be. So sanctions as a prelude to invasion and occupation have a lot to recommend them.

Even unilateral American sanctions, for instance, against Cuba

and Iran, have had some impact on the targeted country’s economy

and capacity to project power. Unfortunately, these unilaterally applied sanctions also have tended to bolster the targeted regimes

and increase their domestic political support. Thus, paradoxically,

unilateral American sanctions have both moderated and perpetuated the threat that such regimes present.

The exemplary deterrent effect of sanctions is hard to measure,

but is probably the best reason for going ahead with further sanctions against Iran. If the international community failed to respond

to the Iranian program, it would be giving a green light to other

countries, including a number of countries in the region, to go down

the same path. So that is certainly a reason to continue to sanction

Iran.

Finally, we have the political imperative to not just stand there,

but to do something. In situations where inaction is unacceptable

and preemptive military attack unappealing, sanctions may provide

the only alternative; and this is certainly one of the reasons that

many outside the government and many of you will end up supporting sanctions.

While sanctions may offer an irresistible political fix to a policy

dilemma, they are not cost-free. Virtually every country that has

ever been sanctioned eventually had a revolution, changed the regime, and became an American aid recipient; and American aid to

countries like Iraq, Afghanistan, the Balkans, and Haiti, has in

large measure been directed to undoing the effect of sanctions. So,

in effect, the American taxpayer does end up paying a certain proportion, and a not negligible proportion, of the cost of sanctions as

they are applied over time. One can only imagine how much money

the United States is going to provide a democratic Cuba to reverse

the effect of 50 years of embargo.

To recapitulate, further sanctions against Iran are not likely to

alter its nuclear policies. They will weaken the state economically

and even militarily. Sanctions against Iran will serve, to some degree, at least, as a deterrent to other proliferators. Further sanctions are almost inevitable for the reasons I have suggested. The

next question, therefore, is what kind of sanctions make sense.

We have heard from Robin and from others about the nature of

the internal dynamic. There is basically a competition between the

Islamic tendency in the regime, personified by the Ayatollahs; the

republican nature of the regime, personified by elected politicians;

and the revolutionary nature of the regime, personified by the Revolutionary Guard. And for 30 years these have been in some equilibrium. That equilibrium has been broken as a result of the fraudulent election and the popular reaction to it, and you are now moving increasingly toward a police state. But that is not necessarily

a stable condition, and it could go in a number of different directions, including toward more democratization, toward a greater police state, or back toward some equilibrium.

It seems likely that sanctions that targeted Iranian society as a

whole would promote the least desirable of these results; that is to

say, the consolidation of a police state under the Revolutionary

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Guard. Such would be particularly the case if the sanctions were

to restrict the flow of consumer products, of which gasoline is probably the commodity most widely consumed. Such a ban would hit

hardest those who own automobiles; that is to say, the urban middle class, precisely those whose pictures we have seen protesting

against the regime and risking their lives to do so.

So an internationally opposed ban on the sale of gasoline would

probably penalize the population, particularly the most politically

progressive element of the population, and strengthen the most regressive elements in the regime. A unilateral American ban would

be meaningless, as the United States does not export any gasoline

to Iran. A unilateral American ban with extraterritorial application

would seem to offer the worst combination of effects: penalizing the

population, strengthening the regime, embroiling the United States

in endless disputes with its allies, and disrupting the current international solidarity in opposition to Iran’s nuclear aspirations.

So what to do? Strengthened sanctions are needed to reduce

Iran’s capacity to threaten its neighbors, to deter other aspiring nuclear powers, and to provide an alternative to even less productive

courses of action. To achieve these results while minimizing negative consequences, such sanctions should be international. They

should be targeted on the regime and on its nuclear potential. Such

measures would include a comprehensive embargo on arms sales

and on transfer of nuclear technology, financial sanctions focused

on the military, on power projection capabilities, and on the internal security apparatus, and an international travel ban on those

associated with all of these institutions. Sanctions would single out

the leadership and impose even symbolic penalties on them, further

delegitimizing that leadership in the eyes of the Iranian people.

Sanctions designed to impoverish the country as a whole probably

would have a reverse effect.

Finally, any sanctions need to be rapidly reversible. Admittedly,

there seems little immediate prospect that the Iranian regime will

alter its behavior in the near term. Nevertheless, on two occasions

over the last 8 years, the Islamic Republic has made far-reaching

overtures of cooperation and accommodation with Washington.

Those offers were made in the immediate aftermath of the U.S.

intervention in Afghanistan and then, a year later, its invasion of

Iraq. In the mood of national hubris which prevailed in this country back then, Washington chose to ignore both overtures. We cannot predict if and when another such opportunity will arise, but we

should ensure that our President is in a position to respond rapidly, if and when it does. This argues for including in any legislation broad authority for the President to waive or terminate sanctions in response to changing conditions.

Thank you.

[The prepared statement of Mr. Dobbins follows:]

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Mr. TIERNEY. Thank you.

Thanks to all of you. I think your testimony was very, very helpful, and enlightening, as well. Let me start the questioning aspect

of this.

I heard, Dr. Maloney, and I see in your written testimony, a

statement saying the Supreme National Security Committee, which

is one of the key institutions of the state, is responsible for nuclear

negotiations and overall foreign policy coordination, but it appears

to be functioning in crisis mode because of the bitter differences

among the principals.

So, Ambassador, you have had as much direct contact with Iranians as anyone here, so let me ask you: is it at all the case that

their failure to respond to the diplomatic overtures, so far is because there are various conflicting groups that you all testified to

are just frozen right now politically, inside, and they are unable to

agree on a way forward to even react to international overtures?

Mr. DOBBINS. I think that is likely the case. The regime clearly

is both weakened and distracted by the reaction to the election. I

was actually quite surprised that they were able to engage as

quickly as they did and initially to agree to the proposals that the

international community had put to them, but that rapidly degenerated into a national debate in which the reformers, among others, began to criticize the regime for the possible accommodation

with the international community; and I think that does mean that

as long as this degree of uncertainty, turmoil, weakness, and distraction continue, it is going to be very difficult to constructively

engage the regime.

Mr. TIERNEY. I think [remarks off mic] blame them for exacerbating an already bad situation, or they feel that the world community

is sort of ganging up on them and making their life worse, and they

better get together and rally around the national flag. Do all of you

come down on one side or the other of that argument, thinking that

it is going to be a bad idea? I know, Ambassador, you just testified

to that effect, and I think I heard that in the flavor of the others,

that imposing refined petroleum sanctions and things of that nature would probably have the adverse effect of driving the general

populous of Iran toward the current regime, and maybe buttressing

them.

Dr. Maloney, we will start with you.

Dr. MALONEY [remarks off mic]. the population responds. Certainly, Iranians can walk and chew gum at the same time. They

can detest their regime and also resent the international community for making their life more difficult. And, frankly, that has always been the historical reaction to the American sanctions regime

among Iranians when you walk the streets; they want to know why

they are being punished for the misdeeds of their own government.

I think the current conditions are chaotic and fluid enough that

it is possible that Iranians may turn more toward the Green Movement in the aftermath of increased economic pressure, but it will

not, in fact, persuade the regime to be more accommodating internationally. They will see themselves under greater threat and they

will certainly be more difficult to deal with. Just as Ambassador

Dobbins has suggested, the current situation is making it difficult

for them to come to the table in a serious way and negotiate over

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a sustained period of time with a clear and coherent position. If the

internal temperature becomes that much more inflamed, then I

think it will be that much more difficult to have a serious set of

nuclear negotiations in the near future; and, as Robin has suggested, there is a time urgency to the nuclear dilemma.

Mr. TIERNEY. Dr. Lopez, you agree with that?

Dr. LOPEZ. Yes, I do. I would go one step further: the imposition

of sanctions permits the regime to shift attention to a new level of

competition, if not conflict, with the United States, and takes the

eyes off what ought to be the main focus, and that is what is wrong

with the Geneva Accord. We seemed, in early October, to have a

reasonable degree of consensus with the Iranians. We want to keep

our focus on that as a template around which we negotiate, and

there may be ways in which the threat of sanctions over the next

3 to 6 months gives us much more leverage with the Iranian leadership than the imposition, because it doesn’t permit the leadership

to focus on new actions by the United States taken under conditions of new hostility; it keeps our eye on the central focus of what

is wrong with this existing nuclear deal, that on paper looked fairly

good to all concerned in early October.

Mr. TIERNEY. The statement I took out of Ambassador Dobbins’

statement on this was the political imperative to not just stand

there, but to do something. And I think you mentioned in your testimony that it seems to be driving a lot of Members, as well as anybody else; and it is a strong and powerful situation when you feel

that somebody is not responding. Can we effectively target sanctions, say on the Revolutionary Guard or on some of the elites

there, in such a way that it doesn’t adversely affect the general

population? Are there things left to be done that do not already

exist in the current sanctions regime that we have?

You have the same problem that I have with the mic; we have

to turn it on. Ambassador, we have to turn the mic on.

Mr. DOBBINS. Sorry. I think that things like international travel

bans, financial sanctions directed at individuals, named individuals, targeting companies that are owned by the Revolutionary

Guard, and, frankly, just labeling those individuals and those organizations as pariahs. And this has to be international to be effective. International sanctions that do that will further delegitimize

the regime, encourage domestic opposition, and make the regime

feel uncomfortable; and they won’t like it, and that in itself can

provide a certain degree of satisfaction, even if it doesn’t produce

the desired results.

Mr. TIERNEY. Thank you.

Mr. Flake, you are recognized for 5 minutes.

Mr. FLAKE. I thank the chairman and thank all the witnesses.

This has been one of the most informative hearings I have been a

part of for a long time and I thank the chairman for arranging it.

Dr. Maloney, you mentioned that the Iranian regime is already

preparing to deal with IRPSA, for example. What examples can you

give? How are they preparing?

Dr. MALONEY. In the summer of 2007, they instituted a nationwide gasoline rationing program that, despite some early tremors

of unrest, was largely accepted by the population. It has been

abused, it has been exploited, but, in fact, there is now a very

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systemized rationing program, as well as a black market price for

gasoline, which did not exist prior to that period. They have, in addition, put major investments into transferring most of the public

vehicle fleet away from gasoline toward compressed natural gas,

which, of course, they have vast quantities of. So they have sought

additional sort of conservation measures; and they have, at least

reportedly, been trying to stockpile gasoline, as well as activate

some of the smuggling networks and craft deals with allies, including Venezuela, and possibly also China—there are conflicting reports on this—to expand their gasoline imports from those countries. Finally, they have also been investing in a major program of

expanding and upgrading their own refinery capacity so that they

will not be as vulnerable in the future to this.

Mr. FLAKE. Thank you.

Dr. Lopez, you have studied this a lot and we hear from the proponents of sanctions, particularly the petroleum sanctions, that

other countries and companies that are dealing with Iran will simply have to make the choice: do they want to exclude themselves

from the U.S. market, or the Iranian market. And we think they

will choose to go with the United States. Is that necessarily the

case, is it that simple?

Dr. LOPEZ. No, I don’t think it is that simple. I think what has

to come along with that assertion is what then is going to be the

cost and the logistics of implementing and enforcing that. Imagine

a world in which U.S. tankers in the Persian Gulf are confronting

Venezuelan ships, who see themselves in solidarity with the Iranian people, trying to deliver refined petroleum.

Which crisis do you want to manage? I think we would want to

manage a crisis with our Russian, Chinese, and other allies at the

Security Council of a defiant Iranian regime that wants to throw

out the IAEA, because we are on the stronger ground there, rather

than shifting the terms of enforcement of an oil embargo, which

has many, many routes for undercutting it. We have never had any

success with secondary sanctions, that is, with those who have

tried to participate in a sanctions regime by sometimes honoring it

diplomatically, but undercutting it economically. That takes us, in

a sense, on a side road that is only going to be a very, very long

and difficult road for the United States to undo; it really becomes

a sideshow that is not at all in our interest.

Mr. FLAKE. All right. Thank you.

Ms. Wright, you mentioned that some of the protestors were

shouting, ‘‘Mr. Obama, you are for us or against us.’’ What do you

mean by that? If you say that they are not in favor of what is on

the table right now in terms of what the United States is proposing, do you mean sanctions that will target or impact the population in general? What do they want the President to do that he

is not doing, is it simply rhetorically getting behind them, or what?

Ms. WRIGHT. I think there is a particular focus or desire for the

United States to take a much stronger role or stronger position on

human rights. They are not looking for the White House to come

out and support the Green Movement; in fact, that would end up

tainting them and giving the regime grounds on which to prosecute

more of them for being spies for the United States or agents of the

United States.

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But they do want to have a sense that the world, the United

States, as the most powerful spokesman for the Free World, is willing to take a stand on behalf of them. The President’s reference in

his Nobel acceptance—the announcement was made about his

Nobel Peace Prize and he referred just a little bit to Neda Sultan—

not by name, but a situation resembling—he mentioned the situation when she died, and that resonated in Iran in enormous ways.

It doesn’t take very much.

Mr. FLAKE. Thank you.

In my remaining time, all of us up here have one of these, and

we are going to be asked to go to the floor later today and use it:

it is a voting card. With regard to IRPSA, if you had one of these

and you were going to vote this afternoon, how would you vote? I

realize arguments can be made this way, but we only have this

card and we only have this vote today.

If we could start with Dr. Maloney, how would you vote?

Dr. MALONEY. I would vote against it.

Dr. LOPEZ. I would vote against these sanctions.

Ms. WRIGHT. I think there are a lot of problems with these sanctions and they could backfire.

Mr. DOBBINS. I would vote against them unless I got the kind of

assurances that the chairman was talking about.

Mr. FLAKE. Thank you.

Mr. TIERNEY. The assurances, I don’t know if you know what

they were. They are either not to be implemented until the White

House and the President, during the diplomatic initiatives, think

it now essential to move to that point, or that he be given the flexibility to use them, but not be mandated to use them.

Mr. FLAKE. Those assurances are not within the legislation right

now.

Mr. TIERNEY. Those are not in the legislation. The assurances

that I am going to receive are that they will be in any final bill

that we vote on after conference on that.

Mr. Lynch.

Mr. LYNCH. Thank you, Mr. Chairman.

First of all, I want to thank our witnesses. I think the testimony

here has been very, very helpful in us making our decision. My

only regret is that the other 430-something Members of the House

are not here to hear your testimony as well, and I want to associate

myself both with the remarks of our chairman and his conditions,

as well as the concerns raised by the ranking member. You know,

this could be a case where there is significant and courageous opposition right now in Iran, as Ms. Wright has so articulately presented. This could be a case of us snatching defeat from the jaws

of victory. Just when there may be an opportunity here for an internal change within Iran, we may be doing something that defeats

all of that.

I have very limited experience in this, you are the bona fide experts, but I look at the situation in Cuba and I have had an opportunity to review that firsthand. The support, the rallying around

the flag effect, as Dr. Lopez has described it, it is a real phenomena, and I think that is what has kept Castro in power in Cuba,

because he stood up to America and he also had a ready excuse:

the embargo, for anything that went wrong in Cuba. He blames

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tropical storms, he will blame that on the embargo, and it gives

him great cover.

I have been to Gaza a couple times and the embargo there in

Gaza has caused great rallying around Hamas, regardless of their

incompetence and inability to deliver for their people. And I have

a fear that we are going to—this is the best thing that could possibly happen to Mahmoud Ahmadinejad. I think that he is welcoming this. This will cause the Iranian population to rally around

him.

So I agree with basically everything that has been said here this

morning.

The one question I had was around the mechanics. Ambassador,

you might be the best person to answer this. To really limit, to implement the Iran Refined Petroleum Sanctions Act, it would seem

to require a naval embargo of some sort, and a land embargo to

prevent refined petroleum from coming back into Iran; and I guess

I am asking is this a proxy vote for military action here? Because

I understand it is going to need approval by the U.N. Security

Council, but this is a first step in that direction. So how would this

work out in practice?

Mr. DOBBINS. Well, if such a measure were to get Security Council approval, the Security Council could also authorize enforcement

measures, as was the case with Iraq, for instance, when it was

even more—Iraq was forbidden from exporting its oil, for instance,

which was an even more effective means of sanctions.

Mr. LYNCH. You are referring to the Iraq Oil for Food Program?

Mr. DOBBINS. No. I am saying that, the Iraq Oil for Food Program came later as an effort to ameliorate the effect of the earlier

sanction, which was simply to ban Iraq from exporting its oil. And

there were enforcement provisions that prevented Iraq from exporting its oil: we were allowed to overfly the country, we were allowed

to bomb Iraq periodically, we could stop ships. And this was all authorized by U.N. Security Council. So, theoretically, you could do

that.

First of all, you are not going to get a Security Council measure

in support of an embargo on gasoline or refined oil products; that

is not going to happen. Second, even if you did, you probably

wouldn’t be able to get authorization for those kinds of enforcement

measures. So what we are talking about here is a unilateral U.S.

measure with some extraterritorial application; that is, we will penalize foreign companies for engaging in this behavior by denying

them access to our market.

I don’t think that either the Congress or the administration

would intend to use military forces to enforce that, so I don’t think

there is a danger that this would precipitate the administration is

authorizing military action to enforce this. I think the enforcement

mechanisms, if they were approved, would be legal mechanisms designed to penalize firms from, say, Great Britain or France or Germany, who sell products to Iran, from selling products in the

United States; and we would get into endless legal hassles and diplomatic disputes with those countries.

Mr. LYNCH. Thank you, Mr. Chairman.

Mr. TIERNEY. Thank you.

Mr. Duncan, you are recognized.

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Mr. DUNCAN. Well, thank you, Mr. Chairman, and thank you for

calling a very interesting and informative hearing. First of all, I

want to associate myself with the opening remarks of my ranking

member, Mr. Flake; I thought he made a good summary of what

I wish was our position. I also agree with Mr. Lynch that it is unfortunate that all the Members couldn’t have heard the presentation that has been made here this morning, because I think all

of us know that this afternoon we will in the House, at least, pass

this sanctions legislation by an overwhelming margin, and I think

that is unfortunate because I think the witnesses have made a

pretty convincing case that these sanctions, or this legislation, is

not a good thing to do, at least at this time.

I think that we need a more neutral foreign policy toward the

Middle East. I think we need to try very hard to be friends with

Israel, but we also need to try harder and do more to be friends

with other countries in the Middle East. I read, a year or so ago,

an interesting book called All the Shah’s Men, about Iran and some

of our activities there. Unfortunately, in many other countries some

of our activities to intervene in political or religious or ethnic disputes have created almost more enemies than friends for our country.

Basically, that is all I really have to say. I don’t know if you have

any suggestions as to how, ever, when we pass this sanctions legislation, how we could do that and still—if there is something more

we can do to show the Iranian people that it is not really aimed

at them, but really toward their top leadership, and almost even

more toward one man at the top. If you have any comments or anything you wish to add, feel free to comment.

Dr. LOPEZ. Well, I would suggest, Mr. Duncan, that it is very,

very important to get the extra rider in this bill out of conference

that gives the White House some degree of flexibility on this: that

the executive branch would judge when implementation, and under

what conditions, would occur. And I think we ought to be much further down the road before that implementation occurs.

Mr. DUNCAN. Well, I think that is a good suggestion.

Ms. Wright.

Ms. WRIGHT. I was just going to add, very briefly, that there has

always been a struggle on public relations on these initiatives and

we never have been able, over 30 years, to explain ourselves and

what our goals are to the Iranian people. Sometimes the White

House or the State Department will come out with a statement

simply saying ‘‘our target is not the people of Iran,’’ but that

doesn’t go very far. The Iranians, of course, with their media monopoly, can spin this in a way, not just this bill, but any action

taken by the United States, as something designed to hurt all Iranians. Any effort to portray the alternative, that this is designed

to, in the end, help them could make a difference.

Mr. DUNCAN. All right.

Thank you very much, Mr. Chairman.

Mr. TIERNEY. Thank you, Mr. Duncan.

Mr. Quigley, you are recognized for 5 minutes.

Mr. QUIGLEY. Thank you, Mr. Chairman. As the relatively new

person on the block, this is quite an education for me as well. And

I appreciate the remarks that my colleagues have made about the

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reservations that the panel seems to have about the effectiveness

of sanctions, but I can’t help read the obvious in the news recently,

in the Times of London, about the Iranian nuclear weapon system

being farther along than we had anticipated and, in recent news,

much larger than we anticipated. So I hear that either sanctions

don’t work—and not just from this panel—or that they take a long

time to work, or they must be specifically targeted with a lot of coalition assistance.

They haven’t worked yet, with the exceptions and the limitations

that the Ambassador has talked about, and they probably won’t

work in this set of circumstances, but we don’t have a lot of time.

And, with the greatest respect, I would suggest that it is not going

to do the Iranian people, who we want to be friends with, a whole

lot of good if they achieve a nuclear weapon or two, and they certainly have enough material. And that makes them, more than

anyone else, a target for reprisal and for destabilization of the entire region, and a threat not just to Israel, but to our other allies

and our troops.

So I guess I am saying Monty Hall isn’t pointing to door No. 3;

there is door No. 1 or door No. 2. If we are in a short timeframe,

tell us the options then if you would vote against this.

Dr. MALONEY. I will take an opening crack at that. I don’t think

there are any good options, and that is something that Secretary

Gates has been saying for many years now. It is something that

most of us who work on Iran deal with every day. There are no silver bullets to a regime that has been in power for 30 years, that

has survived endless crises, and will probably even see this one

through, at least for the short to medium term.

I would raise just one point about the timeframe. The Iranian

nuclear program is an urgent dilemma, but we are not yet at a

stage where Iran has either a nuclear weapon or the capacity to

deliver one—we are several years away from that period. And we

need to give diplomacy some time to work. That means diplomacy

using sanctions, using the combined weight of the international

community working in coordinated fashion, for perhaps the very

first time since the Iranian Revolution, to deal with this government. It means giving the Iranian democratic opposition some time

to actually bring itself together, find a strategy, develop a leadership that can truly confront the regime.

But I am quite confident that, in fact, we can, over a period of

several years, deal in a much more coordinated, much more effective fashion with Iran. Yet that needs to involve both diplomacy

and economic pressure and, in particular, very strong coordination

with the international community.

Mr. QUIGLEY. Well, wouldn’t you acknowledge, Doctor, that the

timeframe that we thought we were working with has compressed

already? You are talking about taking a pretty big risk if we are

assuming it is not going to contract again.

Dr. MALONEY. I am making no assumptions whatsoever, because

I think, obviously, we don’t know everything that there is to know

about the Iranian nuclear program—and we were surprised in 2002

about the extent. We have been surprised by the regime’s willingness and determination to push forward despite the threat of international pressure and sanctions.

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But I think we also recognize that there have been technical

problems with the program; that, in fact, despite the massive investment that the regime has made, they have not yet achieved a

weapons capability. There is fuel that has been amassed, but there

are ways that the international community can deal with that, and

one of them, the very good, I think, proposal by the administration

to export the LEU is one that can be continued to be pursued.

There are at least some signs that there are some within the Iranian regime who would support a revised review of that deal, and

I think that is one of the aims that sanctions ought to be directed

toward, rather than simply punishing the country as a whole, rather than simply trying to reap the highest economic price against

Iran, because we know from past history that won’t succeed.

Dr. LOPEZ. May I, Mr. Chairman, respond to this in that I think

it really focuses us on what is a medium term goal; and the highest

order of a medium term goal, it seems to me, is to create an environment in which it becomes far too costly for the Iranians to continue to reject IAEA guidelines and IAEA inspections. Let’s remember that the Natanz Plant is still under IAEA guidelines. The primary generator of enriched uranium is still under international inspection and control.

One of the great advantages of the Iraqi sanctions over time was

that we had a nice linkage between the pressure of sanctions and

the maintenance of inspections. If you wanted the sanctions lifted,

you had to be continually forthcoming with inspections. And I think

to the extent to which there is pressure on this government to

worry about a longer-term time clock, and sanctions is the answer,

well you then targeted limited sanctions against key component entities that supply high level components to the regime or elements

of the Revolutionary Guard—identifiable people who are in charge

of the nuclear program, to the extent that they can be targeted,

sends the appropriate message of urgency but also doesn’t risk the

possibility of the Iranians expelling the IAEA or withdrawing from

the NPT.

So we want to keep this tense synergy between those, and there

is a way in which the greatest dilemma that Congress faces is that

all the available tools seem to be a toy store that we can mobilize.

In fact, you have to be very astute and selective about how to do

that with a medium-term goal being continued dialog and inspection by the IAEA.

It may be that the end point—2011, 2012, or 2013—puts us in

the same position as the one we were in with Libya. I would make

the case that sanctions were very successful in turning around Libyan commitment to terrorism and to its weapons of mass destruction program. We had to go past the eleventh hour and, fortunately, we didn’t sacrifice constructive engagement—even when

they went beyond the threshold that we hoped they would not.

They woke up 1 day and realized that a nuclearized state is not

all it is cracked up to be.

We may have to go through that entire threshold with the Iranians. I hope we do not, but I think only a strategy of constructive

engagement and a step-by-step approach to medium goals will get

us to where we want to be.

Mr. TIERNEY. Sure.

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Ms. WRIGHT. If you are looking for impact, the kinds of sanctions

that have had the biggest impact on the regime are the banking

sanctions imposed by the Treasury Department. This is something

that has mobilized the international community because of laws

passed after 9/11 that make every bank responsible for knowing

their origin of the flow of money that they have in their banks and,

as a result, the five largest banks in Iran have been crippled from

doing international business. Expanding that avenue, that type of

sanctions, even though it does have impact on the people, makes

the regime sit up and notice, and it ends up paying a real price because it can find alternatives, but at a much higher price.

Mr. QUIGLEY. Thank you, Mr. Chairman. I just want to know, as

you say, though, that sanctions worked and they did, as you suggest, hurt the Iranian people at the same time. I mean, it is very

complicated and difficult, but you challenge us not to use the only

tool we have right now, to a certain extent, if you start limiting

what sanctions we can use.

Ms. WRIGHT. You asked what works, and this is something that,

very quickly, has had an impact. I lived in Africa for 7 years: the

last 7 years of sanctions against Rhodesia and sanctions during

Apartheid, and it takes a very long time for sanctions to work. The

impact of banking sanctions has been almost unprecedented of any

case around the world in terms of how quickly it has made a regime sit up and notice; how big a price, literally and politically, it

has exacted.

Mr. TIERNEY. Thank you.

Mr. Jordan.

Mr. JORDAN. Thank you, Mr. Chairman, and I want to thank our

witnesses, as well, for being here and their testimony.

In today’s Post, Danielle Pletka, and I believe I am pronouncing

that name right, has a piece in there—a pretty compelling piece—

and the writer talks about this. She believes the administration

has kind of resigned itself to a nuclear-armed Iran and is moving

in the direction of a ‘‘containment policy.’’ I would like to get your

reactions to the premise of the piece. And then, also, kind of moving into what Ms. Wright pointed out in her opening statements,

if in fact that is the case, that this containment policy is what is

being pursued, the implications that has for our country to support

the reform or democracy movement that is in Iran.

So we can just go down the list and you can fire away.

Dr. MALONEY. I would disagree that the administration, at this

stage, has settled on containment. I think that really belies everything that has been done, particularly the very creative and positive proposals that were put forward and originally agreed to by

the Iranians to export the LEU and support the Tehran research

reactor deal.

So I just don’t see that evidence. I think that we need to be planning for that eventuality, simply because we can’t predict the way

these sorts of things play out, as we learned from both India and

Pakistan. There may be drivers that force this regime to move forward more quickly that, in fact, produce a nuclear-armed Iran

more quickly than we anticipate, and we should be prepared for

containment if and when that comes. That needs to be done quietly

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and discreetly, but I would hope that planning is already underway.

I do not see that as in any way contrasting or undercutting the

very strenuous diplomacy that we have had, resetting the relationship with Russia, putting forward serious proposals toward the Iranians, and actually, I think, very quietly mobilizing at least some

international support for the kinds of multilateral sanctions that

would be effective—because I think no one on this panel has said

that sanctions should never be used, but simply that they need to

be used only where and how they are most effective.

In terms of how that coordinates with our support for the Iranian

opposition, I would say, quite frankly, that the Iranian opposition

is a force that we neither created nor anticipated, and our support—while important because we are a moral leader, because we

have a certain responsibility given our history, given our ideals—

to voice those sorts of ideas, our support is not going to be what

changes the future for the Iranian opposition. Iran is a proud country that resents the interference of foreigners very deeply. Fifty

years later, they still deeply resent, as one of the other representatives suggested, the involvement with the Mossadeq affair in 1953.

I don’t believe, at this stage, that anything other than moral support for the opposition would be useful or welcome from that side,

and I do believe that opposition, in fact, will succeed over time,

simply because it represents the view of the large swath of the Iranian people.

Mr. JORDAN. Mr. Lopez.

Dr. LOPEZ. Thank you. It is a very, very important question. I

detect, through dealing with people on the National Security Council and elsewhere, no resignation to the containment strategy. In

fact, I believe that the good example here is the way we are dealing

with the North Korea nuclearization problem; that is, we are going

to find every diplomatic and, in the North Korean case, sanctionsbased way to roll this back. So I detect a strategy that—on the one

hand, counter to where I think we have been for the last decade—

rejects the notion that there is an immediacy to the ability to apply

increased pressure and then somehow arm twist the Iranians into

changing their behavior. The new realism I detect in town now is

that we know we are dealing with a very determined regime which

has domestic, cultural, and other reasons to move only straight

ahead with nuclear development.

Now, how do we show them that is a choice that has consequences without immediately imposing penalties? How do we

hold before them a vision of be careful what you wish for, when you

get it, as you deal in your neighborhood and as you deal in the rest

of the global community? How do we find a way for them to match

their own rhetoric with a responsible participation in the global

community’s concerns about nuclearization? I think the contingencies will be there for dealing with this, but I like the notion that

this current approach sees a very, very long road ahead, and if the

measures we don’t take result in the desired turning back away

from the program and an export of uranium, if they go nuclear, we

have models for which to deal with that, as we have executed in

Libya and in North Korea; that is, in a sense we are playing, if you

65

will excuse the sports analogy, with two game plans: one for regulation time, and one for if we have to go to overtime.

Ms. WRIGHT. I don’t have much to add except that containment

is the end of the process, and we are still at the beginning.

Mr. DOBBINS. Well, I think, first of all, you have to understand

it is perfectly logical for Iran to be pursuing nuclear weapons; they

are surrounded by other nuclear powers and they are at a level of

sophistication and capability which allows them to achieve a nuclear capability. If Barack Obama or George W. Bush were elected

president of Iran, they would be pursuing a nuclear capability; any

leader in that geopolitical context would be. The question is can

you, first of all, move toward a regime that is not threatening its

neighbors ideologically, so that people are more relaxed about it

and, second, create incentives and disincentives that persuade

them that a nuclear capability is not in their interest.

We have already seen North Korea cross a nuclear threshold,

and the current policies are to roll it back; and there are fairly

massive sanctions that are in place, and also some fairly substantial inducements that are being offered to try to roll that back. So

Iran crossing the nuclear threshold is not necessarily the end of the

world and it doesn’t mean, even if it happens, that you are going

to live with it indefinitely or try to live with it indefinitely.

One of the reasons, as I have said, for substantial and mounting

sanctions against Iran is to persuade other countries that they

don’t want to do the same thing. So keeping Iran in its pariah status, even if it achieved nuclear weapons or nuclear capability,

would be sound policy, in my judgment. So I don’t think we should

set an absolute deadline here.

That said, we are not going to physically prevent Iran from getting nuclear weapons by anything short of invasion and occupation.

Bombing might delay it, but not indefinitely. Therefore, we are

going to have to continue to pursue a track which involves mounting sanctions, continued engagement, and international solidarity

in an effort to arrest, slow, or eventually, if necessary, roll back

this program.

Mr. TIERNEY. Thank you.

Mr. Luetkemeyer.

Mr. LEUTKEMEYER. Thank you, Mr. Chairman, and I thank the

witnesses for their testimony; it has been very compelling.

I happened to have the opportunity to go to Israel back in August, and our group, both Democrats and Republicans, met with

the leadership, both there in Israel, as well as in Palestine, and

they were adamant in their analysis of the situation that Iran

would have the nuclear capability by the end of the year. If that

is the case, I think it is being very naive, from the testimony we

have heard this morning, that we have plenty of time with which

to deal with this. I think that a sense of urgency is necessary in

order to be able to confront this, have a plan ready to confront it.

I haven’t heard that plan yet this morning. I have heard some

ideas, but I haven’t heard that plan. And if we are going to be

ready for this, we need to have a sense of urgency belying an ability to contain this or deal with it, as the Ambassador just said.

One of the concerns I have is that sanctions are only part of one

of the layers of ways to deal with this, and diplomacy is one of the

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ways. But the folks in the Middle East don’t seem to be able to understand that with diplomacy comes commitment; and they don’t

seem to be willing to live up to commitments. We can get commitments from them, but they are just ignored; it is just a statement

that they can throw away. There doesn’t seem to be any willingness to complete their commitment.

So, in that light, knowing we have a sense of urgency, knowing

we have a difficult group to deal with, knowing that they probably,

if they don’t have it already, will have nuclear capabilities very

shortly, where do we need to go with our sanctions and our diplomatic efforts? Because if we get another North Korea, which ignores diplomacy, which ignores the international community, how

do we deal with those folks?

Ambassador, would you like to start?

Mr. DOBBINS. Well, first of all, I think that deadlines and a sense

of urgency may tend to work against us, rather than for us. They

don’t feel a sense of urgency. If we feel a sense of urgency, then

we are the ones under the gun and we are the ones who are constantly pressured to come up with new ideas, new proposals, new

diplomatic offers.

Mr. LUETKEMEYER. Yes, but don’t you feel we need to be ahead

of the curve on this? Don’t you feel we need to be proactive, rather

than reactive?

Mr. DOBBINS. I am not arguing that we shouldn’t be. I am arguing that we need a sustainable policy, a policy that will continue

to penalize Iran, will continue to make it, over the longer term, unattractive for Iran to either gain or retain a nuclear capability. We

need to maintain international consensus which isolates Iran and

penalizes them in that regard. And to the extent we become fixated

on a particular deadline, we are the ones who then become under

pressure; we are the ones who then find our position weakened by

that kind of time pressure.

So I understand the apparent urgency. Now, I am not sure you

said the Israelis thought they would have a nuclear weapon by the

end of the year. I don’t know what year that refers to.

Mr. LUETKEMEYER. This year.

Mr. DOBBINS. Well, they are certainly not going to have one by

the end of this year, so I think we can dismiss that possibility. I

don’t think they are likely to have a nuclear weapon by the end of

next year, either.

Mr. LUETKEMEYER. Well, with all due respect, Mr. Ambassador,

here is an article from the Times online, December 14th, Secret

Document Exposes Iran’s Nuclear Trigger. They have their final

component of the nuclear bomb; they are working on it as we

speak.

Mr. DOBBINS. If Iran has nuclear materials for a weapon, they

have a facility we don’t know about and can’t bomb, because we

don’t know it exists and we don’t know where it is. So if Iran could

develop a nuclear weapon at this point, they would do it in a way

that we would have absolutely no way of stopping, unless we invade and occupy the entire country.

The uranium they do have, which we know about, is not capable

of creating a bomb, and wouldn’t be capable of creating a bomb for

several years because it requires extensive further enrichment,

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which the Iranians do not, at the present, have the capability to

do, but which they could do over an extended period of time.

So it is possible they have nuclear material we don’t know about,

but, if so, then our options are pretty limited.

Mr. LUETKEMEYER. Well, not to belabor the point, but Dr.

Maloney made the point in her testimony that gave at least two examples where we had underestimated what was going on in Iran.

To me, if we have already underestimated twice, it would seem logical that it is very possible we underestimated them again; and

when you are dealing with a nuclear bomb and a regime such as

that, to underestimate those folks is very, very dangerous.

Anybody else like to comment on the discussion?

Dr. MALONEY. You also posed in your question the idea of where

do we go next, and I think that needs to be the focus of the deliberation at this stage, and particularly with respect to IRPSA.

Where we go next is not more unilateral measures that have limited or counterproductive impact within Iran. Where we go next is

to the U.N. Security Council; test how successful we have been in

changing the dynamic with the Russians, test how serious the Chinese are, as they have suggested, at least, in some rhetoric, about

applying new pressure to Iran, and test the Europeans and see if

they are finally willing, for perhaps the first time since the Revolution, to put their money where their mouth is when it comes to

Iran.

I think that is the route that we go. And we will not succeed

fully, but I think that we can have some real impact in crafting the

kind of measures that, as Robin suggested, have already begun to

make important elites within Iran, people who really do have some

influence over the future of its policies on core security issues,

stand up and take notice; and that is the sort of thing that can pay

off, but it will take time.

Mr. LUETKEMEYER. I appreciate your responses and I would love

to ask more questions, especially with regards to how in the world

we can get the rest of the world to go along with us when half the

world sides with Iran right now, but I realize my time is up.

I appreciate the chairman’s indulgence. Thank you.

Mr. TIERNEY. Ms. Wright.

Ms. WRIGHT. I just have one brief thought. Implicit in your statement is some knowledge that we have about where Iran is, and the

bottom line is you think we knew too little about what was going

on in Iraq, try Iran—we know even less. And that is a sobering reality when it comes to figuring things out down the road.

But I will also say that if you thought Iraq was a complicated

war, try Iran. The military option is not just an issue of using strategic bombing of suspected targets, which would clearly backfire

and clearly galvanize the population around the regime, however

much they hate it, but, because of the nature of conflict in our own

deployment of troops in both neighboring Iraq and Afghanistan,

force the United States to engage in something that was far broader and would look like an open-ended war with Iran.

So I think that when we talk about these options, yes, sanctions

are frustrating. But the military option is one that is so costly, and

we make assumptions about being able to go in and having some

impact, that could be, in many ways, the worst thing to do, because

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it would also encourage people to think they need the bomb to protect themselves.

Mr. TIERNEY. Thank you.

Mr. Luetkemeyer, I can offer two things. You weren’t yet a member of this committee last session when we had a hearing on the

war gaming of just what would be entailed in having a military response and what would be the ramifications, so the committee staff

would be more than willing to make those materials available to

you if you think they are useful at all, with the testimony of the

various witnesses on that. I think there were graphs and charts

and all of that.

The other thing you might find useful, although I suspect we are

a little late for the vote today, you might find it useful if we can

arrange for the Intelligence Committee to give you a briefing on

what it is that we do know. I think everybody acknowledges we

don’t know everything on that, but it is just as dangerous to overestimate their capacity as it is to underestimate it; and if you want

to raise that directly, it is fine. If we can be helpful in that, we will

certainly try to do that with you.

Mr. LUETKEMEYER. Thank you, Mr. Chairman.

Mr. TIERNEY. You are welcome.

Mr. Flake.

Mr. FLAKE. I ran out of time before I could ask Ambassador Dobbins first, and maybe the others if they want to comment, with regard to the mentioned advisability of the sanctions route, the economic sanctions route, of international cooperation and getting our

allies on board. Does it make it more difficult, or do we help by

leading, imposing our own unilateral sanctions?

And there may be a mix of both, I understand, but let’s take today’s action in the House with IRPSA. Does this complicate the

likelihood of getting our international allies on board on other, perhaps more effective sanctions, or some variant of these sanctions?

How does that impact us moving ahead, the fact that we are going

to impose these in the House? The Senate may not go there, it may

look different in conference, I understand, but I just want you to

talk to the advisability of leading on this. Is it something that our

international partners are looking for our guidance on or is it more

useful, and I tend to think, and I want to see if you agree, to move

in concert with them?

Ambassador Dobbins.

Mr. DOBBINS. I think that the element of the bill that you face,

as I understand it, that would disrupt international solidarity and

make agreement more difficult, is the extraterritorial elements, the

effort to use U.S. law to impose sanctions on foreign companies for

doing something that is perfectly legal in their own country and

perfectly legal internationally. We have done that in the past and

we have ended up backing away from it because of the virulently

negative reaction of our closest allies to being manipulated in that

fashion.

Mr. FLAKE. If I could interrupt for a minute. Within IRPSA, that

is precisely what we are doing, is it not?

Mr. DOBBINS. Right. Exactly.

Mr. FLAKE. Dr. Lopez, do you have a comment on that?

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Dr. LOPEZ. I am in agreement with you on this and I think I

would just add two layers to this. One is in terms of the multilateral versus unilateral dynamic, it needs to be more widely understood in the Congress how the Russians and the Chinese share

very much our view that a nuclear Iran is in no one’s interest.

And if we believe we have to march down the road of leading

with economic coercion so that we persuade the Russians and the

Chinese, we are already on the same plain on this; and I think that

is what pushes us to think about more astute arrangements than

are built into this legislation.

Second, I believe we have a new era of good feeling around the

Security Council table that has been hard earned over the last 2

years, and that concerns, particularly in this town, that the Security Council is either inept or the environment is not right there

for us. In fact, within this week I think the United States has

shown remarkable leadership in the Security Council, in the reformulation of the 1267 guidelines with Russian and Chinese partners.

I think we are at a unique moment in which the multilateral

may need to lead the domestic, and we would be much better off

in a technical sense saying the United States has in its holster, if

you will, a set of punishing sanctions, but because our highest

order of priority is changing Iranian behavior in concert with its region and in concert with the globe, we are keeping that powder dry.

But it is very clear what we can do technically and economically,

but at this moment we choose not to because we believe this is a

global concern of which we are pleased to play a part.

Mr. FLAKE. Dr. Maloney.

Dr. MALONEY. Let me just add one final point. Under IRPSA, as

I understand it, currently formulated without flexibility or waiver

authority, we would have to sanction Chinese companies. And if

you think that is going to make it easy to bring the Chinese on

board with the kind of sanctions at the Security Council that would

actually have an impact in Iran, I think there is some obvious conflict there. The Chinese have an enormous interest in investment

in Iran, and if we can in any way encourage them or coerce them

to use that leverage with Iran, that would be far more valuable.

They are unlikely to do that if we are involved in the business of

sanctioning their energy firms.

Mr. FLAKE. Thank you very much.

Mr. TIERNEY. Mr. Foster, you are recognized for 5 minutes.

Mr. FOSTER. Well, thank you. And my apologies for not being

present for all of your testimony here. But I am specifically interested in the possibilities for further micro-targeting of financial

sanctions toward different segments of society that might actually

provide us with some leverage to try to encourage the developments that we want to happen in government there. Obvious targets would be individual institutions and banks, or maybe sections

of the ruling class that might realize that their hold on power is

a little bit shaky and they may be shoveling their assets offshore,

or elements that we think might be friendly toward developments

we want to encourage and making their financial lives easier.

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I was wondering if there is anything that we are missing, anything Congress can do to encourage or enable that sort of better

targeting of financial sanctions.

Dr. LOPEZ. I am willing to respond. I think this particular leadership in Treasury has examined this in detail and I have great confidence in Mr. Levey for knowing what that is; and there have been

a number of discussions, as you know, about that. I think the focus

of this should be on those entities whose activities are most auspiciously in violation of the U.N. Security Council resolutions passed

in 2007 and 2008, which restricted higher levels technologies and

the movement of moneys to support the nuclear program.

I think with the revelations that the Congressman has noted earlier—of the possibility of trigger devices, the movement of scientists, etc.—I think we have possibilities of looking into new areas

where this kind of micro-targeting would be very effective. It has

a combination of sending a very, very strong message that our intelligence is state-of-the-art; that there are ways in which we are

trying to focus on the nature of the problem, which is nuclear development, and not the whole economy; and it also has the ability

to be voided very quickly if we need to reward compliant behavior.

Dr. MALONEY. Can I just add to that? I think, in addition to

micro-targeting and looking for the most important constituencies

within the regime to influence, we also need to think about the way

that we are implementing sanctions; and one of the, I think, existing holes—and it is well known—is Iranian economic interests in

Dubai. To the extent that we can get the UAE, the Dubai Emirate

in particular—to step up its scrutiny and make its financial transactions with the Iranians more difficult, that will have, I think,

some significant impact on the regime elites who currently support

the nuclear strategy.

Mr. FOSTER. Is there any detailed knowledge about segments of

Iranian society moving their assets offshore, into places where we

might or might not be able to see? There are a lot of things happening in the financial services bill that is intended to give us leverage to pry open places like Switzerland, and I was just wondering if that is a source of frustration in understanding what is really

going on there and where we could apply leverage.

Ms. WRIGHT. There has been an enormous drain of capital in

Iran by both people in the regime and others. As Suzanne mentioned, Dubai’s economy is now fueled significantly by the inflow of

Iranian businesses that have basically set up shop there to get

around sanctions. So they bring their goods, or whatever their office is involved in, to Dubai, running out of Dubai, and then they

ship things across the Gulf or use that as their backup office. But

Dubai, at the moment, is also looking for any source of income it

can get, so how much pressure we can actually put on Dubai is

very tricky.

Mr. FOSTER. OK. Well, thank you, and my apologies again for

only covering part of it.

I yield back.

Mr. TIERNEY. Thank you.

Mr. Luetkemeyer, do you have any further questions?

Mr. LUETKEMEYER. Yes, I just have one, Mr. Chairman. Thank

you.

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We talked about the opposition many times. How strong is the

opposition? How well organized is it? Where do you feel that it is

going to grow to?

Ms. WRIGHT. There has been a reform movement that has been

vibrant since the early 1990’s in Iran; it took root officially with the

election of President Khatami in 1997, but it never had critical

mass. Today it does and it crosses all sectors of society. You have

people who were among the original revolutionaries, as well as people who have never been involved in politics and hate the system.

It has all aspects of societal life. I had some of the slides, I think

before you arrived, of women old and young; you have taxi drivers,

as well as professionals. This is something where everyone has

been affected.

And I know we talk a lot about the Revolutionary Guards and

kind of lump them together, but one of the things you need to remember is that even within the military, including the Revolutionary Guards, there is dissent. In 1997, the Iranian polls found that

84 percent of the Revolutionary Guards voted for President

Khatami, the reform president. Every young man has to do service

in the military and many opt to do the Revolutionary Guards because their training is better, it helps get them entry to university,

and, most of all, because they get off at 2:30 p.m., and then the

young men can go off and get a second job, as many young men

have to do to support their families in this bad economy.

So we need to be very careful in looking at lumping any sector

of society in one basket. There are even confirmable reports from

some of the housing compounds from the Revolutionary Guards

that there were people shouting from the rooftops at night, you

know, ‘‘Allahu Akbar’’ and ‘‘down with the system,’’ so forth.

Mr. LUETKEMEYER. What percentage of the people do you believe

either belong to or strongly support these efforts?

Ms. WRIGHT. I would be dishonest if I told you I had an exact

number, but I think that there are vast numbers who either support the opposition, or are disillusioned with the regime because of

their treatment of Iranian society over the last 6 months. Do I

think it is the majority? I can’t honestly tell you, but I think that

to brave the kind of repercussions, whether it is going to jail, facing

torture, potential rape, and that people still get out in the streets,

still engage in civil disobedience in very imaginative ways is stunning, and there is nothing like it anyplace else in the world today.

Mr. LUETKEMEYER. OK, you made an excellent point with regards to how some sanctions would hurt the people in this group,

and they are very politically oriented toward their own world and

very defensive and very protective of it. What do you think, if we

could have them write our policy, what would they like to see us

do to hurt the regime, and yet be able not to hurt their people?

What do you think the suggestions would be from them?

Ms. WRIGHT. Well, as I tried to suggest earlier, I think that the

one common denominator among all three layers of categories of

activism is a desire to see the regime pay the price: the specific individuals, the Revolutionary Guard leadership, the Basij, the head

of the young religious vigilantes. But they also know that there are

lots of little loopholes, so that in the case of an individual who may

be sanctioned, his kid may be in Europe in school. The head of

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household may be affected by the limitations, but it doesn’t affect

their broader life and the ability of them to generate players in society down the road.

So they are interested in seeing us support human rights issues,

give greater attention, acknowledge what is happening without

saying, you know, we are going to allocate $400 million to support

the Iranian opposition. That is not what they are looking for. In

fact, they don’t want any American money for fear that it will taint

them.

Mr. LUETKEMEYER. OK. Very good. Thank you very much.

Thank you, Mr. Chairman.

Mr. TIERNEY. Thank you.

Mr. Flake.

Mr. FLAKE. I just have one other question.

Ms. Wright and others have mentioned the more effective sanctions or efforts to disrupt or impact the regime have been financial

banking regulations. OFAC, or the Office of Foreign Assets Control,

currently does that. Do they need any more authorization or authority from Congress to do things that they aren’t doing now? I

would like to see them be more active, not chasing Americans with

suntans coming back from Cuba. Rather, they should do what

might benefit us more. Do they need more authority from the U.S.

Congress in that regard?

Dr. Maloney, do you have thoughts on that?

Dr. MALONEY. I think, in contrast, the Treasury Department has

been very creative in using the existing authority, and particularly

some of the regulations passed after 9/11 that specifically target financial support for terrorism and proliferation of weapons of mass

destruction, and using those kinds of measures in ways that they

probably weren’t originally envisioned to target Iran, to make it

more difficult for Iran to continue to do business with the international community. The big dilemma of applying pain to Iran is

that as long as they sell oil, they are making tens of billions of dollars a year as a regime, and I don’t think that there is currently

international support for a full-fledged oil embargo on Iran. But we

can make what they do more difficult, more painful, and more expensive; and to the extent that we do that, it tends to hurt those

who have some influence over regime policy.

Mr. FLAKE. But OFAC has the authority that they need?

Ms. WRIGHT. I think that they have a lot, and they have used

it very well lately.

Mr. FLAKE. Thank you.

Mr. TIERNEY. Thank you.

One of the interesting things is, in Treasury, they have quite a

defined list of Iranian Revolutionary Guard, other people on that

from which we can choose to apply or not apply certain sanctions

on, and they refined it quite well to move forward on that.

Let me just ask one last question from me to Ms. Wright, whose

slide show was great. Thank you very much for sharing it with us.

There is a bill that was filed either yesterday or today that would

seek to remove technology like Twitter or Google, from sanctions in

Iran things like that, for non-governmental aspects on that. What

are your thoughts about that? What impact would it have? Would

you be favorably disposed to it, or not?

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Ms. WRIGHT. I think the opposition would be stunned and

pleased that the Congress was enlightened enough to understand

something like that. The regime would probably use it for its own

ends, but if it would actually—and I don’t know the answer to this

question—if it would actually change the accessibility of technology

to the opposition. This has been one of the big obstacles. Just like

the Revolution in 1979 was the most modern revolution in the use

of the fax machine and the tape cassette, what these kids have

done is really unbelievable given that they don’t have the same

kind of access that we do, and how they have gotten around the

bans by the government. So it is a very creative idea.

Mr. TIERNEY. I didn’t mean to imply to our other three panelists

that they couldn’t Twitter or Google on that, just that you had done

the presentation. I thought that you probably, with your background, had a better insight into it.

Are there any members of our panel who have a comment that

they want to share with us, one they feel that they wouldn’t have

told us all that they need to tell us before they leave if we don’t

cover that area?

[No response.]

Mr. TIERNEY. Then I want to thank all of you very, very much.

You were terrific witnesses; you helped us get a focus on this and

we appreciate your time and your information. Thank you very

much.

Meeting adjourned.

[Whereupon, at 12:02 p.m., the subcommittee was adjourned.]

[Additional information submitted for the hearing record follows:]

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